Sample Assignment - Cultural Adaptation and Diversity Challenges Faced by Multi-National Corporations

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Table of Contents

Executive Summary 3

Introduction 3

Scholarly Overview 4

Business Culture in Australia 7

Australian Leaders and their cross-cultural attitude 8

Cross-Cultural Management 10

Cross Cultural Training 10

Characteristics of Cross-Cultural Training 11

Conclusion 12

References 13

Executive Summary

MNCs operate globally and hence they are faced with the cross-cultural relationships, distant cultures and their practical experience of facing the reality no doubt does affect their workforce on the multinational level. MNCs are therefore trained in managing relationships and establishing cooperation among the external stakeholders and their employees (Rozkwitalska, 2013). MNCs are also aware about the cross-cultural implications and the barriers that harm their cross-cultural relationships.

Introduction

Cultural adaptation and cultural diversity challenges faced by the MNC’s that are seeking to set up business in a global environment is a broad subject. It is true as stated by Rozkwitalska that the MNCs are operating and investing in many distant markets and they are creating foreign subsidiaries and affiliates that participate in the strategic alliances and joint ventures. Therefore normally MNCs function as one system and they consist of one among several units that are working in the diverse environments, employing multi-national workforces and negotiating with the foreign contractors. Cultural metaphors can be explained to be profile of a specific nation, ethnic group, a base nation through which cluster of nations also share the same attitudes and values. The context of the text is to relate the cluster metaphors to the culture of nations. Culture metaphor also represents the way to attain insights into nations and group’s culture; they actually provide the method of discussing cross-cultural differences and issues. It is important for the global marketers to understand the cultural metaphors because as stated in the text that the globalized world of today actually demands for the cross-cultural expertise in order to survive. Global marketers are engaged cross-culturally and therefore this becomes the need for them to understand culture metaphor.

In submission to these lines of their collaboration, this paper will look at one particular aspect and that is MNCs meaning and dimensions of culture: that is managing across cultures and Australian region will be focused on particularly. Australia is also one of the diverse growing countries with a huge population and many foreigners. This paper additionally identifies the sensitivity of the subject and therefore it will not provide any over generalized or stereotypical information on another country.

Scholarly Overview

Firstly, it is important to understand the meanings and dimensions of culture. As reported by Doh (2005), the major challenge in doing business internationally is been able to adapt in various cultures. Cultural adaptation is automatically linked to the understanding of cultural perceptions, diversity, values and stereotypes. Further the research on various cultural attitudes and dimensions state that findings have proved to be helpful in providing the integrative and detailed profiles of the international cultures. Doh (2005) explains that the word culture is inherited from the Latin word ‘cultura’ and it is related to worship or cult. If this word is explored in the broader sense then it is known and understood that this word is referred to the interaction between the humans. Therefore, further as Doh states that Culture is understood as the knowledge acquired that is used by people to interpret the practical experience with the attitude of generating the social behavior. Their forms, knowledge, values, influences in behavior and the creation of attitudes.

The characteristics of culture as explained and described by Doh (2005) underlines some of the significant points:

  1. Culture is not biologically based or inherited but it is an experience that is acquired, therefore it can be termed as a learned experienced acquired from understanding and keeping the knowledge of one’s culture.

  2. It is an experience that is shared with the organization, group, society, therefore it is a wholesome experience that does not limit to the experience shared with single individuals.

  3. It is a experience of understanding that the culture is collective and therefore passed from one generation to the other and therefore this is a trans-generational experience.

  4. Culture is also based on the capacity to use or symbolize and represent the another and therefore it is symbolic.

  5. The culture is integrated, organized and structured and therefore change in one aspect can automatically introduce change in the other aspect therefore it is ‘Patterned’.

  6. The culture is also based on the human capacity of adapting and changing as more driven by genetically adaptive process. Therefore this experience is related to the adaptive nature.

Further, Doh (2005) explains that there are many cultures that are represented in this world and therefore a thorough understanding of the impact that the culture has on behavior is one of the MNC’s goal of international management. If the international managers working for the MNC company are unaware about the cultures of different countries that they deal with the results could be harmful and disastrous.

