Abstract – Indian Register of Shipping (IRS) (Fig. 1) is an internationally recognized independent ship classification society, founded in India in 1975. It is an associate member of the International Association of Classification Societies (IACS). IRS is a non-profit making organization. It has a Committee of Management with representatives from the Ministry and from each industry segment that uses its services. Today IRS provides professionally competent, completely independent and highly efficient third party technical inspection and certification services for all types of ships, marine craft and structures. IRS has 15 offices located all over India. It has overseas offices at China, Sri Lanka, Dubai, Singapore. Recently, in April 2009 it has opened an international office in Greece. In this report, the pros and cons of opening the office in Greece is analyzed from international management point of view by collecting data by interviewing a few senior officers of IRS (full interview is given in Appendix). Strategy behind opening office in Greece, strength and weakness of IRS, possible risk, communication and cultural aspects are analyzed chapter wise by using Porter’s Diamond model, Porter’s five force analysis and Hofstede’s Cultural Value Dimensions. At the end, conclusions are drawn in analyzing all aspects.
Boost the utilization of your HCL environment by reevaluating use cases and f...
IRS Expands to Greece
1. Indian Register of Shipping
Going Global to Greece
By
Asokendu Samanta
(SMSID 104118, SID RB09035)
[Course: International Management; Faculty: Prof. Manoj Thomas]
Post Graduate Certificate in Business Management (PGCBM 15)
Centre: Powai, Mumbai
February 28, 2010
2. Indian Register of Shipping: Going Global to Greece 1
Indian Register of Shipping
Going Global to Greece
[Course: International Management, Faculty: Prof. Manoj Thomas]
Asokendu Samanta
SMSID 104118, SID RB09035, PGCBM 15, XLRI, Center- Powai, Mumbai,
Email: asokendu@hotmail.com, February 28, 2010
Abstract – Indian Register of Shipping (IRS) (Fig. 1) is an internationally recognized independent ship
classification society, founded in India in 1975. It is an associate member of the International Association
of Classification Societies (IACS). IRS is a non-profit making organization. It has a Committee of
Management with representatives from the Ministry and from each industry segment that uses its
services. Today IRS provides professionally competent, completely independent and highly efficient third
party technical inspection and certification services for all types of ships, marine craft and structures. IRS
has 15 offices located all over India. It has overseas offices at China, Sri Lanka, Dubai, Singapore.
Recently, in April 2009 it has opened an international office in Greece. In this report, the pros and cons of
opening the office in Greece is analyzed from international management point of view by collecting data
by interviewing a few senior officers of IRS (full interview is given in Appendix). Strategy behind
opening office in Greece, strength and weakness of IRS, possible risk, communication and cultural
aspects are analyzed chapter wise by using Porter’s Diamond model, Porter’s five force analysis and
Hofstede’s Cultural Value Dimensions. At the end, conclusions are drawn in analyzing all aspects.
Key Words: Communication, Ethnocentrism, Expatriates. Expropriation, High-context culture,
Parochialism, Risk, Strategy, SWOT analysis
Fig. 1 Indian Register of Shipping (IRS) Head Office in Mumbai
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
3. Indian Register of Shipping: Going Global to Greece 2
Contents
Abstract 1
Contents 2-3
Chapter 1 Profile of the Company 4-8
1.1 Introduction 4
1.2 Function of IRS 4
1.3 Policies of IRS 7
1.4 Organizational Structure 7
1.5 Culture of IRS 8
Chapter 2 Going Global and Strategy 9-16
2.1 Establishing International Offices 9
2.2 Why, Where, When and How to Enter? 10
2.2.1 Why to enter in the international market? 10
2.2.2 Where to enter in the international market? 11
2.2.3 When to enter in the international market? 11
2.2.4 How to enter in the international market? 11
2.3 Strategy: Porter’s Five Force Analysis 11
2.4 Strategy behind Opening a New Office in Greece 12
2.4.1 Greek Ship Owners 12
2.4.2 Recognition by European Union 13
2.4.3 Expanding the Business in Europe 13
2.4.4 Strategic Coalition with Foreign Society 13
2.4.5 Strategic Location 13
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
4. Indian Register of Shipping: Going Global to Greece 3
2.4.6 Cost Effective and Time Saving 14
2.5 SWOT Analysis of IRS 14
2.6 Strategy: Porter’s Diamond Model 15
Chapter 3 Communication and Culture 17-26
3.1 Introduction 17
3.2 Cultural Value Dimensions 20
3.2.1 Hofstede’s Cultural Value Dimensions 21
3.2.2 Drawbacks of the Hofstede’s Model 24
3.3 Communication and Noise 25
Chapter 4 Global Human Resource Management 27-32
4.1 Introduction 27
4.2 Existing Structure of HR Department at IRS 28
4.3 Ethnocentric Approach and Expatriate Managers in IRS 29
4.3.1 Training to Expatriate Managers in IRS 29
4.3.2 Facility to Expatriate Managers in IRS 30
4.4 Motivating People Across the Boundary 30
4.4.1 Steps Taken by IRS to Motivate Expatriate Managers 32
Chapter 5 Conclusions 33-34
5.1 Summary 33
References 35
Abbreviation 35
Appendix 36-38
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
5. Indian Register of Shipping: Going Global to Greece 4
Chapter
ONE
PROFILE OF THE COMPANY
1.1 Introduction
I ndian Register of Shipping (IRS) is an internationally recognized independent ship
classification society, founded in India in 1975. Within a short span of time (sixteen years), it
has become an associate member of the International Association of Classification Societies
(IACS). IACS is a major international body of classification societies and admission in IACS is
granted only to the best and signifies high standards, excellent reputation and professional competence.
IRS is a company limited by guarantee and not having share capital (Table 1.1). It has its registered office
at Mumbai and other branch offices at major metros / port cities (Bangalore, Bhopal, Chennai, Delhi,
Goa, Hyderabad, Kandla, Kochi, Kolkata, Mumbai, Portblair, Pune, Trichy, Vadodara, Visakhapatnam).
Its foreign offices are located at China, Colombo, Dubai and Singapore. Recently it has opened an office
in Greece.
1.2 Function of IRS
IRS provides professionally competent, completely independent and highly efficient third party technical
inspection and certification services for all types of marine crafts (Fig. 1.1) and structures. These services
have also been expanded to cover a range of offshore and industrial projects. The services are thus
designed to meet the applicable international requirements and thereby help achieve high levels of quality
and reliability, while maintaining project schedules and integrity. Further, they are proven to be cost-
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
6. Indian Register of Shipping: Going Global to Greece 5
effective and meet timelines efficiently. Worldwide, similar types of services are provided by American
Bureau of Shipping (ABS) of United States of America, Llyod’s Register (LR) of United Kingdom, Det
Norske Veritas (DNV) of Norway, Bureau Veritas (BV) of France, Nippon Kaiji Kyokai (NK) of Japan,
Germanischer Lloyd (GL) of Germany and by a few other classification societies (Table 1.2).
