Effective Ways For International Business Conducts

The Importance of Cross-Cultural Competence

Due to the globalisation, many organisations are involved in operations in more than a single nation. This voyage of geographical boundaries on the part of global organisations leads to emergence of the same, in which employees from different nations work with each other (Daniels, Radenbourgh and Sullivan 2014). It might be relevant that these organisations are finding diversifications as lucrative; however, operating and handling an international business is extremely complex in contrast to managing a local organisation. The primary reason for business diversification is to develop global competitiveness by minimising costs of production and exploiting market opportunities through economic integration and trade liberalisation (Hill 2014).

Effectual knowledge and cross-cultural diversity could provide a source of experience and innovative thinking for improving the competitiveness of the organisations. However, the cultural variations might interfere with the successful accomplishment in the current international business community. In order to eliminate such cultural variations, it is necessary for the managers of the organisations to be culturally sensitive, while promoting creativity and motivation with the help of flexible leadership (Bartlett and Ghoshal 2003). Efficient handling of cross-cultural interface serves as a major source of attaining competitive advantage. Managers of the global companies require developing not just understanding and tolerance towards the cultural differences and also acquire a considerable degree of required cross-cultural knowledge regarding diverse values and beliefs. A company’s capability motivate and retain employees from distinct cultural surroundings might result in competitive advantages in cost structures and by means of maintaining superior quality human resources. Cross-cultural proficiency is deemed essential in several managerial conducts such as:

• Structuring as well as negotiating in international business conducts
• Selecting as well as screening foreign distributors and other partners
• Developing promotional and advertising materials
• Communicating with the international recent and likely consumers

Toyota car manufacturing company’s organizational culture explains the employee responses to diverse issues faced by the organization. Being an international leader within the automobile industry Toyota Company employs its organizational culture in maximizing the capabilities of human resource through constant cross-cultural innovation strategies. The objective of the paper is to analyse the effective ways in which Toyota Company can attain cross-cultural proficiency that is extremely vital in successful global business conducts. Through explaining the case of Toyota Company it will be easier to explain the likely risks and opportunities of accruing out business in cross-cultural surroundings and the ways in which the company manages it in an effective manner.

Potential opportunities and risks of doing business in such cross-cultural environment and its management

According to Cavusgil, Knight and Riesenberger (2013) within an international business, cross culture can be understood as an organization’s initiatives in enhancing the understanding of several groups, prepare highly efficient marketing and communication efforts for attaining the consumers outside the traditional marketplace. 

Potential Opportunities and Risks of Doing Business in a Cross-Cultural Environment

Potential opportunities and risks of doing business in such cross-cultural environment

Cultural impact on a global company’s business is signified through attitudes, basic values, and perceptions along with behaviour of consumers. Several opportunities those the international organizations can attain include culturally affected technology transfer, managerial ideology and attitudes along with the government-business associations. Gooderham and Nordhaug (2003) gathered that there are several advantages cross-cultural environment for the international organizations. Operating business in cross-cultural environment enables organizations to become proactive as it enables organizations to build trustful partnerships for successful business. This also facilitates an organization to become highly aware of several nations historical data, vital industries, economic concerns that facilitates the companies in developing cultural rapport. Hill (2014) indicated that operating business in cross cultural surrounding can facilitate an international organization in understanding their individual values along with those of distinct cultures by means of a combination of self-assessments, discussion and group conducts.

Kelly (2009) explained the relevance of cultural understanding in successful international organizations is indicated from its effective marketing approaches those are mentioned within the cultures of target companies. These researchers also confirmed that with an adaptive business model aligned with open minded approach is essential for company success in case of business operation in distinct cultural boundaries and such traits facilitates information flow to and from the company’s global consumers. In contrast, Porter and Kelly (2009) revealed that there are certain risks those can be faced by global organizations in managing their business considering that embracing cultural diversity of a nation might not bring in success but also without managing culturally diverse workforce can increase chances of a company failure. The major issues those are generally faced by the global companies while conducing cross-cultural business are mentioned below:

