Introduction
The ability to leverage and manage cultural diversity plays a crucial role for any business organisation to enhance its ongoing performance and foster overall business growth effectively. It is identified that higher productivity, business growth, successful collaboration, profitability margin, and others are highly dependent upon the way an organisation adapts or manages cultural differences. Thus, the following report aims to provide a brief evaluation about the effectiveness of managing cross-cultural differences by considering UK based company Maple Hotel. The report will illustrate an in-depth evaluation of the way the selected organisation can manage people and cultural differences while they expand its operation across Spain’s market. The challenges that Maple Hotel can experience during their market expansion in the Spain market will be underlined in this report. A suitable scanning framework will be utilised along with appropriate cultural model concepts to illustrate different factors that could directly affect people management and the labour market in the UK as well as in Spain. In addition to this, strategies for people management while expanding in the Spain market will be demonstrated by utilising EPRG (“Ethnocentric, Polycentric, Regiocentric, and Geocentric”) along with Atkinson’s Flexible firm model briefly. Adding to this, recommendations will also be provided for the selected company that could serve as beneficial for Maple Hotel during the business expansion process.
Findings and Analysis
Part A
Scanning Framework
Before expanding business in the host country or target market, it becomes essential for business to determine the present as well as future probable scenarios of the external environment. In this context, PESTLE analysis can serve as beneficial for Maple Hotel to determine the external factors such as political, economic culture and others that could affect their future business performance after expanding in the Spanish market. In this case, profound focus can be kept on exploring relational legal constraints, technological and social aspects that signify the attributes of the external business environment of the hotel industry. It can benefit the company with accurate shaping of their offerings as per the market trends.
Political
Spain is found to follow secular parliamentary and constitutional monarchy democracy in relation to its administration and government system. This system allows foreign businesses to expand and establish its operation across the Spanish market. The mentioned country is found to be associated with trade barriers that could positively affect businesses like Maple Hotel to expand. The key reason behind this statement is that the elimination of bureaucratic and regulation procedures in Spain create opportunities for the companies that are willing to expand their operations across the region. In this context of people management, elimination of bureaucracy can serve as beneficial to strengthen the workforce system and enhance the chance of retaining employees for a longer time. It is identified that the country is highlighting diverse, industrialised and unstable political systems that can create complexities for UK businesses like Maple Hotel to expand its market and foster their business growth. It is also identified that the government of the mentioned country opens up a wide range of opportunities for foreign business through which people management for new business can also be made efficiently (Trade, 2020). In contrast, the UK political system is considered a “parliamentary democracy” due to the structure of the government that varies from country to country (EACEA, 2020).
On the other hand, the employee wages system is found to be different in the UK as well as in Spain. The key reason behind this statement is that the “Self-employed work” culture is found to be persistent in Spain as compared to the UK, which minimises the poverty rate by 21.6% in 2017(Chow and Lin, 2018). People management in the self-employed work culture could be made more accurately across the Spanish market. In contrast, the country UK is found to have a higher poverty rate as compared to Spain. The key reason behind this statement is that the country had a poverty rate of 30.7% during the financial year 2019, which highlights the workforce difference between the two of the mentioned countries (Clark, 2021). In Spain, hourly wages for employees is found to be 16 Euros, which is found to be relatively high wage values as compared to the country UK, whereas, the value is found to be 9.86 Euro respectively. Thus, political instability, employee wages, and others could directly affect people management areas such as conflict resolution, interpersonal conflict, organisational culture, and others in Spain for the company Maple Hotel after expanding its business in the future (Expatica, 2021).
