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In this global society, Culture has gradually seeped into our everyday lives where it is almost impossible to avoid culture. Companies like multi-national organizations are required to apprehend every aspect of the local national culture which they are operating or selling their products in. David Harrison has highlighted that "there are 3 key trends that promise to shape and change the economic landscape well in the 21st century; (1) continued globalization of business (2) enhanced information technology and (3) increasingly diverse workplace" (Harrison, 2000). This further explained the importance of cross cultural awareness between the national level, industrial level, organizational level and individual level. Statistics have shown that 51 out of the 100 largest economies in the world are corporations and the top 500 multi-national organizations justify for 70% of the worldwide trade and this phenomenon have been stealthily increasing throughout the years (WTO, 2003). With the increasing encouragement for globalization in business ventures, companies can now search for cheaper and better raw materials globally. Nonetheless, by venturing out into the international borders, it is unavoidable that one needs to interact with the diverse culture of different nations.
A case study have shown that the lack of cross cultural awareness have caused Tiz Razor, a manufacturing firm operating with British license to encounter cultural challenges in the Qatari Market. Tiz Razor in local languages would mean sharp and they have enjoyed good customer acceptance with its "sharp" image. In the mid 1980s, Tiz Razor was encouraged to mount an export drive due to the government foreign currency deficit (consequences of war with Iraq). The next target segment would be Qatar the next richest and nearest country from Iran. Qatar is a part of the United Arab Emirates which uses Arabic alphabet. However, the products were not very well received with the customers. It is later known that Tiz, the Persian brand name in Arabic slang is referred to "Passing wind"( Tevfik Dalgic and Ruud Heijblom, 1996). The above example has further proved and emphasizes the importance of cross cultural awareness between the different nations.
Despite the escalating volume of academic research on cultural issues in international business, firms appear not to be doing sufficient to prepare their managers for the international business environment (Apud et al. 2006). Cultural differences, while difficult to observe and measure, are obviously very important (Pankaj Ghemewat, 2010). According to Pankaj Ghemewat, culture is defined as a set of shared values, assumptions and beliefs that are learnt through membership in a group, and that influence the attitudes and behaviors of group members which Geert hofstede defines as a process of "collective programming of the mind". It is further explained that "some cultures put more emphasis on universal commitments (like honesty) and others put more weight on loyalty to particular people and relationships." Given the apparent importance of cross cultural awareness in this global market, literature reviews have shown 4 surprising results (James P. Johnson, Tomasz Lenartowicz and Salvador Apud, 2006) that there are a:
Lack of agreement of what constitutes to cultural competence.
Absence of in-depth studies on cultural competence.
Studies on cultural competence in International Business tend to ignore the larger environment which operation managers operate in.
Broad coverage of cultural competence only in US
To investigate and understand the effects of cultures on the business environment
To understand the cultural differences between Western and Eastern
To explore the possibility of cultural differences affecting business interest
To identify the determinants that cause conflicts between different nationalities
To investigate different methods of minimizing cultural conflicts
Philosophy of research
The different philosophy of Positivism, Interpretive and Critical realism, the most appropriate strategy in researching cultural differences is through critical realism. "Realism is based on the belief that a reality exists that is independent of human thoughts and beliefs." It can also be "seen as a large scale social forces and processes that affect people without their necessarily being aware of the existence of such influence on their interpretation and behavior" (Mark Saunders et. al, 2003, Pg 84,85). Edgar Schein definition of culture could be applied based on that "deeper level of basic assumptions and beliefs that are shared by members of an organization that operate unconsciously and define in a basic 'taken for granted' fashion an organization's view of its self and its environment. (Edgar Schein,1985). Given culture's ambiguous nature, the end results are subjective, undefined and determined by external forces while interpretivisim acknowledge "people's experience following by how things behave"(Laing 1967:53)
A deductive approach would not be chosen as it is time-consuming. In the social and economic sciences environment, "extreme deductive would lead to an endless rejection of theories because simply none of them is able to grasp the full complexity of the system described"(Koen.P et. Al, 2007). In contrary, an inductive approach to research culture would be appropriate in such situations; as it is "the process in which you would collect data and develop theory as a result of your data analysis"(Mark saunders et al, 2003, pg85-87). Instead of testing the theories, the paper would focus on building on to theories such as the 6 dimensions of culture by Geert Hofstede and the 3 levels of culture by Edgar Schein.
Easterby-smith et al. (2002) suggest 3 reasons to the usage of an inductive approach; (1) informed decision making can be made about the research design which is more than simply the methods by which data are collected and analyzed. (2) Providing inspiration of which research approaches would work best in the research process and (3) "the knowledge of the different research traditions would solve your constraint on adapting to the research design to cater for constraints."
One of the best methodologies to be used would be case studies; it is a "strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence" (Robson 2002:178). Case studies introduce the concept for generating and testing theory, providing a strategic management team with ground breaking insights (Penrose, 1960; Chandler, 1962; Pettigrew, 1973; Burgelman, 1983). It is argued that case studies are usually "carried out in close interaction with practitioners, dealing with real management situations which could represent a methodology that is ideally suited to creating managerially relevant knowledge"(Amabile et al., 2001; Leonard Barton, 1990). This has fulfilled the research objectives of comparing between different nationalities using real life examples that underline theories and discovering the key to minimize cultural conflicts.
