Culture effects on managing SME’s in the UAE

•06/01/2011 • 1 Comment

 

 

Several issues can affect managing and organizing any small businesses in the UAE. The major issue that influences SME’s is related highly to the culture, especially if the owners of the businesses were women. For example, the women businesses owners might not be able to travel freely anytime they want regarding meeting and dealing with the suppliers. They will have to convince either their brother, father or husband to travel with them, which might stands as an obstacle on their way to success. Other challenge is that some people will not see them as a respected leader as much as if they were men. Regardless to the gender, if the owner of the SME’s did not have enough information about other employees culture, they will not be able to communicate effectively. According to Rajiv Oza; “the values of the Promoter or owner are the expected values or culture of the organization. And this perhaps is one of the most important aspects restricting the growth of SMEs as there is a dire need for change in the organization culture to match the challenges of business”. In order for a SME’s to succeed, they should not be ethnocentric, they should consider other cultures that might have other better opportunities to increase the productivity and the overall performance (Oza, 2010). Dubai is a hugely divers area with different nationalities. According to Dr. Alvin Chan the owners should concentrate in values, ethics and beliefs in order to have guidance and rules that will help the employees on dealing with each other (Chan, 2009). On the other hand, an advantage of having a collectivism culture in the UAE, SME’s owners might get help from their families in times of crises. This will motivate the Emiratis to start up their own business because they will know that they would be supported by their families. In addition to that, the government supports youth by having Mohammed bin Rashid Establishment for Young Business Leaders as financial help. They stated in their website that a good planning will result in having successful business (Mohammed Bin Rashid Establishment for SME development, 2007). Our culture is used on outsourcing whatever is missing so that it will create a solid base of knowledge and experience to help improving our country’s economy.

Bibliography

Chan, D. A. (2009). The Challenges of Human Resource Management. Retrieved from Zero million: http://www.zeromillion.com/business/hrm.html

Mohammed Bin Rashid Establishment for SME development. (2007). Retrieved from Government of Dubbai: http://www.sme.ae/

Oza, R. (2010, October 1). HR Challenges in SMEs. Retrieved from people matters: http://peoplematters.in/articles/focus-areas-13/hr-challenges-in-smes

Cross-cultural effect on SME’s

•06/01/2011 • Leave a Comment

Good morning everyone :)

Globalization is seen as a double edge sward and that it because of the pros and cons that comes along with it  (Hoyt, 2004). The pros of globalization is the new technologies that spread all over the world, the cons of it is that people stared to adapt behaviors of other cultures that is not appropriate in their culture. And in order for HR to succeed in this global environment they must keep up to date with customer’s needs and wants. HR must be “business driven” and it must operate well and at the same time keep in mind the big picture of the business.

Thomas said the segments of workplace diversity are: “age, ethnicity, ancestry, gender, physical abilities/qualities, race, sexual orientation, educational background, geographic location, income, marital status, military experience, religious beliefs, parental status, and work experience” (1992). A good company will be able to manage the divers’ employees and use their abilities, skills, competencies and culture into their benefit and success. By using their skills properly, they will have the ability to be creative and innovative with business opportunity because their divers employees will create a solid base for the business. This has proven its success in (MNC’s) which are the multinational companies were they operate on a global standard and they hire employees of different backgrounds, nationalities, ethics and ages. They also apply ‘Think Global, Act Local’ idea. The issue here is managers cannot detect different cultures and it is not easy to put them all together. In addition to that managers must be aware of different ways of doing the job instead of focusing on their own way which might not be the best way (Chan, 2009).

Culture has an effect on the type of decisions made in the SME’s. For example, if they should hire someone from the family or someone professional. Beside that they must consider giving the power to family members only or professional employees. This type of decision can be either so good or so bad for the business.  The values and believes of the owner of the business might affect the growth of his/her business because the owner’s values are the one expected to be applied in the business. At the same time, the owner’s values might not be the same value’s of other employees and this might result in having conflicts. In this case both owner and employees must be aware of the different values and beliefs. HR’s challenge is to attract and retain talented people. SME’s can do that by providing their employees with “benefit packages”. In conclusion, no matter what the size of the company is, SME’s will also face different type of problems and they must have good HR department that will help in this type if challenges  (Oza, 2010).

