Cross Culture Management of Japanese Company Operating in Malaysia - Case Study Example

Cross Culture Management Table of Contents Introduction 3 Main factors that influence the job satisfaction and commitment of Malaysian employees of ABC MSC 3 Application of Theories to Practice (With Reference to the case study) 6 Analysis of theories in the case study 9 Conclusion 10 Reference 11 Introduction The entire society and human activity is driven by constantly changing nature. There are a certain number of factors that leads to such constant changes. The project seeks to analyse the case of a Japanese company operating in Malaysia. However, the company faces certain problems arising out of cross cultural differences between the two nations. This has resulted in demoralising the Malaysian employees. Due to international expansion, the complexity in organisational behaviour and business activities has changed dramatically which is demonstrated in the case. This paper analyses the Malaysian employees’ perception for a Japan-bases company, known as ABC MNC. This case presents the outcome of a survey conducted with the employees for identifying required changes for management practises. Main factors that influence the job satisfaction and commitment of Malaysian employees of ABC MSC Job satisfaction and commitment from the employees’ end is a necessary criterion for the growth of an organisation. The level of job satisfaction among the employees influences their commitment level. Therefore, a company should always aim to offer higher job satisfaction to its employees. Job satisfaction and organisational commitments are the most important variable that determines the employees’ turnover ratio. Higher turnover of employees is a major issue and it affects the overall performance and growth of a company (Peiró, 1995, p.145). The primary aim of this paper is to identify the multiple factor influencing job satisfaction and commitment among the employees of ABC MNC and to offer relevant motivational theories to encourage the job satisfaction. ABC MNC primarily follows the Japanese management style that includes the four major core principals i.e. job security, promotion and wage system based seniority, enterprise unionism and benefits and welfare services of company. These four principles are favourable for encouraging the job satisfaction among the employees. However, this company is subsidiary of the Japanese parent company present in Malaysia and this subsidiary company does not follow any of these four principles. Japanese work culture is supposed to be growth oriented, and hence, when ABC MNC entered in Malaysia, large number of people wished to join this organisation as an employee. The above stated four principles of Japanese organisations are the major reason for higher job demand in Japanese organisation. During 2003, due to the closedown of its R&D department Malaysia, employees perceived that their jobs had become less secured. This was the first instance that affects ABC MNC’s job satisfaction level. However, followed by this incident, there were also other factors that increased the number of unsatisfied employees in ABC MNC. ABC MNC was highly dependent on local Malaysian people for recruiting its labour forces. However, most of the top level management were the Japanese expatriate managers and there were significant gaps between the thorough process of Japanese top level managements and local Malaysian employees. Basically, the Japanese and Malaysian culture differs from each other due to their basic orientations that influence their basic traits. The Malaysian local employees used to perceive their Japanese top level management as people with a serious working attitude. Moreover, ABC MNC had a tendency to change its CEO in every three years, and every time, the new CEO restructured the entire organisation including strategies that also increases the dissatisfaction level among Malaysian employees. On the other hand, the top management always emphasised that their employees should gain skills like leadership, better communication etc. However, the company never provided any training to their employees in this respect, and instead they expected that the employees should learn these skills by attending seminars, on-job-training by external trainers. Malaysian employees found this to be an absurd expectation. In the process of decision making for restructuring, staff transfer, company policy, the Japanese top level management did not include or consider the Malaysian employees. The decisions taken by the top level managements hardly offered any significant benefits to the local employees. Moreover, compensation policies also had number of loopholes. For example, while determining the salary of an employee, ABC MNC did not consider the factors like qualification level, experience, seniority and instead, it was determined by the negotiation skills of the employees. Hence, an employee with better performance often used to receive lower salary than those who had better negotiation skill. Moreover, the company’s other monetary benefit strategies for its employees were poor for satisfying the employees. ABC MNC used to offer multiple allowances for transport, cell phone and car park. These allowances are important part of the employees’ remunerations and benefits. These allowances were very helpful for the employees in terms of their economic condition. However, the company’s allowance benefits schemes were ineffective and insufficient for their employees. This was really an major area of problems for employees if ABC MNC that led to increase its employee dissatisfaction level followed by increasing employees turnover ratio. Application of Theories to Practice (With Reference to the case study) The case study has been explained in the context of various theories of motivation. There are a number of competing theories explaining the motivational nature in organisations. These theories have been found to be true to a certain extent and were able to explain the behaviour of individuals at certain specific times. However, this must be accepted that the behaviour of an individual in the workplace is primarily determined by the prevailing situation. This is the reason why the level of motivation keeps changing over time and according to circumstances (Mullins, 2009, p.478). The content theory of motivation outlines those specific things which motivate individuals at the place of work. The theories primarily include Maslow’s hierarchy of needs model, Alderfer’s model, Herzberg’s two factor model and McClelland’s theory. The case is analysed with special emphasis with regard to Maslow’s model. The company obviously faces problems arising out of cross cultural differences. The cultural influences include beliefs, values, customs, the degree of assimilation and acculturation and the general conditions of the employees. Inappropriate research on the cross cultural logistics by the company has resulted in demoralising the employees. The company has successfully made use of Malaysia’s high power distance index (ITIM International, 2009). This is the reason why they have placed only the Japanese people on the top positions in the company. However, this has not been the major cause of concern for employees. Resistance have primarily arisen because of improper functioning of the management. The famous psychologist Abraham Maslow has addressed the level of motivation on the basis of a hierarchy of five basic needs of individuals, namely psychological, safety and security, social, self esteem and finally