Critical Analysis of the Cultural Implications (Essay Sample)

Critical Analysis of the Cultural Implications Arising From Multinational Corporations’ Cross-Boarder Activities
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Introduction
It is evident that culture management in any organization whether operating locally or internationally is the driving force towards its success. As posited by Vance & Paik (2006) gaining a competitive advantage in any environment under which an organization operates requires effective management of employees through culture involvement. Employee management in this case entails their development to ensure credibility, their involvement in organization’s policy making, their motivation to improve the quality of workforce and employee performance management. Briscoe & Schuler, (2004) defines culture as the distinctive way of behavior and believe that a certain group of individuals in a nation or organization have. These behaviors and beliefs have direct influence on the decision-making, thinking, problem-solving and reasoning of the individuals within the organization or the country. from the above perspective, it is said that locally based firms operates on a unified form of culture due to the involvement of a single group of employees and stakeholders, on the contrary the issue of culture management in multinational corporations (MNC) and international business operations requires much attention and efficiency from the management since they bring together people from different nations (Taplin, 2008). Unless culture is effectively and efficiently involved in the management of MNC’s activities and those of their employees, then they success is not guaranteed.
According to Sparrow, Brewster & Harris, (2004) a Multinational Corporation is any business enterprise that operates in more than one country with an aim of value addition and effective control and management of production and services offered. These business organizations differ from international business and alliances that do not incorporate the aspect of control and value addition in their actions (Sparrow, 2009). The fact that these MNC operates in foreign countries and their activities bring together staff of different nationalities makes their employee relations and human resource management a challenge. In fact, developing an efficient operating structure for carrying out any activity within the organizations is not simple due to the need to involve the views and ideas of the staff from diverse national context (Ehnert, Harry & Zink, 2014). Since these ideas and beliefs are influenced and embedded in the culture of the individuals, culture management is vital in the employee management process in any multinational organization. For further justification on the importance of culture management in these organizations this paper would explore the cultural effects arising from the cross boarder activities of Multinational Corporation. In this context, this paper will provide a discussion on different options available for MNCs in the design of their operational structure putting into considerations the different culture involved. The drawbacks and benefits of the choices available would also be provided. This paper will then explore the approaches adopted by the MNCs in management of employees, referring to employee relations and staffing after which a conclusion would be provided on the extent to which these organizations have taken part in cross-vergence, divergence or convergence of culture during their operations.
As posited by Schein, (1984) cultures are subjective and are viewed as standards by individuals or groups that they govern. These individuals or groups can therefore be efficiently managed within an organization from this view point taking into account that their behaviors, values and beliefs are inbuilt and developed overtime. It is from this perspective that some of the MNC have adopted Multidomestic structure in their operations (Taplin, 2008). This structure consists of decentralized units that govern and manage the business activities independently in each nation of its operation (Hendry, 2012). Through this means the human resource management focuses predominantly on confined operational needs within the country and in most cases on the country nationals, if need arises for involvement of an expatriate, then the level of experience and independence is assured to ensure the activities are managed as per the culture within the nation. Complying with the belief of Trompenaars and Hampden “many trials by MNC to universalize their operations have stunningly failed,” Multidomestic international corporations have not only focused on national culture in their activities but also adopted the polycentric approach, where the major strategic decisions are made at the organization’s headquarters and only the operations and human resource decisions left for management within the local regions (Punnett, 2004). The problem however, rises on the ability of the organization to maximize profits globally. Hendry, (2012) posits that efficiency in culture management is only attained through the inclusion of national (culture governing a nation) and organizational culture (values and norms governing a social unit). This is not the case of Multidomestic corporations that mainly focus on national culture putting their ability to maintain organization’s policies and quality of services in jeopardy (Briscoe & Schuler, 2004). In addition, this structure only promotes national responsiveness without allowing for integration of ideas and values that increases the chance of an organization to gain a competitive advantage in their operations. It is therefore not the optimal option for any MNC that desires to attain lead in the international market and further succeed.
The drawbacks brought about by lack of integration in Multidomestic corporations have necessitated some of them to adopt the global structure that entails a high degree of integration where corporate activities are managed from the center (parent company of the organization). As observed in Bartlett and Goshal’s models of MNCs behaviors and activities, global organizations have a more centralized system of operations with the organization’s parent human resources taking control of all the employee activities and determining the policies that are adopted in subsidiaries (Ehnert, Harry & Zink, 2014). In this case, difference in culture between different nations of their operations has negligible influence on the human resource management. It is evident that organizations that work on this structure have adopted the ethnocentric approach of management where they control other subsidiaries from the view point of the country of origin (Vance & Paik, 2006). The cultural standards and expectations are therefore based on the parent country to the organization. The cultural implication of this structure is that distinctive gender roles, employee attitude towards work, employee expectations (rewards and motivation), and behavior varies depending on their national culture hence values and beliefs of another nation cannot be coerced into the other and attain acceptability (Hendry, 2012). Moreover, application of activities acceptable in the host country in other nations may result into alienation and lack of trust from the local employees that are likely to interfere with the organizational performance (Taplin, 2008). As much as uniformity and integration may be attained through the adoption of the global structure of management, wider cultural implications may lead to poor quality work force and poor relationship between the local employees and the management which are vital in organization’s performance hence should be considered by any MNC considering globalization as a structure to operate internationally.
Research has indicated that a number of multinational corporations with European origin have adopted global-ethnocentric approach in their operations within and without the boundaries of United Kingdom. More specifically, countries with German, Netherlands and Belgium origins have taken lead where they take the national system of the host country to any other destination (Hendry, 2012; Ehnert, Harry & Zink, 2014). The aforementioned nations formed the European works council that collectively managed the human resources of all subsidiaries with the view point of the culture adopted in the home country (Taplin, 2008). A number of questions arose in their process of operations with people questioning the credibility and efficiency with which this union would effectively manage people with diverse culture focusing on a unified form of culture management. In the process of accomplishing their roles, the multinationals that operated under this strategy failed miserably recording high cases of rebellions from the local staff and poor relationship with the management (Briscoe & Schuler, 2004). It is reported that German MNCs operating inn UK did not report any profits within the period that they enforced home culture in the subsidiaries within the nation. Culture is dynamic and specific to individuals and should therefore be involved in any employee management process if success is to be attained (Hendry, 2012). An intermediate type that incorporates the concepts in Multidomestic and global structures is also available for application by MNCs. Known as the international structure; this concept takes into consideration the benefits of decentralization as well as centralization of organization activities in certain areas (Ehnert, Harry & Zink, 2014). The structure is based and works on the principle of Ogbonna & Harris, (2002) which states that it is important that an organization works responsively at the same time ensure that it does not loose its global integration. Sparrow, (2009) in his MNCs cultural management analysis posits t...