Culture, Globalization and Corporate Management

Author: Iloka Benneth Chiemelie
Published: 22nd April 2017

Part A

Nature of globalization and national culture

Increased level of competition and advancement in technologies has forced companies to go global (Iloka, 2013). While a company could be investing heavily on branding, re-branding and market positioning in its local market, another company could be reaping its market shares (through e-commerce) without having any physical facility within the local market. Thus, globalization has changed the way businesses are performed (Iloka, 2013). International laws, and high level of political stability across different countries have also aided the process. Thus, business is no longer a thing for a specific market, but a service for the global market. Through globalization, corporations can leverage poor performance in their local market with higher performance in the global market. Additionally, globalized companies can adopt cheaper labor via out-sourcing and 3L.

However, companies are faced with issues of culture when they internationalize. This is because the culture of their local market or business might not be the same with the international markets’ culture (Bird and Fang, 2009). For instance, the Norwegian law of “Jante” (Janteloven) is not applicable in the American society. The law features high level of feminism, no being boastful of one’s achievement, not jealous of other people’s achievements and always putting the society above personal gains. This is totally different from the American culture that features high masculinity, products designed to differentiate within classes, and capitalistic business sense (that sometimes endangers the society in order for the company to grow. E.g. the classic case of Enron Scandal).

Thus, globalization demands cultural convergence and divergence depending on the locality. Convergence implies merging the company’s culture with that of the local market, while divergence implies dropping the company’s culture in order to follow that of the local market (Chevrier, 2009). In order for a company to successfully internationalize, it must be willing to understand the cultural view of the international market and adopt its businesses in line with these views. For instance, McDonald’s China offers pork burger, McDonald’s India offer vegetarian burgers, while McDonald’s Malaysia offers Chicken burger. Similarity, their restaurants in China have big round table for group dining (communism), while single tables for pairs and individuals (individualism) are provided in their American restaurants. Thus, the business process must be designed to illustrate the cultural views of the international market, even if the company’s local market has a different cultural norm.

Another topic referenced in line with globalization and national culture is the need for sustainability. Sustainability is defined as the ability of the present generation to meet their own needs without having to deny the future generations the ability to meet their own future needs (Bird and Fang, 2009; Chevrier, 2009). That is to say, the resources must be used now and also made available in the future. The sustainability of cultural values and norms is very important and corporations need to understand that. They must undertake their business process in such a way that the national culture is made sustainable. McDonald is a good example from the above case as it will allow future generations to reference cultural views (about what to eat and how to eat).

Organizational culture and management

While national culture as discussed above represents people’s way of life, organizational culture represent the way things are done in the company. It is the conceived values existing within a given company. They are the things a company value and expect from both the staffs and their consumers. Different kinds of organizational cultures prevail by they are grouped as conventional and non-conventional (Bird and Fang, 2009; Chevrier, 2009).

In a conventional corporate culture, hierarchy is strongly featured and there are strict approaches to the business process. On a different hand, non-conventional culture is horizontal in nature with high flexibility. The culture a company adopts depends on its business and expectations. For instance large manufacturers such as Coca-Cola will likely adopt a conventional culture are their business processes are already established (with step by step guidelines), while SMEs will likely adopt non-conventional culture as they need to make split-second decisions from time to time (due to their lower level of experience and expertise).

An organization’s culture is the center of its management (Iloka, 2013). It communicates what is expected and the people that are accountable to such expectations. In a conventional cultured organization, bureaucracy is higher while the reverse is the case for a non-conventional culture. Additionally, conventionally cultured organization features lower level of creativity and innovation as staffs must strictly follow established codes of conduct. Thus, culture directly impacts the performance of a company. Corporations that desire a shift in their performance (both financially and non-financially), must be willing to affect a direct shift on their cultural views. The absence of the right culture will means lower level of performance, and vice versa. Thus, culture is integral to the management process and success of any given organization.

Part B

A case of McDonald’s Global

Since its inception, this food chain giant has successfully internationalized into varied markets with different cultures. However, success has always welcomed the company in their different global markets. One could be forced to ask, what are the factors behind such? The answer is obvious as demonstrated earlier in this case. McDonald’s understand the need for cultural convergence and integrates its product offerings with the culture of their different markets.

In the USA, its restaurants future more of individual or paired seating (individualism as is central of the American culture), while its outlets in China feature more of grouped seating (communism as a center of the Chinese culture) (Iloka, n.d.). The company offers burger as a menu, but ingredients are different across international markets. For instance, Pork burger in China, Vegetarian burger in India, Chine Burger in Malaysia and Beef burger in Australia (Iloka, n.d.). While the Chinese are famous for their love for pork, Malaysia as a generally Muslim country doesn’t support pork meals due to religious values (Iloka, n.d.). Although Australians are high beef lovers, India worship cows and fancy more of vegetables. Thus, the ability of the company to recognize these values and implement their in their business process is the main factor behind their success (Iloka, n.d.). It reflects the need for companies to be cautious of national cultures when internationalizing into a different market.

References

Bird, A. & Fang, T. (2009) 'Editorial: cross cultural management in the age of globalization', International Journal of Cross Cultural Management, 9 (2), pp. 139–142, Sage Premier Database [Online]. DOI: 10.1177/1470595809335713 (Accessed: 28 July 2016).

Chevrier, S. (2009) 'Is national culture still relevant to management in a global context? The case of Switzerland', International Journal of Cross Cultural Management, 9 (2), pp.169–181, Sage Journals [Online]. DOI: 10.1177/1470595809335723 (Accessed: 28 July 2016)

Iloka B.C. (n.d.). CSR: Examination of McDonald's Performance. Available at: http://ilokabenneth.blogspot.com.ng/2013/11/csr-examination-of-mcdonalds.html [Accessed on: 29 July 2016).

Iloka, B.C. (2013). Concept of national culture and its impact in guiding management practices. Available at: http://ilokabenneth.blogspot.com.ng/2013/12/concept-of-national-culture-and-its.html [Accessed on: 29 July 2016).