Fig. 1.1 Marine craft, classification of these is the main job of Indian Register of Shipping (IRS)
Table 1.1 A few facts of Indian Register of Shipping (IRS) Company
Name of the Company Indian Register of Shipping
Type Public Limited Company
Service Provided Classification of marine crafts
(Third party inspection)
Registered office Mumbai, India
Founded 1975
Total revenue 81.38 crore (Rs.)
Website http://www.irclass.org
To maintain its sea worthiness a ship needs to undergo constant monitoring. There are many international
regulations also. The duty of these classification societies is to check the sea worthiness of the ships from
various aspects (Structural, machinery, environmental etc). Having checked the condition of the ship
physically by a surveyor, the reports are sent to head office. If the reports satisfy the rules laid down by
the classification society, the society subsequently issues the certificates; otherwise society may ask the
ship-owner to take the appropriate action (replace the faulty machinery, change the damaged component
of the ship etc) to get the certificates. These certificates have certain validity (say six month or one year).
Once the date of the certificate is expired, ship owner needs to renew the certificate. So a surveyors need
to check the ship again. These cycles go on during the entire life span of a vessel. Generally life span of a
sea going vessel is 25 years.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
7. Indian Register of Shipping: Going Global to Greece 6
For this purpose, apart from its head office in Mumbai, IRS has a lot of branch offices (called Survey
Station / Outport) situated at various parts of India and abroad. These survey stations are mainly situated
in port area where surveyors have easy access to ships for investigation purpose.
Table 1.2 Ship Classification Societies (IACS members and associate members)
United States of
ABS American Bureau of Shipping
America
BV Bureau Veritas France
CCS China Classification Society China
DNV Det Norske Veritas Norway
GL Germanischer Lloyd Germany
IRS Indian Register of Shipping India
KR Korean Register Korea
LR Lloyd’s Register United Kingdom
NK Nippon Kaiji Kyokai Japan
Registro Italiano Navale
RINA Italy
(The Italian Shipping Register)
Russian Maritime Register of
RS Russian Federation
Shipping
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
8. Indian Register of Shipping: Going Global to Greece 7
1.3 Policies of IRS
Mission
To enable our stakeholders manage their risks and quality Needs better by continually improving the
reliability of Systems, processes and products.
Vision
To be the first choice of all existing & potential customers For classification and certification services and
technical Solutions, globally.
Values
• Integrity
• Innovation & creativity
• Excellence in all pursuits
• Professional development of employees
• Respect for business associates
Business policy
To realise our mission & vision by providing all our services:
• Based on appropriate research and development
• In a cost effective manner
• With ethical and transparent business practices,
• Guided by an effective quality management system
• Through qualified personnel, appropriate tools and work environment
Quality policy:
To pursue service excellence with commitment to:
• Professional integrity
• Meeting the applicable rules & requirements
• An effective quality management system
• Continually improve operational effectiveness by regularly monitoring the realization of the quality
objectives
• Meeting the needs of the customers & other stake holders, as appropriate
1.4 Organizational Structure
IRS has the following organizational structure (Fig. 1.2). Each department has a Head. Further these
departments are subdivided to Groups, which are headed by a group leader.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
9. Indian Register of Shipping: Going Global to Greece 8
Fig. 1.2 Organizational structure of Indian Register of Shipping (IRS)
1.5 Culture of IRS
IRS being a public limited company, and mainly operating in India with majority of the staffs being
Indian, culture of IRS is also Indian. More than 90% staff is Hindu in religion. A few Christian and
Muslims are also employed. In the foreign offices of IRS a few foreign nationals are also employed (i.e.,
in China, Chinese staff, in Greece, Greek staffs are also part of IRS).
Conclusive Remarks
IRS is a public limited company having office in various cities in India and a few offices in
foreign soils (Dubai, Singapore, China, Srilanka). Recently (April, 2009) it has opened an
office in Greece. The culture of IRS is mainly Indian.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
10. Indian Register of Shipping: Going Global to Greece 9
Chapter
TWO
GOING GLOBAL
AND STRATEGY
2.1 Establishing International Offices
S o far IRS had been doing its business based in India only. As such most of the surveys of the
ships are done in India. If it is required to get the survey done in a foreign soil (i.e. sometimes
ship needs some emergency services), its surveyors have to go to that particular places.
However, based on the requirements it started its international offices slowly in various
countries recently as sending surveyors abroad is very costly when it is a continuous affair. As such, IRS
has opened office in Dubai, Colombo, Singapore, China and recently in Greece. Though number of staffs
in those international offices is not huge, in fact in many cases these are only one or two; opening an
office in foreign country requires lot of activities. Some of the activities are mentioned below.
• Analysis (Justification of the requirement)
• Approval from the Members of the Board
• Feasibility study
• Understanding the rules and regulation of the foreign country
• Formulation of strategy
• Human resource activities (Recruiting, transferring, training, motivating etc)
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
11. Indian Register of Shipping: Going Global to Greece 10
2.2 Why, Where, When and How to Enter?
2.2.1 Why to enter in the international market?
Ship classification is a specialized business and needs proper infrastructure and specialized human skills
to carry out the job which can be achieved over a long period. This business also needs Government’s
approval. IRS is in the business for the last 35 years and has certain experience. Utilizing these
advantages, IRS wants to expand its business. There are lots of opportunities in foreign soil too.
Pros: IRS has the opportunity in expanding its business in international level and increase its revenue.
Cons: IRS has to compete with big societies like ABS, LR, DNV who are in the market for more than
centuries.
2.2.2 Where to enter in the international market?
IRS has decided to open its office in Greece (Fig. 2.1). It has already office in foreign soils (Singapore,
Dubai, Colombo, China). Majority of the ship owner in the world is Greek (Fig. 2.1). Opening an office
in Greece will give IRS an advantage to serve these vast amounts of customers easily.
Pros: Majority of ship owners are Greeks. As such Greece is a potential market for ship classification
business.
Cons: Greece is a European country. As such getting permission in various aspects of business is not easy
for an Indian company. Attitude of European customers to get its ships classed by an Indian company will
also be tested.
Fig. 2.1 Location of Piraeus, Greece where IRS has opened its office
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
12. Indian Register of Shipping: Going Global to Greece 11
2.2.3 When to enter in the international market?
Though shipping business is growing every year, ship classification is dominated by a few foreign
societies in international soil. Big names like ABS, DNV, LR, GL are already in operation in Greece for
many years. IRS has opened its office in Greece in April 2009. IRS will neither become first mover, nor
will it become second mover in Greece in the ship classification business. In fact it will become late
mover. However IRS can penetrate in to the Greek market by offering its low cost service.
Pros: Though IRS is late in opening its office in Greece, it can penetrate in to the market by offering low
cost service which many of the Greek ship owners are looking for.
