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Question 1: Please discuss that the chosen company is indeed an internationalised one, please provide evidence to support your argument.
Vartanian and Hayward (2020) define "internationalisation" as the process of developing a product that can be marketed and employed in several countries. In order to best satisfy customers throughout the globe, companies often use this technique. Customers in various countries may have different pReferences or habits. As per the critical study, Amazon manufactures and exports its goods to a range of countries, which indicates that Amazon is a highly internationalised firm.
"Amazon" has been chosen as the subject of this essay since it is an international firm that operates in a lot of countries around the world. Amazon.com, Inc. is most interested in digital streaming, cloud computing, electronic commerce, and artificial intelligence (Wu and Gereffi, 2018). Google, Facebook, Microsoft, and Apple are the only five companies in the United States' information technology industry. Amazon was founded by Jeff Bezos in July of 2005. He ran a hedge fund on Wall Street. At one time, Amazon was known as Cadabra (from Abracadabra). However, Jeff Bezos, Amazon's CEO, advised him not to use the term "magic" in the advertisement. In order to promote globalisation, international management is concerned with managing enterprises and their activities. A growth in cross-border social, political, and economic cooperation may be attributed to advancements in information technology and more efficient cross-border transportation (Alassaf et al., 2020). A greater interchange of ideas, commerce, and cultural diversity occurs as a consequence of this. Many well-known corporations have benefited from globalisation by expanding their operations worldwide.
Amazon has operations in several nations, demonstrating the company's global reach. It's not only the United States and the United Kingdom that Amazon operates; it's also in Canada and Japan as well as mainland China (Amazon, 2021).
“Figure 1:Annual net sales of Amazon in selected leading markets from 2014 to 2020”
(Source: Coppola, 2018)
Amazon has achieved its goal of creating a consumer utopia. To put it another way, they charge far less and promise significantly more than other retailers and platforms: the widest variety, the best pricing, and the fastest delivery. In the "flywheel" model, the more effective Amazon is the more likely they are to succeed in the future. It has been determined that Amazon has declared its intention to establish a new cloud region in New Zealand, where it plans to invest $7.5 billion within next 15 years and create around 1,000 jobs (Lima et al., 2021). In the wake of New Zealand's successful COVID-19 response, the government has declared this "another huge digital investment" (Kilpatrick, 2021). According to research, Amazon's service offerings in New Zealand are rather restricted. New Zealand is known for its wide range of cultural influences. The country's 5 million citizens hail from more over 100 different ethnic groups. More over two-thirds of 'Kiwis' are European, following by “Mori (14.9%), Asians (11.8%), and non-Maori Pacific Islanders (11.8%)”. Percentage-wise: More and more highly qualified Asian professionals, mostly from China and India, are migrating to New Zealand. An ethnically diversified city, Auckland is an excellent area to reside with “60 percent Europeans, 23 percent Asians, 11 percent Mori and under 15 percent Pacific Islanders” (Alassaf et al., 2020).
Amazon is now using international shipping as a way to expand its business internationally, since this method allows the corporation to expand its services from one region to another.
Consumers in countries where Amazon does not already have a physical presence may use the Amazon mobile app to examine products that can be shipped to them. Use the app to simply determine shipping and handling costs, and any import taxes you may owe. This new feature is unlikely to be popular in most regions because of the additional costs involved. In addition, only a limited selection of products may now be sent internationally (Petry et al., 2020).
Question 2: Please draw on theories learned from this module and collect secondary data of the chosen company, to discuss one of the following international strategies:
Cultural difference management
CSR
Entry mode choices
Balancing the tension between globalization and localization
Question 2:
Literature review on cultural difference management
The fact that 'culture environment' is one of most significant elements impacting companies elevates the importance of managing cultural variations in relation to language, values and attitudes, religion, education, politics, and legislations on both local and worldwide dimensions (Boussebaa, 2020). According to this, to successfully exhibit their functional knowledge, CEOs of multinationals need education in personal values, social skills and work skills, as well as cultural skills in order to understand, manage and analyse cultural differences in their workplaces. As stated by Mahadevan, Primecz, and Romani, (2019) If a manager disregarded these cultural variations and acted entirely in accordance with their own, it would have been harmful. Intercultural management is an essential talent for CEOs in global companies because of the wide range of ideas and behaviours that exist between cultures. The management of personnel from a diverse range of cultures is one of the most pressing concerns for multinational corporations, which are now prominent in almost every industry.