Bibliography

Chan, D. A. (2009). The Challenges of Human Resource Management. Retrieved from zeromillion: http://www.zeromillion.com/business/hrm.html

Hoyt, K. (2004). A Double-Edged Sword. Globalization and Biosecurity .

Oza, R. (2010, October 1). HR Challenges in SMEs. Retrieved from people matters: http://peoplematters.in/articles/focus-areas-13/hr-challenges-in-smes

Guiding Turkish SMEs to the success

•05/01/2011 • 7 Comments

Guiding  Turkish SMEs to the success

Globalization phenomenon has changed the businesses rapidly and impacted on it in many different ways. Many powerful elements have been changed through the globalization trends such as; movement of people, technology, money and knowledge. Globalization makes the world a small village that can interact with each other easily. Turkish businesses focus on the behavior and culture in their small businesses in a way that matches the business’s demands. They try to build up teams that consist of different nationalities employees, different skills and different language. They train them to be more flexible while they are working together. Their guideline is a combination of experience and other knowledge from different cultures so that they can build a solid foundation for managing the small business in Turkey (Business Start Up & Development, 2009). Individual relationship in small businesses in Turkey is influenced by cultural and physical and social trends that occur. The success of the small business in Turkey depends on how the company is using the right communication behavior that fits the company’s setting and structure. Turkish employees in the small business in Turkey forget about the diversity of culture in the company. They deal and interact with others based on their own culture instead of taking some good roles from the other employee’s culture among the company. Taking the culture in to account while managing a small businesses would help in avoiding the embarrassment and detrimental that might happen in any small talk or interaction between employees themselves or their managers (Larry, Richard, & Edwin, 2009). Researches showed that small business under the phenomena of globalization encouraged the owners to look at the international companies arround them and cross cultural companies to face the cultural barriers easily while running their businesses. Nowadays, businesses needs a new knowledge, skills and attitudes from different cultures that play a role in developing the small businesses and managing activities, including different culture elements to be prepared to reflect the changing in the market because of the diversity (Godfrey, 1985). Other researches shows that Turkish SMEs prefer to work in group and uses the dimension of collectivism culture. They care about the multinational employees and their satisfaction in the company . some of the Turkish SMEs believe that the success of their business is to care about the multicultural employees within the organization and to make sure that employees are satisfied (YETIM & YETIM, 2005).

Bibliography

Business Start Up & Development. (2009). Retrieved from Copernicus: http://www.exporttoturkey.com/service-details.asp?id=10

Godfrey, D. (1985). Journal of Small Business and Entrepreneurship. Canada: Center of entrepenurship faculty of management.

Larry, A. S., Richard, E. P., & Edwin, R. M. (2009). Communication Between Cultures. USA: Lyn Uhl.

YETIM, N., & YETIM, U. (2005). THE CULTURAL ORIENTATIONS OF ENTREPRENEURS AND EMPLOYEES’ JOB SATISFACTION: THE TURKISH SMALL AND MEDIUM SIZED ENTERPRISES (SMEs) CASE. Social Indicators Research .

Challenges for SME’s in India

•05/01/2011 • 4 Comments

Challenges for SME’s in India

 

In the developing countries enterprise makes up to 40-60% of the total value of the national economy and the SME’s represent about 90% of that enterprise.  This means that those countries rely vastly on that SME’s and enterprises. In India, SME’s came at the second place that drives the economy and contribute with a rate of 40% of the country’s industrial output. Some of the sectors of SME’s in India are: food processing, agriculture input, plastic products, electro-medical equipment, bio-engineering and textile and garment. The reason why SME’s are important in India is that: since the employment in large companies is costly the SME’s provides a lower cost employment, due to the fact that running an SME links with industrial areas it helps to develop the regional area, in addition to that it plays role in having an equitable way of wealth distributing amongst people and last SME’s creates balance since they use raw materials and they do not require imported machinery labor and raw materials. 

