The Globalization and Culture Issues of Siemens in China - Report Example

Running head: THE GLOBALIZATION AND CULTURE ISSUES OF SIEMENS IN CHINA The Globalization and Culture Issues of Siemens in China (Your Name) (University) Abstract Globalization has enabled companies to be able to expand their markets and do business in different parts of the world. However, culture of various host countries has impacted a lot on the way these multinational companies carry out their business. This research paper is going to look on the cultural and social aspects of the Chinese people and how this culture as affected the management polices of siemens China. The paper will identify main cultural aspects of the Chinese people which are social culture, language and religion. It will then examine how the management of siemens China how successfully tackled the different cultural issues. The paper will then conclude that culture is an important aspect that affects multinational companies, and for these companies to succeed their must have management polices that values the host nation cultural beliefs and values. Introduction Global business management can be defined as the interaction of people from different cultures, societies, and various backgrounds in undertaking various business activities with the aim of achieving their goals. (Lee and Carter, 2005) Because of invention of advanced technology the world has increasingly become a village and as a result global business is the modern form of business in this 21st century. Because of globalization companies have been able to penetrate different markets. Siemens China is a good example of a global company that has managed to successful operate in China However, the company was able to succeed in China after undertaking different policies and methods to overcome the cultural issues in China that were challenging its business success. Thus this paper is going to examine the major factors in cross- cultural issues and management of international companies such as siemens China managed to integrate them in order to succeed. Business Profile Siemens Corporation is a multinational company that that was established way in 1847; it has it headquarters in Munich Germany. The company deals in electric and electronics together with telecommunications and information technology equipments which includes developing computer networks, creating wireless technology and dealing in mobile phone technology. In pursing it globalization goals of being a world major play in the industry, Siemens Corporation established its branch in China in 1872 as Siemens China. Over the past many years Siemens China has managed to open more than 40 new branches in China and has 20 joint ventures with other Chinese companies. As at 200, the corporation had a work force of 43,000. In the same year the company employed 5000 employees of with 98% were Chinese. As Dr. Heinrich von Pierer the CEO of global Siemens comments, China is an important market for siemens and more branches will be opened to expand the market share of the Corporation. (Lee and Carter, 2005) Major cultural issues Culture is said to be a system of values and norms that are shared among a group of people and that when combined together it comprises a design for living that is culture is the way of life. Beliefs are accumulated feelings together with priorities which an individual have concerning “things”. While values are situational and not specific principles, that guides the cultural acceptable behaviour in the society. (Lee and Carter, 2005) Social culture Social culture is also very important in Chinese communities. For example in China the social status of an individual is usually determined by the standing of the group he/she belongs to. This stratification of the society affects the operations of any business dealings. Many Chinese people from different cultures perceive them selves in terms of their backgrounds thus shaping the way they relate in respect to other classes. Another important social culture aspect of the Chinese people is ethics; the Chinese people have strong ethical and moral behaviour that values the traditions and socialism. In addition Chinese people regard other people with high respect and integrity. Being more conservative the Chinese, like dealing with companies that value their tradition, thus, Chinese are highly known to make serious bargains when buying products and negotiate a lot before buying products. Chinese people value collectivistic values and they expect a person to put the society first Society. Language difference The other main cultural aspect of is the language. Language differs in different countries and organizations should consider this aspect before going international. Language is very important in business dealings as well as communicating with the different markets. In China the main spoken language is the Chinese language. The Chinese people like their language and speak it freely. However, with international interactions and globalization, many Chinese are learning other languages like English. (Lee and Carter, 2005) Religion Religion is a system of shared beliefs and rituals concerned with the sphere of the sacred or the supernatural and it usually affects the way of carrying out business and especially international marketing. (Lee and Carter, 2005) Hence, religion is another cultural aspect that forms a central core of marketing policy in China. According to latest research, ethical systems consist of moral principles are greatly affected by religion teachings which ultimately affect business dealings. In China there are various religions, the main one is Confucianism which has around 150 million