Cons: Big societies (ABS, DNV, LR, BV, GL etc) are already in operation for many years in Greece. As
such IRS will be late mover.
2.2.4 How to enter in the international market?
IRS has decided to go ahead alone in establishing its office in Greece. However, foreign society (Cyprus
Register of Shipping) has given its office building in Greece to IRS for establishing its business. Though
it is neither a joint venture, nor a proper alliance with Cyprus Register of Shipping, the gesture of Cyprus
Register of Shipping will be helpful for IRS.
Pros: Risk will be mitigated as IRS does not have to invest huge money in renting/buying office building
in Greece.
Cons: As there is no alliance or joint venture, understanding local market and generating a market base in
Greece will be more difficult for IRS. Many of the business activities may be affected due to inability to
understand local culture and local language.
2.3 Strategy: Porter’s Five Force Analysis
Porter’s five competitive forces that shape the strategy are shown in Fig. 2.2.
Fig. 2.2 The five forces that shape industry competition [Ref. 2]
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
13. Indian Register of Shipping: Going Global to Greece 12
i) Threat of new entrants
As the ship classification industry is specialized, there are limited companies in this segment. Due to the
government policy (one country can have only one ship classification society), only ten societies (ABS,
BV, CCS, DNV, GL, KR, LR, NK, RINA and RS) are the members of IACS and only one society (IRS)
is the associate member of IACS. IACS is the main body of the classification societies in the world. As
such threat of new entrants is minimum.
ii) Bargaining power of buyers (Customers)
Bargaining power of customer is predominant in this ship classification business. If a ship owner is not
satisfied with the service of a society, he can switch over to a new society. IRS has to be very careful in
offering its service, particularly majority of the ship owners are European in Greece.
iii) Bargaining power of suppliers
This may not be so much critical in ship classification business as classification society is not offering any
end product, rather it issues certificates.
iv) Threat of substitute products or services
This is quite immense in this business. As a few number of reputed classification societies are operating
in Greece, IRS has to offer its best service to stay in the competition.
v) Rivalry among existing competitors
Though rivalry exists between societies, this is not so intense. In fact all societies maintain some ethics.
For example, if a ship is classed with some society, other societies do not interfere. If an employee of a
society (Let’s say society A) applies for job in some other society (Let’s say society B), generally society
B, asks society A, whether it is alright if they recruit that employee.
2.4 Strategy behind Opening a New Office in Greece
2.4.1 Greek Ship Owners
Majority of the ship owner in the world is Greek (Fig. 2.3). Opening an office will give IRS an advantage
to serve these vast amounts of customers easily.
Greek ship-owners today possess the world's largest merchant fleet —3,065 ships totaling almost 25
million tons [Ref. 3]. As a group, they are the biggest spenders in the world's shipyards. More than 200
vessels, including 43 supertankers, are on order or being built for Greek owners. The Greeks set up shop
wherever they can do business, in London, Manhattan, Lausanne or Beirut. They fly the most convenient
flag —Liberian, Panamanian, Cypriot—but they remain Greek wherever they go. Their enterprise has
been a major force in lifting the postwar economies of shipbuilding nations. In British shipyards alone,
the Greeks now account for 25% of all orders.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
14. Indian Register of Shipping: Going Global to Greece 13
Fig. 2.3 Percentage of fleet owned by Greeks
[Source: http://www.skyscrapercity.com/showthread.php?t=541070]
2.4.2 Recognition by European Union
IRS wanted to get the recognition from European Union to expand its business in Europe. As Greece is a
European country, its capital Athens is well connected to other European cities, having office in Greece
will help IRS in getting that recognition.
2.4.3 Expanding the Business in Europe
IRS wants to expand its business in Europe and wants to open an office in London. As London is the head
office of IMO (International Maritime Organization) and IACS (International Association of
Classification Societies), prior experience in operating in European territory will be advantageous.
2.4.4 Strategic Coalition with Foreign Society
IRS will be using the existing office building of Cyprus Register of Shipping in Piraeus, Greece for its
operation. IRS is getting benefited as they do not have to bear the cost of renting/buying office building. It
will also reduce the risk as IRS will be list affected in case of expropriation (Seizure of assets by local
Government with small compensation).
2.4.5 Strategic Location
Piraeus (Fig. 2.1) is near to Athens, the capital of Greece, which is well connected to any European cities.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
15. Indian Register of Shipping: Going Global to Greece 14
2.4.6 Cost Effective and Time Saving
In order to survey ships owned by Greek owner, either ships could be surveyed in other parts of the world
where IRS has office, or IRS surveyor has to go to Greece. Both options are costly and time consuming.
Operating from Greece, IRS will be reducing time in offering service as well as cost. This will effectively
increase customer satisfaction.
2.5 SOWT Analysis of IRS
Exhibit 2.1 shows the strength, weakness, opportunity and threats in opening an office in Greece.
Exhibit 2.1 SWOT Analysis in opening an office in Greece
Strength Weakness
1. IRS has prior experience in operating in 1. IRS does not have experience in operating
international soil. in European country.
2. Human Resource of IRS is not so costly 2. Work culture and communication in Greek
compared to European country. As such IRS are new to IRS.
can offer cost effective service.
3. As the head office (Mumbai) is far away,
3. Establishment cost will be less as IRS will issuing certificate will take some time which
be using the office building of Cyprus ship owner may not like.
Register of Shipping in Greece. As such risk
of being asset encroached is low.
Opportunity Threats
1. Fleet owned by Greeks is the largest in the 1. Others reputed classification societies
world, as such there are lot of opportunity in (DNV, BV, ABS, GL, NK etc) which are
business. operating in Greeks for years have a very
strong hold.
2. If the venture is successful, IRS would like
to open office in London, where most of the 2. European ship owners will be averse in
shipping related activities are going on. getting their ship classed by an Indian
company.
3. The successful operation in European
country, Greece may help IRS in getting the 3. European Union may not allow an Indian
full membership in IACS which IRS is firm to grow in European country.
looking for.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
16. Indian Register of Shipping: Going Global to Greece 15
2.6 Strategy: Porter’s Diamond Model
Porter’s diamond model [Ref. 14] (Fig. 2.4) is an economical model developed by Michael Porter in his
book ‘The Competitive Advantage of Nations’, where he published his theory of why particular industries
become competitive in particular locations. As many of the points of this model is already discussed in
the previous sections, a brief discussion is given below.
Fig. 2.4 Porter’s diamond model
[Source: http://en.wikipedia.org/wiki/Diamond_model]
Factor conditions: location wise Piraeus, Greece is suitable as many ships are getting surveyed at that
location. As IRS will be using the existing office building of Cyprus Register of Shipping in Piraeus,
Greece for its operation, IRS is getting benefited as they do not have to bear the cost of renting/buying
office building. It will also reduce the risk as IRS will be list affected in case of expropriation (Seizure of
assets by local Government with small compensation). However language may be an obstacle as Greek is
the only official language in Greece. IRS needs to give proper training to make their managers competent
and suitable in Greek cultural environment. Attitude of European customers to get its ships classed by an
Indian company will also be tested.