Economy and labour market
The state of the economy and labour market has the potential to impact directly upon managing people for the company across host countries. Statistics show that Spain is considered as one of the renowned and well-established European countries. On the other hand, the employment rate of a country also plays a key role in maintaining business growth and profitability in the market significantly. In Spain, the employment rate is found to be at 48.47% followed by the UK with 75.2% in 2021 respectively (Trading Economics, 2021) (Refer to appendix 2). The appendix 2 section has been highlighting the relational condition of the unemployment rate in the Spanish market. A profound vision can also be outlined with this data regarding the average unemployment rate over the years considering the previous years. In addition to this, it is identified that the hospitality sector is found to account for about 8.4% of the total employment rate in the UK (Szmigiera, 2021). It is identified that the unemployment rate in Spain has been declining from 16.13% to 15.98% between the years 2020 to 2021. However, in the first quarters of 2020, the rate of jobless remains 14.41% and the onset of pandemic situation is found to be one of the key reasons behind this decline. The rate of labour participation is also found to have declined by 57.69% from a value of 58.19% respectively (Trading Economics, 2021).
Considering this statistical evidence, it can be highlighted that significant growth of the mentioned industry in Spain can serve as beneficial for Maple Hotel to strengthen its expertise and employee base in an effective and systematic manner. The reason behind this statement is that Spain is a culturally and architecturally rich nation that has always attracted tourists around the globe. This workplace culture enhances the chance for new businesses like Maple Hotel to manage people in a more efficient and accurate manner, which in turn brings market sustainability in the future (Araújo-Vila et al. 2020). Stable people management practice can serve as effective for the selected company to foster its business network by building strong expertise in the future. Increasing unemployment across Spain might force the industry to consider enhanced recruitment that might increase the industrial workforce in future. It can eventually benefit the hotel with adequate human resource wanting job.
Social
In terms of critically defining the social aspects of both Spain and the UK, it can be stated that both the market has focused on the consideration of vocational training channels for enhancing hospitality skills. In this regard, hospitality and tourism degrees are also provided by the UK in order to fulfil the required skills and qualifications. Moreover, the gender equality index defines the UK to obtain the sixth rank with 72.7 out of 100 points (Europa, 2021). This reflects a greater preference for the UK market towards the consideration of gender equality. Persistence of gender equality can serve as beneficial for the Maple Hotel to establish workplace diversity that enhances their chance to maximise their business competitiveness and growth across the Spanish market efficiently in the future.
On the other hand, Spain is notified to undertake the 8th spot in the gender equality index with 72 out of 100 points. From this viewpoint, Spain can be suspected to have comparatively low gender equality as compared with the UK market. The Maple Hotel in this concern should focus on outlining strict policies and regulations regarding the maintenance of gender equality in the Spain market (EIGE, 2020).
The UK market is usually noticed to have decent attention upon the attitudes to education. During 2017, 45.7% of the residents attain some form of post-secondary education in the UK. Apparently, the attitudes to education in the Spain market have been attractive as Spain is considered to have the highest levels of upper secondary attainment. However, the Maple Hotel might benefit from the attainment of highly skilled and educated employees in terms of expanding their operations in the Spain market as compared with the UK market.
The aforementioned aspects define greater acceptability of the Spain market from the understanding of increasing education level and average gender equality.
Technology
The technological revolution has entirely changed the way people at the workplace perform their respective activities. In the context of the hospitality industry, technological advancement has drastically changed its overall organisational structure and business operations. Both of the mentioned countries are found to maximise their investment towards adapting digital or emerging technology to improvise existing workforce systems. In relation to the area of people management, it is identified that employees are more attracted towards working in a “tech-savvy workplace” (Gaidhani et al. 2019). On the other hand, businesses entities also utilise and take advantage of different technologies such as robotics, artificial intelligence, sensors and others in order to manage their workforce system effectively and remotely. Different technologies like interview chatbots, automation, applicant tracking system, recruitment marketing software and others are also used for recruitment.
In the context of the UK, it is identified that the country has witnessed a 7% growth rate in technological investment since 2016. This is evident that venture capital investment in technology is found to reach $15bn in 2020, which is found to be an increased value of $200m from 2019 respectively (Pratty, 2021). This highlights that businesses organisations across the country are adopting technological advantages in their ongoing businesses operations.