• Perception- Ricken and Malcotsis (2011) revealed that this issue in conducing cross-cultural business might generate when the employees from the less developed nations lower or vice-versa.
• Inadequate trust- Sweeny and McFarlin (2014) clarified that in a diverse workforce environment, the employees tend to wonder the reasons for which its other teammates speak distinct languages within the office premises other than English. This generates feelings of inadequate trust among the fellow employees within the company.
• Inaccurate biases- Trompenaars and Turner (2012) gathered that people belonging to a particular nation consider making decisions in a group and few people of certain nations is perceived to be not delivering on time. These are certain common versions of cultural prejudices.
• False communication- Moran, Abramson and Moran (2014) indicated that while discussions in an organizations few people tends to nod their heads and considers it as an indication of politeness and not just as an agreement to the aspects those are being discussed about.

Glaser, Stam and Takeuchi (2016) evidenced that ignoring the cultural challenges while dealing with internal businesses within a risky proposition is because of the stakes are increased. In managing the international businesses, including the cultural diversity of a nation might or might not bring in success. For this reason, the international businesses will have to be highly sensitive to the challenges emerging from ethnic and cultural landscape of the nations in which they work.

According to Glaser, Stam and Takeuchi (2016) globalization within global business has necessitated the international businesses to expand its global network across diverse cultures and for being aware culturally and for enabling businesses in increasing cross-cultural competence. For attaining competitive edge internationally, the value of cross-cultural competitive capabilities is becoming highly relevant in several global organizations. Adekola and Sergi (2016) revealed that within the field of international business, the cross-cultural competence concept is perceived as a capability or skill of offering cross-cultural communications and capability of an international business to function in a better manner. Sweeny and McFarlin (2014) gathered that global awareness serves as another competency that if adopted by the international organizations can help in gaining cross-cultural proficiency. These researchers also stated that for being successful the global companies must develop cross-cultural competence by means of perspective consciousness that considers enhancing the capability of a multinational company in analysing their cultural assumptions, ethical judgements and assumptions.

Competencies Required for Successful International Business Operations

There are certain models those are developed in analysing the cross culture within international business. Within this model, such culture can be understood as the collective programming of mind that reveals the differences among the individuals of one group. Sweeny and McFarlin (2014) rrevealed that there are certain aspects of this cross-culture model that includes individualism, collectivism, uncertainty avoidance, power distance along with masculinity and felinity. Another model within international cross culture is the Lewis Model. This model includes certain aspects such as liner-active, reactive and multi-active aspect.

Cross culture is deemed important in international business as cross-culture competence is deemed to have great impact on international business operation. Every nation has a set of distinct variables that might be new for an offshore organization that includes rules and regulation, distinct currency and taxation. The vital consideration in this aspect serves as the cultural difference. It is also revealed that a multinational organization with presence in several cultures tends to have limited cultural gap than a company that has its operation in distinct cultures. The reason of such gap serves as learning factor for working in distinct cultures.

Trompenaars and Turner (2012) indicated that Toyota has been dealing with several issues in conducting business between Japan and USA. The Japanese employees believed that they are obtaining low payment in comparison to American Counterparts. Moreover, Toyota Company also dealt with public relations crisis of distrust from the people of America but also with the work of attempting to enhance the manner in which its employees interacted with public and with one another. Such crisis took place from cultural difference between Japan and America and the company has attempted to resolve public relation issue and has taken effective steps in enhancing public perception of the organization.

Trompenaars and Turner (2012) stated that for enhancing cross-cultural proficiency the international company’s needs to develop its ethnographic skill sets and such skills are referred to as close consideration of stress management, social behaviour along with relationship-building across diverse cultures along with identifying relevant vital international concerns. Moran, Abramson and Moran (2014) revealed that global awareness also serves as major competency for the global organizations in attaining cross-cultural proficiency that takes into consideration general understanding of the global business conditions, systems, ideologies and institutions. For becoming internationally aware, one requires being cautious about activities taking place all through the world that is mainly in the areas of economy and business. According to McFarlin and Sweeney (2014) global learning also helps international companies in gaining cross-cultural proficiency through just being aware as it needs immersion within the international society. These researchers also added that in order to make the diverse employees of an organization more competent, language learning also serves as a major skill for learning to increase global competence. Buckley, Cross and De Mattos (2015) indicated that any businesses that encompass foreign language proficient employees are capable to compete effectively within global marketplace for the reason that communication does not act as major barrier. Budhwar and Debrah (2013) gathered that affective development facilitates the international companies in enhancing cross-cultural competence in which the employees are likely to demonstrate proper and in-depth emotions within specific intercultural contexts.

