Introduction
Abeona is a manufacturer of luggage and travel accessories. The company is based in London and plans to internationalize to Singapore. The plan is to set up offices in Singapore which would act as the headquarters for operations in Asia and the US. The Singapore office plans to be the central hub for the manufacturing operations that will be set up in the surrounding countries including the Philippines, Malaysia, Indonesia, and China.
Cultural Profile
In Singapore, lower-level employees acknowledge and expect power to be delegated unequally over organizations (Hofstede, 2019). They value this to be relatively low however it is evident that in actual practice, the range of power distance for the country is relatively high in comparison to its perceived values (See Appendix A, GLOBE, 2019). This gives some indication that people within organizations in Singapore have a tendency to conform to a hierarchical structure, maintaining a larger distance between top-level and lower-level employees (Tan and Chong, 2017). This is the case even though the research suggests that the people prefer a relatively low distance between their superiors and subordinates. The GLOBE’s culture visualization and Hofstede’s insights help to illustrate this (See Appendix A and B). This opposes their innate values and perceptions towards management as they have a tendency to be more accepting of power being asserted unevenly, this is the basis of their society where there are unequal relationships (Yeo, 1997 Hofstede, 2001). As a result of this, employees expect a high level of control from their managers and their relationship is of a formal nature where both superiors and subordinates respect one another in a disciplined manner (Haley et al, 1998).
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Singapore is a multicultural country which demonstrates a hybrid of cultures epitomizing Western modernisation whilst remaining true to their Asian values (Hong et al, 2000 and Thompson, 2000). In Singapore and its surrounding countries, there is a climate where people place a great deal of importance to their values and their obligations within the community. Through this, they tend to be dismissive of the concept of Western individualism (Thompson, 2000), and remain true to collectivism as a cultural construct (Hofstede, 2001 and Solansky et al, 2017). This conforms to the customs and social behaviors expected throughout their society.
Confucian Asia
Singapore is part of the Confucian Asia cluster of countries and as aforementioned are conforming to and scoring high in both power distance and collectivism. Singapore has been made part of this cluster as their society tends to disburse resources more collectively and within organizations they typically flourish when working together towards achieving certain goals collectively (Eshun and Gurung, 2009 and Quinney, 2009).
Singapore favors an environment within organizations where communication is made on a general consensus level as opposed to the characteristics favored by an individualistic approach which requires a higher level of directness and behaviors which are experienced on a more forthright manor (Oyserman and Lee, 2008). People are expected to take care of one another in return for one another's support and their loyalty (Hofstede, 2019). It is also expected that there will be less of an emphasis on language exactness and more of a focus on the shared instincts of the group when making decisions (Yeo and Pang, 2017).
There can be a common misconception with Collectivism in Singapore as there can be a tendency to overgeneralize when discussing the cultural construct (Huang et al, 2017). Singapore is collectivist however, this gives very little distinction when addressing the authoritarian style of leadership and hierarchies which are to be expected within management practices throughout Singapore (Dien, 1999, and Miller, 2002). The idea of collectivism suggests that relationships within organizations are wholly of a shared value toward shared goals however, individuals express themselves through their roles within the business and are able to assert their power according to their position within the hierarchical structure of organizations (Huang et al, 2017). Individualism seems to be a concept which is adopted more so by Western culture where we focus on the benefits of free markets, whilst the culture in Singapore sticks to its collectivist elements (Wee, 1999 and Oyserman, 2002). Hofstede’s theory of six dimensions (1980) helps to demonstrate and illustrates the differences between high and low-context cultures.
The local government also plays a part in its efforts to control culture. This is controlled through objections of Western culture and the publicity of Confucianism values. They oversee and can influence what is seen in the leading Newspapers and also can have control over which Newspapers from outside of the country go in. So many of the publications that come into the country can be restricted to that of other Confucian Asia countries. This dramatically impacts and reduces the level of Western culture which the country is open and exposed to (Li and Karakowsky, 2002).
Government Intervention
Governmental policies are shaping the culture within Singapore and are one of the key determinants of the type of culture which is expected to be anticipated when internationalizing here. There are transparent and coherent policies from the government that enable an ideal environment for businesses to operate where there is a suitable level of governance (Haley, 1998).
The preponderance of Singaporean organizations have confidence in their government and their ability to build networks as majority of investment flourishes in the cities where relations are already established (Li and Karakowsky, 2002). Singapore has been referred to as the “gateway to China” by organizations from Western countries, entry, however, is not accomplished through these established traditional networks anymore (Segal, 1996). Singapore shares similar cultures to that of other city-states including Hong Kong and Taiwan (Hofstede, 1984), however, the changes we are seeing in organizations and their behavior suggests that the Singaporean culture within the city is trending towards a culture where there is much more reliance on the government (Li and Karakowsky, 2002), and an increasing desire for uncertainty avoidance (Fisher and Ranasinghe, 2001). As a result of the government's support for organizations within Singapore, there has been an increase in dependence on the government which has decreased the level of risk organizations and firms are willing to take.
