The Negotiation of Culture in Multi-National Corporations - Research Paper Example

Research Context (Proposal) Conceptualization of culture depends on the individuals’ perceptions about experience and cultural changes. This study is based on an American multinational corporation located in Romania. Romania is one of the former communist countries in the Eastern European region. Currently, the country has shifted to a market based economy. I chose to base my study on an American company based in this region due to cultural differences depicted by the two parties and the successful infusion of American businesses. Romania tended to embrace foreign investments as it had long suffered as a result of communism regime that was associated with poverty. The primary respondents and sources of information for this study are the Romanian nationals working for this corporation. Moreover, third party respondents such as spouses and close friends were included in the data collection. The third party would be helpful in disclosing information that employees could not, either intentionally or not. In the collection of data, I relied on networking with employees working for this company. First I collected data from different employees regarding various issues related to culture. This was done through interviews. I addition to this, data was also collected from the company’s HR policies and training programs that I accessed from the organization’s website. Annotation of one of the main articles Schotter, Andreas, and Paul W. Beamish. Intra-organizational turbulences in multinational corporations. This article is published in the book Politics and Power in the Multinational Corporation. by Christoph Do?rrenba?cher and Mike Geppert in 2011. This is a research article that is based on intra-organizational crises that occur within multinational corporations. The article is aimed at advancing literature on the relationship between multinational corporations and their foreign subsidiaries. The research is based on the rejection of HQ initiatives by foreign subsidiaries; an area that the authors felt has long been overlooked by various management researchers. The article then moves on to defining conflict, methodology used for the study and the research findings. It has been pointed out that prevalence of intra-organizational conflict in multinational corporations between headquarters and their foreign subsidiaries is not a characteristic of dysfunction and unsuccessful global integration. This is a matter I concur with. Multinational corporations operate in different regions globally. These regions have different cultures under which these businesses are set to operate, hence cultural differences that can cause conflicts. This calls for the management to adopt different strategies when managing relationships between headquarter and subsidiaries. A question that I seek to ask is, if this is the problem, then what is the way forward? According to Schotter and Beamish, global integration measures can be adopted to deal with this challenge. Global integration refers to strategic and organizational activities that seek to reduce organizational and operational differences between a multinational corporation and its subsidiaries (Do?rrenba?cher and Geppert 191). A multinational corporation has to manage many subsidiaries and as a result other factors that trigger conflicts emerge. These factors include global and local competitor strategies, host and home country regulatory requirements, differing market and customer preferences and managerial characteristics and preferences among others. Negotiation is one of the ways through which an organization can resolve a conflict (Adams and Markus 337). A multinational corporation can hardly do away with foreign subsidiaries, since it is meant to operate globally. Cultural differences can result into conflict in multinational corporations; therefore there is need for negotiations of culture in these firms. I find this article relevant to my research topic as it outlines various sources of conflict as a result of foreign spheres of operation. This also highlights different cultural backgrounds and practices that cause conflicts. In most multinational corporations, most of the employees are from the host country. For instance, a company is in Japan but has its operations in USA. It is found that most of the staff working in the USA based branch are from that country, whereas the rest are expatriates. This leads to cultural conflict – one of the challenges facing expatriate employees working for multinationals worldwide. Focus on expatriate experience has been termed as an obstacle that shifts the attention of locals working for multinational corporations. I tend to think this is as a result of assumption adopted by most people. For instance, expatriates receive hardship allowance packages, an incentive that is not available to the local employees (Adams and Markus 357). Researchers have also credited expatriates with cultural challenges, while turning a blind eye on the local employees. For instance, a Japanese working for a bank Coca Cola Corporation in Paris is assumed to be culturally Japanese. To be specific, this case is correct, but the big question is, will this assumption always remain valid? Literature discussion on the negotiation of culture in multinational corporations In some cases, the assumption stated above can still hold. This will serve as justification for some differences arising between a corporation and its foreign subsidiaries. This is because the foreign subsidiaries extend home cultures in their operations; therefore new employees from other countries have to learn how to adapt to the new culture. In trying to do so, employees face various challenges in following norms and practices within the organization. These practices are implemented day in day out within the organization. Are not these practices a contamination to these subsidiaries? And if this