Executive summary
Culture variation across the international organization is defining the way multinational corporations operate in the global market. In this paper, the researcher was interested in analyzing how international companies are forced to embrace new cultural beliefs and business practices based on the local forces. Data was collected from secondary sources. The findings show that although emerging technologies have promoted the creation of a global market, cultural differences still exist from one country to another. As such, it is important for a firm to u understand the local culture when planning to make an entry into a new market.
Introduction
Cultural variation across international organizations is an issue that has attracted the attention of scholars over the recent past. According to Bellinger, an American business that decided to explore the German market may find it difficult to adapt to the local forces because of cultural differences in the two countries (46). The United States and Germany are both developed economies, but the geographic and cultural difference makes it necessary for international companies to make some adjustments to operate in the two countries. Punnett explains that in Germany, management embraces the strict hierarchical flow of command, where the top manager’s issue instruction to the junior employees through the existing leadership structure (45).
It is not common for a junior officer to contact senior managers directly. Instead, they are expected to report to their immediate supervisors who will then pass the message to the immediate boss till it reaches the intended manager. That approach is not common in most American companies that have already embraced the open-door policy in human resource management. This policy allows a junior employees to contact senior managers directly if they have a genuine reason to do so. These cultural variations must be understood by companies keen on operating in the international market to avoid serious challenges relating to managing human resources and meeting the needs of customers. In this paper, the researcher seeks to investigate cultural variations across international organizations.
Discussion
According to Skinner and Stewart, successful organizations operating in the international market have mastered cultural variations across different countries and how to confirm to them to enhance smooth operations (28). They understand that although the emerging technologies, especially in the fields of transport and communication, have promoted globalization, cultural differences still exist and play a crucial role in defining the approaches used in managing employees and meeting customers’ needs. It is important to start by defining the term culture.
Different Definitions of Culture
According to Ysa et al., culture refers to “the arts and other manifestations of human intellectual achievement regarded collectively” (54). It involves how people of a given region approach different issues regarding their intellectual achievements. Bellinger defines culture as “the ideas, customs, and social behavior of a particular people or society” (56). The environmental forces and historical factors define the beliefs and practices of people in a given country. They develop religious beliefs based on the interactions they have had and past experiences. They embrace beliefs in line with environmental forces and interests they have in their society. As Punnett states, culture goes beyond the religious belief and practices of people (39).
It also explains how people approach work, issues about interpersonal relationships, work, ethics, and other related factors that define a person’s personality. In business, culture defines how people behave in an organizational context, the relationships they embrace, and factors that define the purchasing decisions made by customers in the market. A firm must understand the culture of a country of interest because of two reasons. First, understanding the local culture will make it possible to manage the employees and to develop a culture that the society finds acceptable. Secondly, it enables a firm to embrace marketing strategies and to develop products that customers will find appealing based on their beliefs.
Explanation of the Different National Culture Frameworks
According to Noorderhaven et al., although the emerging technologies have brought people of the global society closer than ever before, different countries still gave distinctive cultural practices that need to be understood by the business community (67). An American company that seeks to explore the market in the United Arab Emirates must understand that some of the beliefs and cultural practices that influence the decisions of employees and customers in the foreign country are different from those at home. It is necessary to look at some of the major cultural differences that exist in some of the countries around the world.
The United States’ Open-Door Policy
In the United States, the approach that is taken in the management of human resources has evolved. House explains that the framework has changed from the rigid official structure where information has to flow from the top to bottom using a clearly defined structure to a new flexible framework (12). The open-door policy in managing human resources has proven to be crucial in managing talents. Creativity and innovation are critical in the modern-day business environment. In the past, it was believed that the most learned and experienced individuals are the most creative and innovative individuals.
