Relationship Between Internal Organisation and National Culture and Institutions

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Relationship between Internal Organisation and National Culture and Institutions Abstract
Employing a firm-level research on internal organisation structure, this paper studies the influence of Japanese national culture and institutions on internal organisation design of a Japanese MNEs. I report that some output deriving from features of Japanese national culture and institutions such as collectivism and Long-term orientation have a strong impact on internal organisation, although it does not keep consistency with Japanese national culture and institutions.

Globalisation can be described as the greater movement, which unites the people of the world by combining economic, technological, socio-cultural, and political factors. That is to say, due to integration of national economies into the international economies through trade, investment, capital flows, migration, and development of technology, it is more likely to make the world homogeneous. (Global education, 2008) Especially, Multi National Enterprises (MNEs) are considered as one of the factors to promote globalisation since they have introduced “universal product” to global markets. (Hollensen, 2007) Therefore, it is said that the feature of each countries’ national culture and institutions may become uniformly with the expansion of globalisation. In this report, I address and analyse this assumption in terms of one Japanese MNEs’ internal organisation. The structure of this paper is as follows: The first section is definition of national culture and institutions, and then I refer to Japanese national culture and institutions in section two. In section three, the structure and characteristics of internal organisation is explained. In section four, the influence of Japanese national culture and institutions upon one Japanese MNEs’ internal organisation by employing a hypothesis model. Conclusion is also in section five.

Section One: National Culture and Institutions

There are many different definition of national culture, but Hofstede’s national culture theory is broadly accepted. He defines national culture as the common programming of the sense that differentiates people according to segmentation or relationship. (Peng, 2002) He also developed cultural dimensions in order to grasp remarkable national culture differences in differentiating cultures through his cross cultural psychology (CCP) researches, which were first conducted from 1967 to 1973 within a multinational company (IBM). Hofstede analysed more than 70 countries data collected by IBM, and then others studied students, commercial airline pilots, civil service managers, up-market consumers and elites in various countries. According to these results, he identified primary four dimensions, as describe below. (Hofstede, 2008)

1. Power Distance Tolerance (PD), that is the extent to which powerless people in groups or organisations look up to or follow distant authority. A secretary or chauffer for senior executives is good example. 2. Individualism (IDV), that is the degree to which individuals depend upon groups or organisations. The opposite side is collectivism, which indicates the extent to that people have a sense of belonging to groups. 3. Masculinity (MAS), which shows that men’s values, with reference to competitiveness, measurable performance and assertiveness, are esteemed among organisations compared with women’s values. 4. Uncertainty Avoidance (UA), that is the extent to which individuals and organisations feel either comfortable or uncomfortable for taking risks. High UA culture tries to minimise all sort of mistakes about unexpected situations by safety measures, empirical knowledge and so on.

In addition to these four dimensions, after Bond’s research on students in 23 countries around the world with a survey arranged Chinese scholar, Hofstede and Bond introduced fifth dimension, as follows. (Hofstede, 2008)

5. Long-term Orientation (LTO), which is the degree to...
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