Doh (2005), further explains about the cultural diversity, it is stated that there are more than one ways in examining the impact and cultural differences in the international management. Culture can affect the managerial attitudes, technology transfer, the ideology and also the business and government relations. It is imperative to say that culture also affects the way people behave and think. Culture is easily able to affect the business activities that include etiquettes and manners in an individual country. The culture in each country is defined by the mannerisms of the host country. The illustration to prove the same can be given of U.S.A where a type of handshake is expected to be ‘Firm’ this not only proves confidence but a great deal that can take place between two people involved in the business negotiation.

Todeva (1999) discusses about the three perspectives on culture that is linked with the illustration and the demonstration of culture. After looking at an overview on the culture in general, it is important to understand the organization culture and comparative management. Further the author in their research explains about the cultural-reinforcing factors that analyze the effect on the behavior of the organization. Secondly, the different perspective is highlighted that is linked to the variation and ambiguity present across the sub-cultures at the organizational and national level. Thirdly, Todeva (1999), further explains that fragmentation perspective describes the dynamics of culture at the organizational level. Further it is explained that the subjectivity and the interpretations of culture applicable to one particular country is determined through the manifestations of culture in that particular country. Todeva (1999), further explains that the influence that a socio-cultural environment tends to have on the individual is immense because it is termed by the individuals to accept the behavior of that culture and be aware of the cultural constructs to articulate them in the work setting. In an journal article written by Leo and the team (2005), states the consumer decision making styles that seem to exist between both the Australians and Singaporeans. The research involves the discussion on the cultural dimensions that influence the decision making styles in making strategic decisions and handling the members of other nationalities. The differences that embark between two cultures often include dimensions such as brand consciousness, confused by over-choice and innovativeness.

Leo et al (2005) explain that the domain of management especially refers to the processes, people, markets and products. This is an era of globalization and therefore customized techniques and management tools are applied in various marketplaces. The author of this journal article wants to especially reflect on the decision making styles and their examination based on the cultural overview of two different cultures. It is indicated by the author that there is very little research conducted on the cross-cultural differences that discusses the various consumer decision making styles and therefore because the paper talks about the cultural adaptation and diversity of MNCs in cross cultural context it is also important to understand, investigate and examine the consumer decision making in this context. Moving further into the research question, the discussion and the scope of this research study, the significant and the most important thing is to know that Australia is explained to be a Anglo-Saxon country while Singapore is Chinese. As this research is specifically driven with the context of concentrating on this region, it is important to understanding the cultural heritages of this region.

Australian MNC’s cross cultural attitude

Business Culture in Australia

The main author Rees quotes Hofstede’s (1990) work on the Australian business culture and the stereotypical business behavior within the culture which also explains the MNCs culture and the interaction of other organizations to acquire global conglomerates. Rees stating Juhl (2000) describes Australia to be part of the Anglo-American cluster that includes countries like Australia, UK, US, Canada, New Zealand and the other British Colonies. It is also implies that the business practices and Australian values tend to be same as the other cultures. Juhl (2000) however goes further to explain the different dimension of each country and this also includes the business behavior in Australia that seems to be different and unique than the other countries mentioned for example America. Rees (n.d) explains that the culture of Australia is considered to be low context as they are very informal and the Australians are stated to have equality in interactions that is they focus on here and now and most importantly on the present and the future. The Australians tend to dress casually in the work place with their greeting style explained to be informal and the verbal communication between the employees tends to be logical, direct and precise. Australians also tend to take pride in their assertiveness and they tend to have a very little concern on the opinion of others. Rees further acknowledges the fact that Australians also consider their society to be egalitarian and classless with the distaste of superiority and ambition and they seem to take great delight in cutting down what is known to be ‘tall poppies’. Australians are also described to be very conscious individuals especially in their first meetings with the strangers. In further explaining what ‘Tall Poppy’ meant Rees (n.d) states that Tall Poppy is referred to a syndrome were the tallest flower in the field is first to be cut down therefore with the view of the Australian employees that see management with suspicion and they seem to be least interested in maintaining a social relationship with the superiors.

