The Impact of Culture in Organizations and the Power of Multinational Organizations

Topics: Multinational corporation, Globalization, Corporation Pages: 6 (1650 words) Published: May 10, 2013
Question 1
What are some of the more important ways in which cultures are said to impact upon organisations and management? Critically discuss.

Culture consists of beliefs, values and behaviours built over a period of time and are difficult to break. Organisations should accept and value diversity to create a positive, successful and enduring work environment. Patrick and Kumar (2012) explain that this is because culture affects the way individuals’ process information, negotiation and decisions. Thus competitive advantage depends on how effectively employees are managed with culture-related pressures, expectations and incentives.

The impact of cultural differences on organisations can be understood as Lamoreaux and Morling (2011) describe uncertainty avoidance as the extent to which individuals accept ambiguity and characterise aggression and intolerance. ‘In high uncertainty avoidance cultures, people prefer stricter laws, safer environments and certainty in religious beliefs (Lamoreaux & Morling 2011, pp. 302). This implies an unwillingness to take risks, accept organisational change, and reluctance to take personal initiatives outside prescribed roles. These employees develop an external locus of control that luck and destiny cause events in their lives. Lamoreaux and Morling (2011) explain that this creates pressure for management to set challenging goals, continuously upgrade knowledge and provide training and development.

Individual identity is membership in family, caste and community whose norms and values need to be unquestioningly accepted. Patrick and Kumar (2012) explain that high performers are not satisfied with a work well done. This would restrict their ability to achieve self-efficacy, due to the lack of self-autonomy and self-fulfilment and reduce cohesiveness, commitment and cooperation. Plessis (2012) examines that this creates the need for managers to educate employees and themselves on different cultures and eliminate prejudice to promote shared organisational values and corporate culture.

Power distance is the degree to which individuals accept an unequal distribution of power. Khatri (2009) discusses that this creates need for management to decide to give employees more job autonomy, which gives them motivation from their self-interest and facilitate open communication or have an autocratic style of management. This reflects a lack of trust and creates conflicts, which destroy relationships, reduce employee participation, effectiveness and implementation of decisions.

‘Masculinity concerns gender roles, specifically how different male gender roles are from female gender roles’ (Lamoreaux & Morling 2011, pp. 302). This refers to the dominant values in society such as self-confidence, the gain of money, not caring for others and the quality of life. Low masculinity would mean ‘maintaining personal relationships and care for the weak and the environment’ (Edwards & Rees 2011, pp. 35). Individuals from different cultures may believe that loyalty to the superior, just like loyalty to the head of the family is more important, than meeting the goals and objectives.

Culture involves ‘how people perceive themselves and others’ (Patrick & Kumar 2012, pp. 1). This affects interactions and requires management of communication and adaptability to overcome language and stereotypes, for coordination and collective action. This allows individuals to reach their potential and maximise contribution to the organisation’s strategic goals and objectives, including improving consumer expectations and experiences. However, according to Fenwick, Costa, Sohal and D’Netto (2011), if diversity is not effectively managed, this can lead to lack of skills and competencies which will increase employee turnover reduce employee morale and motivation and reduce productivity. Thus managers need to recognize that individuals from different cultures can bring fresh and innovative ideas which...

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2. Bouquet, C & Birkinshaw, J 2008, ‘Managing Power in the Multinational Corporation: How Low-Power Actors Gain Influence’, Journal of Management, vol. 34, no. 3, pp. 477-508
3. Dorrenbacher, C & Gammelgaard, J 2011, ‘Subsidiary power in multinational corporations: the subtle role of micro-political bargaining power’, Critical perspectives on international business’, vol. 7, no. 1, pp. 30-47
4. Dowling, P, Festing, M & Engle, A 2008, International human resource management: managing people in a multinational context, 5th edn, Cengage, Learning: London.
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