The Case of Toyota Company

Adekola and Sergi (2016) revealed that cross-cultural sensitivity and awareness must be taken into consideration by the international organizations in dealing with the cross-cultural conflict, adaptability within the new organizational changes along with proper cross-cultural adjustment. These researchers also clarified those other capabilities of gaining international cross-cultural business proficiency is through dealing with uncertainty, change, inquisitive along with working as global teams with having language skills. In contrast, Groves, Feyerherm and Gu  (2015) stated that emotional intelligence, international business and organizational savvy, global negotiation skills, relationship capabilities along with self-reliance also serves as vital aspects those if developed by the international organizations can provide them with cross-cultural proficiency. To attain high cross-cultural proficiency the international companies and its professionals requires having people orientation, thought flexibility with disposition along with non-judgemental perception.

The Toyota Company in carrying out business within cross-cultural environment faces several risks. These issues involve slowness in dealing with decision making and responding, accepting risks, expressing disagreement and conflict with the cross-cultural business people. Difference in culture presents serious concerns for the company and for this reason, it can be stated that the company must be highly aware of the different culture understanding (Thomas and Peterson 2014). Toyota Company faced issues associated with distinct viewpoints of all its public relations practitioners within the two nations. While caring out business, Toyota Company dealt with issues related to managing public relations. Another issue that was faced by the company in conducting cross-culture business was because of globalization. With the increasing trend of globalization, Toyota Company manages public relations, as the culture of other nations is distinct from the Japanese culture in which Toyota Company has its business. Considering the same, the company attempted to enhance the way its diverse employees communicated among themselves and all through the nation. For instance, Toyota faced another issue in conducting business because of cultural differences among the Japanese and Americans and these differ greatly in the ways of communication. When a company deals with issues in Japan, they tend to solve it adequately and then inform the same to the media. On the other hand, Americans considers such actions as certain act of ignorance and for this reason, certain cultural issues took place n the company’s business (Nolan and Morley 2014).

Toyota Company also attained several advantages in carrying out cross-cultural business. Employees of Toyota Company attains great opportunities in carrying out cross-cultural business as this has facilitated the company in continuing innovation that further enhanced the company’s culture. The company’s culture contradictions are deemed to have a great role in the success as Toyota production systems and the soft innovation that associates with the corporate culture (Neal 2016). Other effective opportunities that can be presented to the company in the cross-culture environment include continuous improvement, teamwork and pride. Teamwork serves as a cornerstone of the company’s culture that manages workers of the diverse cultures in assisting and supporting them to comminute in a coordinated manner n the diverse work cultures. Global business has facilitated the company in ensuring continuous environment and they are encouraged in sharing ideas in making enhancements for applying the products to make, processes along with work environment (Thomas and Peterson 2014).

Toyota Company is observed to manage its cross-cultural business environment quite effectively. Moreover, it can also be said that the company’s culture efficiently supports its great focus on innovation as well as regular improvement (Sweeny and McFarlin 2014). A great understanding on such business culture is deemed advantageous for recognising the principles and beliefs that that is focuses on the strength of the company’s business and brands. Before the reorganization that took place in Toyota Company in the year 2013, the company culture undergone a drastic change. Before the year 2013, the company’s culture focussed on a perception of secrecy and hierarchy that converted into employee perception that all the decisions must be derived from the Japan headquarters. Organizational culture of Toyota Company facilitates the company in ensuring high growth (Sweeny and McFarlin 2014). Innovation is focussed on continuous improvement by means of learning. Quality improvement as well as problem solving is attained by means of teamwork conducts. Moreover, the secret aspect of the company’s organizational culture indicates likely drawbacks as it decreases organizational flexibility in constant problem solving. After the year 2013, Toyota Company’s organizational culture for managing its cross-culture business was arranged as per their importance that included teamwork, constant improvement by learning, quality and secrecy (Trompenaars and Turner 2012).