It is widely accepted that the well-known Hofstede's five-dimensional cultural values measure is the most important gauge of culture, according to Noorbehbahani and Salehi, (2021). However, since his metric is being used as an external variable, it is usually necessary to explicitly analyse cultural values for certain consumers or managers. This research attempts to provide an individual-level evaluation of Hofstede's culture, which has been requested. Some of Hofstede's model has indeed been put into practise, although its accuracy has been called into doubt. After resolving all of the major flaws in previous studies, CVSCALE, a 26-item, five-dimensional scale of individual cultural values, was born. Measurement reliability, validity and generalizability are all excellent, regardless of sample size or country. According to the Hofstede model of national cultures (Yoo and Shin, 2017), "power distance, uncertainty avoidance, individualism/collectivism, masculinity/femininity, long-term orientation, and indulgence/restraint" are all part of this model. The study that followed and built on it shows the conceptual and investigative effort that came before and led to its adoption as a model for comparing civilizations. There are six dimensions discovered in the research done by Noorbehbahani and Salehi, (2021) on business cultures, and the essay stresses that the dimensions are dependent on the aggregate. Individual value differences should be avoided at all costs, it recommends. Finally, a peek into the future of national cultural components study and the function of countries within them is provided in the concluding paragraphs.
Cultural difference management in Amazon’s internationalization in New Zealand
Culture defines standards and values, openness, quality metrics, flexibility and concentration of authority for employees, as well as techniques of working throughout the duration of a project or a year. At every level of an organisation, it has a significant impact on the company's operations and strategic plans (Genta and Neubert, 2021). Those who hold the most prominent positions in a company's culture are drawn from diverse backgrounds. The objective is to produce a homogenising effect, which means that there will be some variation at beginning. Cultural changes and connections may have both positive and negative effects on an organisation, so it's crucial to keep an eye on them. As a result, a diverse workplace will run smoothly. Consequently, an organization's culture is formed by the variety of cultures that engage inside it, and also how those cultures communicate with one other.
Examples of cultural management theories include Berry, Simons, and the revised Hofstede Model (Yoo and Shin, 2017). Acculturation is the term used to describe the process of adapting to a new culture after interacting with individuals from diverse backgrounds. Whenever it comes to cross-cultural interactions, there are both parallels and differences in the workplace. Employee engagement and the company-employee relationship are directly impacted by cross-cultural organisational behaviour. Amazon, Inc. has lately been reported to utilise a combination of inventive and brutal methods to reprimand its employees ((Benmamoun et al., 2019). Throughout the course of their careers, employees have developed a work culture that is unique to them. Ideally, these principles and practises would be integrated into the company's current ethos and operations.
A strict set of rules are implemented during Amazon's orientation to assist new workers adjust to a single way of working at the company. New hires are instructed to ignore whatever "poor habits" they may well have developed while working elsewhere. The constant speed of the job is also mentioned as a hindrance that students should "climb above" rather than avoid. Working conditions and business culture are strict to prevent discouraging new hires. Managers use this to identify employees who will fit in with the company's culture and who cannot, helping them to make better hiring decisions (Hewett et al., 2021). Employees are required to be innovative thinkers, devoted workers, and responsible individuals, no matter how challenging the job at hand may be, in order to remain effective at their jobs. Because of this corporate culture, the company has grown rapidly, increased revenue, and attracted new customers at the expense of its competitors (Maurya, 2020). As a result, it has helped Amazon retain customers by building goodwill that enables the corporation to achieve its organisational objectives with the highest efficiency. Thus, several problems have arisen, chief among them being an increased burden on employees to perform and adapt to more demanding conditions.
As a consequence, many employees have quit the firm in search of better working conditions. Acculturation is the process through which many diverse civilizations come to share a common language. acculturation is a process of incorporating new employees into the company's culture in this instance. Since individuals are expected to completely alter their cultural roots in favour of those who have been formed inside the firm, Amazon has a huge challenge (Hewett et al., 2021). This may be a challenge for someone who was brought up in an entirely different environment. There is a period of adjustment required for them to learn the company's procedures. If they are assessed by established standards, they may well be demoralised and unfit for the company.
