Mnc Strategy: Cross Cultural Management Assessment Answer

Answer:

Introduction

The culture of each land is different to others. However, in the days of Globalization, the people and businesses are going to places in search for new markets and thus have to accommodate with the market structure, employment norms and culture in the part in which it is serving. Such cultural difference has been bridged by various methods like training and development to understand multicultural working atmosphere along with learning for the business itself to venture out in a new land for further opportunity. Hence, the cultural aspect of MNCs (Multi-National Corporations) is an important aspect of their survival and development in a different culture than that they have encountered at home or in other markets (Ashcroft ad Ingram, 2012).

Cultural Dimensions


Culture or belief systems of a group of people is generated by a group of individuals who have the traits of a nation or society that have varieties of differences with other cultures which may be conflicting and disruptive for the business. Hence, the business from its start has to be such that it accommodates each kind of people in the business by merit to be part of the business and contribute towards its multicultural dimensions so that the business gets an upper hand on cultural issues (Cultural Adaption, 2012). The nations build around the globe have its history and taboos which the business is entering the market has to analyze and make strategies by it. The MNCs that have a multicultural dimension of staffing in its folds may find a better grip in the new market since the business has to cater to the needs ensuring no cultural boycott from the market in a particular economy (Barner-Rasmussen et al., 2014).

In the same way the observation of (Graen and Hui, 1996) suggests that the global business faces the most competitive challenge from the cross-cultural business partners due to lack of cultural understanding. The culture allows the people interact with various other groups to bring peace to the region and understand the people and market needs for the best outcome for the business in the new market that they have barked upon. As an example, it is said that Pork meat is banned in the Islamic state so people working and selling food can't be allowed in such a culture (Kotabe and Aulakh, 2012). This may topple the balance of power in the new state of business where the brand is growing in a new market with other competitions. These observations noted by the management gurus snuggling to find out the right combination of the cultural mix so that the MNC business can establish and thus grow in such a situation (Tamu.edu, 2016). Therefore, the context of culture is important for MNCs which wish to go abroad in the days of globalization. The Asian culture doesn’t represent all qualities that a MNC from US would expect to have for their business abroad. The way the business settles these gaps are of immense importance to the business partners to work in a coherent manner in a different cultural set up.  

Further the does and don'ts, use of technology, skills required, days of the festival along with the bulk that it can produce and sell in the market are very varied. A detailed study of all these aspects has to be done if the business wants to settle in culture, foreign to its origin so that they may take the needed steps with confidence to be developing in that new market (Zhao et al, 2014).

The Difference of MNC to A Single Nation Culture

The understanding of the cultural variances and elements of one culture being different from other is an important step for a business to go multinational. The differences of culture show the dimensions like masculinity, power distance, uncertainty avoidance, individual /collectivism are important aspects of any cultural dimensions of a region or nation. In such a condition the elements of cultural co-existence become impossible if the business does not keep these into account (Schneider, 2011). The family ties in some nation outdo the skills or competence of an individual but rather gives preference to one with a certain family background or tradition. Therefore for a business to gap multinational this aspect of that nation which is in the view of the MNC to expand plays a major role. Multinational businesses should tailor their operations around cultural norms of each country to be able to stay and thus grow in such nations (Ghemawat and Reiche, 2014).

Understanding these elements and thus training the group of people that the business wish to employ in a foreign land has to be given the needed training to conduct the expansion with efficiency. The people from a different culture can pick up the better of one culture for their advantage in the place they are present in and it may show positive results. This makes the business multinational much more prominently over the cultural aspects of a business settled in a different nation from its home soil. The mix of various cultures makes the business truly global in its approach and content. The unification of the team as one needs a great effort regarding training and development, cultural competence development and thus gives it the efficiency that the business objectives have prepared for its growth and plans for expansion (Ashcroft and Ingham, 2012). The laws of working can be amended with the cultural needs, but the effort remains to make the systems such that the integration, as well as productivity of the business, sees a positive leap forward. This can also be described as uniting the employees irrespective of the cultural differences by an MNC towards a unified mission for its future benefits (Gooderham et al, 2013).

