Managing in Multinational Companies - Research Paper Example

? Managing in Multinational Companies College Managing in Multinational Companies Introduction Organizational culture is a set of behaviours to be observed when working in a particular business. Today, there are numerous definitions of organizational culture from various scholars. However, Hofstede (2004) offers a concise definition of culture as a collaborative realignment of the minds of a number of persons, making a group of people to differ from others. Culture refers to a set of gained knowledge that some individuals may employ to make meaning of experiences towards generating a unique set of behaviour. Different business establishments engage diverse cultures in their setups. These cultures are necessary for guiding the entire organization towards a common objective, by promoting a uniform way of thinking and acting. In other words, an organization prevents subjectivity of decisions and behaviours in an organization, which promotes uniformity and team working spirit. On the other hand, countries will have different cultures that organizations have to respect, which are inherent in the views and values of such country. A multinational company setting its operations in US will need to observe a relatively diverse organizational culture compared to one setting operations in Mexico. An organization has to respect and observe a country’s culture while designing its organizational culture. Germany and Japan are two countries with significant variations in culture, though they are both industrialized. Companies operating in the two countries face different cultural and social dynamics inherent with employees, which have to be respected. This report investigates the differing views and beliefs surrounding overtimes and how the issue differs across the two countries. In this investigation, the report will illustrate that national cultures have a role to play in shaping organizational cultures. Main Body Literature review and Discussion Both Germany and Japan have similar challenges related to supply and demand of the labor market. In 2007, 10.0 % of all employed Germans were in full employment compared to 14.0% of Japanese. In addition, part time employment in Germany was at 26.3% compared to Japan at 22.5% of all forms of employment (Seifert, 2010). A common aspect in both countries is that a company will consider other types of employment other than permanent employment to save on labour costs, to achieve flexibility and to benefit from workers for a short period (JILPT, 2009). Such an approach is common in short-term specialized jobs. In addition, there is a major variation in hourly pay rates between permanent and part-time workers in Japan compared to Germany (Smith 2000). Part time employees have fewer benefits in bonuses offered compared to their full time colleagues in Japan than in Germany where bonuses are not of much importance. Germany has more part-time employees than Japan due to the working time variation. There are two reasons to explain the prevalence of part-time working in Germany than in Japan. One, such part time workers are found in the tertiary sector, which bore the brunt of economic crises than the manufacturing sector, which has motivated employers to source more part-time workers (Smith, 2000). Part-time working in both countries has mainly improved because of structural changes in the economy towards a service economy. In Japan, non-regular employees get much fewer salaries with the difference increasing when the bonuses and one-off payments are considered in permanent employment (Ishiguro 2008). In Germany, on the other hand, part-time employees and regular employees have fewer differences in their wages; a part-time worker earns almost like a regular worker (Smith, 2000), with part-time workers taking advantage of overtime payments to bridge this salary gap. These are some of the factors differentiating working patterns between the two countries. Having considered the general trend in the employment patterns in the two countries, there is a need to consider working attitudes across these countries. In japan, there is a belief that women are best at home with children while men have much less domestic roles to play. A man in Japan spends more time in the workplace, decreasing the time left to spend at home, where they have fewer chores to attend to than a woman. As a result, men’s working hours are much longer in Japan compared to Germany, with many husbands returning home well after eight o’clock at night, and most of them working during weekends (Mohwald, 2002). This is due to the belief that domestic chores belong to women; men have few roles to play at home. In Germany, there is increasing male-female partnership that has its onset from the 1970s, which has led to debates on gender equality with a belief that both men and women have important roles domestically and in employment (Mohwald, 2002). Japanese service sector is unique in that many people will work without pay and will forego leaves, more so when such leaves are paid. There is a belief that any unused leave days, and a good number of overtime in the service sector are eventually necessary for possible promotions and increased bonuses in the future, especially when one intends to be employed on a permanent basis (Ogura, 2009). Consequently, workers are hopeful, take their respective time seriously, and have increased motivations to perform at much higher levels, with all these factors manifested in long working hours (Ogura, 2009). However, other factors such as the influence of merit based labour in the market, consumer demand, management and administrative roles come to play when considering such working hours. On the other hand, in Germany, people are more observant of the labour laws, labour agreements, and are assertive to follow these to the letter. In case the number of worked hours is over the ones stated in labour laws, such hours have to be considered under the labour contract