In the context of globalization, companies are interconnected around the world. The outbreak of joint-ventures, mergers and acquisitions has created a very complex environment in particular through the management of global teams and networks. The production process is “more functionally fragmented and geographically disperses” (Dicken, 2011).
According to Berry and Pootinga (2006), “culture is a shared way of life of a group of socially interacting people, transmitted from one generation to the next via acculturation and socialization processes that distinguish one group’s members from others”. Thus, a multinational company is a set of different backgrounds and cultures.
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This follows a series of investment in protection equipment. China considers that these investments are not cost efficient and useless. This divergence of interests might be also explained by the uncertainty avoidance dimension. Indeed, Germany has a high uncertainty avoidance rate. Thus, it can be argued that Germany gives importance to the respect of health standard and avoid all possible working risks. China can be seen as a country which accept easier risks and see useless the use of standard procedure (geert-hofstede website). Moreover, Higgs (1996) concurs that Germany is characterized as an individualist country at the extent of fostering a high degree of flexibility instead of China which is a collectivist country: values are linked to the engagement on the long-run. Compared to Germany, China may not be inclined to make concessions and thus, they are not willing to give in to German demands.
This conflict shed light about the complexity of national cultures and its impacts on business relationships. It can be assumed that the trust is a key element of success. The confrontation of Chinese and German cultures creates a mistrust which can compromise the pursuit of commercial relations. Trust creates a virtuous circle improving the competitiveness in terms of fostering the flow of information and innovation, saving cost and time, sharing of knowledge and collaboration.
In addition, the
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Culture is connected to the knowledge , beliefs, customs, and habits, acquired by the members of the society. The impact of culture depends upon on which religion of the world a firm is active. To illustrate further we can see a case study called CULTURAL CONFUSION: AN ACCENTURE MANAGER IN INDIA or HINDU RELIGION AND ITS IMPACT ON BUSINESS from international management book page 36 and page 20. (Ahlstrom, Bruton, 2010).
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.
Generally, individuals consciously or subconsciously interject ethnic values, attitudes, or behaviors into the dynamics of company culture. Factors that impact the extent to which diverse cultures interact with existing cultures are: 1) where they come from, and why they are here, 2) where they live, 3) the socioeconomic status, education and upward mobility, 4) the political and religious ties, 5) the spoken languages, 6) the extent of family intermarriage with or connection to other ethnic groups, 7) and the individual's attitude
Cultures are varying among different parts of the globe. People with different cultures have different characteristics and viewpoints on the subjects due to diverse understanding and method of learning. During the past few decades, the international trade grows in a very rapid rate due to the advantages that it provides; “increased sales, operational efficiencies, exposure to new technologies and broader consumer choices” (Heslin). Therefore, when considering the culture aspect to current business world, it is crucial for business to understand the culture aspect because of the tremendous growth of international business as well as utilize the international market to its maximum
Another value that is very important in Chinese culture is trust. Trust lies at the heart of successful long-term intercultural business relationships. Therefore, Oldtown employee must be prepared in gaining the Chinese Manager in China trust to deal with business. In China, the cross-cultural business relationships, trust plays an indispensable role since partners from different cultures don’t always have the same values or assumptions about how business works. When trust is developed, partners can navigate difficult issues over time by fostering a candid exchange of ideas, issues and agendas. Developing trust can significantly reduce what Westerners often complain of in their dealings with Chinese counterparts: unpredictable behavior and a lack of transparency. As a Chinese executive at Google put it, “In China, your success depends on how well a person trusts you.”
Hofstede (2003) defined culture as "the collective programming of the mind that distinguishes the members of one group or category of people from another". Corporate culture refers to the intangible aspects of companies, including the interactions at an interpersonal level, and values, morals and ethics which permeate the way that decisions are made and polices are implemented (Buchanan & Huczynski, 2011). Just as when one undertakes international travel, and sees different cultures where there are different attitudes and traditions, one can also observe different
The culture and social bonds come from the people who live in the community. The cultural influences and the recruitment of new employees can be very profitable in the long run. Global recruiting can be a complicated process with members of the communities supporting and foster the relationship. This does require skilled employees who are willing to work through the training and growing pains that come with expanding globally. Organizations or like people they each have their DNA, which would be viewed based on the traditional makeup of the company and extended to meet the needs of other communities. The cultural content is based on the assumptions, belief, and values of the organization. Changes will come with training, time, and growth
When we talk about eastern and western culture, two countries are the perfect example. China and the United States of America. Although each has cultures distinctively different from each other, it has not interfere with their business cooperations and cultural exchanges. On the contrary, “more than a billion dollars of goods and services flow between two contries each day” ( Baden, 2013). What factors within the culture promoted such business cooperation between two countries? What factors could interfere with such intercultural exchange? This article will duscuss the similarities and differences between two countries with the use of Hofstede’s value dimensions of culture.
The very nature of increasing globalisation within an industry causes a decrease in predictability and increases complexity. The management of complexity is a goal for a successful manager and requires not only using traditional organisational processes of an "organisation's design, detailed lists of assets and financial projections" but it requires an organisation "collaborating, discovering, architecting, and systems thinking" (Lane, 2006, p4); this is often a new way of thinking for managers.
According to the works of Chaney & Martin (2011) and Harris & Moran (2000), they agree that international management skills are in need for the increasing scope of international trades and investments. A large number of multinational companies have expanded their businesses through both developed and developing countries. Some of the business invest directly and others are partnership arrangements and strategic alliances with domestic operations. Their studies show that independent entrepreneurs and small businesses have started investing and competing in the world marketplace. Thus, to acquire corporations’ objectives, there is exceedingly a necessity for the development of strategic framework for cross-cultural management and communication in the current competitive global market. Chaney & Martin (2011) also noted that, cultural awareness and cultural differences are strongly important to the multinational corporations’ success. A good understanding of the culture where business is implemented can make international managers productive and effective.
According to Ricks, Toyne and Martinez (1990) CD is a study of principal differences in the national culture between the home country of the multinational enterprise and the host country. According to McGahan and Victer (2010):
As trade increases hyper-competition grows forcing organizations to go global. By a company going global it requires them to rethink strategy and reform (Ananthram and Pearson, 2008). Global organizational structure is the way a company aims to merge local preferences with global strategy. The definition of global strategy is “strategic choices that have the characteristics of being globally uniform or integrated,” (Yip et al., 1997) such as standardization of products, uniform marketing, and competitive moves, but all globally (Townsend et al., 2004; Zou and Cavusgil, 2002; Bayraktar and Ndubisi, 2014). Global strategic strategy is a way to adjust to globalization. Globalization is “the economic and social process by which economies and communities grow inextricably interdependent “(Jhirad et al., 2009). The recent financial crisis (Das, 2010), large amount of poverty, and climate change are all problems that show how the world is globally connected because all countries impact each other (Jhirad et al., 2009).
The purpose of this paper is to analyse and review the importance of National Culture for Multi-National Corporations & Trans-National Corporation while seeking to operate in global environment (Gligorovska, 2009).