The Elements of Culture for an MNC

The elements of culture for a new business or MNCs in a new land can be best expressed with a PESTEL analysis of the external market to reach to an answer. It stands for Political, economic, social, technological, environmental and legal aspects of the land that the business wishes to migrate in. These elements have its dimension which the business has to adhere to if it wishes to prosper in the new land with its set of norms culturally. The MNC before entering a particular market has to make arrangements like understanding the laws of the land, political stability, social dynamics, and concern for the environment of the people associated with it along with the technology that can be adapted to a particular market (Matusitz and Minei, 2011). All these makes the attributes or the cultural need of the place great and inviting for the people associated with it to be aware of the laws of the land and the people’s attributes of that place they are working in. The issues about go Multinational needs the application of studies about the PESTEL is as below.

Political: The people in legislationare determine the policies and politics of a land. The laws of the land are hugely as well as the stability of the business future is dependent on the politics of the nation that the business is venturing into. Therefore the business of a state like the US may find it difficult to work in the conditions where China is involved. The authoritarian regime of the communist state to democracy may have to be well balanced so that the businesses from both the nations feel well accommodated and comfortable with the Political aspect of the land they are venturing into (Chini and Ambos, 2011).

Environmental: The business which produces a huge amount of toxic wastes or carbon in the atmosphere is not well taken by the ever growing demand of pollution free atmosphere by a large section of the global community. They find it intolerable to see huge carbon footprints being generated and is destroying the natural balance. For a business that wishes goes overseas the issues about the environment has to be taken care of if they want to do business in a multinational atmosphere to be more competent with the environmental laws and public consideration of its activities to be stable in that new market. Hence technologies of rectification of waste generation and carbon footprint reduction should be a priority when it goes multinational (Li, 2011).

Social: This is the most significant perspective of the discussion where the social and cultural aspect of the land plays a huge role in making these decisions of how to deal with manpower for an MNC. The power distance of Japan and US is different. Likewise, the masculinity of the Middle Eastern nations are different to the UK businesses and so on (Golan et al, 2009). Thus a business when plans to expand over a wide space would undertake the efforts to make it possible to be in tuned with the culture of a land before they invest or sought for a business expansion in such lands with various cultural and social aspects in mind. The social development is another aspect which the nation in which the business is operating wish to see from the business (Helin and Sandström, 2013). The business has to plan its manpower strategies, hierarchy as well as gender ratio in a manner that suits the cultural norms of that land. This also determines the individualism or collectivism in the aspects of operations to suit the business interest the best (Cullen and Parboteeah, 2010).

Technological: The aspect of technology is important for the business to keep an edge over other competing businesses. This also helps in making the right arrangement for skill development initiatives and adoption of new from old ways. This is a cost saving instrument which also can bring out the best quality at the lowest cost in a constant flow. Therefore, the MNC to expand has to take up cultural dimensions to initiate the training and skill development program which would make the new venture in a nation outside its home as competent and effective as it is at home. It also has to be recognized that technology is the key for best output in the minimum time with constant quality, so the cultural adoption of such technology has made the gaps between the MNC's growth to its cultural barriers in the foreign soil (Godiwalla and Bronson, 2015).

Economical: The different culture of nations outside the business has its way of life and economy. The MNC in the nation has to be such that it aids in the economic development of the mass and stakeholders of the business in those lands at par with the home business. This gives the business a great opportunity to grow and prosper along with the culture that they are in. This is a mutual benefit approach (Li, 2010).

Legal: The legalities of each land is formulated by the legislature of the nation which includes the tax laws, employment laws, laws of environment change along with wages a matter of concern for the business which wishes to go multinational. Therefore, the opportunity of the business along with the additions or negations that a business has to do to implement the legal framework in the nation that it is working in to be a better among the other businesses present (Wu et al, 2008).