with the company. The difference is that a German worker will be paid for each hour worked, more so considering most workers are in part-time employment than in full employment. This explains the relatively lower gap in income between the permanently employed and the part-time employees in German compared to the difference in Japan. More workers in Germany will work to increase their revenue and not for emotional satisfaction; work is a means to earn a livelihood and not a step to achieve higher gains as is in Japan. Consequently, In Germany, it is common to find employees with bonuses and benefits up to 70% of their monthly pay (Ogura, 2009). In Japan, the bonuses may accumulate to about five to six times of their normal salaries as they are paid twice a year. The fact that workers receive bonuses and benefits twice per year indicates that working overtime in Japan, unlike in Germany, is a way of life to motivate employers to offer long-term working contracts and better remunerations as the person proves hardworking. In addition, the Japanese will prefer being at the workplace than at home as they do not believe in performing domestic chores, which a preserve for women. Therefore, it is common for employees to work extra hours as a way to pass the time before retreating to their homes late than early evening. People attach different meanings to work; interestingly, in the two countries, the idea that a job is just a source of money increases with age with 40% to 42% of respondents in Germany and Japan agreeing with this statement (Smith, 2000). However, the belief that work is the most essential activity in one’s life scored a 51.1% of respondents in Germany, compared to a whopping 87% in Japan (Smith, 2000). These figures indicate that, in Japan, work is part of life and most people regard work as a critical aspect in their lives. This supports the fact that some Japanese are willing to work for much longer hours without any extra pay and to forego their paid leaves. In Germany, work is not part of life, but a process through which they earn a livelihood, which means that as one accumulates resources, work becomes more distant and unappealing. Moreover, 88% of retired Japanese workers previously on permanent employment responded that work was the most important activity in life (Smith, 2000). As Smith observed, the Japanese, unlike other workers, have value for any job. Smith (2000) noted that workers under 30years of age valued advancement to higher positions in the workplace, except in Japan. Germany in the report is isolated as a country with the highest sensitivity to job security and independence to work, and at the bottom of a need to have a job that is useful to the society. On the other hand, Japan was rated much lower on job preference based on security, interesting jobs, independence at the workplace, and flexible in working hours, attributes that are important among most German workers (Smith, 2000). The Japanese do not mind the flexibility of a job and other aspects related highly in Germany, Japanese treasures any type of job. In other words, to the Japanese, a job is a job, and it is important despite the level of the job on the hierarchy of command. In Germany, most dream to have a job at the top of the hierarchy of command, mainly because the potential of the job to reward workers handsomely. The difference is that to a German employee, the remuneration and the benefits obtained from a job come first. However, to a Japanese, all jobs are equally important, which explains the value that Japanese attach to any jobs and are willing to put in more hours without any financial consideration. In the recent past, Germans have portrayed increasing interests in leisure at the expense of work (Seifert, 2010). There is a considerable decrease in work centrality among most Germans, and an increase on the importance attached to leisure activities, which drastically reduces the number of hours worked (Seifert, 2010). Therefore, most Germans require good compensation not to reduce their working hours, and generous overtime compensation for any extra hours worked. Germans remain objective in the workplace and with high professional standards that guide their working culture. Most German professionals are highly objective in that they get to the point and stick to that point with no side bargains (Schroll-Machl, 2013). Thus, they are goal-oriented people, to whom any contribution requires facts. Consequently, they have more respect and preference for written words and any contract has to be in clear black and white without any degree of vagueness. Moreover, they do not insist on knowing their business partners or creating a friendly environment at the workplace, a culture that is prevalent among many Japanese workers. To Germans, a contract has to be clear with all terms committed in writing, and their objectivity does not allow them to sidestep these agreements. In a company, they need strict and well-defined working hours and other conditions, which imply that in case a German has to work overtime, there has to be agreed conditions on the benefits that would accrue from the overtime. Unlike the Japanese, Germans are strict on working schedules, which means their culture requires payment of overtime in full when their contracted time ends (Hodgetts, Luthans and Doh, 2006). Japan has a social economy with a collectivist ideology in all their cultures (Domnez, 2007), where belonging to a group is an important aspect, and one has to work for the common good of the group. Pagell, Katz, J.P. and Sheu (2005) asserted that, in Japan, there is a strong relationship between individual groups, which defines a solid collectivist approach in their operations. In Japan, it is common for people to work for the common good of all including the organisation, unlike in Germany where people have an individualistic approach. Strong interpersonal relationships among workers and positive work attitudes make the Japanese to give up their time to the