In contrast, Spain has also enhanced its investment in technological development. A news report published in 2020 highlights that Pedro Sanchez, the Prime Minister of Spain declared the country is going to invest about €600 million in emerging technologies along with Artificial Intelligence (AI). In addition to this, the maximisation of investment in technology would play a significant role in terms of change in the overall business environment in Spain in the upcoming years (McMurtry, 2020).
In this context, it can be highlighted that technological advancement can serve as beneficial for Maple Hotel in terms of managing its people in a more improvised and convenient manner across the Spanish market in the future. In addition to this, technological devices such as Dayforce HCM, Kissflow HR Cloud, Calamari, along with different online platforms can serve as beneficial to manage its people remotely.
Legal
Distinctive legislative aspects can be notified in the UK market regarding the hotel and hospitality industries. For example, Brexit uncertainties are found to impact upon the existing labour market. This negatively impacted Maple Hotel while they tried to expand business in the Spanish market. On the other hand, in order to migranting local workers to the Spanish market, it would become essential for workers to undertake the VISA procedure so that they obtain the authorization to work in the Spanish market after expanding business.
The topmost concern in this aspect enlightens the Business Names Act 1985, which discloses the responsible person behind a hospitality organisational operation. Moreover, the Trade Descriptions Act 1968 is also followed in the UK concerning business-marketing activities along with people management (Asset Sure, 2021). This UK law enables the fair and accurate description of the hotel and hospitality facilities for the potential consumers in the UK. The booking process in the hotel and hospitality sector across the UK is dependent upon both the Data Protection Act 1998 and Credit Card Order 1990. It reflects the prospects of securing valuable credit card information of the potential consumers along with fare monetary transactions during reservation. This law can ensure the guest’s privacy in UK hotels considering the aspects of people management. Along with this, the Health and Safety Act Work 1974, the Working Time Regulations 1998, the Safety Signs and Signals Regulations Act 1996, the Employers Liability Act 1969, the Licensing Act 1964 and others are followed across the UK hospitality sector (Asset Sure, 2021).
With regards to the area of people management, the Spain hospitality market is notified to have Hotel Management agreements (HMA) covering valuable legal constraints. The employment right in Spain’s hotel industry is found to be associated with the criteria mentioned in HMA. In addition to this Equal Pay Act is found to be followed across the Spanish hotel industry that helps to minimise the challenges associated with the gender pay gap along with empowering the aspects of people management. Apart from that, the labour law implications can also be respected across the Spanish Hospitality industry, which should be considered by the Maple Hotel in terms of its spending and its operations in the Spanish market. On the other hand, Spanish Labour Law is found to provide freedom for employees as well as employers while making employment contracts. It is identified that effective and flexible employment legislation allows the country to generate effective workplace culture and environment.
The mentioned aspects clearly define fair hospitality activities in the Spanish market due to which the Maple Hotel might be able to operate under complete legal surveillance.
Culture
Hofstede cultural model
Power distance index
Spain is considered to have 57 in the power distance index as compared with 35 in the UK market culture. From this viewpoint, both countries can be observed to prefer societal equality considering the implications of people management with hierarchical distribution of power. Moreover, Spain has scored 51 in individualism where the UK scored 89 (Hofstede-insights, 2021).
Individualism
This attribute defines a greater preference for individualistic culture in Spain due to which the Maple Hotel might feel comfortable in the Spanish market considering the attributes of effectively managing people. Considering these aspects, it can also be mentioned that by considering the performance based rewards such as employee of the month, team of the month and others could be effective for the Maple Hotel to maximise employee engagement after expansion.