followers in China, Japan and other Asian countries. Other religions like Christianity, Islam Buddhism are present but with few followers. Cultural management practices of siemens China The management of Siemens has handled cultural aspects in China by undertaking various measures that includes, developing a personal relation that has tackled the issues of culture in China by integrating local experts in the management, accepting the cultural differences and acknowledging them and developing proper cultural management strategy that to deal with above underlined cultural issues. Due to the long history of the company, which is over 130 years, the management have learned the traditions of the Chinese people and easily understand them. In addition, the management of siemens China is also focusing on corporate social responsibility by sponsoring education, health care, taking part in environment protection and other social welfare issues that help to integrate the company and the society. Managing social cultural issues Lee and Carter (2005) states that ‘for the inexperienced marketer, the similar but different’ aspect of culture creates an illusion of similarity that usually does not exist” is a statement that shows that the concept of culture is significant and the managers of firms need to fully understand it so that they can increase their productivity. Culture varies from one country to another and marketing strategies and policies should be formulated in such a manner that it does not contradict the way of doing things or living by the target population. The management of Siemens China has created a strategy to assimilate the culture of the Chinese people in the company by employing Chinese people to the management positions which has created co-operation between the employers and the employees. This has enhanced the business activities of the organization which have led to high productivity in the company and ensured the continuing growth of the company. Also, the company has succeeded by creating a good working relation with the government and abides with the country business laws and regulation. Chinese is a socialist country and siemens China has developed company values that concur with the people social life Managing language difference issues Any organization who wants to go international must address the issues of language, such as translation, non-verbal communications, and personal skills among others. Language is very important in business dealings as well as communicating with the different markets. Siemens management marketing policies are designed such that, they address the element of language barrier and has ensured that it is solved. The organization has ensured that the workforce especially the marketing managers are equipped with Chinese language in order to meet the demands of their customers. The management also stress on employing Chinese speaking personnel, though they also incorporate some language teaching classes for top managers who have a problem in the Chinese language. Siemens have also developed it equipment based on need of the Chinese population this helps the organization to achieve its market goals. Managing religion issues Religion is a delicate and issue that any company has to treat it with a lot of sensitivity. With diversity of religion systems in China, international marketing has become difficult to be carried out because of the differences that are involved between religions. The Siemens China corporation management has adopted a policy of being in partial to different religions in China. The company also respects all religion beliefs and give allows its worker force freedom of worship. This policy has ensured that the company has a good working relation with its employees and the community as a whole. At the same time the company has been able to penetrate the market as it seen that it respects the Chinese people religion. This makes the Chinese people to be able to buy and embrace the company products. Summary As Lee and Carter (2005) observes, globalization lies at the heart of modern culture and cultural practices lies at the heart of globalization. Business globalization has led firms that operate and invest in a global scale to transform patterns of trade and shape the interactions between them. Global events and competition affects almost all modern businesses and organizations are increasingly facing challenges as a result of the ever changing cultural environments. Siemens China is a global company dealing in electric, electronics and telecommunications. Over the years siemens China have grown and expanded its braches in Chinese due it its proper marketing strategies. Culture plays an important role in international business and Siemens China has managed overcoming cultural challenges in China by coming up with policies that embrace and value the cultural differences of the Chinese people and undertaking strong corporate social responsibility that has endeared it to the people. Conclusion Culture still ply an important role in international marketing management practice, culture is the greatest concept that must be understood clearly by all managers and Chief Executives Officers of siemens China in order for the company to continue doing well in the Chinese market. We can ascertain that siemens China has been able to manage different cultures through formulation of good marketing policies which have been employed by the company in order to increase their market share and profits. References Hill C. (2005): Global Business Today, 4th Ed. New York: McGraw/Irwin Lee, K and Carter, S. (2005): Global Marketing: Changes, New Challenges and Strategies. 1st Edition, Oxford . Read More