The Comparative Business Culture - Essay Example

Comparative business culture In the modern times, as people are part of a global village they attempt joint business ventures throughout the world irrespective of cultural, social, economic and political difference. Therefore, human resource issues have always been taken place in many such organisations due to difference mainly in culture. Even though, human resource is the real asset of an organisation, it is something which is very difficult to be managed. When the human resource of an organisation is from different cultural backgrounds, the role of HR manger becomes quite strenuous. The possibility of human resource issues is doubled as cross cultural business ventures are getting popularised among people. In such joint venture, it becomes necessary for the organisation to involve teams from both the countries who are of difference in culture, economy and polity. The difference in these aspects will reflect through out their actions in the organisation if they are not properly trained and managed. When a joint venture between two companies from different continent is made, the most sensitive area becomes the human resource issues and its management. Such business venture has to follow certain human resource strategies and policies distinct from other ordinary business organisations. The company which undertakes a joint venture between two or more countries with different cultural background will come across many human issues like cross cultural communication, inference, different understanding of reality etc. Moreover, many ethical and moral issues also may take place if the teams are from two continents with vast distance. Under this scenario the following two questions are discussed here. a) How do you think cultural differences, both national and organisational, impact on the Human Resources strategies in companies involved in joint ventures? The companies involved in joint ventures need to formulate human resource strategies that support the organisation and the goals of the joint venture. The companies which are involved in joint ventures with other countries should formulate a distinct human resource strategy. Even though, joint ventures involve a high level of risk, the expansions of markets to a global market and the development in technologies have led to a soaring increase in such attempts. The main area of risk is the human resource issues due to difference in culture and nationality. The companies that are involved in joint ventures should identify the right employees, who will go in tune with the organisation’s work environment and culture. The work culture and the work environment of such an organisation would be totally different when compared to other organisations got established in a locality within the purview of a country. When a company decides to do a joint venture with another company in other country the human resource strategies have to be developed to befit the cultural contexts in which both the companies exist. The most sensitive issue in a joint business venture is the effective human resource strategy. The human resource strategy should go in tune with the cultural differences that exist between the countries. The impact of cultural differences on the human resource strategy in joint ventures is in the form of certain changes in the human resource policies. According to Vadim Kotelnikove, the following are the main human resource strategies to be adopted in a joint venture as a result of the impact of cultural difference on the human resource strategies. Develop a distinct identity and culture for the organisation. When the organisation attempting a joint venture with a company in other country develops a distinct identity and culture automatically many human resource issues in the future are going to be solved from the root itself. Even though a distinct culture and identity can be developed only in the long run it is a decisive factor in alleviating many of the human resource issues based on the cultural dissimilarity. The organisation attempting a joint venture should develop a distinct culture and thereby its own unique identity. Aggressive communication to employees. Firm and regular communication between the management and employees of the company is ensured as a part of joint business venture. When a joint business venture is attempted the company maximises its communication to the employees; otherwise dissatisfaction may creep into the minds of the employees. The impact of cultural difference on the human resource strategy is resulted in the form of aggressive communication to the employees. Such consistent and prompt communication can never be felt in organisations other than joint business ventures. Distinct career paths The career path followed by joint business ventures is quite distinct from other organisations. This career path gives fuller satisfaction to the employees. The system of unique career paths is the direct impact of cultural difference on the human resource strategies. Means of return for the employees transferred to the joint ventures. Those employees transferred to the joint ventures are assured easy and prompt transfer for the organisation Adequate compensation, incentive and retention programme. As a result of cultural difference adequate policies in compensation, incentive, retention programme etc. are followed. These are the main impact on human resource strategies as a result of national and organisational cultural differences in business organisations attempting a joint venture. b) How would these relate to cultural theory? These human resource strategies are based on the cultural theory applicable in joint business ventures. Cultural theory is the cultural context in which both these organisations exist. The cultural context may be different when a company attempts joint venture for the first time. What is right in a culture may not be so in another culture. Therefore business decisions have to be carefully taken understanding the cultural milieu. A joint business venture is not the merging of two companies in different countries alone; but it is the intermixing and merging of two different cultures, socio-economic backgrounds etc. So the human resource strategy to be followed in a joint business venture depends on the cultural theory. Cultural theory is different from one country to other. Before setting up the background for some joint ventures companies should have a thorough understanding of the cultural contexts. The managerial skill of organising needs to be effective for setting up a joint venture. The strategies can be followed only on the basis of the cultural theory and the cultural contexts of the two countries. A joint venture between a western country and an eastern country will have a more complications as both these countries do have many difference in their culture, socio-economic background etc. The communication between company and employees differs in western and eastern cultures. Employees from these cultural backgrounds expect differently. Likewise, in western and eastern countries people’s career path is also totally different. It never goes alike. Thus, the human resource strategy adopted by a company during a joint business venture should be suitable to the cultural context. The same can not be applicable in all the case. Therefore, adoption of human resource strategy and the country’s cultural theory or cultural contexts are highly related in a joint business venture. Marketing is an important area as far as a business organisation is concerned. the successful existence of any organisation depends on the sale of its products. Marketing plays an important role in product promotion. The process of marketing becomes impossible without understanding the cultural theory of a country. The name of any international organisation would be severely affected if the company tries to promote its products without understanding the cultural context in which they operate. “Lack of cultural considerations not only can result in a mediocre response to product promotions, but can even impact the companys international image” (Welsh 2005). Therefore a thorough understanding of the cultural context is necessary for the right promotion of products without adversely affecting the international image of the company. Under this scenario the following questions are answered. a) With reference to cultural theory, what are some of the marketing considerations that a company needs to make when operating a localized strategy within a global organisation? Why are these important When a company is operating a localised strategy within a global organisation, the company has to make many marketing considerations. Without proper understanding of the cultural theory the marketing of products becomes impossible for a joint business venture. With reference to the cultural theory, a company needs to make the following marketing considerations when operating a localised strategy within a global organisation. Culture impacts on marketing (international versus domestic); Cross-cultural dimensions of marketing research; Cross-cultural aspects of marketing mix (products, price, promotion, and distribution) Cross-cultural marketing education and professional training; Cross-cultural practice in electronic marketing. These marketing considerations need to be made when a company operates a localised strategy within a global organisation. Marketing considerations are important because they act as strong pillars for basing the organisation effectively in an entirely different cultural background. The practicability of electronic marketing, product mix, price, promotion, distribution etc. in the particular cultural theory concerned with the country is to be clearly analysed before attempting a whole hearted joint business venture. b) How could a global company best respond to cultural differences when formulating its international marketing strategy? While formulating international marketing strategies, a company can respond to the cultural differences positively. The positive response on the part of the organisation is going to have a constructive and desired effect. Before attempting a joint business venture the company has to understand the cultural background and should formulate the marketing strategies to suit the cultural difference; because, otherwise the marketing strategies won’t work for the organisation and the product or service will not thrive successfully in the market. Therefore any organisation attempting a joint venture with other company in some other countries should have an encouraging international marketing strategy. Works Cited Kotelnikov, V. Joint Ventures: Why, What and How? Ten3 Business e-Coach , Viewed 14, May 2009, < http://www.1000ventures.com/business_guide/jv_main.html > Welsh, A. How Cultural Differences Affect Your Global Marketing Message Raw Power Writing, Viewed 14, May 2009, < http://www.rawpowerwriting.com/article.asp?id=9> Tian, G. Marketing in the 21st Century Cross-cultural Issues. Viewed14, May2009, http://www.studyoverseas.com/america/usaed/crosscultural.htm Read More