Government intervention also plays a large part in influencing and shaping the businesses which operate. For example, the government presents appealing conditions for organizations to internationalize to Singapore, specifically for situating regional HQs. They do this by designating resources for foreign companies and investment with the aspiration of becoming more integrated with the international market (Heyzer, 1983 and Ho, 1994). This however means many firms within Singapore have to seek out a comparative advantage against competition from the West and through changes in globalization and government policy (Parayil, 2005).
For years, Singapore’s government has overseen many of the takeovers and mergers within the country. As part of this policy, they may decide to take a certain level of control. These are known as ‘government-controlled’ organizations. These tend to dominate the market, whilst MNCs fight for the remainder of the market share. These government-controlled organizations reflect many of the Singaporean values and cultures aforementioned (Haley et al, 1998 and Hofstede, 2001). As a result of this government-controlled organizations tend to offer a much more stable and secure employment, which encourages young graduates to strive for the positions within these organizations rather than the multinational corporations (Li and Karakowsky, 2002 and Yeo and Pang, 2017). Younger graduates are not necessarily encouraged to join these organizations however, they tend to offer higher incomes which is attractive and so a majority of the local talent within Singapore and the surrounding areas are employed by organizations under the government's control.
Staffing policy and other HR aspects
Abeona plans to take on an ethnocentric orientation approach to internationalization. The key would be to mix management between good quality local people and current management from the UK. This way, any potential limitations or risks with recruitment will be mitigated. This will help to establish the current vision for the company in the UK is kept and that there is a consistent vision and sense of direction within the management. This will be beneficial particularly in regards to motivation purposes within the new offices. Existing management will help reflect the current level of standards that we have set throughout the organization.
An individual is expected to conform to their culture however, their perception of this can have a considerable influence to their attitudes towards their organization. Additionally, this is especially evident when we look at expatriates and the risks involved in the inadequate cross-cultural adjustments to their new settings (Wu and Ang, 2011). This can lead to substandard or unsatisfactory performance which will need to be avoided in order to reduce the overall overheads of recruiting new staff. As a result of this it will be imperative, from an HR perspective to recruit the right balance of Singaporean local talent and expatriates with competence and confidence to lead and manage the organization (Javidan et al, 2006 and Solansky et al, 2017). Throughout the beginning stages of expansion to Singapore, it is crucial that both expatriates and local recruitment are given the support they require. Social exchange theory suggests that the amount of support that these individuals receive will determine the level of contribution the firm will get in return (Kraimer and Wayne, 2004). If the employees feel valued on all accounts then they should add value to the organization (Tan and Chong, 2003).
Leaders throughout Confucianism culture concept are expected to show the highest levels of leadership as firms in Singapore typically appoint their leaders and managers based on ability (Hofstede, 2019). Singapore has a high context culture so it is common for the power to be distributed unevenly and so a hierarchical organizational structure will be emplaced as this is favored by their culture due to the employees' expectations of high levels of control and authority from their superiors (Hall, 1978 and Kopnina, 2005). Additionally to this leaders should avoid using empowerment and focus on a dictatorial style of leadership especially with subordinates much lower down the organizational structure (Solansky et al, 2017). Although this ethnocentric approach will be expensive, it will mitigate many of the risks that could be endured if we were to adopt a Polycentric approach to internationalization. Once the firm has become accustomed to Singapore’s government policies and gains a greater understanding of the Singaporean culture, then expatriate managers could be retracted and brought back to the UK. This will be possible when new local management is trained and equipped to continue operations within the Singapore HQ for distribution within Asia and the US. A small percentage of expatriate management could remain in the host country in order to assure that current levels of performance remain consistent and our stable and have longevity.
Another facet to consider through the process of internationalizing is the management of ethnocentrism. The perception of one culture being greater than another can cause sensitivities which will need to be mitigated (Vasquez and Taylor, 1999). Managers will be required to have a certain level of knowledge and preferably experience in dealing with cultures other than their own. Confucian leaders have been known to present a high degree of morality in their decision-making (Ling et al, 2000) so leaders that have this ability are quintessential to the organization especially given the adverse effects of the ethnocentric approach (Durvasula and Lysonski, 2006). Leaders that possess and acquire these skills will have the propensity to communicate problems and find suitable solutions and are likely to have a greater ability to deal on a multicultural level whilst retaining the competence to deal with different diversities in different situations (Yeo and Pang, 2016).
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