Multicultural Management - Term Paper Example

Table of Contents Executive Summary………………………………………………………….……………3 Introduction………………………………………………………………………………..4 Overview…………………………………………………………………………………..6 Literature Review…………………………………………………………………….……6 Analysis………………………………………………………………………………...….7 Multinationals in the Country……………………………………………………………..9 Conclusion……………………………………………………………………………..….9 Executive Summary Understanding the cultural climate in different regions of the world also depicts the atmosphere in which management takes place. This also helps to identify the way in which different countries are able to interact with multinational companies, specifically because of cultural differences. The purpose of this study is to show how the concept of management intertwines with culture. In this report, India will be identified because of the changes occurring in the economic trends of this time. At this time, India is one of the most important regions of the world when identifying multinational corporations and an expansion of the economy. For three years in a row, India has expanded by an average of 9%, specifically with outsourcing and import and export possibilities. At the same time, there are several noted boundaries with the cultural affiliations between India and the Western countries, even though this is one of the main multinational corporations in the area. This is blocking the development of companies in India and is leading to different global affects in other regions of the earth (see Appendix A). This makes it one of the most important countries in the global economy, with specific questions of how the growth of this financial center will affect business and culture in different regions of the world (Economy Watch, 2010, http://www.economywatch.com/indianeconomy/indian-economy-overview.html). The format of this study will provide a general overview of India, including the ethnic and cultural traits. This will be combined with a review of literature, which will show how this affects the economy and global changes. An analysis will take place to identify what the trends in India are, which will end with a conclusion to identify the changes that are occurring in India and how the culture is affecting the management of multinational companies. Introduction There are several prominent identities in India, specifically which relate to the changes that the country has gone through over time. India is known as one of the oldest countries on earth starting with the Indus Valley Civilization. This led into several kingdoms that developed, specifically which were based around spiritual and religious beliefs. This led to divisions between the Hindu and Buddhist traditions in the area by the Middle Ages, each which were led by different empires. During 77 CE, this was followed by Islamic trade with India, eventually which led to Islamic and Muslim rule over specific divisions of India. By the 18th century, India opened to trade with Britain which moved into colonization of several sectors of the country. This has led to one of the most unique aspects of India, which is based on the diversity of different areas of the country. This has led to regional differences with language, customs, traditions and religions of different areas (Keay, 2001, 19-129). The historical reference to India has led to several traditions, ethnic and cultural traits that are a part of the system. The division of different religions and cultures into different areas has led several to acknowledge each of the traditions as a custom of their own. While prayer and worship is generally considered a private matter among all traditions because of the dominance of the Hindu and Buddhist religions, other customs are widely recognized. The festivals and holidays of India are considered the most important and are celebrated as national days by most. There are three main holidays which are celebrated throughout India, as well as national celebrations known as a part of Indian culture. This is combined with a variety of Hindu festivals for different gods and deities as well as harvest festivals celebrated in different regions. Recognizing the different festivals and religious systems in this area is considered important and sacred to those in the region (Sharma, Gupta, 2007, 17-29). The last major part of the Indian culture that is recognized as a nation is based on family. Most of the families live in joint units, which consist of brothers, sisters and married couples in the same household. It is rare that a family member moves out, unless they are a woman that has arranged to be married. The arranged marriages are still considered sacred, in which the family matches two individuals based on compatibility, caste system and social status. While men and women are considered equal in society, most women care for the home while men are in charge of the monetary wealth of the home. It is expected that the children raised in the home will not work until they are married or until they have received an education. The work force in India, because of this, consists of individuals that are older in age because of the family system. While this is changing in the larger cities, most still honor this tradition because of religious belief (Patel, 2005, 27-52). The focus of this report will be based on the religious customs and the family that is a part of India. This alters the way in which management in multinational companies can be handled. To ensure respect with the religious and cultural affiliations, as well as the treatment of different individuals, it is necessary to understand the different ways in which culture will affect the work area. Creating a system that is compatible to those living in India will then provide a sense of respect while working with those in the culture while building an understanding of how to work within the Indian culture. Overview While India is beginning to move into a global economy, the cultural customs and traditions make it different than most other regions. The strong family ties and associations is one of the differences with other regions of the globe. Staying with the family, joint families and the ability to work at certain ages are all a part of the differences. In Western societies, such as the United States, the neutral family is more common. The idea of work for individuals that are 16, as well as a sense of independence that is a part of this is combined with the concept of Western culture. The religious customs also are different than other countries. The variety of religions, as well as the eastern thought that is a part of this is one of the strongest parts of the traditions of India. This regard has transformed into festivities and celebrations that are prominent in the culture to show respect. The celebrations are different than other regions of the earth, as well as the way in which individuals worship in this region. Review of Literature When looking at other literature, it can be defined that there are several that are showing similar patterns with the culture and multinational corporations. One of the ways that researchers have found that this changes is through the concept of power and progress in the company. The familial structure as well as the societal structure that reflects this immediately moves into the work area. The corporate structure and the hierarchy that is within it is based on individual improvement and