The Cultural Role to MNE Decision in its International Strategy - Coursework Example

The Cultural Role to MNE Decision in its International Strategy Student’s Name Course Professor’s Name University City Date The Cultural Role to MNE Decision in its International Strategy Introduction The international enterprises are required to understand and adapt to the managerial practices relating to the national cultures where they intend to operate. This helps in achieving higher business operations and performance at the international level. The country of origin is essential for the MNE organization as the cultural characteristics are the dominant factors influencing the firm’s productivity and performance. The organization tends to depend on the institutional environment relating to the cultural dimension of the targeted international country. The international ventures depend on the nature of the cultural perspective for MNE to identify its identity and integrating the cultural practices to its operations. The MNE depends with the cultural aspects of the targeted international country to focus on the compatibility of the business operations. The companies are guided by their mission and visions principles to determine the cultural compatibility with the targeted country. This paper focuses on the key roles played by cultural perspective when the MNE is deciding on the international strategy. The study seeks in elaborating the appropriate models and limitations encountered when the management is considered in determining the MNE international strategies. Therefore, the research evaluates the cultural aspect to determine the international strategy for MNE. Importance of Culture in Determining International Strategy Increased pressure to globalization Culture helps in defining the nature of the business operations that are undertaken in a specific region. According to Wal-Mart in India case study, ("Case Study on Wal-Mart in India - PDF file," n.d.), it reveals the international culture of the targeted regions and how an organization aligns its operation to meet the surrounding culture. This helps in assessing the compatibility of the organization operations with the region cultures. Internationally, the cultural diversity supports different business operations (Park & Jun, 2003, p. 537). These cultures also influence the business operations and performance both in short-run and in long-run. The aspects of the business are determined by the nature and characteristics of the culture to support its operations. The culture and region dimensions are essential in the determination of the MNS strategic measures to identify the best region to expand the business (Trompenaars, 1996, p. 51). Furthermore, the management should learn the cultural contributing on the business to be initiated in a certain area. Therefore, it is the role of the management to ensure they undertake due diligence on the surrounding culture to determine the appropriate region to invest. Developing appropriate structures In developing the organizational structures in the international perspective, the international organization management has to consider cultural aspects of the target region (Damanpour, Devece, Chen, & Pothukuchi, 2012, p. 456). The national and corporate cultures might not be compatible and hence influence the organization operation. The basic consideration is choosing the national culture that aligns to the organizational operation characteristic. The management has to consider the culture that provides the entire required environmental factor to support the operation and improved performance (Mehta, Anderson, Dubinsky, Polsa, & Mazur, 2010, p. 93). In reality, the targeted economy must possess all the required cultural qualities that would enhance the productivity and performance of the international organization productivity. Planning and coordination Walmart organization has hierarchical functionsl structure that determines the planning and cordinational culture. The structure of Walmart stores is essential in determination of the directives and manadates by the management. As an organizational culture, the walmart consider both structure and culture in managerial purposes and ranking of positions. The top ranking management has coherent association with the middle management down to the subordinate employees. This structure is essential in enhancing the coordination and implementation of the walmart stores duties depending on the positions. Planning enable the management of the international organization to consider the appropriate destination for the organization that relates to the organizational culture. The destination must be compatible with the organizational culture as illustrated in the good or bad of Wal-Mart’s culture experience in the case study, ("Good and Bad of Wal-Mart's Culture|Human Resource|Organization Behavior|Case Study|Case Studies," n.d.). This helps to ensure culture does not negatively influence the performance and productivity. Coordination, on the other hand, focuses on the internal communication of with management and other employees (Shen, Edwards, & Lee, 2005, p. 375). As the firm moves into the international level, it has to outsource the workforce. These workforces come from a different cultural background, and hence coordination is essential to ensure the mode of communication is achieved. Coordination enhances openness in the idea development and presentation from the different communities and cultures where the MNE consider venturing (Waldman & Soma, 2007, p. 53). This ensures the organization is working on the best prevailing environment and supportive culture. Therefore, planning and coordination help the management of the MNE to consider the best cultural background before making an international investment decision (Manrai & Manrai, 2010, p. 87). As the international strategy, the culture provides the best understanding of the nature of the customers and market segment that organization is focusing. Therefore, it is essential for the management to ensure they plan properly and coordinate with the community on the basis of identifying the cultural attribute toward the productivity and performance of the MNE. Attitudes The international strategy of MNE should focus on prioritizing the organization in the personal life. Nike organizational culture in production of foot wares and jerseys has been embraced mostly by athretes and footballers. The nike organization as an international organization has been able to enter into different countries. This has made it to improve its venture and being compatible with different international cultures. The development of positive