Demand condition: Majority of the ship owner in the world is Greek (Fig. 2.3). Opening an office will
give IRS an advantage to serve these vast amounts of customers easily. However as the big societies
(ABS, DNV, LR, BV, GL etc) are already in operation for many years in Greece, IRS has to offer its best
service to stay in the competition.
Related and supporting industries: As the ship classification industry is specialized, there are limited
companies in this segment. Due to the government policy (one country can have only one ship
classification society), only ten societies (ABS, BV, CCS, DNV, GL, KR, LR, NK, RINA and RS) are the
members of IACS and only one society (IRS) is the associate member of IACS. IACS is the main body of
the classification societies in the world. As such threat of new entrants is minimum.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
17. Indian Register of Shipping: Going Global to Greece 16
Firm strategy, structure and rivalry: IRS wanted to get the recognition from European Union to
expand its business in Europe. As Greece is a European country, its capital Athens is well connected to
other European cities, having office in Greece will help IRS in getting that recognition. Though rivalry
exists between societies, this is not so intense. In fact all societies maintain some ethics. For example, if a
ship is classed with some society, other societies do not interfere. If an employee of a society (Let’s say
society A) applies for job in some other society (Let’s say society B), generally society B, asks society A,
whether it is alright if they recruit that employee.
Government: IRS needs to maintain Government (Greece) policy. Such as, any communication (Public
Notice/ Quotation etc) has to be made in both the languages (English/Greek).
Chance: India is one of the countries, which is least affected during the down turn of global economic
crisis. Business of IRS is also not greatly affected during that time. IRS needs to take this opportunity in
expanding its business in foreign soil. In doing so successfully in European country, they also have a
greater opportunity in getting the full membership of IACS, the highest body of ship classification.
Conclusive Remarks
Market Penetration: Though IRS is late in opening its office in Greece, it can penetrate
in to the market by offering low cost service which many of the Greek ship owners are
looking for.
Customer Satisfaction: As majority of the ship owners are Greek, IRS will be able to
serve them quickly if it has an office in Greece. This will definitely increase customer
satisfaction which IRS can not ignore.
Coalition and Risk Mitigation: IRS will be using the existing office building of Cyprus
Register of Shipping in Piraeus, Greece for its operation. It will reduce the risk as IRS will
be list affected in case of expropriation (Seizure of assets by local Government with small
compensation).
Attitude of European Union: Greece is a European country, attitude of European
customers to get its ships classed by an Indian company will also be tested.
Late Mover: Big societies (ABS, DNV, LR, BV, GL etc) are already in operation for
many years in Greece. As such IRS will be late mover.
Threat of Substitute Services: This is quite immense in this business. As a few number of
reputed classification societies are operating in Greece, IRS has to offer its best service to
stay in the competition.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
18. Indian Register of Shipping: Going Global to Greece 17
Chapter
THREE
CULTURE AND COMMUNICATION
3.1 Introduction
T he culture of a society comprises the shared values, understandings, assumptions and goals
that are learned from earlier generations, imposed by present members of a society and
passed on to succeeding generations. It is clear that cultural variables – shared beliefs, values
and attitudes – can greatly affect organizational processes. Some argue that the effects of
culture are more evident at the individual level of personal behavior than at the organizational level as a
result of convergence. Convergence describes the phenomenon of the shifting of individual management
styles to become more similar to one another. A manager assigned to a foreign subsidiary, must expect to
find large and small differences in the behavior of individuals and groups within that organization.
Being a European country, culture of Greece is similar to the other European countries. However, local
language is mainly Greek, which may have a great impact in expanding business in Greece by an
Multinational company and is discussed in the later part of this chapter. Following description will give
an idea about Greece and its culture, politics, language etc.
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
19. Indian Register of Shipping: Going Global to Greece 18
Geography
Greece is a peninsular and a mountainous country situated in southeast Europe on the Mediterranean Sea,
with a total area of 130,800 km2. The country is surrounded by the sea. The Greek islands represent one
fifth of the country's surface. Greece has about 1400 Greek islands, of which only 169 are inhabited. The
majority of the islands are scattered in the Aegean Sea between the Greek and Turkish coasts. The
country has a population of about 11 million (2000), with 4 millions living in Athens, the country's
capital.
Politics
The conventional names of the country are Hellas or Hellenic Republic. The democratic Greek system is
working like a parliamentary republic with the President of the Hellenic Republic as the Head of the
State. The actual head of the government is the Prime Minister. It is the manager’s job to understand the
political system and how it affects organizational processes to negotiate positions within that system and
to manage effectively the mutual concerns of the host country and guest country.
Greek Culture
Greece is a country of a great interests and diverse cultures [Ref. 5], influenced by its location, at the
junction between the East and the West and by the many occupations endured by the Greek people
throughout history. In general, the Greeks are particularly proud of their culture (Fig. 3.1) and speak of
their country with an intense passion, feeling that their Greek culture is a definition of their national and
ethnic belonging. Traditions, religion, music, language, food and wines are the major composites of the
Greece culture and constitute the base for those who wish to visit the country.
Fig. 3.1 The architecture and purpose of the Parthenon, Acropolis in Athens epitomizes many facets of
Greek culture, both ancient and modern.
[Source: http://en.wikipedia.org/wiki/Culture_of_Greece]
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
20. Indian Register of Shipping: Going Global to Greece 19
Greek Economy
Economy has a powerful influence on organizational process as sourcing, distribution, incentives and
repatriation of capital. At this time of radically changing political systems, it appears that the drastic
differences between capitalist and socialist systems will have less effect on multinational corporations
(MNC) than in the past.
Greece is a developed country, with a high standard of living and "very high" Human Development
Index, ranking 25th in the world in 2007 and 22nd on The Economist's 2005 worldwide quality-of-life
index [Ref. 10]. According to Eurostat data, GDP per inhabitant in purchasing power standards (PPS)
stood at 95 per cent of the EU average in 2008. Greece's main industries are tourism, shipping, industrial
products, food and tobacco processing, textiles, chemicals, metal products, mining and petroleum.
Greece's GDP growth (Fig. 3.2) has also, as an average, since the early 1990s been higher than the EU
average.
