Multinational Enterprises – Organizational Culture vs. National Culture

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I n t e r n a t i o n a l

J o u r n a l

o f

M a n a g e m e n t

C a s es

Multinational Enterprises
– Organizational Culture vs.
National Culture
Sabine Scheffknecht
Leeds Metropolitan University, UK

This situation brings a lot of advantages (less
dependence on the economy or political situation of
one single country; differentiated marked position;
economy of scale through the size of the business;
use of synergies; etc.) but also comprises the
challenge to combine many different nationalities
and with this also diverse cultures under one roof.

Abstract
Multinational enterprises are the engine of the
world’s economy. Reason enough to focus exactly
on this kind of organizations within this paper.
Analyzing multinational enterprises it has to be
recognized that such an organization is in fact
not one homogenous company but most often a
conglomerate of companies spread out around the
world. Most of these multinational enterprises try to
establish a common organizational culture within
their companies (e.g. workshops to communicate
the values).

To be able to use the advantages mentioned
above, it is important that not too much energy
within the organization is lost through cultural
barriers. Therefore, many multinational enterprises
try to establish an own organizational culture to
find a common “language” or way to collaborate all
around the world.

Although the efforts are high to create such a
culture there are still national or regional cultural
influences which can not be avoided. Assuming
that the organizational culture or at least the
efforts to establish such a culture are the same
within one international enterprise, differences in
certain behaviour may come from these national
differences.

However, it is not possible to fully neglect the
influence of the national / regional culture. Therefore,
although these enterprises often run expensive
programs to establish a common organizational
culture, the behaviour and thinking may differ
from one unit within the multinational enterprise
to another. The following literature research will
show a summary of both aspects, national and
organizational culture, and how a multinational
enterprise may handle this challenge.

This is exactly what researches like Hofstede
(2001) together with Hofstede and Minkov
(2010) discovered, analyzed and summarized in
6 dimensions of cultural differences. To have a
detailed look at national and organizational culture
is the goal of this article.

Cultural differences – National level
The name Hofstede and his IBM study (company
internal employee attitude survey program,
executed between 1967 and 1973, with more
than 116.000 responses from 72 countries and
20 languages) are undeniably the most prominent
ones when it comes to cultural research.
Researches all around the world have used the
results of Hofstede for their studies. Meanwhile
not only Geert Hofstede (1928) but also Gert
Jan Hofstede (1956) his son focus their research
efforts on cultural differences. Almost 50 years of
studying national cultural differences in more than

Key-words: Multinational Enterprises, Cultural
differences, Organizational Culture, National
Culture

Introduction
The term “Multinational Enterprise” implicates
already that the according organization not only
makes business or is located in one single country
but in many (multi) different countries (nations).
73

Internation a l

J o u r n a l

o f

M a n a g e m e n t

C a s e s

70 countries bring a broad and deep knowledge of
the topic (Hofstede, Hofstede & Minkov 2010).

Equality vs. Hierarchy (Missana 2011; Changing
Minds 2011).

The originally four dimensions of cultural difference
(Power
Distance,
Uncertainty
Avoidance,
Individualism and Masculinity) have over the years
been complemented by two additional ones (Long
Term Orientation, which was included 1991 in
collaboration with...
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