International trade and business operations and transactions have become increasingly frequent with the spread of globalisation, with businesses engaging in operations in diverse cultural and jurisdictional locations. However, cultural inflexibility has created cross-cultural differences that impede the quality and effectiveness of international business communication and negotiation. Since the negotiating parties tend to make decisions and judgments towards interests and behaviour based on their own values, failure in negotiating and losses might occur due to lack understanding of the cultural differences in intercultural business. The report aims to provide advice a businessperson wanting to navigate the cross-cultural landscape of business between Australia and Italy.
Differences between Australia culture and Italian culture
According to Kirkman, Lowe and Gobson (2006), the Hofstede frameworks measure the disparities of cultures by examining attitudes, workplace behaviors, and other organizational outcomes. Due to the homogeneity of societies in terms of economic activities and their cultural orientation- the two go hand in hand- the cultural orientation of a people determines the most effective strategies a business can use to create strategies to exploit their market.
By this assessment, the major disparities between the cultures of Australia and Italy lay in the aspects of their indulgence and their long-term orientation. Observations by Baldassar, Pyke and Ben-Moshe (2012), Italy tends to have a short-term focus, which implies that the society will tend to have an absolute standard on their modes of thinking. Thus, Italian culture tends to follow the tradition and pursuit fast results. According to Borgo (2007) the Italians are very serious about punctuality, but they are given to have different rules on the subject of time-keeping while dealing with foreigners. While they may not always adhere to punctuality, Italians expect their business counterparts to do so without fail. The main focus of business in Italy is to increase short-term profits, and this regulates many of their business conduct.
Furthermore, it takes a longer time to develop personal relationships in Italy, yet these are the driving force behind successful negotiations in business (Borgo, 2007). The long time taken in developing relationships is in line with their short-term orientation which demands that people be rewarded according to their abilities, the greatest reward of which is the acceptance to a business community. With the long established history of Roman political and military domination, authority, power, and age are the most widely respected qualities in business and social dealings, with older people being accorded preferential treatment (Katz, 2008). However, teamwork projects are worked on in a more informal and less structured manner.
Accordingly, while making the acquaintance of a colleague, the accepted norm is to use the last name together with their professional titles and doing so until invited to address them in a different manner (Katz, 2008). Short term oriented people such as the Italians place managers and employees in different camps, which explains the basis for this social norm, which is also what informs their need for self-determination and personal achievement to earn the respect of peers and superiors.
Australia, on the other hand, is a more relaxed society, lacking the hierarchical organization of Italy and favoring a more inclusive system of business operation featuring an outdoorsy culture and work life balance (Katz, 2008b). With its orientation being more long term, Duarte (2008), states that the two main principles of egalitarianism and fairness taught in school, churches, and the family unit enable them to make and maintain lasting personal networks. The international reputation of Australian people as easygoing, informal, and friendly people is shared by the people who are described as non-conformists, with a disregard for authority, and showing a self-deprecating, sarcastic sense of humor (Duarte, 2008). These values are reflected in their business practices, with the first name basis of addressing business associates being a common practice. However, it is advisable for foreigners doing business with Australians to be cautious of stereotyping, as the people are more individualistic and frown on being bunched together with everyone else (Culturewise, n.d.). these are indications of long-term oriented people who homogenise workplace aspirations between managers and their workers for efficient delivery.
Main challengesThe two cultures of Italy and Australia are quite distinct, falling into different low and high power distance dimensions. The tendency of Australians to be more informal and friendly according to Mathew, Hicks and Bahr (2013) reduces the hierarchy in an organization and makes superiors and subordinates occupy the same level of respect. This system contrasts sharply with that of Italy which is known for its adherence to a strict guideline of hierarchical authority based on both age and power (Masino, 2008). Theirs is a dimension that accords people different status in the organisation, with superiors and subordinates being distinct sorts of people. This is therefore the greatest challenge of carrying out bilateral business negotiations between the two countries, as their cultural precedents for interpersonal relationships, especially between managers and other workers, are rather differentiated (Boccabella, 2002). While it is perfectly normal to address a stranger by their first name in Australia, (Syed & Kramar, 2010), doing the same would be frowned upon in Italy, where one ought not to use the informal title of a professional without being requested to do so (Ruggieri et al., 2014).