is the case, to what extent? Multinational corporations are identified as sites where different cultures exist, resulting to emergence of organizational cultures, where features of the original national culture are ignored. However, these organizational cultures can hardly be abandoned as they cannot be separated from employees who carry them. Although literature has accepted that individuals can adopt other cultures once they relocate to foreign countries, different scholars seem to ignore the fact that local employees spend significant part of their day in an organization that is quite different from their own cultures. This can be equated to living in a foreign country, where there are cultural differences. In such a case, their lay a reason to question the assumption that host country employees are culturally interchangeable with the rest of the country’s population. In addition, the assumption that host country employees extending their national cultures to work environment (multinational corporations) serves as an advantage, rather than a problem. From the discussion above, it appears that cultural profile of host country employees of multinational corporations differ from that of local residents of that country. As part of the negotiation of culture in multinational corporations, this research will focus on the extent to which the host country nationals reflect the features of their national culture and interchangeability of the same with the rest of the population from the host country (Stahl, Bjorkman, and Morris.). This research will be based on experience of host country nationals in an American multinational corporation subsidiary based in Romania. The main objective of this paper is to present a cultural profile of the host country nationals that reveal the extent to which these employees reflect their national culture. Multinational corporations as incubators of culture Multinational corporations can be credited and criticized for changes they bring in the society. They introduce new and popular products in the market as well as cultural practices to the host countries, and use of those practices to exercise control in the organization. In most foreign subsidiaries, concentration lies heavily on expatriates, then local employees, who are acculturated as a result of heavy socialization process (Ang, Van Dyne, and Tan 586). Through socialization, they get to know how to perform their new duties, together with incorporation of new behavior beliefs and values. This section answers the question: what should we expect of the culture of a new subsidiary, given the fact that the parent corporation is foreign? From the exploration of cross border joint companies, crucial fats about the way organizational cultures emerge in multicultural context have been discovered. This has led to the development of negotiated perspectives of culture. When dealing with joint ventures operating internationally, the organizational cultures are constructed through interactions of different cultures. The culture of the parent corporation can be powerful when it comes to negotiating the new culture of an organization. The importance of a multinational corporation can be influenced by cultural differences of between the parent corporation and that of employees. This is because there may be some cases where employees adopt very strong degree of cultural attributes, whereas there are those who are not deeply rooted into the culture? These individual culture differences are considered crucial indicators of culture of multinational corporations. However, individual differences in power and position will reduce the degree at which these individual cultures are manifested in the resulting organizational culture. Moreover, there are various similarities between expatriates and host country nationals working for various multinational corporations. However, existence of some differences is a factor always prevailing in these organizations and this is the reason for prevailing conflicts in various subsidiaries of multinational corporations. There exist some differences between international joint ventures and multinational corporations. These differences can be viewed in terms of culture. For instance, international joint ventures depict bi-culture in the organization, whereas multinational corporations identify with the culture of the parent company. For the case of joint ventures, employees have not choice of being members, whereas in the multinational corporations, employees have such a choice. These are some of the contextual differences that change the outcome of negotiated culture. Negotiated culture can lead to a process in which assumptions, values and normal orientations are imported from home to host culture as selected by the host country nationals. These local employees are always under the guidance of contextual and structural influences form the parent company. These influence their relationship with expatriates and other host country employees in the organization. However, there is the need to examine the extent to which contextual factors, with combination of cultural differences influence and shift negotiations towards the favoring or rejection of elements from different cultures of origin. It is clear that interaction between multinational corporations and host countries leads to cultural exchanges (Ang, Van Dyne, and Tan 584). Where a corporation has subsidiaries established in developing countries, there are differences in terms of power. This is one of the factors that can enhance the outcome of the cultural negotiations closer to the original culture of the parent multinational corporation. Moreover, it is the same case found in the international corporations. In the international joint a venture, one of the partners is seen to dominate the other in terms of culture. This is mostly noted in the initial stages of the joint venture and implications are felt directly on the working culture of the