attitude culture to players has enabled the firm to attract customers from different parts of the world. The footware and jerseys are considered attractive to everyone and hence creating organizational culture. Nike corporation, management focus on the interest of the firm relating to the cultural contributing to the wellbeing of the company as indicated in the Nike case study, (YOUNG, 2017). In selecting the appropriate destination of the firm overseas, the management should rely on the nature of the production and market available (Obukhova, 2011, p. 311). They should be concerned with the issues influencing the firm rather than their personal attributes. Attitude ensure that the management considers the issues that are beneficial to the firm rather than to their personal interest. Furthermore, it is important to relate the cultural support from the community as well as the customers in the regions targeted. Therefore, attitude helps in defining the interests of the firm first comparing to the personal life achievement. Controlling Culture enhances the identification of the appropriate skills and experiences that help in supporting the firm’s operations. At the international level, the strategies that are supposed to be enhanced in taking control relate on how business are operated. According to the Dell corporate (Fisher, 2004, para. 13), culture of the business operation in the targeted region should define how to operate the new venture in the region. The Dell corporate culture has enabled it to become successful in computer industry in the world. The Dell corporate focused on the customers cultural needs and compatibility to enhaces its international venture in different countries. The production line and suppliers selection was essential in defining control measures and approaches. The organizational structure and culture helped in reinforcing the distribution of the Dell computers in different countries in a controlled approach. The reporting of the organizational data is supposed to be controlled to ensure they are accurate and relevant (Limaye, 2000, p. 34). This happens if the firm concentrates on the locally controlled mode of reporting and data presentation. For example, different regions use different accounting models and standards. It is essential for the firm from the international level to focus on the accounting standard that is used in the region in order to have compatible operations with the systems available in the country such as tax compliance and other expenses that depend with the accounting compilation. Cultural models essential in MNE Management Cultural Model using Context Hall 1976 Theory High cultural aspects ensure the management and the people possessing the authorities are personally responsible for the organization actions from all of their subordinates under taking responsibility aspect. High culture ensures the decision-making focus on the top-down approach whereby the higher ranking management is responsible for making the essential decision regarding the firm’s operation. The higher contest culture provides a clear definition of the management authority as they are responsible for the learning organization (Dickson, Hartog, & Mitchelson, 2003, p. 746). The management provides decisions and direction to other employees regarding the organization operations. Furthermore, they are fully responsible for the organization performance and productivity. On the other hand, the low context culture, the responsibility does not focus on the specific managerial position as it diffuse and hard to pin the responsible person. The low context culture has the tendency of the scapegoats whereby no one takes the responsibility especially when negative results are obtained. Therefore it is hard to relate the responsibility to the specific individual or managerial position. In the higher context of culture, the employees in an organization tend to avoid taking confrontation in ensuring the harmony and intimate bonds are maintained. The higher context of culture ensures minor disagreement are ignored and hence repressing the inner feelings. Therefore, it leads to anger explosions. On the low-context cultures, the critics are made direct to the specific person and are formally recorded. This leads to damaging relationships between the accused personnel. High and Low Context of Cultural Model The Cultural model indicates that cultural experiences are essential in determining and understanding the context and structure of life. The patterns of communication essentially determine the cultural values. Furthermore, the author reiterates that culture depends heavily on the common shared experiences among the members of the identified community. Therefore, the MNE organization has to consider the aspects of the culture depending on the shared experiences in the targeted regions. In the higher context of culture, people are deeply connected to one another, and hence a lot of shared experiences are evident. They live in a community with relationships lasting longer. In the higher cultural context, the social hierarchy structure exists whereby the community has the leaders who are essentially formalized to make the decision on behave of the community members. The individual inner feelings are usually under the strong control as the community depends on the interest of the majority. Furthermore, the higher cultural context is essential as the information is widely shared among the community members through simple messages that have deep meaning understood by all people within the cultural community. Finally, in the higher context culture, the cultural patterns do not change easily, and hence it takes the time to gradually change. For example, taking the Chinese culture, they integrate the culture to the organizational operation. The culture is widely identified and hence preparing international organization venturing into China to comply with the Chinese culture. Therefore, the Chinese culture can be referred as high culture context in this argument. The low context culture indicates that people focus on their interest as they are highly individualized. There is no long lasting relationship whereby the community would live together for a common interest. In this community of low context culture, there is greater mobility regarding social and jobs aspects. In this context, communication is considered to be more explicit. The listeners do not understand clearly the message, and hence they should be told practically on what the message means. Furthermore, the cultural aspects and patterns tend to change very fast in the low context culture. Hofstede Cultural Model According to the