BU 240 International Business – Spring 2020

To: Prof. Marshall

From: Nikki Kiehl

Date: 02/01/2020

Re: Executive Brief #2: The Importance of Culture and the Political Economy for the American

Company, Apple Inc., Entering Australia

Introduction:

This Executive Brief (EB) will provide American associates of Apple Inc detailed information

on Australia’s political economy and culture. It is important that the associates have a thorough

understanding during this transition. Although Australia is like America, there are still

differences for all associates to be aware of and respect.

I. Political Economy is the makeup of systems that businesses should understand prior to

becoming international. These systems consist of political, economic, and legal that are

different amongst all nations. Understanding these systems will help international

business leaders manage and operate based on the differences they face. Business leaders

must know how to recognize and handle implications that may occur because no nation is

the same. The knowledge of the following systems is the forefront for a nation to pursue

international business successfully.

a. Political System: Although there are three different systems that makeup a nations

political economy, without the political system, there would be no economic or

legal system (Hill & Hult, 2020, pg. 38). This system of government is

categorized under collectivism or individualism and democracy or totalitarian.

Collectivism is the type of political system in a nation that categorizes the

needs of citizens to have a collective goal rather than an individual goal, meaning

if it works for some, it should work for all (Hill & Hult, 2020, pg. 39). With this

notion, these types of systems are consisted of socialism, public ownership is for

the common good, and communism, the idea that socialism is through total

dictatorship (Hill & Hult, 2020, pg. 39). However, this system has proven to fail

the world economy, which led to more privatization, the move from government

owned business to private owned (Hill & Hult, 2020, pg. 39). Whereas

individualism stresses that individuals should push for their own interest and

needs, making their own decisions without government interference. Allowing

individuals to have their own control will open the society to shift towards change

for the better.

The other portion of a political system is made up of whether a nation

represents a democracy or totalitarianism government. Democracy is the idea that

the government is managed through the people through elected representatives

(Hill & Hult, 2020, pg. 41). This system is different compared to totalitarianism

that governs individuals’ rights and freedom. Historically, a nations government

is more beneficial to the world economy when it is part of a democracy.

Moreover, these forms of government are what will make international

business succeed in many nations. When the government is more difficult to

handle, there are more hurdles for a business to handle. Australia and America
 have very similar government systems that encourage equality across the country,

however Australia is more of a socialism country. With socialism, Australia has

many forms of government funded welfare programs to help its citizens

(Conaway & Morrison, 2006, pg 21). Although, the United States has quite a few

welfare programs of their own, but not nearly as many as Australia.

b. Economic System: The economic system is made up of three different forms of

economies, market economy, command economy, and mixed economy. These

forms of economic systems represent how governments manage the country’s

economy that feed into the world economy. Market economy essentially consist

of supply and demand determining what goods and services are offered, whereas

command economy consists of what goods and services the government wants to

offer (Hill & Hult, 2020, pg. 44).

Australia and the United States have similar economic systems, but

Australia is primarily has a free market system, whereas the United States has a

mixed economy. The standard of living between both countries is similar,

resulting in Australia being just below the United States (Australia, 2020).

c. Legal System: The last form of a political economy is the legal system. This

system determines the type of behaviors and laws that are allowed in the country

and how they may be handled (Hill & Hult, 2020, pg. 46). The types of legal

systems stem from common law, civil law, and theocratic laws (Hill & Hult,

2020, pg. 46). Within common law, the laws are based how issues were

historically handled based on best practices. Civil law consists of the courts being

forced to follow the laws without making their own judgement. This form of law
 is more strict than common law. Lastly, theoretic law are the laws that are made

based on religious beliefs (Hill & Hult, 2020, pg. 47). Within these theoretic laws,

religion beliefs outweigh any other forms of laws presented.

With the legal systems at mind, both the United States and Australia

primarily follow common law. While both the countries have their own

constitutions to follow, they both allow for common law practices to be handled

as well. The constitutions govern the legal system and help with making the best

decisions for the country involved.

II. Cultural Differences/Similarities and Dimensions

a. Culture is what makes countries unique from one another. Hill and Hult (2020)

define culture as the system of values and norms that represent the nation

altogether (pg. 90). Although nations have primarily a single culture within that

area, there are typically many different cultures within one nation. Cultures

consist of religion, social structure, language, education, political philosophy, and

economic philosophy (Hill & Hult, 2020, pg. 90).

For businesses to become international, it is important for the business to

understand the culture. Without understanding the culture of another nation, it

can be dangerous for a business to go international when it is uninformed (Hill &

Hult, 2020, pg. 91). When culture is always changing, it is crucial for

international businesses to stay informed for economic progress and globalization.

