IMPORTANCE OF CULTURAL DIFFERENCE FOR THE GLOBAL MULTINATIONAL CORPORATION
Globalisation formula is used by most of the potential business authorities in an international sector for developing both of their productivity and profitability. In this essay, importances of globalisation for Multinational Corporations are elaborated to understand different business perspectives. On the other hand, PESTLE analysis is accomplished in this study for evaluating decision making factors for famous Asian organisations. Apart from this, all the social norms, values and ethics are considered proficiently in this study for detecting advantages and disadvantages of cross culture. Moreover, this essay is a transparent view of business liabilities of several popular organisations during its globalisation process.
Table of Contents
Impact of globalisation on organisation and their management 4
Social and cultural problem problems in an international setting. 5
Decision making perspectives in business process. 6
Sensitivity of cultural difference is important for global multinational corporation (MNC) for understanding the perspectives of and business internationalisation can be facilitated through this. In this study, dimensions of culture are elaborated to understand values, norms and ethics for social mobility purpose of an organisation by analysing PESTLE for global MNCs.
Impact of globalisation on organisation and their management
Globalisation is a sustainable business approach for famous organisations as it helps to influence normal operation management process. As per the view of Popli et al. (2016), all the potential companies are ready to incorporate several changes for acquiring suitable profit. On the other hand, profitable changes affect on business process in a positive way and customer base of the organisation can be moderated. Apart from this, diversification of market is another issue for globalisation that in turn helps an organisation to acquire more profit per annum. However, competitive landscape is broader in case of business globalisation and it becomes difficult for a company to grab quick response from new consumers (Henderson et al. 2018). Along with this, most of the companies are unable to manage bigger market share and revenue generation is ceased. On the other hand, organisational productivity can also be hampered because of globalisation and mix culture within a company.
Management of an organisation can be affected both in positive and negative way through business globalisation due to constraints in market entry process. As pointed out by Padhi (2016), bargaining power of suppliers and buyers has to be high during diversification of business. In order to do so, it is vital to restructure internal management and improving product quality in a cheap cost. Along with this, high global competition can be possible for a company if this entity is able to reduce risks. On the other hand, emergence of business in a new area has to maintain under ethical guidelines but majority of the companies are failed to moderate performance. Corporate Social Responsibility of an organisation can also be modified after internationalisation of business. However, cross culture and acquisition of multiple cultures is helpful for business leaders to evoke economic backbone with proper technical and physical feasibility (Van Dyne et al. 2016).
Social and cultural problem problems in an international setting
Cross culture literacy and dimensions in business is a proficient concept for business leaders to detect difference between company culture and its background. As per the view of Henderson et al. (2016), cross culture education is vital for any business entity before perusing globalisation under sustainable ethics. In order to emerge market in abroad, it is necessary to acquire style and substances of this particular country. This fact has not been done by most of the organisations due to business dilemma and procurement of unethical business process. On the other hand, value of business can also be reduced by maintaining social culture in a proper manner. In contrast, Lorenz et al. (2018) pointed out that cross culture literacy is demanded for all global firms before changing its platform from national to international. This in turn helps to enhance communication process with new target populations under sustainable cultural diversity and affectivity.
Cultural diversity is important for multinational corporations as this factor of globalisation can help a company by providing competitive edge with the help of skilled labours. As per the opinion of Vlajcic et al. (2019), cross culture helps to improve technology to accomplish any business process. On the other hand, originations are able to compete with global economy by proposing cultural diversity in business process. As an example Asian organisations can be taken and its market emergence for European market can enhance technical backbone. Therefore, the organisation becomes able to gather sustainable profit by collaborating with joint ventures. However, Miao et al. (2016) mentioned that social mobility is minimum in case of business globalisation and civic disengagement can be ensured because of language barrier. As a result, business process is hampered in a larger way due to improper management rule and different perspectives of all employees. Henceforth, it is not easy for the Asian organisations to diversify their field without workplace issues and social constraints.
Decision making perspectives in business process
Decision making strategy in international business is highly influenced by investigating relationship between contextual and environmental factors in a better way. PESTLE analysis table is given below to understand the consequences of different global factors in business process.
Political constraints arise for cheap labour in Asian marketInternational relations of traders are goodThere is no problem with currency system with European countriesTrade process is reluctant in most of the regions of this continent
China, Singapore are potential countries to be business leaders across the globePresence of workforce is largeCapable to serve large global economy with low inflation rateLower wage and dilemma of people enhance production cost
Cultural difference is major and adaptation rate is low in amountConflict between previous and modern employeesReligion taboo is major to reduce business procurementFashion and innovation perception varies from one country to another due to cultural barrier
Research and Development fact is high for Asian countriesOnline marketing services are majorly used by the retailers for attracting global consumersBusiness machinery is very strong in natureSocial media marketing provokes business process
Legal embargos is responsible to loss marketNumber of secure labour is low due to legal constraintsMost of the foreign countries have banned major advertisementCounterfeiting reduces the prestige of the organisations
Climate change is responsible to ensure barrier in business processDistribution cost of the companies are not accurate to fulfil customers demandQuality of water in different countries have affected on natural processLack of raw material and natural resource have delivered a number of problems
It can be analysed from above PESTLE table that globalisation of Asian business authorities become tough due to socio-cultural barriers. As per the opinion of Vaara et al. (2019), countries like China, Malaysia, and Thailand are solely involved with their own business culture. Most of the organisations belonging to this country use local languages for proceeding business acquisition. On the other hand, culture of business is totally country freak and demands of national consumers are preferred mostly. However, Chinese companies are prone to change their organisational culture and have tried to use a single global language for internationalise their business at any situation (Brannen et al. 2017).
It can be interpreted from this study that cross culture business is relevant to know the demands and complaints of customers. On the other hand, major social problems for an organisation can be reduced by developing cross-cultural business on a daily basis. As a result, economic backbones of different organisations are moderated positively by reducing cultural barrier in business process. In addition, cultures differences of countries are able to modify business performance of an organisation both in direct and indirect manner. Moreover, cultural difference is required for global organisations to meet selected goals by gaining major profits in business process.
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