• Teamwork- Toyota Company is observed to use teams in almost all of its cross-cultural business areas. Among the company’s principles is that the capability of teamwork results in increased success and capabilities. This aspect of the organizational culture focuses on the involvement of the employees within their associated teams. For making sure that the teamwork is appropriately integrated within organizational culture, all the employees of Toyota goes through team-building training problem.
• Continuous improvement through learning- Organizational culture of Toyota Company supports the advancement of a company as a learning company. A learning company uses the relevant information attained by means of the conducts of individual employees for developing the policies along with programs for effective results (Gooderham and Nordhaug 2003). Organizational culture of Toyota Company signifies learning as a manner of developing solutions for the problems. In such manner, the company is capable to enhance process continuously output and processes with the organizational culture support.
• Quality- Quality is considered extremely important for the organizational culture of Toyota. The success of Toyota Company is attributed to the capability to offer superior quality cars. To integrate efficiently quality within the company’s organizational culture the company uses Toyota way strategy for developing culture of stopping to deal with issues for obtaining desired quality at the right time. The Toyota way serves as a set of principles that explains the business strategies employed within a company.
• Secrecy- Organizational culture of Toyota Company has a significant degree of secrecy. In addition, the intensity of secrecy has decreased in the current years in consideration to the reorganization of the company. In the previous years, information regarding the problems faced within the workplace is required to pass through the company’s headquarter. Moreover, in consideration to re-organization, organizational culture of the company does not focus on secrecy largely. For instance, issues faced within the US production plants are disseminated, solved and evaluated within the cross-cultural business units of Toyota Company.

Strength · Increased centre of the research and development · The company positioned itself as most valuable automotive brand all through the world · Super advantages of Toyota production system · Increased competence within hybrid vehicle production	Weakness · Lack of increase competence within autonomous vehicles · Weak existence within America · Decreased brand portfolio · Negative publicity because of increased vehicle recalls
Opportunities · Prices of fuel are anticipated to increase in the future · Increased demand for the autonomous vehicles · Frequency and timing of the fresh model releases	Threats · Increasing Japanese yen exchange rate · The automotive sector is subject to certain governmental regulations · Rising competition within the global automotive sector · The company might be greatly impacted through natural disasters

Conclusion and Recommendations

The objective of the paper is to analyse the effective ways in which Toyota Company can attain cross-cultural proficiency that is extremely vital in successful global business conducts. Through explaining the case of Toyota Company, it will be easier to explain the likely risks and opportunities of accruing out business in cross-cultural surroundings and the ways in which the company manages it in an effective manner. The discussion and analysis explained that the Toyota Company in carrying out business within cross-cultural environment faces several risks. These issues involve slowness in dealing with decision making and responding, accepting risks, expressing disagreement and conflict with the cross-cultural business people. Difference in culture presents serious concerns for the company and for this reason, it can be stated that the company must be highly aware of the different culture understanding. Toyota Company is observed to manage its cross-cultural business environment quite effectively. Moreover, it can also be said that the company’s culture efficiently supports its great focus on innovation as well as regular improvement. A great understanding on such business culture is deemed advantageous for recognising the principles and beliefs that that is focuses on the strength of the company’s business and brands. Organizational culture of Toyota Company facilitates the company in ensuring high growth. Innovation is focussed on continuous improvement by means of learning. Quality improvement as well as problem solving is attained by means of teamwork conducts. Moreover, the secret aspect of the company’s organizational culture indicates likely drawbacks as it decreases organizational flexibility in constant problem solving. After the year 2013, Toyota Company’s organizational culture for managing its cross-culture business was arranged as per their importance that included teamwork, constant improvement by learning, quality and secrecy.