With the many forms of culture throughout the society, religion, language, and

education tend to be priority.

b. The Culture of the United States

 i. Religion: Christianity is the most followed religion in the United States,

but individuals are free to follow their religion of choice. Across the

country, many other forms of religion are practiced, such as Judaism and

Islam. Essentially, culture is formed around one’s religion due to the

teachings of ethical and moral beliefs.

ii. Language: The United States main language is English, with its second

language to be Spanish. English being the main form of language in the

U.S. helps other countries understand the cultural differences due to

language barriers. However, the spoken language of English is

comparatively different for the unspoken language in the U.S.

iii. Education – Education is offered to Americans through primary schooling

and secondary school, kindergarten through twelfth grade. This form of

education is funded through the government although it is left to the hands

of the state’s government. Once a child has completed the last grade of
 high school, they can pay for additional education through universities or

public colleges.

c. The Culture of Australia

i. Religion: The majority

of Australia practice

Christianity but have a

large percentage of

individuals who do not practice any religion (Australia, 2020). Unlike the

United States, there are other religions practiced but are very small

amounts such as Islam and Hinduism.

ii. Language: Australia’s language is also English, but with different

meanings compared to the United States. The language has been formed

from a mix of British English language and American English language

and will alter back and forth. Because of the language altering back and

forth, there can be confusion for this unique language (Conaway &

Morrison, 2006, pg 21).

iii. Education: Australia education program is funded through the government

that is distributed throughout the states. Schools offer primary education

starting at the age of 5 and offered through at least age of 15. It is not

mandatory to continue schooling after the age of 15, some states 16

(Australia, 2020). More recently the government has been introducing the

option of learning more languages to help relieve the language barrier with
 the countries Australia is in association with. Additionally, higher

education is offered to all citizens.

III. Cultural Dimensions

Professor Geert Hofstede is known for his extensive studies within a nations workplace and the

influence culture has on it. Throughout the years Hofstede has continuously evaluated

dimensions of natural culture and its impact on how businesses are managed within a specific

country (Country Comparison, 2019). Hofstede Insights helps businesses across the globe to

become successful business leaders as they transition internationally and help leadership

understand the importance of culture. With Hofstede’s six dimensions of national culture,

business leadership will have a

better understanding through

knowledge of the power distance

index, individualism versus

collectivism, masculinity versus

femininity, uncertainty avoidance

index, and normative orientation

(Country Comparison, 2019).

a. Power Distance: The degree to which individuals accept the inequalities of power

within a business. When individuals are convinced by others that they are lesser

of power in the business, they automatically accept that notion. When a country

has a higher grade for power, it shows that business associates are likely to submit

to executive business leaders rather than voice their opinions and concerns. With

a low grade of 38 and 40 for Australia and the United States, shows that
 management is not holding their position through complete power and control

(Country Comparison, 2019). This represents the idea that Australia and the

United States are more inclined to become innovators. As successful innovators,

Apples core values will be reached.

b. Individualism vs Collectivism: The degree to which individuals are expected to

be independent or part of a group. While it is expected to be more independent

within the organization, it is also expected as a whole, individuals focus on

themselves and immediate families (Country Comparison, 2019). Organizations

have leadership in the place of guidance and not necessarily for complete control

of all job duties. Managers require associates to be self-driven and show initiative

to be successful at their job. Australia and the United States have a very high

score of 90 and 91 that highlights their ability to be independent in the workplace

(Country Comparison, 2019). Particularly, businessmen in the United States do

not hesitate to ask questions and utilize the information they have received.

However, this form of individualism within both companies is significant to

Apples idea of inclusion and diversity values.

c. Masculinity vs Femininity: Highlights how individuals express their

accomplishes throughout life by wanting to do the best and be the best. For

Australia and the United States to score 61 and 62 for masculinity in the

workplace, shows how individuals working in these environments like a good

competition. In the workplace, individuals take pride in what they do and enjoy

expressing their accomplishments. Apple’s culture is surrounded by stories of

achievement however, it is wise to stay humble.

d. Uncertainty Avoidance: The degree of how an individual can handle the

uncertainties of life outcomes. Without knowing exactly where life will take an

individual will lead to worrisome thoughts. In these situations, individuals can

create anxiety for themselves. As Australia scored a little higher than the United

States, with 51 and the United States scored 46, does not show significant

differences. These anxieties are very common within the workplace amongst

those who have deadlines and results (Conaway & Morrison, 2006, pg 23).

Although some may find these results questionable, the results still acknowledge

that it is normal to have concerns and anxieties over an individual’s job.

e. Long Term vs Short Term Normative Orientation: This explains the degree to

which countries are willing to recognize their shortcomings and understand

enough to make changes. There are times that history should not repeat itself and

should be addressed accordingly. However, it is important for countries to learn

from their own native history and make changes. It is difficult at times for

countries to initiate change right away because of the pride behind what historical

changes have been made. Although Apple is an American company, the company

still encourages change for ethical reasons, therefore the United States and

Australia are moving in the right direction for change.

Conclusion
In conclusion, Australia and the United states share many similarities when discussing

their culture and business dynamics. Because of their similarities, Apple’s transition to Australia

will not be as difficult as it may be for entering other countries. With the explanation of the

different dimensions presented by Hofstede, help determine that Australia and the United States

tend to manage businesses with the same mindsets.

 References
Australia. (2020). In Encyclopaedia Britannica online. Retrieved from

https://www.britannica.com/place/Australia

Conaway, W. A. & Morrison, T. (2006). Kiss, bow, or shake hands (2nd ed.). Avon, MA: Adams

Media

Country Comparison. (2019). Retrieved from https://www.hofstede-insights.com/country-

comparison/australia,the-usa/

Hill, C. W. L., & Hult, G.T.M. (2020). Global business today (11th ed.). New York, NY:

McGraw-Hill Education