Factors That Influences The Success Of Mncs

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Culture Culture is one important factor that influences the success of MNCs in host country. Culture can be defined as values, beliefs, practices followed by a group of people, which shapes their behaviour and attitudes. MNC may try to bring the culture of the home country in the host country, but adjusting with the practices prevailing in the host country and their culture is of importance for the success of the MNC in that country. Example, Walt Disney case of opening the park in Paris. In the beginning the park was a failure, one the cultural practices in Europe was analysed and changes were bought accordingly the amusement park started functioning with profits. Hofstede, Trompenaars, and Jackson have conducted studies that understand the behavioural aspects of people in different countries in various organisations. These studies show that how culture influence the behaviour patterns of employees and in turn this moulds the organisational culture.(Eileen Crawley) According to Hofstede, there are four dimensions of culture namely Power Distance, Individualism Masculinity, and Uncertainty Avoidance. These dimensions were developed after conducting a study at IBM. These four dimensions help to understand the behaviour at the workplace. Taking the example of Newzealand and China , the comparison can be made for Hofstede four dimensions(Eileen Crawley).Power distance is at 80 in China and 22 for Newzealand. In China, the society accepts inequality and believes that power is centred with top management, but in Newzealand, the hierarchies are just framed for convenience, there is an informal relationship among the managers and employees. Newzealand has a score of 79 and is known as an individualist culture; here people take care of t... ... middle of paper ... ...ences the culture of a society.MNCs should understand the national culture, as this helps in framing policies and practices. Most MNC’s send expatriates and their families for foreign assignments to their subsidiaries. It is their adaptability to that culture determines the success of the assignment.MNCs provide cross –cultural training and prepare these expatriates for adjusting according to the culture in the other country. If an expatriate is not willing to adjust to the host country culture, he may not be able to perform in the organisation and also live in that country(Eileen Crawley). According to the research by Gabell , “ Emotional Intelligence “ is an important criteria that should be analysed while selecting expatriates for international assignment.(Gabel, 2005).IHRM is important for managing the culture of the organisation and the individual manager.
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