The Impact Of Cultural Differences On International Business Conducting Essay.

As part of the formal assessment for the programme you are required to submit an International Management group PowerPoint presentation and individual report. Please refer to your Student Handbook for full details of the programme assessment scheme and general information on preparing and submitting assignments.

Learning Outcomes:

After completing the module, you should be able to:

1. Understand the role of culture in international business including knowledge of the major policies.
2. Develop knowledge of key organisational and national cultural characteristics in order to manage successfully in diverse contexts.
3. Evaluate the challenge and opportunity of managing a diverse global workforce to create value and achieve organisational goals.
4. Understand the factors that contribute to the notion of a globalised economy demonstrating an awareness of ethically sound and accountable international policies
5. Work effectively as a member of a global virtual team with practical application of cultural awareness, including team working skills.

Explore and discuss how the national and organisational culture from the head office location affect how business is conducted when encountering the regional cultures that are present in each of its locations.

Use the group dynamics to explore the four countries and draw upon the external resources made available during the module and your own extended reading. Present your findings as one group MS PowerPoint with narration, using no more than 10 slides. An 11th slide can be added containing your references.

Individually write up your own conclusions as to the key effects of regional cultural issues on the corporate organisational culture of this multinational company as it conducts its business internationally.

The impact of the human resource management is becoming significant in the modern business world. The multi-national organizations are observed to be more inclined towards the scientific management of the business operations. There are several reasons behind the incorporation of the scientific management of the business conductions into the modern day organisations like the significant increment in the business competition or the cultural shock that the expatriates experience in the new culture (Fleisher and Bensoussan 2015). Many of the modern organizations are also observed to face significant amount of crisis due to the improper communication and coordination regarding their activities to the. Hence the importance of the human resource management on the effective business conduction is pretty evident (Armstrong and Taylor 2014). The paper highlights the factors that have greater significance in the success and failure of the expatriates in the new culture along with the key elements of the globalised economy that has the potential to demonstrate the awareness of ethically sound and accountable international policies. Apart from this, the paper also specifies the differences that the organizations and its culture face in different regions. The impact of it is assessed in the paper in order to encounter the significant effect of the regional cultures.

As it is pretty obvious that the regional culture will have a significant impact on the employees of the organization, the difference between it and the corporate culture of the organization will be affecting the efficiency of the employees. The considerable variation in the value dimensions of the host nation and the parent nation of the organization will be a major factor for the inefficiency as well. However, there are several reasons which affect the international business conduction of the concerned organization and the cultural differences are observed to have the most predominant factor. The evaluation of the variations in the aspect of the power distance for the chosen countries will show that UK is such a country where the hierarchical structure or the inequality among the employees is not desired usually (Robinson et al. 2013). However in Brazil, it is seen that the people of the society significantly believes the fact that the inequality among the employees or the people should be there and the various corporate organizations in the region likes the application of the hierarchical corporate structure as well. This has the potential to create significant amount of difficulty for the senior level management of the organization to dictate the outline of the conduction of the business operations for Brazil. However the impact of it will not be significant on the countries like Germany or Japan as both the countries are observed to have same sort of preferences towards the existences of the inequality and the hierarchical structure.

In addition to this, the rating of the UK in the aspect “Individualism” is also observed to be different from that of the other countries. The parent country for the organization is highly individualistic in nature (Uz 2014). The people of the society prefer their own at first. Hence the assimilation of the employees or the team effort among the employees of the nation will be significantly dissimilar to that of the countries like Brazil or Japan where the people are highly collectivist in nature. The ratings of Japan and Brazil in the mentioned aspect clarify the fact that those societies and the people of them prefers the common or team goal more than the individual goals and that becomes significantly problematic for the people of UK to assess. The masculinity index has the potential to create the same issues as well. As from the ratings, it is visible that the people Japan are strongly aim oriented where the urge for becoming the best is significantly high (Dartey-Baah 2013). The country and the people of it love the competition and consider it to be a tool for achieving better and increased efficiency. This, however, has the capability to benefit the corporate organizations as the increased efficiency or the urge for the increment in the efficiency has the potential to increase the productivity and the profitability of the organization as well. Hence the assessment of the work culture of the people of Japan might be confusing from Britain. On the other hand, Brazil’s masculinity index is observed to be less compared to UK and that can be problematic for the review of the work of the people of the country by the management of the UK.