However, the Greek economy also faces significant problems, including rising unemployment levels, an
inefficient government bureaucracy and widespread corruption. In 2009, Greece had the EU's second
lowest Index of Economic Freedom (after Poland), ranking 81st in the world. The country suffers from
high levels of political and economic corruption and low global competitiveness relative to its EU
partners. Although remaining above the euro area average, economic growth turned negative in 2009 for
the first time since 1993
Fig. 3.2 GDP Growth of Greece compared to the Eurozone between 1996 and 2006
[Source: http://en.wikipedia.org/wiki/Economy_of_Greece]
Language
Greek is the official language of the Hellenic Republic and has a total of 15 million speakers worldwide;
it is an Indo-European language. The history of the language spans 3000 years. Greek has had enormous
impact on other languages both directly on the Romance languages, and indirectly through its influence
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21. Indian Register of Shipping: Going Global to Greece 20
on the emerging Latin language during the early days of Rome. Signs of this influence, and its many
developments, can be seen throughout the family of Western European languages. Though Greek is the
only official language of the country, a large part of the population, mostly the people working in tourism
and the younger generations, currently use English at a good level and sometimes other popular European
languages.
Greece Traditions & Customs
Traditions in Greece and Greek Islands are either of a religious character or coming from paganism.
Furthermore, most of the traditions and festivals still followed and celebrated today are religious. Many
panygiria are organized in the country, which are actually religious celebrations of saints followed by
traditional music and dance in the square of the village. Many Greeks are very superstitious people and
believe a lot in religion as well as in supernatural or paranormal phenomenon. This impresses many
visitors who travel in Greece. For example, some people believe it is bad luck to see a black car, it is 7
years bad luck to break a glass or mirror, while others knock their fingers against wood if they have a bad
thought.
Greece Religion
The spiritual belief of a society is often so powerful that they transcend other cultural aspects. The Greek
population is composed of a 97% of Christian Orthodox. The rest of the population is Muslim, Roman
Catholic and Jewish. Greece (and the Greek Islands) and Russia are the only countries to have such a
great proportion of people that belong to the Orthodox Church. The Orthodox Church forms the third
largest branch of Christianity after the Roman Catholics and the Protestants.
3.2 Cultural Value Dimensions
As a first step toward cultural sensitivity, international managers should understand their own cultures.
This awareness helps to guard against adopting either a Parochial or an Ethnocentric attitude.
Parochialism occurs, for example, when a Frenchman expects those from or in another country to
automatically fall into patterns of behavior common in France. Ethnocentrism describes the attitude of
those who operate from the assumptions that their way of doing things are best no matter where or under
what conditions they are applied. Good managers treat people as individuals and they consciously avoid
any form of stereotyping.
Cultural value dimensions can be analyzed by three ways.
i) Project GLOBE cultural dimensions
ii) Hofstede’s value dimensions
iii) Trompenaars’s value dimensions
In project GLOBE (Global Leadership and Organizational Behavior Effectiveness), Assertiveness,
Future Orientation, Performance Orientation and Humane Orientation are discussed. Geert Hofstede
has analyzed cultural value dimension from the aspects of Power Distance Index, Uncertainty
Avoidance Index, Individualism, Masculinity. Later, Long-Term Orientation is added in the analysis.
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22. Indian Register of Shipping: Going Global to Greece 21
Fons Trompenaars also researched value dimensions and his research work was spread over a ten year
period, with 15000 managers from 28 countries, representing 47 national cultures. He main discussed on
universalism versus particularism, neutral versus affective and achievement versus ascription. In the
present report, only Hofstede’s cultural value dimensions are discussed from the cultural context of
Greece.
3.2.1 Hofstede’s Cultural Value Dimensions
National cultures can be described according to the analysis of Geert Hofstede [Ref. 6]. These ideas were
first based on a large research project into national culture differences across subsidiaries of a
multinational corporation (IBM) in 64 countries. These studies identified and validated four independent
dimensions of national culture differences, with a fifth dimension added later.
• Power Distance Index (PDI)
• Uncertainty Avoidance Index (UAI)
• Individualism (IDV)
• Masculinity (MAS)
• Long-Term Orientation (LTO)
The ranks of various countries in Hofstede’s Cultural Value Dimensions are shown in Table 3.1 and 3.2.
A comparison between Greece and India is shown in Fig. 3.7.
Power Distance Index (PDI): PDI (Fig. 3.3) focuses on the degree of equality, or inequality, between
people in the country's society. A High Power Distance ranking indicates that inequalities of power and
wealth have been allowed to grow within the society. These societies are more likely to follow a caste
system that does not allow significant upward mobility of its citizens. A Low Power Distance ranking
indicates the society de-emphasizes the differences between citizen's power and wealth. In these societies
equality and opportunity for everyone is stressed. PDI for Greece is 60 whereas for India it is 77.
Fig. 3.3 Hofstede’s Power Distance index [Ref. 6]
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23. Indian Register of Shipping: Going Global to Greece 22
Uncertainty Avoidance Index (UAI): It (Fig. 3.4) focuses on the level of tolerance for uncertainty and
ambiguity within the society - i.e. unstructured situations. A High Uncertainty Avoidance ranking
indicates the country has a low tolerance for uncertainty and ambiguity. This creates a rule-oriented
society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty. A
Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and
uncertainty and has more tolerance for a variety of opinions. This is reflected in a society that is less rule-
oriented, more readily accepts change, and takes more and greater risks. A significant difference between
UAI value of Greece (112) and India (40) is observed.
Fig. 3.4 Hofstede’s Uncertainty Avoidance index [Ref. 6]
Individualism (IDV): Individualism (Fig. 3.5) focuses on the degree the society reinforces individual or
collective, achievement and interpersonal relationships. A High Individualism ranking (USA, Australia,
UK, Table 3.1) indicates that individuality and individual rights are paramount within the society.
Individuals in these societies may tend to form a larger number of looser relationships. A Low
Individualism ranking (Panama, Ecuador, Guatemala, Table 3.1) typifies societies of a more collectivist
nature with close ties between individuals. These cultures reinforce extended families and collectives
where everyone takes responsibility for fellow members of their group. These values are nearly same both
for Greece and India. However, a bit high value of India (48) over Greece (35)in Individualism
indicates that Indians like to be Individualistic.
Fig. 3.5 Hofstede’s Individuality index [Ref. 6]
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24. Indian Register of Shipping: Going Global to Greece 23
Masculinity (MAS): It (Fig. 3.6) focuses on the degree the society reinforces, or does not reinforce, the
traditional masculine work role model of male achievement, control, and power. A High Masculinity
ranking (Japan, Hungary, Austria, Table 4.1) indicates the country experiences a high degree of gender
differentiation. In these cultures, males dominate a significant portion of the society and power structure,
with females being controlled by male domination. A Low Masculinity ranking (Netherlands, Norway,
Sweden, Table 3.4) indicates the country has a low level of differentiation and discrimination between
genders. In these cultures, females are treated equally to males in all aspects of the society. The MAS
index is similar for Greece and India. As such, similarity of culture from this aspect may be observed.
