Cultural influences are extremely important for conducting international business (Kania, 2010), as they heavily influence how many businesses operate (Grandys and Grandys, 2010).
Different market cultures of various countries result in different commercial activities. As a result, executives working on the global scale experience challenges, that individuals leading businesses on a local scale, do not (Greblikaite et. al, 2016). Intercultural awareness, particularly within a multinational organization, is a vital concept to the supply chain components and overall business performance. These multinational corporations face the task of handling various societies' diverse multi–environment systems (Reidy, 2010). Cook and Cook (2011) emphasize that as companies globalize, there is an increasing need for cross-cultural awareness, culture-specific management styles, and intercross-cultural exchanges.
Furthermore, Chhokar, Brodbeck, and House (2007) recognized the significance of global awareness and cultural appraisal in the developing and industrialized worlds to prevent global managers failing in their assignments. Because of discrepancies in business culture and ethical norms, the vital method of making choices, reaching common agreements, and creating trust
has taken on a different dimension. Cross-cultural communication skills and interpersonal negotiating expertise, as stated by Connerley and Paul (2005), are needed for successful management of a multination workforce.
Global companies must address cultural differences in handling overseas branches, among other factors, to meet corporate objectives. Miscommunication and misunderstandings are a major issue for many global companies, particularly between the head office and regions.
People in various countries respond differently to inputs, speak in different ways, and reach different conclusions. Organically grown business cultures which have been overlooked for a long time continue to crumble. The more individuals who deal with peers from other backgrounds in distant countries, the fewer they catch up upon understanding and the more they are prone to confusion and inaccuracy (Meyer, 2015). Furthermore, as multinational teams have participants from more than one country, people within the team carry preconceived notions regarding team members from other countries, which may contribute to unintended tension attributable to misunderstandings (Rothbard, 2009).
Subtle miscommunications exacerbate the second challenge that a multinational organization encounters, namely “camping”. Employees often form different camps with a “us vs them”
environment. Regional branches, with good intentions, establish what a CEO described as
“overseas cocoons,” whereby the staff exchange tasks and collaborate while remain separated from their coworkers. Headquarters also aims to be egalitarian, but staff exchanges are disrupted by gaps in social norms. When firms establish rules on information exchange and inclusion, they frequently run into a third issue: leadership style. Consider TNT, a Dutch shipping business, that has long valued task-oriented efficiency and egalitarian management.
Before it came to Chinese market, it discovered that none of those ideals was compatible with local standards. As Asian leaders changed their models to recruit local customers and inspire the local workers, the business culture increasingly grew more relationship oriented and hierarchical. The logical approach is to implement various procedures that allow workers to summarize key messaging and express the way they cooperate with one another, which person follows particular activities and at what time. This sort of change is generally useful to particular organizations (Meyer, 2015).
The issue with such adjustment seems to be in the point where organizational culture is often a core indicator of its growth. If a general manager agrees that the company's culture is what makes it better, it is best to insist on upholding it in all workplaces, even if it contradicts local experience. Creating a strong business culture that is similar from Beijing to Brazil allows internal operations simpler and more effective. However, it is fraught with risk. Continuing on this theme, Hodgetts and Luthans (2003) expressed concern that it will be very challenging to do business in the same way across the world due to cultural disparities, differences, and disputes. They warned that attempting to handle workers in the same way through cultures would pose significant obstacles to many multinational companies. Similarly, O’Rourke (2013) concluded that the unwillingness to grasp and respond to international methodologies, as well as behavioral ineffectiveness, are common factors leading to managers’ failure to perform effectively in global company assignments and programs. While companies’
participation in the global economy grows, they must ensure that their managers are adjusting to new and diverse societies. Chaney and Martin (2007) argue, in line with other cultural analyses, that a keen understanding of cultural disparities is becoming increasingly essential
to the progress of global competition. International administrators may be both successful and efficient if they have a clear understanding and knowledge of the society in which they do business (Okoro, 2012). Meyer (2015) builds on this argument by stating that an organization with a good corporate culture usually recruits people who can blend into the culture and teaches them to function and perform in an internationally recognized manner.
