How Cross Sectional Differences Affect The Probability Of Ceo Turnover And Its Sensitivity At Firm Performance After Cross Listing

This report examines cultural and institutional factors of Mexico and how they can impact global HR management and practices. Specifically, by analyzing Mexican culture based on Hofstede’s dimensions, economy, labor legislation, union and employment tradition we reached the conclusion that the features of Mexican culture (high power distance, strong collectivism, high level of masculinity and uncertainty avoidance) and institutional factors have a strong impact on management styles and HR practices of business in Mexico and may arouse some challenges for global company and their expatriates, especially those from countries that bear different cultural features and institutional conditions. In order to minimize the potential conflict between Mexican local employees and expatriates, parent companies need to provide trainings (culture assimilation, country condition, etc.) before sending anybody to Mexico. Also, whether the expatriates should put more effort to disseminate home country (headquarter) culture or to adjust to local culture depends on the company’s strategy in terms of being localized or standardized around the globe.

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.

Task 2c: Evaluate the impact of cultural differences on international business performance in the international market D2

Harris and Helfat (1997) classified the human capital at three levels a) generic skills which are transferable across industries, businesses or firms; b) industry specific skills which can be transferred only to the firms that operate in that industry; and c) firm specific skills which cannot be transferred outside of the firm. They investigated the relationship between the impact of these skills on CEO compensation for both internal and external successors and concluded that differential skill specificity is associated with pay premiums to external successors. CEO’s age & tenure may play an important role but the studies conducted were unable to test for this due to lack of relevant data (Tosi et al., 2000; Buchholtz et al., 1998).

After reviewing our text, it suggests that changes in organizational culture will not occur until managers make adjustments in basic assumptions (Kreitner & Kinicki, 2013). The Chrysler company was in need of a major revamp given their recent financial woes. An existing organization’s culture is more difficult to transform than that of a new organization, as people are inclined to adapting to a new culture, but more resistant to change (Sims, 2000). New leadership was imperative to change Chrysler’s organizational culture and the way in which the business operated. Enter Sergio Marchionne, a man up for the challenge. Sergio Marchionne changed the basic assumptions of the Chrysler company in a few different ways. Mr. Marchionne decided that

Cross Cultural management explains the behaviour of people in organizations worldwide, helping managers and firms to understand how to act in business matters dealing with the different cultures. (Adler, 2008)

According to Czinkota (2007), cultural factors have an important impact on the flow of business. Chinese want genuine personal relations ships with their business partners and they are often more reserved and distant than Americans. There are four strategies for managing cultural differences according to Hoecklin (1994) and they are: building a strong corporate culture internationally, developing a common technical or professional culture worldwide, relying on strong financial or planning systems and leaving each culture

The risk factors when dealing with corporate culture are numerous and should not be understated. If ignored a festering corporate culture can be detrimental to the health and longevity of a company, a prospering culture can have an equal and opposite effect. While management might be limited in quickly changing a company’s underlying corporate culture, especially in the aspect of underlying assumptions as previously discussed, there are some cases where a change, even a slow one, might be required. It is important during these culture changes to use outside personnel to fully identify the current company culture and be cognizant of the results the change will have, consult personnel about the change and solicit feedback, and implement the

D2 – Evaluate the impact of cultural differences on international business performance in the international market

If I were the CEO of a multinational corporation in the 21st century, it would be critical for me to develop and employ a cross cultural approach to the leadership in consultation with Hofstede's Five Cultural Dimensions. Though I have prior knowledge of management theories and other examples of Hofstede's work, "Cultural Constraints in Management Theories" (1993) was a welcomed shock and surprise. One of the aspects of the article that struck me the most was the clear demonstration of the singularity of the American style, perspective, and application of management in the workplace. This fact made it abundantly clear to me, that as the CEO of a hypothetical multinational corporation, that it is imperative for the sake of my financial success, professional reputation, and for the sake of all my employees, I must not implement the American style of management as part of the leadership practice.

Cultural differences between countries have strong effects on individual personality and behavior, as well as on organizational culture (Hofstede 2001). These differences can be a significant barrier for an international business leader. Failure to understand and adapt to these differences may

Managers are responsible for using resources, including personnel, to ensure a company’s success by meeting its overall goals and objectives. This alone can be a challenge, but when operations cross national borders, it can be particularly difficult. Mangers face unpredictable and sometimes hostile environments in areas they often know little about. In their book “Management Across Cultures,” Richard Steers, Carlos Sanchez-Runde, and Luciara Nardon discuss ten specific people related challenges managers face that can mean the difference between success and failure in the global market (Steers, Sanchez-Runde, & Nardon, 2010).

Mismanaging cultural differences can render otherwise successful managers and organisations ineffective when working across cultures. As stated byOsland (1990, p. 4) ``The single greatest barrier to business success is the one erected by culture''. Hofstede (1983) defines culture as "the mental programming of the mind which distinguishes the members of one human group from another" (Hofstede 1983 p. 25). Through the comparison of Chinese culture and Australian culture using Hofstedes five cross-cultural dimensions: power distance, uncertainty avoidance, masculinity, individualism, and long-term orientation an insightful view into the differences and similarities of the cultures can be obtained (Chong & Park 2003). Human Resource Management

The early dismissal of newly appointed CEOs refers to CEO dismissal within three years of tenure, following practice in the literature (Zhang, 2008; Shen & Cannella, 2002; Finkelstein & Hambrick, 1996). While prior literature identified poor performance and corporate

In times of rapid globalisation and economic development growth, the environment of business has become more and more complicated as a huge number of firms want to globally expand their businesses. Subsequently, the managerial implications of cross-cultural management is the challenge of this development. As Abbe (2007) states, cross-cultural leadership has developed as a way to understand leaders who work in the global markets. Culture is the “software of mind” that can influence people’s patterns of thinking and behaving.