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The Cultural Difference Issue of Multinational Companies - Assignment Example

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This study analyses the issues that may arise in multinational companies in an effort of solving the cultural differences. In spite of the many problems that these companies face, they can effectively internationalize their functions if they concentrate on pursuing a controlled marketing technique…
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The Cultural Difference Issue of Multinational Companies
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Download file to see previous pages Developing cultural knowledge enables companies to build global competitive advantage as well as enabling people to be more sensitive to globalization. However, global markets face various challenges that are crucial and may affect the performance of the business. One major challenge is culture and as it can affect the entire company. Culture is divided into three main types which include data based culture, relationship-based and finally group based. Data based culture is controlled by a timetable where individuals do their responsibilities at a time. Relationship-based culture enhances teamwork and interlinks social life since individuals are not punctual in their work but do their duties at a time. Group-based type is very patient and people mostly consider working in groups such as family or corporations. People always avoid conflicts with wisdom and respect are the major virtues needed (Cateora and Graham 2005).
Culture affects business operation in various ways such as language barriers, culture collisions and difficulties in pricing. The above are not exceptional and particularly at the start of the business. These problems should, therefore, be minimized at all levels of operations. It is therefore important for the company to inform its members about the customs and ways of conduct in the new culture. According to Cavusgil et al. (2007), cultural differences can yield both positive and negative outcomes. The most helpful thing to consider in a foreign market is to respect and understand the new culture. This builds up trust, respect, and thus competitive advantage. Cultural aspects found in various countries are for example in Denmark, red color means positive but considered as a sign of death and witchcraft in most African countries and in Korea and Taiwan rectangular shapes are considered to show a negative effect. ...Download file to see next pages Read More
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