Impacts of National Culture Multinational Corporations Performance (Essay Sample)

National Culture Impacts on Multinational Corporations Performance
Student’s Name
Business and Statistics
Introduction and background
National culture is the set of behavior and norms as well as beliefs and customs that exist within the boundaries of a given state, community or group of people. On the other hand, multinational corporations are simply companies which operate in more than one state. These multinational corporations get challenges when they operate in those nations that they start their businesses. Most of these challenges are usually originated from the national culture of the host countries. These multinational corporations are forced by the laws of the hosting country to adapt and develop their management and other practices in line with national culture of the country they are under operation. Emerging markets/ economies are those countries which are beginning to be felt globally by contributing; implementing reform programs and most importantly, they are undergoing gradual economic development. It can also be used to describe a list of little middle to higher income countries within the developing countries. As such, you will find some multinational corporations performing better than others.
It is in line with this that in this paper we are going to analyze the impacts that different national cultures have on the overall performance of the multinational corporations. We critically analyze specific multinational companies by illustrating a method of strategic performance by taking into consideration the effects of home countries national culture on multinational company’s performance (Agarwal 1994). The analysis, which acts as evidence, shows clearly that the national culture has a direct impact on Multinational Corporation’s performance. Furthermore, the results purely show that multinational corporations that have better performance usually experience clear as well as distinct characteristics.
The civil rights societies
The civil right societies are formed by groups of citizens in a country to protest and alarm the public of any malicious action that may be taken by the government or any other influential citizens or non-citizens. These civil societies are usually very keen on any step taken by organizations, especially manufacturing companies and much worse; multinational companies (Agarwal 1994). This is because they tend to have a second thought as to the reason why the operation has to be undertaken in the host country. They reason out that maybe it could be having a health issue which may affect the citizens of the host country. As a result, the multinational corporations are forced to undergo serious scrutiny for any project they have to launch to ensure that it has no any negative consequences on the life of the citizens of the host country. This greatly hinders their performance because the processes are time consuming as well as costly. (Agarwal 1994)
Corporate social responsibility
Corporate social responsibility is simply about the organizations contribution to sustainable development. It is all about how organizations can be accountable to the social, economic as well as environmental impact as a result of their operations in the overall society. It is a question of companies do with their profits as well as how they make those profits. Though a very good operation, corporate social responsibility has been doubted in terms of validity and for profit making organizations (Agarwal 1994). Corporate social responsibilities are usually very costly projects for these corporations since they have to cater for several spheres of influence such as the workplace, community, marketplace as well as the public policy.
Case study; Coca Cola Company.
The Coca-Cola Company in the Middle East partnered with its bottling firms and come up with a program to curb HIV/AIDS in the region. So the companies formulated a clear HIV/AIDS policy putting into consideration the fact that the diseases is a public health emergency and therefore used the workplace to reduce the spread and effect of the epidemic(Agarwal 1994). The challenge it faced was that despite its enormous presence and still with its widespread bottling partners across the region, it could not cater for most of the people in that region who needed its services. For it to function appropriately, it had to incorporate the healthcare management organizations, hospitals and pharmaceutical companies as well as NGOs in order to prevent, create awareness and offer voluntary counseling and testing. This one of the demonstration that corporate social responsibility should be heavily be incorporated into organizations general business strategies and not just as a way of doing things because they should be done. This is because if the multinational companies don’t put as part of the entire business, it might end up affecting its performance due to unbudgeted costs that it incurs.
Conservative nature of some nations
Some national cultures are quite conservative. This usually slow down the overall performance of multinational corporations in such countries. The conservative nature of a country is majorly contributed by the religious and social aspects of the people. As such their laws, either business or social are drawn from their beliefs and religion. Multinational corporations therefore experience great challenges when it comes to business because they have to adapt to the host country’s regulations. Another major blow to the multinational corporations is the requirement by most hosting countries to absorb employees from the host countries. The challenge with this arises mostly in the third world countries, where the citizens may not be meeting the required job specifications. The companies are therefore reduced to absorbing incompetent employees who obviously end up hindering performance. In most cases, the companies train the employees in order to suite for the available jobs and this raises their expenses thus lowering the profits. (Agarwal 1994)
Another aspect of national culture that affects multinational performance is the nature of the people of the host country in terms of their value of life and hard work. A country where its people are dedicated to their work, the domestic companies also grow r...