Hofstede (1984), culture indicates the power distance whereby the different levels of hierarchy and power are experienced. These levels of power distances are unequal and hence higher positioned individual have higher power compared to the subordinate. In the MNE, the power distances are experienced depending on the management responsibilities and ranking (Hofstede, 1984). This shows that higher ranked management are essential in decision-making on issues relating to the international strategy. Individualism and Collectiveness are another aspect of the Hofstede cultural model. The model indicates the extent at which the personal achievements tend to be prioritized compared to the organizational or group performance. The model also focuses on the uncertainty avoidance aspect whereby it indicates the extent to which community members are comfortable living in ambiguity. This shows that people’s culture do not express clearly what people intend or may wish to know and understand and hence the extent of unknown experience prevails (HAYTON, GEORGE, & ZAHR, 2002, p. 45). It is clear that people in different culture live in diverse cultural understanding without full knowledge of the cultural changes that may take place. Hofstede relates the masculinity and feminist culture to the role of the people understanding and how they associate different aspects in the community. The sex roles are always differentiated depending on the cultural understanding among the community (Hofstede, 2011, p. 11). The masculinity traits are connected to the assertiveness, material successfulness, and the competitiveness. On the other hand, the feminist approach is connected to the societal and environmental issues affecting the community as they lack competition. Connecting the Cultural Models to MNE International Strategy In connection to the cultural theories, the international organization are supposed to consider the whether they are operating in high or low cultural context. Hofstede provides the authority culture that cut across the organizational management ranking and hierarchy. This relates to the cultural context by Hall 1976 theory whereby the connection of high and low context provides the basis of the organizational operations. The cultures are expressed as work-related whereby the MNE has to consider the compatibility and universal connection between its operations to prevailing culture in the community. The international organization has the responsibility of considering national cultural values to ensure it enhances or imposes some norms into the business units. These norms are supposed to be aligned with the current culture prevailing in the region of venturing to ensure integration in the product and services delivery. As an international strategy, the MNE has to consider the local values (Schaefer, Hannibal, & O'Neill, 2003, p. 37). These local values are essential for the management at headquarter to interpret the organizational regulations and making changes to comply with the cultural demand. Therefore, it is important for the MNE to apply the international strategy to focus on the cultural values and norms to identify appropriate measures to the organizational regulations to fit the region targeted. The Limitations of Using Above Cultural Models In creation or imposition of the similar organizational norms especially for MNS tend to pose a danger of unnecessary moral challenge and inefficiencies creation. The approach by a multinational organization focusing on changing the organizational culture and norms to fit into a certain market, it tends to contribute to confusion and unnecessary inefficiencies within the systems. The International strategy should relate to the cultural aspects that relate to the firm's culture (Zhang, Knight, & Tansuhaj, 2014, p. 168). This does not contribute to changes in regulations and management approach in order to fit into a certain cultural dimension. Furthermore, it is essential to relate to the cultural context model to identify the extent at which the impositions of the organizational norms are expected to impact on the performance and productivity. Therefore, the firm is supposed to focus on the cultural aspects and norms and impact would be caused if it invests in the different region. The cultural differences in different regions may contribute to inefficiency and ineffectiveness in the MNE operations. The differences in the culture demand the international organization to comply with the changes to fit its operation in the cultural perspective. The approach of cultural changes demands that MNE to keep changing its organizational culture depending on the international countries where it invests its operations. It is difficult for the MNE to operate is some regions as they lack coherent cultural compatibility. Furthermore, the firm is limited in its operation in the regions that lack any cultural aspect or norms aligning to the firms’ culture (Zhang, Knight, & Tansuhaj, 2014, p. 167). This indicates that it would be difficult for the firm to operate in other areas or it should change completely in its organizational culture, values, and norms to comply with the societal culture. Therefore, the MNE is limited to operate within the regions that have cultural practices, norms and values compactable with the organization operations. Conclusion MNE culture, values and norms are indicated on the vision and mission principles of the firm. The different culture at international level influences the international strategy for MNE in selecting the destination to venture. The connection of the high and low cultural context provides the MNE with an appropriate understanding of the cultural dimension. These cultural contexts display what the community members and society relates to the culture and the impact to the organization. In reality, the international organization management is supposed to conduct due diligence relating to the targeted regions of the venture. This helps in identifying the compatibility of the societal culture to the organizational values and norms. In making an appropriate decision, the management has to consider the alignment of these cultures and the impact they have on the organizational regulations. Therefore, the MNE cultures are determined by the compatibility of the organizational values and norms to the societal culture relating to the productivity and performance in the international venture. Bibliography Case Study on Wal-Mart in India - PDF file. (n.d.). Retrieved from http://www.casestudyinc.com/wal-mart-india-case-study Damanpour, F., Devece, C., Chen, C., & Pothukuchi, V. (2012). 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