The Toyota Company might face considering the likely risks those in conducting business within cross-cultural surrounding, certain recommendations have been provided to the company for attaining cross-cultural proficiency in carrying out their global businesses. To manage a diverse workforce, Toyota Company is recommended to gain understanding on cultural differences along with intercultural communication competence that will not only facilitate the company to bridge the communication gap among several nations along with enabling them to succeed in foreign business and strategic alliances. For the reason that in managing Toyota Company’s diverse workforce, the company is recommended to effectively lean, understand and appreciate distinct cultural and ethical conducts as well as suitable etiquette for carrying out business operations on an international scale. Through gaining certain competitive global skills and competencies will facilitate Toyota Company’s business in maintaining long-term strategic relationships and retain their employees over extended period. Moreover, Toyota Company is also recommended to consider the difficulties and advantages linked with globalization, multinational business conducts, managing cross-cultural skills, and awareness along with managing multicultural sensitivity along with international perception by managers will ensure sustainable growth within global business.

Reference List

Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective. Routledge.

Adekola, A. and Sergi, B.S., 2016. Global business management: A cross-cultural perspective. Routledge.

Bartlett C and Ghoshal S., 2003. Transnational Business: Text and Cases McGrawHill 
Education.

Bartlett C and Ghoshal S., 2013. Transnational Management: Text, Cases and 
Readings in Cross-Border Management McGraw-Hill Education ISBN: 223-343

Bartlett C. A. and Beamish P. W., 2013. Transnational management: Texts, Cases 
and Readings in Cross Boader management, (6th edition) McGraw Hill.

Buckley, P.J., Cross, A. and De Mattos, C., 2015. The principle of congruity in the analysis of international business cooperation. International Business Review, 24(6), pp.1048-1060.

Budhwar, P.S. and Debrah, Y.A. eds., 2013. Human resource management in developing countries. Routledge.

Cavusgil, S., Knight, G. and Riesenberger, J.R., 2013. International Business: Strategy, 
Management and the New Realities. (3rd edn) Upper Saddle River: Pearson/Prentice 
Hall. ISBN: 120-134.

Daniels J, Radenbourgh L. and Sullivan D., 2014. International Business (15th 
edition) Pearson. 

Glaser, L., Stam, W. and Takeuchi, R., 2016. Managing the risks of proactivity: A multilevel study of initiative and performance in the middle management context. Academy of Management Journal, 59(4), pp.1339-1360.

Gooderham P and Nordhaug O., 2003. International Management: Cross-boundary
Challenges Blackwell Publishers.

Groves, K.S., Feyerherm, A. and Gu, M., 2015. Examining cultural intelligence and cross-cultural negotiation effectiveness. Journal of Management Education, 39(2), pp.209-243.

Hill C. W. L. 2014. International Business (global edition), McGraw Hill.

Hill C., 2014. International Business: Competing in the Global Marketplace (9th ed) 
McGraw Hill Education.

Kelly, P., 2009. International Business and Management. Cengage Learning.

McFarlin, D. and Sweeney, P.D., 2014. International Management: Strategic Opportunities & Cultural Challenges. Routledge.

Moran, R.T., Abramson, N.R. and Moran, S.V., 2014. Managing cultural differences. Routledge.

Neal, M., 2016. The culture factor: Cross-national management and the foreign venture. Springer.

Nolan, E.M. and Morley, M.J., 2014. A test of the relationship between person–environment fit and cross-cultural adjustment among self-initiated expatriates. The International Journal of Human Resource Management, 25(11), pp.1631-1649.

Porter, M.E and Kelly, P., 2009. International Business and Management. Cengage 
Learning.

Ricken B. and Malcotsis G., 2011. The competitive Advantage of Regions and Nations,
Gower.

Sweeny P. D and McFarlin D. B., 2014. International Management : Strategic
Opportunities and Cultural Challenges (5th edition) Routledge.

Thomas, D.C. and Peterson, M.F., 2014. Cross-cultural management: Essential concepts. Sage Publications.

Trompenaars F and Turner C.H., 2012. Riding the Waves of Culture: Understanding 
Cultural Diversity in Business (3rd edn) Nicholas Brealey Publishing Ltd. ISBN: 978- 988.