Fig. 3.6 Hofstede’s Masculinity index [Ref. 6]
Table 3.1 Hofstede’s high and low value dimension
[Arranged by authors collecting data from Ref. 6]
Power Distance Uncertainty Individualism Masculinity
Avoidance
High
Malaysia (104) Greece (112) United States (91) Japan (95)
Guatemala (95) Portugal (104) Australia (90) Hungary (88)
Panama (95) Guatemala (101) United Kingdom (89) Austria (79)
Philippines (94) Uruguay (100) Netherlands (80) Venezuela (73)
Mexico (81) Belgium (94) New Zealand (79) Italy (70)
Low
Ireland (28) Hong Kong (29) Colombia (13) Costa Rica (21)
New Zealand (22) Sweden (29) Venezuela (12) Denmark (16)
Denmark (18) Denmark (23) Panama (11) Netherlands (14)
Israel (13) Jamaica (13) Ecuador (8) Norway (8)
Austria (11) Singapore (8) Guatemala (6) Sweden (5)
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25. Indian Register of Shipping: Going Global to Greece 24
Table 3.2 Hofstede’s value dimensions for major countries
[Arranged by authors collecting data from Ref. 6]
Power Uncertainty Individualism Masculinity
Distance Avoidance
Australia 36 51 90 61
Brazil 69 76 38 49
China 80 40 20 66
Greece 60 112 35 57
India 77 40 48 56
Japan 54 92 46 95
Nigeria 77 54 20 46
Norway 31 50 69 8
Singapore 74 8 20 48
South Africa 49 49 65 63
United Arab Emirates 80 68 38 52
United Kingdom 35 35 89 66
United States 40 46 91 62
Fig. 3.7 Hofstede’s Cultural Dimensions for Greece and India
3.2.2 Drawbacks of the Hofstede’s Model
The Hofstede Model of Cultural Dimensions can be of great use when it comes to analyzing a country’s
culture. There are however a few drawbacks.
1) The averages of a country do not relate to individuals of that country: Even though this model has
proven to be quite often correct when applied to the general population, one must be aware that not all
individuals or even regions with subcultures fit into the mould. It is to be used as a guide to understanding
the difference in culture between countries, not as law set in stone. As always, there are exceptions to the
rule.
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2) Accuracy of the Data: The data has been collected through questionnaires, which have their own
limitations. Not only that, but in some cultures the context of the question asked is as important as its
content. Especially in group-oriented cultures, individuals might tend to answer questions as if they were
addressed to the group he/she belongs to. While on the other hand in the United States, which is an
individualistic culture, the answers will most likely be answered and perceived through the eyes of that
individual.
3) Is the data up to date?: How much does the culture of a country change over time, either by internal
or external influences?
3.3 Communication and Noise
Communication is a critical factor in the cross cultural management issues, particularly those of an
interpersonal nature, involving motivation, leadership, group interactions and negotiation. Culture is
conveyed and perpetuated through communication in one form or another. Culture and communication
are so intricately intertwined that they are essentially synonymous [Helen, 2006].
The term communication describes the process of sharing meaning by transmitting messages through
media such as words, behavior or material artifacts. Managers communicate to coordinate activities, to
disseminate information to motivate people and to negotiate future plans. It is of vital importance, then for
a receiver to interpret the meaning of a particular communication in the way the sender intended.
Unfortunately the communication process involves stages during which meaning can be distorted.
Anything that serves to undermine the communication of the intended meaning is typically referred to as
Noise (Fig. 3.8). Attribution is the process in which people look for an explanation of another person’s
behavior.
Cultural variables in the communication process depend on many factors, Attitudes, Social
organization, Thought patterns, Roles, languages, Non verbal communications and Context. Non
verbal communication again can be categorized into i) Kinesic behavior, ii) Proxemics, iii) Paralanguage
and iv) Object language.
Fig. 3.8 Communication process
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27. Indian Register of Shipping: Going Global to Greece 26
A major differentiating factor that is a primary cause of noise in the communication process is that of
context. The context in which the communication takes place affects the meaning and interpretation of the
interaction. Cultures are known to be high context culture or low context culture. In high context
cultures (Asia, Middle East, Africa and Mediterranean), feelings and thoughts are not explicitly
expressed, instead one has to read between the lines and interpret meaning from one’s general
understanding. In low context culture (Germany, Switzerland, Scandinavia and North America)
communications are more explicit. Feelings and thoughts are expressed in words and information is more
readily available.
Conclusive Remarks
The Power Distance index of Greece and India are 60 and 77 respectively (Fig. 3.7). As the
index value is more for India, it indicates that inequalities of power and wealth have been
allowed more to grow within Indian society. A significant difference between UAI value
of Greece (112) and India (40) is also observed. It indicates that Greeks are less tolerant
that Indian. Individualism values are nearly same both for Greece and India. However, a
bit high value of India (48) over Greece (35) indicates that Indians like to be
Individualistic. An international manager needs to consider these aspects.
It is observed that culture of both Indian and Greeks are high context (Ref. 9). This
similarity will be helpful to an international manager to understand the meaning of the
conversation. However, as the languages of both the countries are different (in Greece,
only official language is Greek and in India, official language is mostly English), it is
expected that a good amount of noise may exist. Thus a manager should be very careful in
understanding the meaning of the communication and should not assume that others use
the same reasoning processes. In fact during interview with the manager of the Greece
office of IRS, it is understood that they are facing a huge challenge due to this
language barrier.
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28. Indian Register of Shipping: Going Global to Greece 27
Chapter
FOUR
GLOBAL HUMAN
RESOURCE MANAGEMENT
4.1 Introduction
A vital component of implementing global strategy is international human resource
management (IHRM). IHRM is increasingly being recognized as a major determinant of
success or failure in international business [Helen, 2006]. Alternate philosophies of
managerial staffing abroad are known as the ethnocentric, polycentric, region-centric and
global approaches. Firms using an ethnocentric staffing approach fill key managerial positions with
people from headquarters – that is, parent country nationals (PCNs). Among the advantages of this
approach, PCNs are familiar with company goals, products, technology, policies and procedures – and
they know how to get things accomplished through headquarters. This policy is likely to be used where a
company notes the inadequacy of local managerial skills and determines a high need to maintain close
communication and coordination with headquarter. With a polycentric staffing approach, local
managers – host country nationals (HCNs) are hired to fill key positions in their own country. In the
global staffing approach, the best managers are recruited from within or outside of the company,
regardless of nationality (i.e. third country nationals, TCNs). In a region-centric staffing approach,
recruiting is done on a regional basis. Most MNC use a greater proportion of PCNs (also called
expatriates) in top management positions, staffing middle and lower management positions with
increasing proportions of HCNs (inpatriates) as one moves down the organizational hierarchy.
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4.2 Existing Structure of HR Department at IRS
Structure of Human Resource department of IRS and its responsibility are shown in Fig. 4.1. The number
of employees and number of HR personnel working in IRS are shown in Table 4.1.