success of organisations. As a result, the Japanese have a tradition of working much longer even without pay. Moreover, the Japanese have a masculine culture where success for a man is critical. As a result, many are eager to give their time to a company with the single intention of gaining recognition, for possible promotions to achieve individual success (Domnez, 2007). Germans, on the contrary, take risks and have low uncertainty avoidance; thus, to most Germans, working for an organisation calls for clear defined goals that each of the entities has to achieve, with any extra work requiring an extra pay. Collectivist cultures have high uncertainty avoidance (Matsumoto, 2000), where workers view the collapse of an organisation as fatal, not only to their individual’s sake, but for the entire group, as well. To avoid the death of an organisation, the Japanese have learned to put more efforts towards ensuring sustainability of the organisation. This explains the rationale behind the Japanese manufacturer, Kenosuke Matsushita, who announced 250 years organisational plan, divided into ten-25years stages (Lane et al. 2001). Germans invest and fully concentrate on a task and on meeting the objective of their roles in the workplace. Their concentration is so extreme that they may miss any signal unrelated to their objectives when working. After completing their contractual duties in the company within the required timelines, (Schroll-Machl, 2013) any more input would have to fetch more pay as it is not within their objective at that time. Recommendations and Conclusion Considering the differences in perception and beliefs surrounding the issue of work, there is a need to have different policies and guidelines that explain the best ways to handle overtime in the workplace. Overtime is necessary to meet deadlines especially in cases where a company has a limited workforce. However, it is important to take into consideration the national cultures about work in designing overtime schedules and their implementation. In a country such as Germany, it would be necessary to have clear guidelines that strictly elaborate the working hours, when overtime is needed and employee compensation for each additional hour worked. The guidelines have to be attached to a contract before recruiting any employee. The aim would be to ensure employees understand their operation modulus and the various aspects the company requires from them. Most Germans would not prefer unplanned notices of overtime; they are assertive and objective to a task. To them, planning is necessary to accommodate every task in the plan, necessitating prior information about any overtime required. In japan, when designing overtime guidelines, it would not be necessary to emphasize overtime requirements in a contract before hiring. The Japanese have a collectivist approach in the workplace and like collaborating with one another. Moreover, they have a positive attitude towards work and in some cases are willing to work more for the benefit of the company, even when such overtime is not necessary. When drafting the overtime guidelines, the manager can print circulars when overtime is needed defining the actual tasks to required, and the expected hours that such overtime would be expected to take. The partnering approach that Japanese use in the workplace encourages them to spend more time socializing and forming strong bonds. Consequently, overtime would be a welcome opportunity for them to cement these bonds. Moreover, some may put in more hours with a view of gaining promotions due to their hard work. Such employees may spend more time than required in the work place, making it necessary to state the number of hours that overtime requires and which the company will pay for. However, the company should leave space for those willing to work for more hours than needed even if their departments are not included in the overtime schedule. Creating a favourable environment that allows employees to spend more time in the workplace enhances partnership bonds among them, which is necessary for team working, for the benefit of the company. Therefore, it is necessary for the company to design different overtime plans for the two countries. References Domnez, O. 2007. The Transfer of Organisational Culture in Multinational Companies. Published Master Thesis, University of Nottingham. Hodgetts, R. M., Luthans, F. & Doh, J. P. 2006. International Management: Culture, Strategy, and Behaviour. London: McGraw-Hill Hofstede, G. & Hofstede, G. J. 2004. Cultures and Organizations: Software of the Mind. London: McGraw-Hill Ishiguro, K. 2008. Japanese Employment in Transition. The Growing Number of Non-Regular Workers. Electronic Journal of Contemporary Japanese Studies. [online]. Available at: http://www.japanesestudies.org.uk/articles/2008/Ishiguro.html [Accessed 2nd Oct. 2013]. JILPT. 2009. Labour Situation in Japan and Analysis: Detailed Exposition 2009/2010. [Online] Available at: http://www.jil.go.jp/english/laborsituation/detailed/2009-2010.html[Accessed 2nd Oct. 2013] Matsumoto, D. R. 2000. Culture and psychology: people around the world. Belmont: Wadsworth Thomson Learning Mohwald, U. 2002. Changing Attitudes Towards Gender Equality in Japan and Germany. Munchen: Verlag GmbH Ogura, K. 2009. “Long Working Hours in Japan.” The Japanese Economy, 36(2), 23-45. Pagell, M.; Katz, J.P. and Sheu, C. 2005. “The importance of national culture in operations management research”, International Journal of Operations and Production Management, 25(4) : 371-394 Schroll-Machl, S. 2013. Doing Business with Germans: Their Perception, Our Perception. Bristol, CT: Vandenhoeck & Ruprecht. Seifert, H. 2010. Atypical Employment in Japan and Germany. [Online] Available at: http://www.jil.go.jp/profile/documents/Seifert.pdf [Accessed 2nd Oct. 2013] Smith, T. W. 2000. A Cross-national Comparison on Attitudes towards Work by Age and Labour Force Status. Chicago: National Opinion Research Centre, University of Chicago. Read More