Australian Leaders and their Cross-Cultural Attitude

The Australian managers tend to find the group processes of decision making a difficult task or emotionally draining because they are unafraid to challenge the authority as stated. It is also observed and marked that the Australian leader’s emphasis on a directive style and approach. Australians are also explained to work in order to live rather than it being vice-versa. Additionally, it is also stated that Australians in their working style see themselves as tough, innovative, practical, adventurous and practical. In the Australian work context ‘Rees’ goes on to state that the sex-role distribution in Australia sees females to be nurturing and males to be assertive. Australians are also considered to be short-term thinkers that live for the present and they do not like to consider looking ahead to their future.

Muenjohn and Armstrong (2013) discuss about the culture specific leadership, often it is stated that the cross-cultural management leaders find it challenging to demonstrate the cross cultural practices in their management style. It is also mentioned that often in the MNC’s Transformational leadership is demonstrated in the cross-cultural setting. Transformation leadership helps the leaders to be effective leaders in cross-cultures and though the behaviors that are associated with each leadership may be different yet the transformational leadership style is encouraged within the organizations. This is also applicable to the Australian leaders and the managers in MNC are leading corporations. The pattern of the transformational leadership found in Australian leaders is shown in the figure below:

(Muenjohn and Armstrong, 2013).

Additionally Chung and Smith (2006), add one more dimension to Australian managers working for the MNC’s, the challenge they face in understanding the language and culture of a different country for example Chinese, though irrespective to say that they love the Chinese food. It is stated by Schneider and Barsoux quoted by Chung and Smith (2006), that the Australian managers who accept the Chinese cuisine, the music, literature and art of other countries should learn also to accept the art of management that differs in other countries.

Cross-Cultural Management

Chung and Smith (2006) stated that the Australian management systems were well accepted in the Chinese systems as it was acknowledged by the interviewees that believed that Australians brought great training style and management systems to the Chinese. It is stated that when Australian managers travel overseas for example visiting China for work purposes, it is often a challenge for them to deal or adjust to a different way of life and it definitely puts psychological limitations and their ability in understanding the foreign culture. This thought is also applicable to the employees that are sent overseas on work assignments and the same story seems to repeat itself, however Australian employees and managers tend to adjust more than the others when they are sent overseas, though it takes some time and challenges to overcome but the good news is the cross-cultural training that helps them to overcome and cross each hurdle that comes in their way of working.

Cross-Cultural Training

MNC’s in Australia bag in or encourage for the Cross-Cultural training to improve the inter cultural learning through the development of behavioral, affective competencies needed to cross the cross-cultural barriers. It is stated by Gojer E (2012), that cross-cultural training is conducted either face to face or due to the technological benefit it is also possible for the cross-cultural training to take place via self-paced learning modules. Cross-Cultural training trained expatriates and prepared the employees for overseas work, and it also helped to be aware of different culture and taught them to interact with individuals that came from various cultural backgrounds. In addition to this, cross cultural training also has extended to multi-cultural teams that are preparing the use of techniques in the cross-cultural setting. It is additionally been stated that there have been advances in the distribution channels and communication in expanding the operations beyond international borders. Most MNC corporations have no choice but to deal cross-culturally with the managers and employees that come from a different cultural background.

Characteristics of Cross-Cultural Sensitivity

Gojer E (2012) comments on the relationship between culture and psychiatry, asserted that culturally relative belief systems can have important implications in the cross-cultural sensitivity. In continuation, it is stated that health professionals should examine values, biases and beliefs; they should perform an agency assessment to determine if resources are sufficient to meet the needs of ethnically diverse clients and assess clients within the context of their culture, using culturally appropriate assessment tools.

The “Experiential Model” teaches empathy and cultural sensitivity to demonstrate instructional model in teaching culturally sensitive, empathic communication skills. This model attempts to integrate and communicate the conceptual and experiential understanding of cross-cultural empathy through the practice of mind-ful attitudes. A culturally competent care model created for nursing theory has interesting insight. This model has four dimensions to cultural competence: cultural knowledge, cultural sensitivity, caring and cultural skills. The model states that cultural competence does not only involve caring, but knowledge, language ability and cultural sensitivity (Gojer, 2012).