However, studies have confirmed that although academic excellence enhances creativity, it does not mean that the less educated junior employees cannot be creative in their areas of work. When offered a perfect environment and the necessary support, junior employees can come up with innovative ways of undertaking various tasks assigned to them. In the United States, many companies have embraced a cultural framework that allows junior employees to engage top managers directly if they feel they have a new idea that may help transform the firm’s operations. The open-door policy, as Den notes, promotes an innovative culture (59). It empowers junior employees by making them feel that their ideas can be taken seriously and that they have the capacity of talking directly to the top managers instead of relying on junior employees.
According to Skinner and Stewart, this cultural framework works well in an environment where people appreciate the need to undertake their duties without having to be followed by the top managers, as explained in McGregor’s Theory Y (90). This theory holds that people are often self-driven and can work effectively when offered a perfect environment without the need to maintain close supervision. It works well when people appreciate the tight schedule of the top managers and the need to engage them when it is necessary. House argues that this policy must be implemented when a culture has been inculcated within an organization that makes employees understand the importance of their role and the approach that they need to take in addressing tasks assigned to them (49). It works well in companies that have highly educated employees who appreciate the relevance of working under minimal supervision.
The German’s Hierarchical Management System
The German society shares a lot in common with Unites States’ society. However, the human resource management approach slightly differs in various ways. The open-door policy that is common in the United States is rare in many German companies. The cultural framework embraced by most of the local companies in this country is based on strict hierarchical policy. It means that junior employees must follow the well-laid structures and systems to share their views and opinions with the top managers. Similarly, the top managers are expected to pass instructions to junior employees using these structures at all times. The interaction between top managers and junior employees is rare. It often occurs during end-year parties and in a non-formal environment. However, Halouane explains that it does not mean the top managers cannot contact junior employees directly when it is necessary (45). It is only that such interactions are maintained at a bare minimum to ensure that the senior managers can concentrate on policy-making and other strategic activities.
This cultural framework is important in large organizations where the top managers have limited time to engage junior employees. It also works well in an environment where the top managers feel that junior employees cannot work without proper supervision. As House notes, this framework embraces McGregor’s Theory X (95). The theory holds that people are often lazy and are unwilling to engage deliver quality work without proper supervision. As such, they need to be subjected to strict rules and close monitoring to ensure that they undertake their duties as expected of them. Organizations that embrace this culture expect employees to work based on the strict policies of the organization. They have to follow the strict reporting structure and must follow the guidelines provided by their seniors. Den warns that although this strategy may be effective when managing a large workforce, a section of which may be semi-skilled, it is not appropriate in an environment that requires creativity (43). In this framework, there is an assumption that the most educated and experienced employees at the top level of management can come up with innovative ideas. Although it does not restrict junior workers from coming up with innovative ideas, it does not offer them a perfect environment to do so.
Saudi Arabia’s Socio-Cultural Beliefs
The cultural framework in Saudi Arabia takes a sharp twist from that in the United States and Germany. It is strictly defined by Islamic teaching and principles. According to Thomas and Peterson, the culture in Saudi Arabia defines the role of men and women in clear terms (36). Although some of these cultural rules are becoming relaxed because of local and global pressure, there is yet to be a complete change despite the initiatives that have been taken by the government. Women are not expected to take the leading roles in the decision-making processes. When an American firm considers opening up a branch in Saudi Arabia, several factors will need to be taken into consideration because of these cultural differences. It is not advisable to have a woman being assigned the role of the head of the new branch. It may not be easy for such a woman to command the respect that is needed to head such an entity. This is so because the societal system expects women to be submissive and subordinate to men. Society is also strict on the products that can be sold and the promotional campaigns that a company can use in the market. Using languages that are considered contrary to beliefs and cultural practices may be counterproductive in such an environment.
Japan’s Work Ethics
Japan has a special work culture and ethics that is unique and worth discussing in this paper. According to Thomas and Peterson, the Japanese have a military-like work culture that does not tolerate laziness or disobedience (112). Most of the Japanese are often self-driven in their work as long as their duties are clearly defined. In Japan, it is common for employees to work for ten or twelve hours a day without complaint. This strong work culture is unique and has attracted many companies around the world keen on improving their production capacity. Many organizations in this country use a blend of the open-door policy and strict hierarchical system as a way of managing the workforce. There is a general understanding that employees in this country can work efficiently without having to be subjected to strict supervision. However, employees are expected to follow strict policies set by the senior managers whenever they are undertaking their respective duties.