Assignment 2

The UK society is seen to be highly reluctant to the changes or the uncertainty of the result or outcomes. The society is observed to be less affected with such factors whereas Japan scores high on the uncertainty avoidance index which shows that the people of the region get influenced with the changes in the outcomes or conditions. Apart from that, the people of the country are seen to be affected with the unknown element in the business and are highly restrained from taking notable risk. Hence this can affect the business conduction and the integration of two of the workforces as the UK management will be pretty relaxed in these aspects and the Japanese workforce will be highly concerned with the mentioned aspect. In addition to this, Brazil and Germany, both the countries show significant amount of concern on the changes and uncertainty that might be associated with an unknown result or outcome and that is much higher compared to UK (Rees-Caldwell and Pinnington 2013).

Apart from these reasons, the cultural differences among the different workforces will have the potential to cause notable amount of difficulty in the smooth integration of them. As the language is a significantly influential factor for the societies, the management of UK will find it difficult to communicate effectively in the mentioned new regions. The ineffectiveness of the management in communicating regarding the operations of the organization or the business conduction of the organization in the parts of Latin America or in the parts of Asia will be influential contributor in the generation of the conflict among the workforces. This will be a strong barrier for the organization in conducting their usual business conduction in the mentioned regions.

In the modern business world, the concept of the outsourcing of the infrastructure and the employees are visible. With the significant rise in the establishment of the various multinational organizations, the recruitment of the employees from different cultures and nations are pretty evident. Several researchers of the human resource management are observed to comment this as a result of the increment of the impact of the globalisation as well. Apart from this, it is also observed that the management of the employees belonging to different countries or cultures is much needed from the part of the human resource management of the organizations in order to increase the success of them. The performance of the employees is significantly affected with the culture of the organization and the differences or similarity of the cultures of his or her own and of the host country for the organization (Martin and Nakayama 2013). The scope of the differences for the multinational organizations is generally present with the implementation of the business mergers, the acquisitions or the business expansions and in that case, several organizations are observed to be a failure due to either the incapability of the employees in matching to the organizational culture or the host nation culture. The evidences of this can be collected from the merger of the HP and Compaq where the corporate culture of both the organizations were the main barring in achieving a profitable business merger.

Conclusion

The success of the modern day mergers lies on the success of the expatriates or the employees that operate for the respective organizations. The modern day multinational organizations are seen to face the impact of the failed assignments that are the result of the premature return of the expatriates due to the significant impact of the culture shock and lead them into trouble. The expatriates are responsible for the business conduction in a particular region for a time span and usually those regions are various countries in which the organization operates. Hence the expatriates are subjected to the employees, the customers or the corporate structure that might be significantly different from his or her own one and that is the main reason behind the differences or obstacles that they face in conducting in that region (Ribbink and Grimm 2014). Usually it is seen that the expatriates, as they are the outsiders of the culture of the host nation, face significant amount of discomfort in dealing with their counter parts, the lower level employees or the line managers (Minkov, Blagoev and Hofstede 2013). The specific reasons behind the discomfort are considered as the problem of language as the expatriates fails to get an effective communication with their counter parts, the absence of the knowledge of the local society and the culture as it provides notable obstacle to the expatriate in achieving a smooth integration with representatives of the host culture inside the organization. Along with this, the incapability of the expatriates in achieving the knowledge of the preferences of the local customers and the community in terms of purchasing the services or the products that the expatriates’ organizations sell, become significant as it has the potential to creates considerable amount of gap in the expatriates’ inputs in the process of manufacturing the services or the products that his or her organization sell (Gunn 2017). This has the potential to create the culture shock among the expatriates and that can be significant in formation of job stress or the dissatisfaction from his or her own job. As the job stress becomes notable, the expatriates are found with the tendency of leaving the project without the completion and that forces the multinational organizations into deep crisis.

Apart from this, one major reason in the dissatisfaction of the expatriates is seen to be generated from the differences of the corporate culture that the expatriates face in different environments with different organizations. The concern of various organizations with the business conduction, the various aspects of the operations of the organizations, the way of integration of innovation into the culture of the organization or the business policies are the major varying factors inside the corporate culture that the expatriates face while conducting their usual operations (Ferraro and Briody 2013).

The factors that increase the rate of success for the expatriates under such situation is the ability of them to adapt to the new culture, the ability of them to learn the local language and the ability of them to get well accustomed with the cultural and societal preferences. Apart from this, the expatriates’ ability to handle the differences of the corporate culture of the organizations also plays a key role in their success as it is observed that their excellence in managing the conflict regarding the different aspects of the organization’s business operations or the way of the integration of innovation and technology into the corporate culture of the organization prove to be significant (Jack 2014).

The factors that contribute to the globalised economy and have the potential to demonstrate the awareness for the ethically sound and accountable international policies are observed to be significantly contributing to the development of the organizations. The influential factors for the globalised economy like the containerisation, technological changes, the economies of scale, less protectionism, difference in tax systems and the growth strategies of multinational companies are seen to be sound and sufficiently effective in the formation of an accountable international business policy.