Schein’s Model of Organizational Culture
Schein's three-level model (also referred as the "onion model"), which he developed in 1984 and revised in 2010, focuses on signs and artefacts, accepted values, then assumptions underlying. Processes (“logos, architectural design, mission and vision, and attire”), accepted values (“rules of behaviour or ideals publicly proclaimed by the firm”), and assumptions are three forms of organisational artefacts (behaviours that are ingrained in the culture). A company's values and basic ideas are presented to new employees as a way to help them adapt to their new workplace (Mamatha and Geetanjali, 2020). An arrow pointing from A to Z is part of the Amazon Mark, which is seen in the image above. The cheerful face depicts happy customers, and the arrow next to it indicates that the business provides everything a customer would want. A company's beliefs may be communicated via the use of certain colours. The colour black is being used to represent the company's elegance, supremacy, and command over the landscape of its industry, while the colour orange is being used to represent the company's emblem. Amazon's mission is to become a global consumer-centric company that allows people to purchase any product they choose online. A wider variety of products at the lowest possible prices is expected from it. Despite the lack of a strict dress code, Amazon workers are obliged to carry an identification badge at all times (Maurya, 2020).
An employee's behaviour and beliefs are reflected in the second layer of the onion model, which indeed represents the company's many values. Whenever it comes to recruiting new employees and enforcing the company's code of conduct, Amazon takes a very strict approach. The company's particular approach allows it to maintain a workforce with very high expectations (Mamatha and Geetanjali, 2020). To meet the tight deadlines imposed by this regulation, employees are required to work long shifts, often far into the wee hours of the morning. Even Despite this, it is not uncommon to see junior employees assigned greater responsibility than their colleagues in most companies. Most individuals may find it difficult to concentrate at Amazon due to the obvious company's competitive atmosphere. Because of the pressure they place on their employees, managers see this as a means to motivate people and encourage innovation. Several employees have had mental or physical health concerns as an outcome of the company's strict evaluation approach. As a result of the belief that Amazon's employees are devoted and imaginative, the company's success has been boosted (Maurya, 2020).
“Hofstede's Theory of Cultural Dimensions” and its implication on Amazon:
A company's organisational culture is described by Hofstede (2011) as the way workers interact with one other and the outside environment in contrast to other firms. Everything about them is distinct, from their worldviews to their ideologies to their methods. Hofstede's five key factors affect employee behaviour: “male/female power distance, individuality, uncertainty avoidance, and long-term orientation” (Huang and Crotts, 2019). It's all about how much power each individual has depending on their job description. Each Amazon employee is appointed to a certain team, such as procurement, sales, or finance, and each team has a specified goal. Managers are in charge of managing the activities of each team. All managers are accountable to the CEO, whereas each team member is accountable to their own manager. Despite this, employees are given a lot of freedom and responsibility in managing their work, which is a far cry from other companies. There is a gap in the ability of men and women to manage a company to its set goals. Due to the obvious enormous expectations put on employees, this is particularly true. More women than men feel the strain of the profession, and this is especially true for those with kids. It's hardly a surprise that Amazon's employees are pushed to go the extra mile in order to fulfil specified targets (Maurya, 2020).
People in a work setting with a high Uncertainty Avoidance Index are more prepared to cope with unexpected occurrences and repercussions. Employees at Amazon are encouraged to think beyond the box. This entails a great level of risk, and workers should be ready to cope with it. Workers at Amazon should be able to handle both happy and terrible events, as well as meet all of the company's goals, no matter how challenging they may be. Immediately after joining the company, they're used to this way of life. Workers who work alone or in groups to achieve a common objective are said to practise individualism. It is expected of each Amazon employee to fulfil both team and personal goals (Gallego-Álvarez and Pucheta-Martínez, 2021). The team's members should individually meet their own aims while also working together to achieve the group's goals. Employees are expected to work hard and late in order to compete against each other in order to meet predefined targets. All of this must be done in conformity with the set standards and leadership principles of the company as a whole. However, total performance is taken into consideration when awarding or disciplining employees.