Uncertainty Avoidance
In this concern, the Maple Hotel might be extensively benefited in terms of perfectly matching their cultural instincts in the Spanish market from the perspective of people management. The prime cultural difference between Spain and UK reflects on the uncertainty avoidance index where Spain has scored 86 and UK has achieved only 35 (Refer to appendix 3). This attribute defines a comparatively safe and secure cultural tendency from people with the most conservative decisions (Beugelsdijk and Welzel, 2018). In this context, the Maple Hotel might feel benefited in terms of being engaged in risky behaviour by reducing ambiguities in the Spanish hospitality sector as compared with the UK market.
Masculinity
With the score of 42 and 66 in masculinity for Spain and UK respectively, it can be noted that the UK market has enlarged competition across the hospitality sector, whereas Spain depends on avoiding polarization along with considering consensus in terms of managing people (Hofstede-insights, 2021).
Trompenaars cultural model
Individualism versus communitarianism
Unlike Hofstede cultural mode, similar consequences can be reflected through trompenaars dimension where the aspects of individualism can be preferred against communitarians.
Universalism versus particularism
Universalism can be seen across the Spanish market concerning the proactive engagement of the legal aspects with the hospitality people management.
Neutral versus emotional
Spain has scored 48 in a long-term orientation where the UK has scored only 51. This defines the consideration of modesty and education as positive values in both the UK and Spain market from the perspective of long-term orientation. This factor can extensively motivate the Maple Hotel to consider a pragmatic and modest approach in their people management aspects (Huang and Crotts, 2019).
Specific versus diffuse.
A diffusive culture is preferred across Spain where the UK belongs to a specific culture. Similarly, a neutral culture is followed in the UK and Spain follows an emotional culture.
Part B
The strategic orientation in this case highlights the best suitable approach to be taken by the hotel for their successful expansion in Spain. The strategic models and theories like EPRG framework, resource based view are undertaken to explore successive strategic interventions and people management respectively. With regards to the findings of Part A, these two frameworks have been evaluated below.
People Management strategies
Effective strategies for managing people play a significant role in strengthening overall organisational productivity along with Business prosperity. Human Resource Management (HRM) is found to ensure the right quality and quantity of personality persisted within the workplace (Amrutha and Geetha, 2020). This is evident that having an effective HRM strategy establishes opportunities for an organisation to generate a motivating workplace that directly enhances overall organisational profitability. Adding to this, the EPRG framework can also be beneficial for ensuring effective people management by considering the proportion of market characteristics. According to Ahammad et al. (2020), every business professional, executives or managers try to implement suitable and effective people management strategies to accomplish proposed business goals. In the context of Maple Hotel, expanding across the selected market requires adapting a suitable strategic approach to manage its people across cross-culture.
In this regard, the concept of Resource Based view approach can be interlinked to analyse its significance in managing people (Refer to appendix 4). It is identified that while managers or leaders are required to manage their employees across cross-culture, a strategic approach is being considered to encode and motivate them. This in turn overall organisational productivity and operational activities can be enhanced. Resource-based View (RBV) is found to be an effective managerial framework that is being utilised to sustain competitive advantages by managing people effectively (Collins, 2021). This approach helps an organisation to visualize its internal strength and resources according to which they could implement strategy to manage people. It is seen that utilisation of the mentioned approach has the potential to illustrate the key resources through which an organisation can foster their business growth in the target market. Organisation like Maple Hotel that is willing to expand business operation can utilise the mentioned approach in order to strengthen its internal resources accurately (Escrig-Tena et al. 2018).
It is identified that every business organisation that is willing to expand in the host market are required to manage their people in such a way so that they could operate the required business operations effectively across the host market. Thus, utilisation of the mentioned approach can serve as beneficial to manage their internal employees strategically and can establish long-term planning that could foster their business growth in the host market. This approach also serves as beneficial in terms of generating business competitiveness across the target market by enhancing ongoing operational activities (Guest, 2017).