One of the significantly influential factor in the emergence of the globalised economy is the significant scope of the business conduction that generates with the coming down of the cost of the ocean shipping (Stopford 2013). Due to the containerisation, the bulk shipping is observed to be significantly easy and cost efficient to the multinational organizations of the modern world. The unit cost of the shipping products is seen to be coming down and with this, the organizations have the chance to introduce more effective and competitive pricing strategy that will be helpful in the try to attract the customers (Talley 2017). It produces the opportunity to the organizations of the upscale market to fight with the organizations of the mid-scale or lower scale markets in pricing of the products or the services. Apart from this, the factor produces the scope to make the market more contestable globally.

One of the key factors in the rise of the globalisation is the transfer of the idea, opinions, important market insights and the information. The formation of the globalised economy is significantly influenced with the transfer of the information and that too be ethically. The major obstacles for the organizations in the earlier ages were the notable time and effort required for the transfer of the information or the important insights. The modern organizations are observed to be immune to the impact of those issues owing to the significant change in the technology (Dodgson 2018). The modern innovations and the upgrade in the technology and the equipment are playing a key role in the reduction of the time and the effort consumed for the transfer of the information. This increases the efficiency of the individuals inside the organization and increases the productivity of the organization as a whole. The technological advancement has the potential to ease out the difficulty of the organizations in conducting the business but it also has the potential to cause notable difficulty for the ones who do not have the quality or the skills to handle it. Hence the required training is much needed from the part of the organization in order to get the advantage of it.

The grouping of the markets with respect to the economy is also observed to be an influential factor in the formation of the globalised economy. Several market analysts are observed to comment on the increment of the minimum efficient scale associated with the various industries. The minimum efficient scale is used in the identification of the point where the production or the manufacturing cost assists the introduction of a competitive delivery cost. Apart from this, it gives an idea regarding the number of the operational competitors inside any industry from the market size or the consumer demand and thus it makes effective calculation for the organizations willing to take part in a particular industry (Aggarwal and Evenett 2013.). Along with this, the minimum efficient scale has notable significance in the consideration of the group for the markets as the increment of the minimum efficient scale has the potential to make sure that the domestic markets are regarded as small to satisfy the selling needs of the industries.

The globalised economy and the introduction of the globalization in the business market is observed to be significantly influenced with the tax systems of the nations. The multinational organizations of the modern business world are seen to get the benefits like the lower unit labour costs in various nations and in the case of the choice of the nations, the above mentioned benefits are highly influential (Mathur and Singh 2013). Apart from this, the nations are also trying to encourage the foreign direct investment to boost their and the global economy with the competitive and risky adjustment in the tax systems of them (Blonigen and Piger 2014). This is pretty evident in the modern century as several organizations are observed to be engaged in the tax competition between each other so that they can win the race to achieve the lucrative foreign investment projects (Hickman 2013).

The protectionism has great potential to influence the global economy and that is evident with the transformation that the business world is able to observe from the old form to the modern formation. The various aspects of the non-tariff protection like the import licensing or the foreign exchange controls and the significant strict rules and regulations that were associated with it, were observed to be reduced notably in the modern business world (Evenett and Fritz 2015). The restrictions of the national boundaries for the business conductions are reduced and the average import tariff levels are comparatively lowered as well.

However the elimination of the non-tariff barriers is yet to be achieved by the organizations and the nations as well. The incapability in the achievement of the real economic growth and the increasing formation of the trade and current account deficits are significant proof of the above mentioned fact (Braithwaite 2017).

Apart from the above mentioned factors that have the potential to demonstrate the awareness of ethically sound and accountable international policies in the concept of the globalised economy, the corporate strategies of the organizations along with the business objectives produce significant impact as well. The growth strategy of the multinational organizations, incorporating the tactics for the increased revenue and profit, the global attention, the higher market share and market coverage are notable contributing factors in the concept of globalisation. The business aspects like the outsourcing or the offshoring enables the organizations to achieve the services of skilled and efficient employees at notably competitive price and along with that, it provides the chance to the organizations to compete in the industry without having the fear of the benefits of the other organizations which belong to other markets like mid-scale or the low scale (Bailey et al.  2018).

Conclusion:

On a concluding note, it can be said that the multinational organizations will face the difficulty in their operations owing to the variation in the culture and the background of the employees. However the success of the organizations in the competitive market lies on the achievement of elimination or reduction of the cultural differences and the excellence of the human resource management of the organizations is the key element in it.     

References:

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