The use of interviews would be necessary to find out the determinants of the conflicts. Discussing about conflicts may be sensitive for some individual, thus an interview with them would be appropriate. "Individual interview can often provide in-depth context, stories and discussion related to one or more topics" (WBI evaluation, 2007). It is important for the interviewer to find a peaceful environment where the "Interviewer can ask for elaboration or explanation with follow up questions"(WBI evaluation, 2007). The respondent may also appreciate the "additional personal attention that the interviewer can offer in opposed to a survey or focus group"(WBI evaluation, 2007).
Despite the validity of case studies, Yin(1984) have argued that there are 3 disadvantages; (1) case studies often lack of rigor as "too many times, the case study investigator has been sloppy, and has allowed equivocal evidence or biased views to influence the direction of the findings and conclusions" (2) "Case studies provide very little basis for scientific generalization since they use a small number of subjects, some conducted with only one subject". (3) Case studies are often labeled as being too long, difficult to conduct and producing a massive amount of documentation (Yin, 1984) . Yin (1993) considered case methodology 'microscopic' because of the limited sampling cases that may lead to an inaccuracy of data.
Likewise for interviews, due to the complexity and great detail involved, it is usually time-consuming as each respondent would require 30-45 minutes to answer those questions, in addition of organizing and comparing the data would take up even more time. There is also an underlying question in terms of validity as researcher would not be able to know if the respondents are lying. In the case of interviewing different nationalities, there is a possibility that there is a miscommunication due to language barriers between the different countries.
Operation of Methods
The first step in deciding which case study to use is determined by the countries which should be explored. Yin(1984) has proposed to use the 6 step in using case study:
Determine and define the research questions
Select the cases and determine data gathering and analysis techniques
Prepare to collect the data
Collect data in the field
Evaluate and analyze the data
Prepare the report
As mentioned in the research objective to understand the significant cultural differences between the western and the eastern, 2 case studies were chosen; "Danone Vs Wahaha" and "Nissan Vs Renault" . The 2 case studies showcased France which belongs to the western culture, China and Japan which belongs to the eastern culture. A framework of Geert Hofstede's 6 cultural dimensions will be used to differentiate and compare distinctly between both very extreme opposite cultures. Beyond the case studies, Edgar Schein's 3 levels of culture can be used to analyze the different elements of culture.
Referring back to the research objective, exploring how cultural difference between the eastern and western culture could cause conflicts and whether the diversity of culture creates a rife of creativity and efficiency that results in better business interest for the company. In this interview process, the sample size would include 4 sales and marketing personnel aged ranged 25-30 each from the western and eastern country. Argumentatively, the sales & marketing personnel could provide abounding relevant information; since they are the ones that formulate creativity and profits for the company. Scheduling a timing slot for a Skype interview is required as respondents do not reside in the same local country. During the process, the session will be divided in accordance of scheduling the first 4 western employees for interview in the 1st week and the following 4 eastern employees in the next week. Scheduling interviews in different weeks allows time to organize and analyze the data given. An example of the interview question will be provided in the appendix below. (Exhibit 1.1)
Analysis of Data (Coding)
In the analytical process, Open coding would be used which "is essentially the first stage of the process of qualitative analysis" (Mark. P, et al, 2003, pg 399,340). This is where the data is collected and grouped into conceptual units followed by being given a label for each unit. The same label would also be given if similarities of data were found. "The emphasis in this grounded theory approach will be used to derive meanings from the subjects and settings being studied"
In the case studies provided, the researcher needs to identify and label data which is important, followed by finding similarities of data between both cases of "Danone Vs Wahaha" and "Nissan vs Renault". Conjointly, the interview data from each of the western side and the eastern side, similarities of the data should be found and labelled accordingly. "The process of looking for relationship between the categories of data that have emerged from open coding could be explained as axial coding". Axial coding "indicates the process of the theoretical development as they are rearranged into a hierarchical form with the emergence of subcategories" Finally, the process would go through Selective coding where there is already a developed a number of principal categories and related subcategories. This is when identification of one most important subcategory as a core category and integrate them into the research in order to develop a grounded theory (Strauss and Corbin 1988).
Culture has always been a essential element yet sensitive topic; riots may occur as a result of not handling the cultural differences well. A potentially successful business ventures may backslide where there is an absence of cross cultural awareness. With the advancement of globalization seen worldwide, it is even much more important for companies to grasp the understanding of each different national culture. Even with mounting volume of research about cultural differences, cultural conflicts still remain in today's society. Further research should be performed to know much more in depth about the ambiguous nature of culture.
In order to fulfil my research objectives, 2 main methodologies were used. Case studies are used to compare the differences between the western & eastern while Interviews are used to identify the determinants of conflicts and ascertain methods to solve cultural conflicts. After the data is collected, it will have to go through the process of open coding in order to analyze the data given.
With a good analysis of data, this will allow us to build on the theory and let us gain a further insight of culture which is essential for businesses in the future. By grasping culture into our understanding, we may be much more prepared for what the future may bring us.