Cultural Challenges That Influence Multinational Operations

Every country differs in culture which has been there for centuries. The international market is growing rapidly, with more and more multinational organisations entering new markets each day. In this assignment I will evaluate how the difference in cultures affects the performance of international businesses.

Communication – verbal and otherwise – remains an important dimension of international management, and there are different communication styles, how communication is processed and interpreted, and how culture and language influence communication and miscommunication (Luthans & Doh, 2012).

In multinational workplaces understanding how important the significance of cultural differences is larger than we might think. Organizations that are diverse have to work together because their functionality impacts the productivity of the workplace. It is vital to have an understanding the different cultures to develop a strong organization. Certain principles will help you acknowledge that different cultures exist within the organization. As a manager, you have to analyze the reasons for the development of the differences and

4b.The next article, “Their oyster, with grit included”, discuses cross border deals that India is involved in. Most Indian firms are aspiring to be multinationals, and succeeding. Some of the way these firms are achieving this is through vertical integration, acquisition and using a Greenfield approach. This is successful because Indian workers are already used to a very diverse workforce. Another approach that is gaining success is firms being pocket multinationals meaning that acquire small businesses abroad and use those small businesses to maintain a presence. A benefit of being a pocket multinational is having access to new technology, products and markets but merging to different very cultures of two different firms is always a challenge. Foreign firms in investing in India are not having the easiest time either. Most Indian

Today’s organizations are doing business more and more in a global context. The people that count in any business from the suppliers to clients to employees are increasingly based in remote locations in foreign countries. The need for effective and clear intercultural communication is becoming vital in securing success in today’s global workplace. Managers of global corporations need to understand the role of intercultural communication competence in achieving cohesiveness in diverse environments of global business teams. Whether delivering a presentation, negotiating with a supplier, or providing assistance to a client, intercultural communication must be done right.

The Floundering Expatriate case study provides the right example of problems associated with the global marketplace and when businesses and their leaders transcend physical and cultural boundaries and they fail to adapt to cultural specifics. We consider that this report will allows making an analysis that contains discussion on culture and communication issues along with globalization.

Both the authors have taken descriptive approach to elaborate in detail their respective areas of cross cultural management. As per article, “Rethinking Cross Cultural Management in a Globalizing Business World” by Soderberg & Holden (2002), due to globalisation and its increasing trend, the organisations and its environment has gone through significant changes. Thus the traditional way of defining the cross cultural management needs amendments. Further the author has elaborated that in this commitment the authors are contending for a split far from the conventional method for considering and portraying diverse administration for two fundamental reasons. To begin with, the winning idea of society as-substance, which in this logical connection is vigorously connected with national societies (and, by augmentation, country states) is distant with the hypothetical improvements of conceptualization of society and character. Moreover a conceptualization of hierarchical and national society’s too characterized and homogeneous substances is out of stage with the new economy, with its accentuation on systems administration, hierarchical learning and information as the fundamental hierarchical asset, which rises above firm, industry, and national limits. Second, the new economy requires not simply new skills and 'worldwide education but also needs to adopt 'the worldwide attitude'. A globalizing business world too needs suitable calculated apparatuses and expository methodologies of advantage to both analysts besides, specialists. Consequently the article “Cross cultural Differences in Management” by Amman & Jordan (2012) has concluded that due to cross cultural environments, the managers can encounter different impact on different areas of management. These impacts can create many limitations and barriers on different areas of business. Therefore, managers of the

Needless to say that to do business in the current globalized economy, business partners need to communicate effectively in a given language. But communication requires much more than a solid knowledge of a language. Becoming communicatively competent in a foreign or second language implies more than being able to speak fluently and accurately. Being communicatively competent in a language requires having not only good linguistic knowledge but also knowledge of the culture that is beneath that language, the culture that this particular language reflects. When doing business in a global context, the ability to communicate cross- culturally is a must for the success of any enterprise. Electronic Communications Ltd. (ECL) had decided to start business in China and to form a relationship of common prosperity with Chinese people. The company knew that there was major progress to be made, but there were also risks and challenges. One of these was the management of cultural differences. An issue the management was whether it should adapt ECL's management practice to the Chinese culture or to establish ECL's global management policies in China. Successful cultural alignment is an important element for multinational organizations. Electronic Communications Ltd (ECL), like many other companies entering foreign markets, is faced with how to adequately incorporate their corporate culture with the Chinese national culture ECL, as a leading corporation throughout the