CS= Chief Surveyor, DH= Divisional Head
Fig. 4.1 Structure of HR Department
Table 4.1: HR Department of Indian Register of Shipping (IRS) Company
Inception of HR department 2004
Total employee 350 (Approx)
Number of HR person 4
Having discussed with the HR manager of IRS, it is understood that HR department of IRS has the
following roles.
Recruitment and Selection Process: The objective of the process is to recruit appropriately qualified
personnel for required positions in short period of time. Emphasis is given on optimum manpower
utilization and focusing on lean organization structure, to obtain higher rate of productivity while
maintaining high standards and accountability.
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Induction and Orientation Process: Induction is a process of receiving and welcoming new entrant,
when he/she joins a company, giving him/her the basic information that he/she needs to settle down
cheerfully and start work. Induction and Orientation aims to smoothen the adjustments at the preliminary
stages when everything is likely to be strange and unfamiliar.
Probation and Confirmation Process: The purpose of probation is to evaluate the employee’s suitability
for the position and job for which he/she has been appointed.
Transfer Process: Depending on the company’s business requirements and with a view to create career
development opportunities, company may transfer its employees to other geographical locations within
India or abroad.
Performance Management System Process: The objective of the processes is to create accountability
and performance based culture in the organization. It is an objective for evaluation of employees keeping
in mind overall business objectives.
Exit Process: This process is framed with a view to provide guidelines to employee who is leaving the
services of the company either by Retirement, Resignation or Termination.
4.3 Ethnocentric Approach and Expatriate Managers in IRS
Discussing with HR manager of IRS, it is observed that IRS mainly follow ethnocentric approach in
staffing to fulfill managerial cadre position. In its office in Dubai, Colombo, Singapore, China all
managerial positions are filled by parent country nationals (PCNs) or expatriates. It is also observed that
in Greece office of IRS also, the manager is an Indian. IRS selects this position from the manager’s
domestic track record and his ability to do challenging jobs.
4.3.1 Training to Expatriate Managers in IRS
In order to make the expatriates managers efficient, IRS needs to provide sufficient training so that they
can adapt to local culture and working environment. These training include
Cross cultural training – to improve interaction with host country individuals.
Culture shock training – to ease adjustment to the new environment.
Sub-cultural shock training – this may occur due to difference in cultures in different parts of the same
country.
It is understood that IRS provide following techniques
Area studies: IRS arranges to provide information about geography, economy etc of the foreign country
where the manager is likely to be posted. Some times the manager is sent to the foreign country in
advance to understand its culture and policy.
Language training: Language training is needed to understand the foreign country’s local language.
However, this is not so rigorously followed in IRS. One of the reasons is the paucity of time in giving
sufficient language training to the managers as managers are always busy. As a result, it is understood
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31. Indian Register of Shipping: Going Global to Greece 30
that the manager in Greece is facing problem in many due to his inability to understand Greek which is
the only official language in Greece.
These trainings are given mainly at export stages. As such the degree of rigor is Low to Moderate.
4.3.2 Facility to Expatriate Managers in IRS
IRS provides following facilities in compensating expatriation.
Salary: salaries of the expatriate managers are decided based on local buying power.
Allowances: IRS provides relocation expenses, housing allowances, car allowance, petrol allowance and
food allowance in order to cope with the foreign environment.
Children education benefit: IRS provides monetary allowance in admitting the kids in schools.
Benefits: Health insurance of the managers and their families are covered by IRS.
4.4 Motivating People Across the Boundary
Motivation at work place is an issue of vital concern since it is well established that a motivated
workforce will achieve much better results than an unmotivated one. There are many and varied
techniques used to motivate staffs at work place. The goal of using motivation techniques is usually to
increase productivity but a highly motivated workforce also often equates to other improvements such as
reduced absenteeism and turnover, increased innovation, employee satisfaction, and an enhanced
corporate image. Many theories are evolved on motivation in the last centuries. Out of which, Maslow’s
hierarchy of needs theory is well known.
Maslow’s hierarchy of needs theory consists of five needs (Fig. 4.2) – physiological, safety, social,
esteem and self actualization – in which, as each need is substantially satisfied, the next need becomes
dominant. Though Maslow’s needs theory has received wide recognition, particularly among practicing
managers, unfortunately research does not validate the theory. Maslow provided no empirical
substantiation and several studies that sought to validate the theory found no support for it (Hall and
Nougaim, 1968; Rauschenberger et al. 1980). Clayton Alderfer attempted to rework Maslow’s need
hierarchy to align it more closely with empirical research. His revised need hierarchy is labeled ERG
theory that posits three groups of core needs: existence, relatedness and growth. Psychologist Frederick
Herzberg proposed the two factor theory also known as motivation-hygiene theory. This theory relates
intrinsic factors to job satisfaction and associates extrinsic factors with dissatisfaction. A relationship
between these three theories are shown in Fig. 4.3.
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32. Indian Register of Shipping: Going Global to Greece 31
Fig. 4.2 An interpretation of Maslow's hierarchy of needs, represented as a pyramid
[Source: wikipedia.org]
Fig. 4.3 The relationship between Alderfer’s ERG needs, Maslow’s hierchy and Herzberg’s two factor theory
(Luthans, 1998)
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33. Indian Register of Shipping: Going Global to Greece 32
4.4.1 Steps Taken by IRS to Motivate Expatriate Managers
Following steps are taken by IRS to motivate its managers.
Performance based appraisal: Annual appraisals are determined based on the performance of the
managers. As a result if a manager does well in his job, he has a chance to be promoted quickly to the
next hierarchy and has a chance to get higher increment.
Giving Honor on Annual day: IRS celebrates its Annual day at the end of the every year. If a manager
does good job, IRS management honors the particular manager in front of all IRS employees and their
family members which is quite motivating.
Conclusive Remarks
RS mainly follow ethnocentric approach in staffing to fulfill managerial cadre position.
In its office in Dubai, Colombo, Singapore, China, Greece all managerial positions are
filled by parent country nationals (PCNs) or expatriates.
IRS selects this position from the manager’s domestic track record and his ability to do
challenging jobs.
IRS provides various training in order to make the expatriates managers efficient whose
degree of rigor is Low to Moderate. However, language training needs to be strengthen
in order to avoid difficulties, which the manager of IRS in Greece office is facing
presently.
In motivating managers, IRS has taken various steps, Performance based appraisal,
Giving Honor on Annual day etc.
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34. Indian Register of Shipping: Going Global to Greece 33
Chapter
FIVE
CONCLUSIONS
5.1 Summary
D ecision of IRS in opening a new office in Greece is analyzed from international
management point of view. It is observed that though IRS has a few advantageous, it has
some disadvantageous also. These points are discussed in various chapters. The biggest
advantage is that IRS has an opportunity in penetrating in the market of ship classification
in Greece, which has most number of ship owners. However, it is also observed that IRS needs to
strengthen its training department and arrange more training for expatriate managers to make them more
efficient. The important points are discussed below.
i) Increased Customer Satisfaction: As majority of the ship owners are Greek, IRS will be able to
serve them quickly if it has an office in Greece. This will definitely increase customer satisfaction
which IRS can not ignore.
ii) Mitigation of Risk: IRS will be using the existing office building of Cyprus Register of Shipping
in Piraeus, Greece for its operation. IRS is getting benefit as they do not have to bear the cost of
renting/buying office building. It will also reduce the risk as IRS will be list affected in case of
expropriation (Seizure of assets by local Government with small compensation).
iii) Market Penetration: Though IRS is late in opening its office in Greece, it can penetrate in to the
market by offering low cost service which many of the Greek ship owners are looking for.