joint venture. The perspective of negotiated culture is concerned with reconciliations of the work culture within an organization. This is a broad perspective that can be dealt with at once. For this purpose, I will focus on aspects of Multinational Corporation’s culture as depicted in the individual level. This aspect also covers a reflection of the internalized organizational and national culture. Most employees define themselves in relation to the organization they work for. This defines the importance of being a member of a certain organization for the purpose of social identity. Employees are even more attached to the company when they know that their organization presents distinctive characteristics that are viewed positively by members of the public. This happens mostly in the developing countries where global brands of multinational corporations tend to manifest more in the market as compare to the local brands (Ang, Van Dyne, and Tan 582). Social identity and self categorization are some of the concepts mostly applied by organizations to predict the degree at which employees compare themselves with others from a different company. These are the concepts that are applied by multinational corporations while deploying expatriates to foreign subsidiaries. Cultural transfer is also effected through intensive training and social contact and is applied to those host country employees who might be receptive to norms and practices of the parent corporation (Ang, Van Dyne, and Tan 587). Identification with a certain organization and culture acts as a connection between the national, organizational and individual culture level. Discussion of the research findings From my analysis of data collected, respondents perceived employees from Romanian companies as inferior since they are close- minded. Moreover, the employees from the American multinational corporation were regarded as elites, a new social class that could hardly be compared to the local typical Romanians. The group was also characterized by high rate of personal growth that other typical Romanians take a long time to achieve. This gave the host country nationals a sense of empowerment, self esteem and security, features that majority of Romanians never enjoyed. However, the respondents revealed that there was a price to be paid for working for the corporation. This was based on balance or imbalance between work and life. While respondents felt that long working hours was equivalent to exploitation, they were quick to note that all this was overshadowed by the benefit packages received. I also noted that the host country employees were interested in how the corporation will change their lives and not really working for the corporation. Respondents also seemed to be caught between two cultures, as some lived to fulfill the corporation American dream while others criticized the American culture and postulated some of the Romanian cultural practices they missed. Basing my findings on this research, I categorized the corporation’s employees into different classes. The converted employee category comprised of those home country employees that had highly regarded the company and its American culture. They are well adjusted to the culture of Americans and tend to emulate expatriates. However, they have limited interactions with other Romanians as a result of adjustments. The conflicted employee category comprised of those employees that were not happy working for the corporation. They were reluctant in disclosing their working experience in the corporation. They also expressed frustration and dissatisfaction towards their work. There was also a group of employees that had found a way of reconciling their differences between their Romanian culture and that of Americans. They had completely changed their attitudes toward the organization. During the interview, they acknowledged positive features of the American culture portrayed by the organization. Finally, there was a group of employees who had extreme favorable attitude towards the corporation. These employees had only positive things to talk about the corporation and were unwilling to talk about disadvantages of this corporation. Estranged employees are those who once worked for the company but resigned later. They utilize the knowledge and culture from the corporation to establish their own businesses. They also seemed to develop some disrespect towards the American culture as they perceived it to be unnecessarily rigid. Conclusion The existence of host country employees with a cultural profile of the local culture enhances the understanding of various human resource practices in multinational corporations. These practices are geared towards reconciliation of different cultures within a multinational corporation that is likely to cause conflicts. For instance, these organizations should take into account the cultural differences depicted by categories of employees discussed above. Multinational corporations should reevaluate the presentations and look for measures to reconcile these cultures to the organization’s culture. These corporations should also prepare expatriates to expect certain local cultures, therefore prompting them to adjust their culture. Works Cited Adams, G., and H. R. Markus. Toward a conception of culture suitable for social psychology of culture. In M. Schaller & C. S. Crandall (Eds), The psychological foundations of cultures: 335–360. Mahwah, NJ: Lawrence Erlbaum, 2004. Print. Ang, Soon, Linn Van Dyne, and Mei Ling Tan. Cultural Intelligence. Web. 11 Dec. 2012. . Do?rrenba?cher, Christoph, and Mike Geppert. Politics and Power in the Multinational Corporation: The Role of Institutions, Interests and Identities. Cambridge: Cambridge University Press, 2011. Print. Stahl, Gunther K., Ingmar Bjorkman, and Shad Morris. Handbook of Research in International Human Resource Management. Cheltenham, UK: Edward Elgar Publishing Limited, 2012. Web. 11 Dec. 2012. . Read More