growth. However, in cultures such as India, it is found that improvement and growth is a community effort and is communal. This stems from the familial and societal structure as well as what is accepted in society. The concept of empowerment, management and practices within the work place became ineffective in regions with communal ideals. Productivity slowed and many of the individuals in the workplace became disempowered with individual goals as the focus, instead of the community focus (Marchese, 2001, 130-132). A second study related to multinational companies shows how the structure of power and management in the environment of India is not the only change and influence. The strong religious customs and ties also create a difference in how those in India interact with management. Another research study showed how a multinational corporation, when working in India, had to approach different concepts related to religious respect and the sacredness of different concepts. Specifically, the company was faced with ethical beliefs from those in India and ideas that were considered a part of moral condemnation. This was partly related to the political environment of the time; however, the corporate structure and the way in which the services were offered was considered immoral by those that were in India. This division and the inability to understand or respect the culture was strongly noted as a major problem with the corporation and management that was working in India (Berge, Holtburgge, 2001, 105-119). These research studies, as well as others, show that there are strong divisions in the multinational corporation and the management offered. Many have found that the Western structure of corporations doesn’t work with the main social and cultural ideals as well as the religious associations. This creates a division among those working for corporations and does not provide a general sense of progress for companies or for those working in India. Analysis The trends that are growing in India are changing with the cultural associations and into a global identity. However, multinational corporations are also having several difficulties because of the culture and customs of India. According to Hofstede’s analysis, India can be considered as a collective culture in which the power distance is high. While those that are in the culture work within community to achieve goals, the continuous initiation of the caste system creates a high distance between those in management and those below. These two aspects create a division from those that are working with corporations, specifically because the concepts of empowerment and communication are lowered in different areas. This is also causing the uncertainty avoidance to be stronger within the different corporations. The culture is mostly masculine, specifically because of the familial traits. However, most are long – term oriented and plan to stay in one area for a longer time frame. The inability to have these two management aspects may be one of the reasons why India is not thriving as much as other regions, despite the recognized growth. It can also be stated that this is leading to the growing industries in India which has the highest trends in public service and community oriented services (see Appendix B). The common concepts with this cultural aspect can then be compared to the corporate cultures of India. The family culture is one that is defined as a part of the community. Those that are in a family are used to joint living situations and are able to share in a community oriented environment, which is similar to the corporate culture. When in an incubator culture, guided missile or Eiffel tower, the Indian culture will consider it out of harmony with the culture and the community oriented concepts that are in the area. This is linked to closer friendships as well as a sense of dependence on authority areas to make the decisions because of the way in which the family culture relates to what is occurring. Structuring a corporation and management structure in this manner has led to several debates within India. This includes anti – corporate activism that is prevalent throughout India, specifically with many believing that it violates human rights and is immoral (Pitelis, 2000, 74-79). The personalized, egalitarian and hierarchical organizations, when looking at it from this perspective, is one that is not welcomed by Indian culture because of the communal nature and the different acceptance of cultures as a part of the community. Multinationals in the Country The different multinationals in the country have the work affected because of the different cultural customs and religious affiliations. For instance, the case study of the German company noted that there were problems with moral and ethical beliefs, specifically relating to the idea of hierarchy and personalization of sales (Berg, 2001, 105-119). Other corporations, such as GM, have experienced this same problem. For instance, one of the growing trends in India is the use of natural and renewable energy. When GM moved factories into this area, many in India considered it immoral and one against the environment. This also led into difficulties because of the attitudes and trends toward the corporation, with the activist movements against the hierarchy taking place. This shows that the culture in the area is one that doesn’t support the multinational management, which stops the same level of progress from taking place in India, as opposed to other global areas (Pitelas, 2000, 74-79). Conclusion The concept of multinational management in another country is one that is dependent on the culture and reactions available. This determines the success of the corporation as well as the growth of the economy in the area. When looking at the Indian culture, it can be seen that the communal nature and the cultural aspects have stopped the growth of corporations, specifically when referred to against other economies. While there is still welcoming of this for financial aspects, most in India are also holding to the moral beliefs related to religious customs, as well as socio – cultural affiliations toward the corporation and functions of power. To manage multinational corporations, it is required that there is an understanding and adjustment to the culture. Showing a sense of respect to the culture and employees in which one is in will change the internal environment of a company and will assist in the growth of the company within a different region. References 1. Berg, Nicola, Dirk Holtbrugge. 2001. Public Affairs Management Activities of German Multinational Corporations in India. Netherlands: Journal of Business Ethics. 2. Economy Watch. 2010. India Economy Overview. [Online] Retrieved March 6, 2010 from: http://www.economywatch.com/indianeconomy/indian-economy-overview.html. 3. Keay, John. 2001. India: A History. New York: Harper Collins Publishers. 4. Patel, Tulsi. 2005. The Family in India: Structure and Practice. New York: Sage Publications. 5. Pitelas, Christos. 2000. The Nature of the Transnational Firm. New York: Routledge. 6. Marchese, Marc. 1993. Matching Management Practices to National Culture in India, Mexico, Poland and the US. Academy of Management, 15 (2). 7. Sharma, S.P, Seema Gupta. 2002. Fairs and Festivals of India. India: Pustak Mahal. Appendix A Comparison of global regions Appendix B Common Sectors of Work in India Read More