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Cultural challenges in international business
Cultural differences in business
Cultural challenges in international business
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A managerial role is complex and demanding. A manager is no longer just responsible for drawing upon their own expertise and actions, they must now juggle diverse, often ambiguous, responsibilities which are interwoven in a fabric of relationships with people who have conflicting demands. Linda Hill (2003) describes the daily routine of management to be often pressured, hectic, and fragmented. A mangers role is to plan, organise, lead and control, however these play out differently as the culture context and distance interact.
There is no clearly clarified and agreed upon definition of what traits a manager in a globalised world should possess. Lane, DiStefano and Maznevski (as cited in Kedia and Mukherji, 1999) suggest that thinking globally means broadening from one-to-one relationships and adapting to engaging in multiple relationships in a more complex reality. Kedia and Mukherji conclude that in order to be effective managers in a global context they need to have an openness that allows a global mindset to form and develop.
Rhinesmith (1992) argues that having a global mindset is an important skill for any manager to have. A manager with a global mindset are better positioned to value and manage cultural diversity and consider this diversity an advantage not a burden. They are
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International business negotiations are not only communication and cooperation of economic interests, but also a communication of cultures. Contrasting the American ‘beehive’ thinking style with the Chinese ‘loop’ style Peng Luo (2008) highlights the importance of knowledge for success. The ‘beehive’ approach sees the negotiable content divided into smaller parts. Where the ‘loop’ style of the Chinese has them focussing on the bigger picture first. Understanding how culture determines customer preferences, client-supplier or employee-employer relationships is a requirement for management
Constant technological and global changes create challenges that forces leaders to manage different cultures in different countries. People, goods, services, and ideas are moving today at greater speeds which mean our labor force is becoming more diverse and multicultural by the day. Effective leaders need to understand such global dynamics in order to successfully manage organizational cultures. The cultures of leaders and their core assumptions might be different from the values and assumptions of employees in a different country. Two managers working for the same global company might see things differently due to their backgrounds and cultural values. The different countries, in which the organization operates, will have different cultures depending on the social, economic, and political history of the country. Managing and understanding these differences need an effective cross-cultural thinking leader (Yukl, 2013). Some research questions that Yukl, 2013 suggests are: 1) how behavior differs across cultural values and for different countries? 2) How values and behaviors are influenced by personality across company and country? 3) What types of traits, skills, and experience are most useful to prepare a leader being assigned to a new country? 4) How does the fast-changing culture in developing countries affect and relate to
Firstly, we can analyze that Canadians are individualism while Chinese are collectivism. Canada negotiators are more concerned with their sales over establish relationship with Chinese negotiators. They care ab...
Moorhouse, A. (2005, November). International Management Organizational Behavior. Retrieved October 16, 2008, from University of California Berkley: http://www.ocf.berkeley.edu/~matran/Files/proKarenLeary.doc
A multinational corporation is an entity that its headquarters is based in one country and incorporates a group of organizations that are geographically distant and have various goals. "Such an entity can be conceptualized as an inter-organizational network that is embedded in an external network consisting of all other organizations such as managers, customers, suppliers and regulators"(Ghoshal & Barlett, 1990). As the organizations develop and find their way into significant growth they are inclined to identify the goals, perspectives, assimilation, and rules of their framework. The role of the managers in such entities is to coordinate organizations that work in various cultures and environments, in which the levels of involvement, diversity,
With the proliferation of the internet international Business transactions are more common today than ever. Globalization is now a key factor when creating a business strategy for most companies whether they are small family own businesses or huge corporations. Globalization however does not just involve selling a product in other countries. There are legal and cultural concerns that must be addressed. The legal aspects are fairly simple because in most places the laws are spelled out. It's the local customs, and regional way of doing things that can be tricky. Research on globalization has shown that it is not an omnipotent, unidirectional force leveling everything in its path. Because a global culture does not exist, any search for it would be futile. It is more fruitful to instead focus on particular aspects of life that are indeed affected by the globalizing process. (1). In this new economy, as it has been in the past, it will be the people not the machines who will determine a company's success. Having an effective Human Resource Management team that effectively analyze your company's current and future personnel needs is key in any business organization.