International Mergers and Acquisitions
International mergers and acquisitions are becoming common strategies that firms are using to expand their operations beyond their national borders. According to Halouane, mergers and acquisitions have numerous benefits over direct market entry strategy (81). When using a merger or acquisition, a firm will be able to reduce the level of competition in the market. It also enabled the acquiring firm to start operating in the new market at a point. The new firm will be acquiring the market share of the local company and its employees as well in such a process. However, Den explains that such a company must be prepared to deal with the culture shock in the new market (83). In most cases, the head office may want the acquired branch to embrace a culture that is in line with the organizational culture of the parent company. However, that may not be possible in some markets. Dubai is currently one of the most cosmopolitan cities in the world (Halouane 97). That does not mean an American company can impose an organizational culture popular in the home market upon its branch in Dubai. It is necessary to evaluate the local culture during such mergers and acquisitions and ensure that the new branch is operated in line with the local expectations. The top management may consider making various adjustments in the systems and structures of the acquired firm, but that should be done in line with the local socio-cultural forces.
Explanation of the Different Integration Mechanisms
Culture is a force that a company keen on achieving market success cannot ignore. Cultural beliefs and practices define the decisions that buyers make in the market. It defines what customers purchase and how they make their purchases. It is important to embrace different integration mechanisms to ensure that a company overcomes challenges that are associated with cultural differences in the market. A German firm that makes an entry into the Saudi market may want to maintain marketing policies and practices common in the home market. However, it may not apply all the principles and practices in this foreign market because of cultural differences. However, it may be necessary to find a common ground. The company making an entry into the new market will need to find policies that may work and those that may require adjustments.
Effective integration is achieved when the new firm finds a way of operating in the local market that meets its standards but in a way that does not go against the local culture (Bentley 93). It must understand that the majority in Saudi Arabia are strict Muslims whose principles and practices are defined by the teachings of the Quran. For instance, it may be advisable to have a man head the Saudi branch because he will get the respect needed to run the firm instead of having a woman. Similarly, it crucial to ensure that products are planned to be sold in the new market and the brand is promoted appropriately. The approach that is used in promoting lingerie in the United Kingdom’s market, such as that used by Victoria’s Secret, cannot be used in the Saudi market because of the standard dress code expected of women. A new strategy may need to be developed that the locals will find acceptable. Figure 1 shows one of the popular adverts of Victoria’s Secret’s lingerie advert that may not work in Saudi Arabia.
Justification of the Integration Mechanisms
The discussion above shows that the integration mechanism chosen by the national partners is often based on their value orientation. The approach that is taken should be justifiable. One of the important justifications of the integration mechanisms chosen by the partners is the need to have a system that can facilitate effective human resource management. An approach that is used to manage employees in Japan may not be suitable in the United Arab Emirates. The work ethics in the two countries is different. The company will need to find an approach that can work well with the locals. The management principles must meet the expectations of the top managers while at the same time being realistic to the employees (Bentley 74). The second justification is the need to be acceptable to the customers. The marketing strategies used by a company in France may not be suitable in Saudi Arabia. The choice of words must reflect the cultural beliefs of the host country. The inability to understand the cultural beliefs and practices of the target market may spell doom on a firm’s success.
Conclusion and Recommendations
Cultural variations across the international organization are becoming increasingly common as firms struggle to expand their operations beyond their national borders. It is becoming apparent that when planning to explore a new market outside the borders of the parent country, one of the factors that must be taken into serious consideration is cultural differences. The management of the parent company must understand that strategies used in the home market may not necessarily work in the new market. The following recommendations should be taken into consideration:
- It is necessary to employ human resource management policies that are in line with the work ethics and beliefs of the locals.
- The marketing strategies employed in the new market must reflect the religious and social beliefs of the targeted market.
Works Cited
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