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35. Indian Register of Shipping: Going Global to Greece 34
iv) European Union: Greece is a European country. As such getting permission in various aspects
of business is not easy for an Indian company. Attitude of European customers to get its ships
classed by an Indian company will also be tested.
v) Late Mover: Big societies (ABS, DNV, LR, BV, GL etc) are already in operation for many years
in Greece. As such IRS will be late mover.
vi) Threat of Substitute Services: This is quite immense in this business. As a few number of
reputed classification societies are operating in Greece, IRS has to offer its best service to stay in
the competition.
vii) Hofstede’s Cultural Value Dimensions: A significant difference between Uncertainty
Avoidance Index (UAI) value of Greece (112) and India (40) is observed. It indicates that Greeks
are less tolerant than Indian, which managers needs take care.
viii) High Context Culture: It is observed that culture of both Indian and Greeks are high context.
This similarity will be helpful to an international manager to understand the meaning of the
conversation.
ix) Ethnocentric Approach: IRS mainly follow ethnocentric approach in staffing to fulfill
managerial cadre position. In its office in Dubai, Colombo, Singapore, China, Greece all
managerial positions are filled by parent country nationals (PCNs) or expatriates.
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36. Indian Register of Shipping: Going Global to Greece 35
References
[1] http://www.irclass.org
[2] Porter, M.E., ‘How competitive forces shape strategy’, Harvard business Review, March/April
1979.
[3] http://www.skyscrapercity.com/showthread.php?t=541070
[4] http://www.time.com/time/magazine/article/0,9171,901268,00.html
[5] http://www.greeka.com/greece-culture.htm
[6] http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/
[7] http://www.cyborlink.com/besite/hofstede.htm
[8] Helen Deresky, ‘International Management, Managing Across Borders and Cultures’, 5th Edition,
Pearson Education, Delhi, 2006.
[9] http://en.wikipedia.org/wiki/High_context_culture
[10] http://en.wikipedia.org/wiki/Economy_of_Greece
[11] Class Note on International Management, by Prof. Manoj Thomas, PGCBM 15, XLRI,
Jamshedpur, 2009-10
[12] Hall D.T. and Nougaim K.E. (1968) An examination of Maslow’s need hierarchy in an
organizational setting’, Organizational Behavior and Human Performance, February, pp. 12-35.
[13] Rauschenberger J, Schmitt N. and Hunter J.E. (1980). ‘A test of the need hierarchy concept by a
Markov model of change in need strength’, Administrative Science Quarterly, December, pp. 654-
670.
[14] http://en.wikipedia.org/wiki/Diamond_model
Abbreviation
GLOBE Global Leadership and Organizational Behavior Effectiveness
HCN Host Country Nationals
IHRM International Human Resource Management
MNC Multi-National Corporations
PCN Parent Country Nationals
SWOT Strength, Weakness, Opportunity, Threat
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37. Indian Register of Shipping: Going Global to Greece 36
Appendix
Interview with Manager (in Greece) of
Indian Register of Shipping
[This information on setting up office in Greece by Indian Register of Shipping (IRS) is collected through
telephonic interview with the Manager (Greece) of Indian Register of Shipping on 16 February 2010.
Subsequently, information is also collected through face to face interview of a few senior officers of IRS,
at head office of IRS, Powai, Mumbai]
A. Introductory Information
1. Name of the Organization: Indian Register of Shipping
2. Year of Inception: 1975
3. Ownership of the Organization (Please tick the appropriate):
i) Public Sector ii) Private Sector
iii) Joint Venture (public & private) iv) Joint venture (private & private)
v) Public Limited Company
4. Locations of Business: i) Single location ii) Multi location
5. Nature of Business (tick the appropriate):
i) Automobiles x) IT
ii) Banking xi) ITES
iii) Cement xii) Petrochemicals
iv) Chemicals & Fertilizers xiii) Power
v) Electronics & Telecommunications xiv) Processing
vi) Engineering xv) Retail
vii) Pharmaceutical xvi) Textiles
viii) FMCG xvii) Classification/ Third Party Inspection
ix) Hospitality xviii) Others (Pesticides)
6. Main Services:
i) Surveying Ships and Issuing Certificate based on Survey to the Ship Owners
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B. Opening a New Office in International Soil
1. What is the location of new office of IRS? Piraeus, Greece
2. When is the operation started? April, 2009
3. How many staffs are there in Greece now?
Presently only two. However the number may be increased depending on the business growth.
4. What are the strategies behind in opening a new office in Greece?
a) Greek Ship Owner: Majority of the ship owner in the world is Greek. Opening an office will give
IRS advantage to serve these vast amounts of customers easily.
b) Recognition by European: As Greece is a European country, having office in Greece will help
IRS in getting that recognition from European Union.
c) Expanding the Business in Europe: Experience in Greece will help in opening office in strategic
location like London, which is the head office of IMO (International Maritime Organization) and
IACS (International Association of Classification Societies).
d) Strategic Location: Piraeus is a place where lots of ships are available for survey.
e) Benefit: Cyprus Register of Shipping has given their office building in Piraeus, Greece, to IRS
for operation. IRS is getting benefit as they do not have to bear the cost of renting office building.
f) Proper Connection: Athens is well connected to other parts of Europe.
g) Cost Effective and Time Saving : In order to survey ships owned by Greek owner, either sip
could be surveyed in other parts of the world where IRS has office, or IRS surveyor has to go to
Greece. Both options is costly and time consuming. Operating from Greece, IRS will be reducing
time in offering service as well as cost. This will effectively make more customer satisfaction.
C. Regulatory Requirements
1. Are there any regulatory requirements to be followed from the local government?
a) Communication: Any communication (Public Notice/ Quotation etc) has to be made in both the
languages (English/Greek).
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai
39. Indian Register of Shipping: Going Global to Greece 38
D. Difficulties
1. What are the difficulties IRS may face during its operation in the new office in Greece?
a) Communication Problem: As the local language is Greek and Indian employees do not know
Geek, they are facing problem in communicating for any official work as well as non official work.
b) Environment: Local environment is not similar to the environment of many of Indian major
cities. In winter temperature is -200C to -150C.
The End
Asokendu Samanta (SID RB09035, SMS ID 104118), PGCBM 15, XLRI, Center: Powai, Mumbai