Issues facing SME’s:

 

Due to the financial crises the SME’s in India was affected vastly because of the increasing interest rates and caused slowdown in the business.  In addition, the lack of knowledge has resulted in creating obstacles for SME’s to grow. The main issue that prevents SME’s from development is that access to “timely and adequate credit” is not always available. Another factor that is creating an obstacle for SME’s is globalization and the need to produce high quality products that requires new technology. The unavailability of information on “upcoming market trends and information” plays a huge role in slow development of SME’s because when they want to start a business they do not find the information on machinery that might be handy for the business. Another issue facing SME’s is that they are not very creative and innovative; they rely mostly on the domestic and the foreign buyer’s design. In addition to that the type of the technology they use is very old and it has a huge effect on the profit margin and the level of productivity and that would prevent the creation of new products. SME’s faces a huge problem related to marketing because those organizations belong to rural and semi urban areas where resources are easy found in addition to the labor. But the issue here is marketing those products to people and to aware them of the quality of their products  (BHARATH.P, 2009).

Another type of challenges that SME’s in India are facing is the lack of support from the government, banking and financial sector. In addition to that the low production capacity due to the low level of  technology used in production has a negative effect on it  (Challenges to SME Sector, 2008).

In conclusion, a lot of the challenges that India is facing is related to the culture because they tend to live in urban places which affects their business negatively. In addition to that the lack of creativity and innovation might have relation to their culture, that they tend to respect what their clients need only instead of creating new products. 

Bibliography

BHARATH.P. (2009). PROSPECTS AND CHALLENGES OF SME’S IN INDIA . Retrieved from Scribd: http://www.smechamberofindia.com/challenges_to_sme_sector.aspx

Challenges to SME Sector. (2008). Retrieved from Small & Medium Business Development Chamber of India: http://www.smechamberofindia.com/challenges_to_sme_sector.aspx

 

Ethics in SMEs

•04/01/2011 • 7 Comments

Ethics in Small Businesses

 

Different cultures have different ethics and morals. Some of the cultures care about the morals and the behavior of the employees in the businesses. They believe that the culture is an important element in any small business that can handle its success or failure. HR practitioners try to manage the culture within the organization to avoid the conflicts that might happen between the employees. SMEs face some troubles because of the ethic issues. According to Taylor, ethics has been defined as a “…inquiry into the nature and grounds of morality where the term morality is taken to mean moral judgments, standards and rule of conduct” (Taylor, 1975, p. 1). The businesses are a mixture of different nationalities, cultures, ethics and values. Some of the cultures and ethics don not fit in the organization and that might be an obstacle that the small business should take care of. According to Sathe, he considers that the moral values are the most important thing to have a successful relationship between the employees or their customers. He admits that the good relationship will lead to trust and honesty with a fair of treating employees. This will result in having a better communication system in order to make t easier and to avoid confusion (Bradley, 2004). HRM role in this issue is to provide the employees with a induction of the different cultures background among the company. They have to make them ready to work in a team with different nationality team members  (bringtn, 2010). Small business provides their managers and employees with the Codes of Conduct and Ethics Rules. This would help the managers and the employees to understand the rules and how the company’s system work and its disciples. For instance, some behaviors are accepted in some cultures and unaccepted in other cultures. This means that the company should put a standard regarding its rules and disciplines that they think it will fit their company and the employees to reach the business objectives (Gross, 2010). Human resource management department in any small business should be careful while hiring employees and care about their values and ethics. It is challenging to establish clear moral values and have a multicultural workplace, but with their effort and visibility they will help in achieving the desired outcomes and support the other nationalities in the company. 

References :

Bradley, J. (2004). Ethics in Small Businesses: Can Culture and Moral Values Successfully Co-Exist? 2-5.

Bringtn. (2010, October 5). Diversity And Ethics. Retrieved from OPPapers.com : http://www.oppapers.com/essays/Diversity-And-Ethics/326131

Gross, B. (2010). Ethics and People Management. Retrieved from Champions of small business: http://www.allbusiness.com/human-resources/employee-development-employee-ethics/2975409-1.html

Taylor, P.W. (1975). Principles of ethics: An introduction to ethics (2nd ed.). Encino, CA: Dickenson Pub.