Over the last ten years, numerous firms have continued to embrace international operations. However, the international operations come with numerous obstacles. For instance, culture is one of the bottlenecks faced by the firms operating in the global arena. Studies indicate that language problems and difficulties along with culture collisions are some of the cultural bottlenecks that an international firm must handle. The firms operating in the international market must recognize that different cultures have own modus operandi in terms of business transactions. In this regard, a subsidiary operating in the host country is obliged to respect the culture of the host nation.

This paper is a report on cross-cultural management, with the issues related to cross-cultural management being discussed in the paper. Additionally, the report has produced the future way of cross-cultural management, including how it can be improved in offices relying much on this strategic approach.

During this last semester, I have learned a lot about international business practices. Some companies have flopped after moving business outside of the United States boarders while others have strived and been very successful. This semester, I traveled to Bangalore (Bangaluru) for the second time for work. During this trip, I built stronger and more meaningful business relationships. My final research paper will explore American based businesses and their successes while taking their corporations abroad. I felt that this topic was relevant in my life because on a day-to-day basis while at work, I deal with many different cultures (even if I am not traveling for work). To explore and understand some intercultural communication success stories from other companies that have been positive, will only improve on my relations. “Globalization is a broad concept defined in many different ways. To begin with, it can be understood as, 'Growing interdependence between different peoples, regions and countries in the world as social and economic relationships come to stretch worldwide'.” (Shaheen, 2010)

There are a variety of reasons why multi-national corporations become successful, and possibly more reasons why they fail. One key aspect of being successful in the international arena of business is the ability to create a successful multinational/cross-cultural teams. Top companies such as Exxon Mobil, Wal-Mart, and GE have mastered the formula of building such teams (DeCarlo, 2013). Our world today has become more and more intertwined and has led to more cross-cultural business teams being created. To build a cross-cultural team, there are many obstacles a company may face. To become as successful in building cross-cultural teams for international business as the companies named previously, it is absolutely necessary to study the differentiation in several key areas. The importance in understanding difference in the areas of Legal and Political views, communication (verbal and non-verbal), and business practices in varying cultural dynamics cannot be understated. It is imperative to have a deeper understanding of each aspect if an organization hopes to create sustainable cross-cultural teams.

In today’s international market, a business needs to stay competitive in order to succeed. To do this, businesses need to have access to as many markets as possible to sell their products and services. However, just as each nation has their own culture, so do their business markets. Cross-cultural training is important for success in the world of international business. As stated by Diemer (2010): “To act without awareness of differences among norms within a differing culture is to invite cross-cultural blunder.” This means that, if we do not take into account the differences between the two cultures and adjust yourself accordingly, it can lead to an incident that is difficult to recover from. In the business world, such an incident can kill a deal that took months or even years to cultivate.

Since India and China’s economy is the fastest growing economy in the world. In the past few years these two countries has experienced an explosion in the field of foreign direct investment. Doing business in India and China provides a very good platform for international organizations, however, it is extremely important for the companies to at the same time there are number of cultural challenges that can create misunderstanding, conflict as well as huge direct or indirect costs to the organization if overlooked.

Culture can be defined as “the sum total of the beliefs, rules, techniques, institutions, and artefacts that characterize human populations” (Ball et al, 1999 p.258). Sociologist generally talk about a socialization process – referring to the influence of social groups upon an individual, and the interaction of that individual with other members of society. Key elements of culture include language, religion, values, attitudes, customs and norms of a group or society. Cultural issues present a significant challenge to businesses; particularly international businesses. This is because businesses involve people. Every business employs people, sells to people, buys from people, and is owned and regulated by people. International people involve people from different national cultures - these cultures affect every aspect of business functions, including but not limited to: recruiting and managing a workforce, marketing and distribution, purchasing of raw materials, dealing with regulators, and securing funds. The challenges that cultural issues present to international business is that of creating and nurturing cultural awareness; identifying and understanding the dynamics of culture; recognizing behavioural patterns and practices that affect the business; and coming up with strategies for dealing with cultural differences.