The importance of developing corporate culture in multinational enterprises


In recent years, with the development of the world economy, the international competition of firms has become increasingly fierce and the pressure has grown heavier. Corporate culture, the core competence of a company, receives a lot of public attention and seems extremely significant in companies. In most cases, corporate culture is created unconsciously in companies and it is a tremendous challenge to coordinate and develop it, especially in multinational enterprises. As a result, multinational enterprises are always consisted of a serious of enterprises in different areas. They are confronted with not only a native environment, but also the environment of whole company (Rosenzweig & Singh, 1991). In order to integrate their subsidiaries and dominate in such severe competition market, leaders in multinational enterprises have to pay more attention to develop their corporate culture and make massive efforts to do it. This paper attempts to give the definition of corporate culture, analyse the effects on multinational enterprise employees, explain the importance of corporate culture in multinational enterprises and give some strategies to develop it.

Lady using a tablet
Lady using a tablet


Essay Writers

Lady Using Tablet

Get your grade
or your money back

using our Essay Writing Service!

Essay Writing Service

Currently, there are several definitions of corporate culture. Most research agree that 'corporate culture refers to the set of values, beliefs, and behavior patterns that form the core identity of an organization' (Denison, 1982). As can be seen from the definition, corporate culture stands for the company's personality, views, spirit and soul. Every corporation has its own unique corporate culture, Such as, Procter & Gamble Company is pursued the corporate culture of 'intriguing' (Denison, 1990), Google Company's corporate culture is 'innovation', whilst the corporate culture of Hitachi Company is 'honest, exploitation spirit, harmonious' (Shao, 2008).

Corporate culture has a lot of positive effects on enterprise employees. Some research demonstrates that corporate culture can build employees' responsibilities and restrains their behaviors. Such as how one chooses to dress, how employees interact, the physical distance one keeps from others, the communication styles, the work time, the office space employees get, the work environment, the training employees receive, the attitude towards work and the extent of competition. These are all related to corporate culture. Research also indicates that corporate culture has a strong impact on employees' career planning, even their concept of family and society. To be more specific, employees would like to work hard and make contributions to society if they agreed of the corporate culture. Generally speaking, effective corporate culture can improve employees cooperation, productivity and loyalty.

The importance of multinational corporate culture is growing every day, that is to say, having an effective corporate culture is really essential to multinational enterprises. In the first place, corporate culture is the direction of a company. Without it, the company will lose its way. Due to corporate culture tells the company what should to do, what cannot to do and what is willing to do. In addition, effective corporate culture can help company created an excellent environment and harmonious atmosphere, which is really crucial to companies. Then, corporate culture shows people the endeavor and passion of each company. It usually reflects the aim and prospect of the company. Also, corporate culture gives people the core value and spirit of the company. Good corporate culture just likes 'glue', it is 'a powerful way to hold a company together' (Goffee & Jones, 1996) and make the staff to achieve the same goal. Finally, positive corporate culture gives customers and clients a positive image of the company. Obviously, customers are the backbone to any company and related to companies' effectiveness. Good reputation may promote customers to buy more commodities. Consequently, the profit of companies increases accordingly. On the contrary, without their support, a company would lose money and ultimately may have to shut down. Overall, corporate culture plays a crucial role in multinational enterprises and it is closely related to companies' survival and development.

In order to run multinational enterprises effectively and efficiently, managers should attach great importance and use some impactful strategies to develop corporate culture. To begin with, multinational enterprises should hire excellent employees. Specifically, qualified, intelligent, hard-working and enthusiastic employees will provide some useful ideas to develop corporate culture and help the company progress quickly. On the contrary, unqualified, unmotivated and negative employees can make a company backslide. Moreover, multinational enterprises should cultivate employees' responsibility, treat them equally and inspire them by good environment and friendly atmosphere, give them a good stage to display their talent and exert their ability. People all want to work in a happy and free place, also they desire to contribute to the company. If companies treat their employees well, as a result, the staff will regard the company as their own and initiatively take part in making decisions to develop corporate culture. Also, continuous innovation is absolutely necessary in companies. Innovation can help companies adapt different environment quickly and keep unbeatable in the intense competition. It is the company's resource and motivity. Successful companies are always concentrate on innovation (Shao, 2008). Take the company of Microsoft as example, since established from now, it applies itself to innovation. Nowadays, it is the worldwide successful multinational enterprises. Meanwhile, some investigation shows that only by doing this can companies develop in a long-term and prosperous way. Lastly, managers of multinational enterprises should focus on the effective measures to develop corporate culture and do more research on it. Normally, multinational enterprises need to shape outstanding corporate culture to face the more complicated business environment and the immense challenges. While, shaping and developing a unique corporate culture need a long time, cumulate it step-by-step is the only way to achieve.

Lady using a tablet
Lady using a tablet


Writing Services

Lady Using Tablet

Always on Time

Marked to Standard

Order Now

In conclusion, corporate culture is 'a key component in the achievement of a corporation's mission and strategies, the improvement of organizational effectiveness, and the management of change' (Adeyoyin, 2006). In such continually changing business environment today, ongoing development of corporate culture is necessary. Therefore, a lot of managers of companies tend to invest a large amount of money to develop their own corporate culture. The positive effects of good corporate culture are countless. Not only is it very important to employees, but also has a close relationship to company's survival and development. That means if a company wishes to be financially successful and have an excellent reputation in public, it needs to shift their focus on developing an efficient corporate culture. A large number of successful multinational enterprises, like Google, IBM, Haier, Hitachi and Sony, have proved the importance of corporate culture in the company's development and success. All in all, corporate culture presents the quintessential of each company and it plays an extremely significant role in multinational enterprises. Much research has shown that matching corporate culture always promotes successes of the company, just like a vehicle to get the company to the desired destination.