Culture’s effect in SMEs in Asia

•04/01/2011 • 6 Comments

Culture’s effect in SMEs in Asia

 

 

 

 

SMEs in Asia are affected by many factors such as economic and social factors. Culture and values can be the most inflectional factor on business structure and relationships. Lessem said: “cultures earn their livings, produce and develop effectively, that which their member most value. To believe that a particular task is valuable is a necessary prelude to doing it well”. According to most of east and south East Asian countries “the relationship comes before the contract”. The relationship between the people has more power than business contracts because their relationship is very natural and they do not use outside agencies. According to Hall’s theory in high context culture they focus on the external environment around the business so they have an indirect way of communication in contrast with low context countries where things are explicit and communication is direct. International human resource management`s role is to understand the difference between the high and low context  countries to avoid cultural misunderstanding that affect the overall business performance (Harvie & Lee, 2002). Another article illustrate that the high context cultures focus on the long term relationships instead of focusing on the task that should be done at the moment only.  They are interested in interacting and building relationship with others instead of completing the tasks.  High context cultures spend time in finding a solution for the problems but they precise on the relationship that will come up with good result for the business performance (Holzer, 2010). In order for a small business to bein a leading position, they must possess innovation and creativity otherwise they’ll be in the cluster.  (Tambunan, 2009) In conclusion, Asian countries which are high context culture they focus on managing the relationships between business partners and employees in order for them to succeed in their business.  

References :

Harvie, C., & Lee, B.-C. (2002). Globalisation and SMEs in East Asia. UK: Edward Elgar Publishing.

Holzer, C. (2010, November 16). Small World: How High & Low-Context Cultures Affect Business in West Asia. Retrieved from Gen Juice: http://www.genjuice.com/2010/11/16/small-world-west-asia-and-how-high-low-context-cultures-affect-business/

Tambunan, T. (2009). Promoting innovation in SMEs through. Special Feature: Innovation in SME clusters , 35-36.

The role of culture in small business . .

•29/12/2010 • 4 Comments

Good Morning :)

Most of the small businesses do not pay attention to the culture among the company. Even if it is a small enterprise, still the culture can play an important role that leads to the success or failure of the business. According to Hofstede; (1992) “he describes the different cultures in different countries and comes up with what he calls cultural dimensions which give some explanation as to the behavior of people in economic activities”. Hofstede introduced four dimensions some of them are directly related to the cultural issues such as; power distance. Some of the countries prefer the high power distance like African and Asian countries. These dimensions can cause some problems like lack of initiative and low creativity. In addition, individualism and collectivism are another issue that may stands as an obstacle for the company’s success. Some people prefer working independently and others in team, which may cause a less in productivity or misunderstanding between the employees which will affect on reaching the company’s goals.  (Balunywa).

Some of the small businesses faces problems that cost them a lot and it is because of the fact that they were not aware of the cultural issues. The lack of awareness of others culture in any small business requires training that might help the employees and asses them on how to deal with different types of clients to retain them.  (Mkanderson, 2010)

Culture might be a challenge in small businesses. Employees need to know about their colleague’s culture, because the businesses are a combination of different nationalities and knowing their cultures would help in interacting and communicating with them easily.

According to Gibson, who owns a small business, he suggested 3 steps that could help the small businesses with the culture issue. “First, Become aware of potential cultural differences. Second, spend time listening to and observing your employees to understand their cultural orientations, preferences and values. Third, if necessary, adjust your own behaviour as a boss to help incorporate your employees’ cultural orientations, preferences and values”. (Hernandez, 2010)

Culture is an important factor that every small business should consider about it and take it into account. If the small business ignored the culture issues, they might face many obstacles in running their companies. Culture is the key to the success of the company if the managers are aware of how to deal with it and manage it properly. (Balunywa)

 

 

  

Bibliography

Balunywa, W. (n.d.). Culture and Small Business Success: Entrepreneurship and Small Business Enterprise Growth in Uganda. Retrieved from Evan Carmichael: http://www.evancarmichael.com/African-Accounts/1639/80-Culture-and-Small-Business-Success-Entrepreneurship-and-Small-Business-Enterprise-Growth-in-Uganda.html

Hernandez, B. A. (2010, August 17). Culture Plays Big Role in Employee Attitudes. Retrieved from Business news daily: http://www.businessnewsdaily.com/culture-plays-big-role-in-work-attitude-0461/

Mkanderson. (2010, April 27). Small business culture. Retrieved from Mkanderson: http://www.mkanderson.com/portal/archives/9

 
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