Discuss the Management Problems Facing Multinational Companies and Companies with an International Dimension in Various Parts of the World

Topics: Culture, Management, Geert Hofstede Pages: 5 (1407 words) Published: August 27, 2007
Nowadays, business is set in a global environment. Companies not only regard their locations or primary market bases, but also consider the rest of the world. In this context, more and more companies start to run multinational business in various parts of the world. In this essay, companies which run multinational business are to be characterized as ‘multinational companies'. By following the globalization campaign, multinational companies' supply chains can be enriched, high costs work force can be transformed and potential markets can be expanded. Consequentially, competitive advantages of companies can be strengthened in a global market. Otherwise, some problems are met in the changed environments in foreign countries at the same time. The changed environments can be divided into four main aspects, namely, cultural environment, legal environment, economic environment and political system problems. All the changed environments make problems to multinational companies. In particular, problems which are caused by changed culture environment are the most serious aspect of running a multinational business. This essay will discuss these problems and give some suggestions to solve them.

Tylor(1977)has pointed out that "culture is complex whole which includes knowledge, beliefs, art, morals, laws, customs and any other capabilities and habits acquired by man as a member of society". According to this definition, it is easy to know that every nation has different cultural preferences, national tastes and value standards. These factors impact on every part of management in multinational companies, especially on marketing management, human resource management and alliances management. Thus, multinational companies have to consider the cross culture issues when they run multinational business.

Marketing management
Different national culture causes different consume behaviors. According to Gogel and Larreche (1991), "marketing across cultures is a complex process of balancing resources and effectiveness between building product strength and identity on the one hand and increasing geographical coverage on the other hand". There are some problems will be met when multinational companies expand foreign market without analyzing the material culture of the proposed foreign market and they do not change their product standards to meet the requirement of specific market. Furthermore, the cultural diversity usually is ignored by multinational companies. They usually use their initial product promotion when they are exporting marketing campaigns in another country. For example, in Japan, people prefer to buy shampoo which uses a beautiful Japanese girl in its advertisement, but in Russia, people will never buy any washing power which uses a Japanese housewife in its advertisements (Miroshnik, 2002). If a Japan shampoo company, who does not know the cultural diversity between Japan and Russia, launches a kind of shampoo in Russia by using the same advertisement as in Japan, they will fail in the Russia market obviously. Finally, multinational companies should increase consideration that what products and brand mean to the people in different culture when they are exporting marketing campaign in a foreign country. They have to pay attention to avoiding inappropriate translations, considering different cultural behaviors and product usage.

Human resource management
Multinational companies should use different managerial behaviors to manage human resources in different cultural environment. Firstly, people who come from different cultural backgrounds have different views about the world. These views significantly affect the ability to develop a meaningful statement of company values. Thus, it is incorrect that some multinational companies simply translate their statements of values and distribute them to another country directly. This will lead the statement to be interpreted by other cultures just as small...

References: Berrell, M., M. Gloet & P. Wright (2002). ‘Organizational learning in international joint ventures: implications for management development ' The Journal of Management Development 21(2): 83-100
Gogel, R. and Larreche, J.C. (1991). Pan-European Marketing: Combining Product Strength and Geographical Coverage. San Francisco, California: Jossey-Bass
Miroshnik, V. (2002). ‘Culture and international management: a review ' The Journal of Management Development 21(7): 521-544
Tylor, Edward B. (1977). Primitive Culture: Researches into the Development of Mythology, Philosophy, Religion, Art, and Custom. London:John Murray
Sonderberg, A-M & N Holden. (2002), ‘Rethinking cross cultural management in a globalizing business world ' International Journal of Cross Culture Management 2(1): 103-121
Wright, P., Geroy, G. and Baker, D. (1996), Management Training Challenges in Vietnam, Corporate University Review, July/August, pp. 40-1.
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