While expanding business in Spain, Maple Hotel can undertake the concept of RBV in order to manage its expertise in a more effective and systematic manner. Higher productivity can also be established through the utilisation of RBV approach and thus this approach would be appropriate for Maple Hotel to manage people during their business expansion process (Schweyer, 2018). Considering the evidence from PESTLE and cultural factors, RBV approach will future help the mentioned company to manage people while they expand in the target host market.
Another strategy that could be considered by the aforementioned company to manage its people is the “best-fit approach”. The utilisation of this approach can play a significant role in terms of developing HRM policies and procedures across the business strategy. According to Boon et al. (2019), this approach is found to be associated with future planning activities including policies, performance objectives, business goals and others that can serve as beneficial towards obtaining long-run business success. Most of the time, it is identified that managers or leaders of an organisation failed to implement a suitable strategic approach to manage its people. This in turn, creates job dissatisfaction among employees and negatively impacts on organisational productivity and growth. This aspect can be considered as one of the key reasons behind adopting a suitable strategic approach in order to motivate and encourage employers towards their work and foster overall business growth (Knies et al. 2020).
In the context of Maple Hotel, it can be highlighted that while expanding business in Spain, they need to change or improve their existing employee structure or they might need to recruit new employees. In this regard, utilisation of the best-fit approach can serve as beneficial in terms of identifying employees’ needs instead of only focusing on organisational profitability within the country (Kianto et al. 2017). Therefore, it can be articulated that with the help of a best-fit approach Maple Hotel is able to expand and stabilise its workforce across the host market in the future.
Strategic orientation
In order to critically define the possible strategic orientation from the perspective of the Maple Hotel in the Spain market, the EPRG framework has been considered.
EPRG framework
In accordance with this framework, different variables can be suspected which includes ethnocentric, polycentric, regiocentric and geocentric aspects. The ethnocentric aspect reflects the proportion of the same market characteristics where similar marketing aspects might be applicable. The polycentric approach defines the consideration of most benefits by comparing different markets. In this aspect, different marketing strategies are adopted based on existing cultural differences by the organisations for each market segment. The regiocentric approach reflects the implementation of internationalisation strategies from an organisational perspective for specific regions (Silvestrelli, 2018). Moreover, the geocentric approach depends on the utilisation of one type of strategy for all countries regardless of the cultural differences and others. This approach can also minimise the operational cost due to not being involved in many adoptions with this approach. As per the present context, the polycentric approach is likely to be undertaken by the Maple Hotel (Refer to appendix 5). Justification behind considering polycentric approach as best one for Maple Hotel is underlined in the adjoining paragraph.
The Maple Hotel has been seen to consider the Spain market for expansion of their business activities. In this regard, the implementation of suitable internationalisation strategies might be beneficial for them in terms of undertaking a suitable approach for their business operations in Spain. Moreover, the Maple Hotel is currently operating within the UK market, which is partially similar to the Spain market circumstances. Apart from that, the polycentric approach is recognised as the opposite of the ethnocentric approach. In this context, an organisation usually pays attention to utilise a polycentric approach by considering different markets abroad with an intention to identify the best suitable host countries offering potential benefits.
Comparing both the Spain and UK hospitality industry, a sense of dynamic growth can be suspected. The UK hospitality sector had obtained a 78.8% occupancy rate during 2018. The revenue per available room in the UK was standing at GBP 67.5 (Mordor Intelligence, 2021). On the other hand, the Spain hospitality industry has been predicting distinctive growth with efficient financial standing over the upcoming future. The Spanish market is expected to reach up to USD 24.1 billion by the year 2025 (Globe News Wire, 2019). Along with this, an increasing proportion of leisure trips and business trips can also be noticed in the Spanish hospitality industry. These aspects define greater accountability of the Spanish hospitality industry in terms of generating extensive financial feasibility and workforce generation for the industrial players. This attribute can largely be considered by the Maple Hotel based on which they might be able to empower their financial standings while expanding their services in the Spanish hospitality sector. It defines increasing chances of strengthening the organisational market share and financial profitability for the Maple Hotel in case of expanding into the Spanish market.