Conclusions

The cultural differences may cause some difficulties along with some positive attribute for the best efficiency of the MNC. Therefore, businesses which have multiple cultural aspects present along with the elasticity to pick up and use them to unify the people in a MNC under a singular culture of work that have all aspects of various culture integrated, gives the best output. This gives the people a feel of their own culture being given a space in the working which makes the MNC efficient to produce the best of results in various economies to establish as a successful MNC. Such an atmosphere makes people to integrate and be part of the business faster and let the business cross boundaries with such attributes. Hence the study of the culture for an MNC is important in each step for the formulation of policies of sales, operations and manufacturing as per the laws of the land.

References

Ashcroft, B. and Ingham, K. (2012). Company adaptation and the response to regional policy: A comparative analysis of MNC subsidiaries and indigenous companies. Regional Studies, 13(1), pp.25-37.

Barner-Rasmussen, W., Ehrnrooth, M., Koveshnikov, A. and Mäkelä, K. (2014). Cultural and language skills as resources for boundary spanning within the MNC. Journal of International Business Studies, 45(7), pp.886-905.

Chini, T. and Ambos, B. (2011). Capabilities, cultural distance and the effectiveness of knowledge flows within the mnc. Academy of Management Proceedings, 2005(1), pp.J1-J6.

Cullen, J. and Parboteeah, P. (2010). International business. New York: Routledge.

Cultural Adaptation. (2012). Science, 290(5498), pp.1853m-1853.

Ghemawat, P. and Reiche, S. (2014). National Cultural Differences and Multinational Business. [online] Aacsb.edu. Available at: https://www.aacsb.edu/~/media/AACSB/Publications/CDs%20and%20DVDs/GLOBE/readings/national-cultural-differences-and-multinational-business.ashx [Accessed 18 Aug. 2016].

Godiwalla, Y. and Bronson, J. (2015). Cross Cultural Negotiations for Greater MNC Competitiveness.Applied Economics and Finance, 2(4).

Golan, G., Johnson, T. and Wanta, W. (2009). International communication in a global age. London: Routledge.

Gooderham, P., Grøgaard, B. and Nordhaug, O. (2013). International Management. Cheltenham: Edward Elgar Publishing.

Graen, G. and Hui, C. 1996, "Managing changes in globalizing business: how to manage cross-cultural business partners", Journal of Organizational Change Management, vol. 9, no. 3, pp. 62-72

Helin, S. and Sandström, J. (2013). Codes, Ethics and Cross-Cultural Differences: Stories from the Implementation of a Corporate Code of Ethics in a MNC Subsidiary. J Bus Ethics, 82(2), pp.281-291.

Kotabe, M. and Aulakh, P. (2012). Emerging issues in international business research. Cheltenham, UK: E. Elgar.

Li, L. (2010). A framework for analysing the relationship between human resource management-corporate strategy (HRM-CS) integration and the design of cross-cultural training programmes for managers in multinational corporations (MNC). Wagga Wagga: School of Commerce, CSU.

Li, T. (2011). Reviving traditions in research on international market entry. Amsterdam: JAI.

Matusitz, J. and Minei, E. (2011). Cultural Adaptation of an MNC in Mexico: A Success Story. Transit Stud Rev, 18(2), pp.418-429.

Schneider, L. (2011). What is the best way to improve cultural integration in a MNC?. Strategic HR Review, 11(1).

Tamu.edu. (2016). Culture. [online] Available at: https://www.tamu.edu/faculty/choudhury/mnc.htm [Accessed 18 Aug. 2016].

Wu, C., Lawler, J. and Yi, X. (2008). Overt employment discrimination in MNC affiliates: home-country cultural and institutional effects. Journal of International Business Studies, 39(5), pp.772-794.

Zhao, M., Park, S. and Zhou, N. (2014). MNC strategy and social adaptation in emerging markets.Journal of International Business Studies, 45(7), pp.842-861.

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