There are four generic types of cultures as mentioned, horizontal collectivism which is stated as the community sharing, the second one is the vertical collectivism that is hierarchical authority or ranking, third is the horizontal individualism which is stated as the equality matching and vertical individualism that is market pricing. The Horizontal collectivism and community sharing reflects on the principles of community sharing in a way where the members of the in-group all share the goods. Vertical Collectivism is found in Africa, Asia and Latin America where it involves the psychological relationship shared between the leaders or the leaders along with the others in the culture. Third description is of Horizontal Individualism where there are three things mentioned: firstly equality, secondly, the dominant are Sweden and Norway and lastly it is where all individuals are given equal preference even if one group is taxed heavily.

In conclusion, it is important to understand that this paper has covered the cross-cultural adaptation and the diversity issues that are important to discuss especially when it concerns with the MNC corporations. This paper has highlighted ‘Australia’ as the region of research because it is understood that there is diversity in Australia. However, with MNC’s corporation it is either individuals coming to work at MNC’s companies in Australia, or the Australian employees including managers have to travel to a different country for their work purposes.

Within a culture there are many different cultures; Australian culture is understood to be a laid back culture that is not as formal as the culture of the United States. Cross-Cultural knowledge and awareness is important because it is required when individuals from various cultural backgrounds work together. Racism is one of the critical issues in the world and in order to avoid the bondages to racism, this paper highlights the cultural barrier advancements in working together for big corporations such as MNC. People are judged in this world according to their color that is how unjust the environment has become for genuine people who live in this world. In order to avoid racial conflicts at work, this research paper highlighted some of the important aspects to different cultures and to fight the cross-cultural hurdles to have peaceful working atmosphere.

In the end it can be stated that though cultural diversity exists but the hope is that this study is just a thought of being sensitive to other cultures.

References

Chung, M. and Smith, W. 2006. http://www.buseco.monash.edu.au/mgt/research/working-papers/2006/wp42-06.pdf . [online] Available at: http://www.buseco.monash.edu.au/mgt/research/working-papers/2006/wp42-06.pdf [Accessed: 29 Sep 2013].

Doh, H. 2005. The Role of Culture. [online] Available at: http://www.unice.fr/crookall-cours/iup_cult/_docs/_International%20Management%20Chapter04%20408020.pdf [Accessed: 29 Sep 2013].

Joshua Gojer, E. 2012. Cross-Cultural Training and Success Versus Failure of Expatriates. [online] Available at: http://digital.library.unt.edu/ark:/67531/metadc122179/m2/1/high_res_d/Cross-cultural%20training%20and%20success.pdf [Accessed: 29 Sep 2013].

Leo Et Al. 2005. Cross-Cultural Differences in Consumer Decision-Making Styles. [online] Available at: http://eprints.qut.edu.au/13244/1/13244a.pdf [Accessed: 29 Sep 2013].

Muenjohn And Armstrong. 2013. Transformational Leadership: The Influence of Culture on the Leadership Behaviours of Expatriate Managers. [online] Available at: http://knowledgetaiwan.org/ojs/index.php/ijbi/article/viewFile/118/10 [Accessed: 29 Sep 2013].

Rees, M. 2013. IS AUSTRALIA ANOTHER ANGLO-AMERICAN COUNTRY – A REVIEW OF THE AUSTRALIAN BUSINESS CULTURAL STEREOTYPE. [online] Available at: http://www.crossculturalresearch.com/ccr_website/proceedings01/papers/rees.doc. [Accessed: 29 Sep 2013].

Rozkwitalska, M. 2013. Effective cross-cultural relationships in multinational corporations. Foreign subsidiaries’ viewpoint. [online] Available at: http://www.academia.edu/3732624/Effective_cross-cultural_relationships_in_multinational_corporations._Foreign_subsidiaries_viewpoint [Accessed: 29 Sep 2013].

Todeva, E. 2000. Models For Comparative Analysis Of Culture: The Case Of Poland. [online] Available at: http://epubs.surrey.ac.uk/1963/1/fulltext.pdf [Accessed: 29 Sep 2013].