The aforementioned statistics define greater accountability of the Spanish hospitality sector from the perspective of providing extensive financial standings for the industrial players. Evaluating the circumstances between the UK and Spanish market can be noted that the Spanish market has also included distinctive opportunities of obtaining growth in future for the Maple Hotel due to which the polycentric approach could be considered for the hotel. In this case, the locally created marketing strategies should be implemented in accordance with the current market preferences and demands.
People management approach
Resourcing
While expanding business in the host market, analysing jobs and responsibilities plays a crucial role for any business organisation. This is because, without having understanding or knowledge about the responsibilities, against a specific field of work business extension may not be executed properly. For example, while expanding in Spain, Maple Hotel is found to have cultural differences in its workplace. In this regard, the selection of the right people in the host market from the existing group of employees will serve as beneficial for the company. In addition to this, while expanding business in cross-cultural markets, communication barriers often hinder the chance of obtaining business growth and success in the target market (Liao et al. 2018). For instance, high level employees will be selected from some renowned hospitality universities in the Spanish market. On the other hand, job consultancies will also be considered to recruit low-level employees, which in turn maximise the chance to operate business smoothly in the Spanish market.
Flexibility in this regard is important for an organisation so that they could adapt to any kind of cultural changes effectively and foster business growth. Management of Maple Hotel requires focusing on developing the existing skills of employees based on their respective field. This could be performed through conducting training and self-development programs. As mentioned by Knies and Leisink (2018), training to the employees can serve as effective in terms of enhancing workforce strength as well as overall business performance. On the other hand, analysing roles and jobs across the host market also enhances the opportunities for the mentioned company to identify the way they could manage people in cross-cultural regions. It can be mentioned that consideration of people management approach is found to be critical that directly affects the organisational present as well as future prosperity and profit margin.
In order to define the best suitable people management approach for the Maple Hotel in the Spanish market, Atkinson’s flexible firm model can be undertaken.
Atkinson’s flexible firm model
This model can categorise an organisational employee into a couple of groups including the core and the peripheral group. The core group includes full-time primary workers where the peripheral group consists of secondary workers having less skill and experience (Beukema, 2019). In this aspect, the Maple Hotel will have to look for arranging their employees’ infrastructure in the Spanish market with the core group consisting of the full-time primary workers showing integration to the organisational functionality. High-level skills from the core group employees along with knowledge and experience might add a greater value to the organisational operations and people management in the Spanish market (Refer to appendix 6).
On the other hand, this model has also identified three different forms of flexibility within an organisation including financial, numerical and functional flexibility (Blyton and Morris, 2017). However, the concept of functional flexibility is likely to be considered by the Maple Hotel as an integral part of their people management approach in the Spanish market. The functional flexibility can allow the Maple Hotel management to efficiently relocate co-workers between multiple tasks and workforces. In this regard, the provision of training will have to be considered by the Maple Hotel along with the conceptualisation of flexible working hours and re-evaluation of the payment structure.
Conclusion
The overall report has provided extensive insights regarding people management across cultures along with defining valuable strategic options concerning a UK oriented organisation the Maple Hotel. The scanning evaluation between the UK and Spanish market defines increasing accountability of the Spanish hospitality sector about applying the economic and social aspects. Increasing attitudes to education and upcoming future technological advancement have been increasing the reliability of the Spanish hospitality sector for the market expansion of the Maple Hotel. Moreover, the best-fit approach defines the consideration of obtaining employee motivation in terms of successfully expanding business operations in the Spanish market from the perspective of the Maple Hotel. The Polycentric approach is recommended for the Maple Hotel in order to implement suitable internationalisation strategies under the lights of licensing approach. Lastly, the Maple Hotel will also have to look for applying the concept of functional flexibility with their core group of employees in the Spanish hospitality sector as an efficient approach for people management.
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