In terms of leadership qualities, the two countries also occupy different extremities of the high and low power distance dimension. While Australians view leaders as resourceful democrats who consult widely and create a team-oriented method of making decisions and maintain a close relationship with employees, in Italy leaders are viewed as autocrats occupying elevated positions of power. Their superiority to the subordinates is ensured by their enjoying privileged statuses. Italian cuisine, art, and fashion as a marker of fashion. The Australian practise of almost extreme informality may be misplaced in Italy, which means that an Australian firm extending to Italy will need to shift its marketing strategies completely and possibly seek local guidance to remain relevant and connect with the local market. The same goes for Italian businesses, although their acceptance to Australian culture is well recorded (Rubino, 2002); (Ruggieri et al., 2014); (Katz, 2008); (Borgo, 2007). In the high-low cultural contextual differences, formalities and fairness are clearly different in the two countries, with both taking the most extreme positions on either sides of the scale (Kirkman et al., 2006). While outwardly the differences may not appear to be critical enough to be a matter of concern the matter of equality in corporate philosophies is a polarizing subject in Australia (Syed, 2010). Without a similar precedent back in Italy, cultural conflict is a real corporate concern for Italian businesses as stated by Graen (2006) in accordance to the third culture bonding strategy of cross-cultural leadership.
For Italian firms, the deeply entrenched concept of keeping businesses under the control of the family unit often creates hindrances to expansion, making it easy for growth opportunities to be missed (Masino, 2008). Therefore, businesses from either side of the spectrum in Italo-Australian trade are faced with a rather steep learning curve that requires them to adapt to circumstances that are markedly different from their normal operations (Anna, 2017). The Italian faces challenges in adapting to a society that fosters informality and embraces strangers, while Australians will most likely be stumped by a rather aloof manner of the Italians in interacting with strangers and the formalities.
RecommendationsAccording to Rubino (2002), Italian is the widest studied language in Australia after English. This is informed by the long history of Italian immigration into the country during the 1950s, which established Italian culture as one of the biggest subculture in the multi-cultural Australia. Italo-Australians maintain contact with relatives back in Italy and also follow closely events in politics, society, and cultures such as fashion. While Australia plays host to numerous Italian immigrants, the business community has not exploited the Italo-Australian populace to foster deeper ties (Baldassar et al., 2012). Research conducted by Baldassar et al. in 2012 found that while 96% of Italo-Australian respondents maintained contacts in Italy, those who were in some form of business-related communication with people back in Italy were much lower at 14.1%.
With the high number of Italian immigrants in the country, Australia enjoys a greater advantage in improving the Italo-Australian business relations. Australian business people should foster relationships between the two countries and take advantage of the high contact rate of immigrants with their Italian contacts (96%). The 14.1% business-related communication should be bolstered to reach more than 48%, with Australian citizens and Italian immigrants alike being brought in on the trade. Rather than focusing on Italian art and fashion industry as the main form of business relation, Australian business people should also trade in their local arts and material culture to foster an equal cultural exchange.
According to Rubino (2002), the development of an Italo-Australian culture, especially among the youths of the second and third generation of Italian immigrants has created a lucrative industry of youth clubs in Sydney and Melbourne, hang-out cafes, restaurants, and streets, and icons in music, film, and literature. The pride of Italian descent has cultivated a new breed of Italo-Australians who profess to their Italian roots and actively seek to identify with others of their ancestry. This further underpins the great differences between Italians and Australians as stated before, with Italians being given to bunching together in groups of fiercely loyal kin while Australians welcome diversity.
To avoid the formation of mini-Italy in Australia and the apparent self-imposed segregation of Italo-Australians based on descent, the private sector should actively cultivate sentiments that seek to establish Italo-Australian as part of the Australian culture by inculcating them into the local entertainment industry. Business people from Australia should learn to communicate in the Italian dialect and also acquire their negotiation practices of formality and hierarchical dealings, as this will resonate more with the Italians. A conscious effort should be made to avoid the informality and overt friendliness that is the norm of Australian business conduct while dealing with Italy-based businesses. Negotiators should indulge the short-term orientation of Italians by discussing the short term goals of a business relationship rather than strategic long-term benefits.
ConclusionItaly and Australia are two countries that play a critical role in the politics of the European continent and the world. Their divergent hi...
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