Meyer raised the issue, “How do multinational organizations avoid connectivity breakdowns, fault lines, and other risks?” (Meyer, 2015, p.6). Certain cultural and structural defects have solutions that are sometimes less apparent than the signs, and the specifics can vary. However, Meyer (2015) contends that firms that carefully enforce ground rules are more ready to adjust their market culture in nations before compromising their basic capabilities. In this regard, Hofstede (1994) observes that implementing these rules is not a one-time practice. It needs constant commitment from senior management, patience over many years, and, in most cases, a cultural review to determine if the desired improvements have been achieved. Furthermore, Hofstede (1994) emphasizes that structure should obey culture; that is, the object of an organizational structure is to coordinate activities. Three questions must be asked for each corporate unit when designing the organization of a global and multi-business organization.
The first issue is determining whether any of the department's variables can be coordinated from other areas of the organization. The second issue raised by Hofstede (1994) is when and at what stage does collaboration take place. The final question is how close or loose the teamwork can be. In any scenario, the simple option is between cooperation along regional collaboration and business-to-business coordination (Hofstede, 1994).
Erin Meyer (2015), on the other hand, takes another approach, presenting five approaches that leaders can use as guides while preparing for international culture. The first method is to determine the dimensions of difference. When dealing with a clash between a business culture and a national culture, the first objective is to understand the important features where several distinct cultures differ. The best approach is almost always a patchwork system that meets corporate lines in certain situations and regional lines in others. This may be a bit clumsy, yet this meets market and business department cultural requirements. The world whereby a company works should be varied, and this should be balanced by sufficient internal variation.
Optimal strategies can evolve with time, therefore the occasional reshufflings, that every big enterprise experience, can be viewed as functional (Hofstede, 1994).
The second way is to allow everybody a chance to speak up. While managers may change certain guidelines based on culture and organizational structure, one principle that must be followed always is ensuring that any cultural community is understood (Meyer, 2015). For this case, Hofstede claims:
“Two roles are particularly crucial: (a) country business unit managers who form the link between the culture of the business unit, and the corporate culture which is usually heavily affected by the nationality of origin of the corporation, and (b) “corporate diplomats”, i.e. home country or other nationals who are impregnated with the corporate culture, multilingual, from various occupational backgrounds, and experienced in living and functioning in various foreign cultures. They are essential to make multinational structures work, as liaison persons in the various head offices or as temporary managers for new ventures” (Hofstede, 1994, p.12).
The third strategy is to protect the most innovative units. Companies can plan out the places of the organization that depend extensively on ingenuity and collective adjustment to accomplish their corporate goals when they grow globally. The fourth solution is to cultivate key norms in everyone. When joining a foreign market, businesses would inevitably adjust to some of the local norms (Meyer, 2015). These norms may be adapted by specialized training that focuses upon operating instead of living in other nations. The emphasis in these kinds of classes is on understanding someone else's cultural programs and how they vary from those of citizens from other countries (Hofstede, 1994).
Meyer’s (2015) final approach is to be heterogeneous anywhere. Hofstede (1994) expands on this issue, stating that the key role of international staff management is to ensure the availability of qualified people at the right time. This entails prompt hiring of potential management prospects from various nationalities, as well as job advancement by scheduled transitions where these individuals can absorb the company community. Multinational human resource agencies must strike a balance between uniformity and flexibility of staff policies.
As a result, corporate-wide measures are enforced on branches where they will not operate, or where they will only earn lip support from loyal yet perplexed locals. On the other hand, the belief of everyone being unique as well as the way that individuals in branches ought to understand better and be able to go their own direction is often unfounded. As a result, it is recommended that roles and responsibilities are distributed through locations, and that staff members are instructed to create bridges of cultural understanding (Meyer, 2015).
4 Discussion
The thesis would conclude with a critique of the stereotypical representations of culture and its influence of management studies as well as cross-cultural business ones. The objective aims to demonstrate that the absence of cultural conceptualization has culminated in the spread of myths and cultural assumptions. The thesis then aims to challenge some of the underlying theories regarding the basic nature of culture by utilizing references from a range of literature. The research seeks to raise concern of the dangers in oversimplification of such words and ideas, as well as to advocate with a more comprehensive understanding of culture in the context of business and management.