Managers nowadays do not actually do what a manager really should do back in the eighties. Changes that occurred in the new economy, the increasing use of technology in business, and the effects of globalisation towards business world have led management into a whole new dimension. New managers are expected to be able to manage on an international scale, act strategically, utilize technology, establish values, and of course, act responsibly as well. (Crainer, 1998) Henry Mintzberg once asked, "What do managers do?" After conducting his research based on a study of five CEOs, he concluded that managerial work involves interpersonal role, decisional role and informational role. And the fact is that, managers get things done through other people. Therefore, managers are required to possess certain skills and competencies which allow them to play these roles effectively and efficiently throughout the four functions of management. (Mintzberg, 1998)
Globalization has many implications for leadership today and in the future. Global perspectives are being spread to the farthest points in the world and to the most isolated people. People of different cultures come to the United States daily to live, travel, or engage in business. Leaders must respond to this challenge of globalization so they can effectively reach out to as many people as possible. Opening themselves to the world's changes allows leaders to compare and contrast their culture with the arts, language, beliefs, customs, philosophies, and ways of living of other people. By observing and questioning another culture, leaders can understand the origin of an individual's viewpoints and become more sensitive to the cultural needs of that individual. By continually exposing themselves to other cultures, young leaders can thoroughly develop this global perspective and devote themselves to making connections with the entire world.
International businesses are also finding new ways of increasing diversity abroad. Instead of using expatriate employees as management, they are starting to hire locals. Companies that operate abroad are realizing that using expatriate employees is not a permanent solution. They are often expensive, and are not capable of translating their skills into the new environment. In a company that operates globally, it is important that the company knows how to relate to the local markets, and a great way to do this is by hiring local talent. Hiring locally is cheaper, there is not a language barrier, and they are accustomed to the business environment in the area(5). They can also help the business by providing a new perspective into international markets, and offer ways that the company can improve their diversity abroa...
Global Leadership. The topic of leadership on a Global scale encompasses the textbook and Campbell’s 2012 study on Emotional Intelligence (EI) in regards to the range of leadership styles neceesary to manage a “changing workforce and globalization” (p. 30). Nevertheless, this study emphasizes Global Leadership and Organizational Behavior Effectiveness (GLOBE), as it relates to the future of leadership. Specifically, GLOBE analyzes the interconnectedness between “societal culture, organizational culture, and organizational leadership” (Hellriegel & Slocum, 2011, p. 341). The annotated milestone from Hellriegel & Slocum involves the ability to influence people from different places around the world. This will require leaders to understand how to interact and communicate with “diverse
In the last decades, small national companies have grown in amazing scale all around the world. Companies that once were family owned have become huge multinational corporations. Corporations, which by the side of globalization, have expanded all around the world. International business has become one of the most important areas of business due to the need for companies to expand to markets outside their borders. Companies have had the need to adapt to another cultures and business systems. At the same time the way human resource management works has changed. Multinational corporations have had to adapt to new human resource requirements in order to be more effective and efficient. The business melting pot that surged in the last decades has forced corporations to develop a diverse workforce with the ability to expand their businesses.
"Management is a multipurpose organ that manage a business and manages managers and manages workers and work."-(Peter Ferdinand Drucker)
In the past few decades, the world has experienced heightened globalisation. During this period, organisations have prioritised setting up leaders capable of dealing with the ever-increasing involvedness of running their global operations. Overseeing global talent along with career paths is consequently a decisive challenge in lots of multinational organisations. Individuals as well as organisations perceive International assignments as a constructive way of developing global occupational competencies (Brewster & Suutari, 2005).
Google and the Government of China. A case study in Cross-Cultural Negotiations. Develop a negotiations planning document using the Kellogg format in Exhibit 11. Issue Google Chinese government Purpose of negotiation Priority: 1 Position: focuses on profit and brand management Priority: 2 Position: technological, economic gaining.
To be successful in today’s global market, managers and leaders need to understand more than just technical skills. Managers and leaders should also understand globalization and organizational behavior. Globalization is the tendency of businesses, technologies, or philosophies to spread throughout the world, or the process of making this happen. The global economy is sometimes referred to as a globality, characterized as a totally interconnected marketplace, unhampered by time zones or national boundaries (Search CIO). Organizational behavior is a field of study that studies individuals groups, and structure. Organizational behavior applies the knowledge gained about individuals, groups, and the effect of structure on behavior in order to make organizations work more effectively (Robbins,2014).Gaining an understanding of globalization and its effect on organizational behavior is crucial to interacting effectively in the modern global economy. Globalization affects an organization’s behavior in several ways like stimulating hyper competitive pricing for a product or service, perpetuating continuous operations and communicating around the clock and globe, capitalism is replacing governmental control and organizations are no longer constrained by borders, and corporations are becoming more heterogeneous and adapting to people who are from different nationalities and cultures. To be successful in a global economy, professionals should have a thorough knowledge of sociology, psychology, communication, and management.
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