self actualisation. He suggests that the higher order needs like self esteem and self actualisation become activated only after the lower order needs are satisfied (Adler & Gundersen, 2008, p.185). The following figure demonstrates Maslow’s hierarchy of needs model. Figure 1: Maslows hierarchy of needs model (Source: Mullins, 2009, p.481) The responses from the respondents are presented with relevance to the above theories. In accordance to the survey that was conducted, it was revealed that 85% of the respondents were not satisfied with the pay which they received. Salaries would be one the basic and primary requirements which would determine the motivation level of employees. It would account for the psychological needs or the lowest order needs presented in Maslow’s hierarchy. It was also seen that the company was confronting high labour turnover ratio. This can be accounted for the low salaries in comparison to the other telecommunication companies in Malaysia. In fact, the experienced IT engineers were able to fetch better offers in terms of salaries and also positions in other companies. The survey also revealed how the employees used to get their grievances addressed. What followed from the survey revealed that majority of the employees considered talking to their superiors to be most useful. People felt that their grievances would be addressed most appropriately by the management. However, the final responses that were provided by the respondents revealed that they preferred to remain quiet and silent and would not convey their dissatisfaction towards the management even if they were highly dissatisfied with the management practices. This shows that lack of fulfilment of the second order need in Maslow’s hierarchy. David McClelland was another theorist who has suggested that the most important driving factors which motivate people are “the need for achievement, power, and affiliation” (Adler & Gundersen, 2008, p.186). Even though the focus is more on the need of executives for power, initially he had emphasised on the fact that the need for achievement was the fundamental based on which certain societies produced more as compared to others. His studies elaborated the fact that entrepreneurs trained in the needs to achieve were found to perform better than those who were untrained. Hofstede has put forth a question in this regard. He has asked how universal these needs are. His studies have revealed that nations which had high needs for achievement simultaneously had high needs to produce. They could also accept risks easily. This fact gets revealed through the case study. People’s need for power and achievement gets revealed through their choice for working in the organisation just because it is linked to a famous and sell know parent company. The company was perceived as being financially stronger, well established and secure to work in. Some of the respondents said that their reason for joining the company was because of the prevalence of more opportunities with regards to issues like promotions as it was growing at a very rapid pace. One respondent even said that the company would open opportunities for him to get training from Japan. There were several candidates who said that their reason for joining the company was the belief that working in a foreign company would help them to develop their knowledge and skills and also add weightage to their career by working in a reputed company. Candidates were considering the company to be a stepping stone to move up their career ladder. This phenomenon is also associated with the highest order need in Maslow’s hierarchy which is self actualisation which is generally attained through growth, creativity and advancement (Mullins, 2009, p.483). Analysis of theories in the case study What follows from the case study is that the management has to take special steps in motivating its employees, especially when it is a foreign company which is established overseas. This is especially relevant with reference to salaries and wages, other benefits and welfare services; or even the system of promotion. The management also has to take care of the fact that management practices do not remain the same across all nations. It is important to analyse the nature and characteristics of human resources at the place where the company is set up before employing the local employees. As apparent from the above case, candidates were moving out of the company on account of low salaries and other benefits. This is the reason why the management had introduced benefits like transport allowances, car parking allowances and sell phone allowances for retaining the employees. It was also seen that the top management positions in the company were dominated by the Japanese personnel. All major decisions of the company with regard to company policies, restructuring of departments and the transfer of employees were undertaken by the management without the consensus of the local employees. For a company which is established overseas, it is crucial to consider the suggestions and opinions of the local employees while implementing any decisions. Conclusion This paper has presented crucial areas of job satisfaction and commitments focusing on a case study of a Japan-based company called ABC MNC present in Malaysia. The company suffered from lower job satisfaction level and lower commitment level that led to increase the employee turnover ratio of the organisation. In the present world of competition, managing a growth oriented organisation culture is a necessary but difficult task. As ABC MNC is a multinational organisation, it has to deal with number of issues. Therefore, it must make an effort to understand the culture and psychology of its local Malaysian employees who are crucial factor for the success of ABC MNC of Malaysia. However, in spite of being a Japan-based company, ABC MNC has not able to develop motivational work culture for creating higher job satisfaction and better commitment level. There are significant mismatches between the Japanese top level management and local Malaysian employees and the employee related policies and strategies are ineffective to motivate them. In this respect, the company must focus on motivating them by introducing a number of employee benefit programs. The case study had also been analysed from the purview of Maslow’s hierarchy and McClelland’s theory. This reveals that the employees are particularly conscious about their higher order needs like self actualisation and also safety and security. This is one of the reasons why the company reputation has been one of the major factors why people have considered the company as a highly reputed one. McClelland’s theory bears relevance to the fact that people have been attracted to the company on account of need for power, achievement and affiliation. Reference Adler, N. J. & Gundersen, A. 2008. International dimensions of organizational behaviour. Cengage Learning. Cameron, K. S. and Quinn, R. E. 1999. Diagnosing and Changing Organizational Culture. [Pdf]. Available at: http://webuser.bus.umich.edu/cameronk/culture%20book-chapter%201.pdf. [Accessed on March 24, 2011]. Guirdham, M. 2005. Communicating across cultures at work. 2nd ed. Palgrave Macmillan. ITIM International. 2009. Geert Hofstede™ Cultural Dimensions. [Online]. Available at: http://www.geert-hofstede.com/hofstede_japan.shtml. [Accessed on April 01, 2011]. Mullins, L. J. 2009. Management and Organizational Behaviour, 7/e. Pearson Education India. Peiró, J. M. 1995. 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