The major components of International Companies

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A major component of international business is international marketing. International marketing can be successful if good marketing policies are adopted by firms or organization and can lead to increase in market share and thus increase in profit level. Efficient and effective marketing strategies or policies however, should be adopted to fit the unique characteristics of each international market. Before an organization embarks on international marketing it must consider the cultural environment that is involved in business activities. (Franke, Hofstede and Bond, 1991)

The organization engaging in international business must consider cultural values that will vary from one country to another. Culture is said to be a system of values and norms that are shared among a group of people and that when combined together it comprises a design for living that is culture is the way of life.

It is important for any firm that wishes to go international to understand fully the concept of culture and how this cultural environment will affect its business undertakings. To many writers culture is the central core for any marketing policy. This is because as firms thrive to explore new markets customers of different cultures are involved and thus the marketing policies of each and every firm has to meet the demands and desires of the diverse cultures. (Franke, Hofstede and Bond, 1991)

Aims

The aim of study is to shed more light on the issue of culture as one of key components that organizations have to engross in there organizational management in order to enhance their effectiveness towards attaining the set goals. The research is also aimed at equipping managers particularly those from Human Resource department to look critically on the best ways of managing a diverse workforce.

Objectives

The overall objective of this research work is to find out Why allot of companies are failing when they are faced into cultural differences of other countries. Why are many companies going into merger and acquisitions in order to be able to get into a new market share that they have no knowledge of? Why are companies struggling to cope with changed when they learn and try to adapt with different cultures? How will it affect the company internally and externally?

Research Questions

Based on the objectives of this study research questions will include the following:

Does culture play a key function in attaining organizations goals or objectives?

What are the different ways of managing workforce diversity in an organization?

How can management link culture to performance in its effort of trying to achieve stated objectives?

How can the management evaluate the culture that is put in place and rate it as effective or non effective?

Benefits of conducting the research

This research will be applicable to all those organizations who wish to attract and retain a diverse workforce that can accomplish stated objectives efficiently. It will provide focus and insight to the management of the global organizations as well as portraying to the management the importance of a motivated and satisfied diverse workforce in an organization.

Limitations of the study

Because this is an exploratory study it will mean that more time will be required to carry out the research in order to find the relevant information that will reflect the issue of culture as a key force to achieving results in an organization. Also another limitation is that of availability of funds because the study will require the researcher to reach to a wider population through interviewing many respondents.

Literature review

Culture in many organizations is largely attributed to the concept of globalization. Globalization can be termed as the interaction of people from dissimilar cultures, social orders, and different backgrounds in carrying out assorted business practices with the intention of achieving their objectives e.g. profitability Globalization therefore has increasingly disregarded national boundaries and many firms have gone international which has also enabled workforce diversity. The authenticity and existence of the concept of globalization can be observed when patterns of culture in workforce are considered; for example Coca Cola and BAT Companies have always employed staff from different countries apart from those who originate from the host countries where the firms are set up. The existence of integrated financial system has also enabled workforce diversity since employees of various companies can be paid with less difficulty for example the existence of common exchange rate systems. (Foster and Harris, 2005)

Globalization is also now intensely clear because of the way human resources migrate from one nation to another devoid of much complexity, for instance different states have relaxed their tough itinerant regulations to permit sufficient time for trading practices to be carried out thus the spread of workforce around the globe. Globalization and culture is heavily influenced by new innovations, enhanced infrastructure. Workers are now taking advantage of such technology thus the need to shift to look for greener pastures which will assist them in developing their careers since many workers like the working in challenging environments. Therefore globalization has resulted to affluence to all firms practicing the concept and the main component to it has been the presence of culture that posses different kind of skills which if combined together yield great results in terms of production purposes. More specifically development in technology together with communication effectiveness and enhanced global relations has contributed immensely to the endorsement of culture in organizations. (Foster and Harris, 2005)

Diversification in structure has come by where the organizations are forced to restructure so as to reduce costs and at the same time remain competitive. Complexity in structure has also occurred where there are mergers, acquisitions and venturing in to new fields. Also companies are moving from traditional structure to team-based structure. Technology affects the way people work and its diversification allows people to do more and better work but it also restricts people in different ways thus it has its own pros and cons. The rapid change in technology for example the widespread use of internet gives firms a great pressure to maintain a great balance between technical and social systems. (Hofstede, 1980)

Organizations operate in different environments which are both internal and external. An organization doesn't exist alone; it is a part of different mergers which include other organizations, government and the society at large. Numerous diversifications in the environment gives new demands to the organization for example people expect an organization to be socially responsible and also create products which satisfy them. The quick globalization of production departments, supply of materials and marketplaces creates a great pressure which brings vibrant groups of people which affects the organizations in turn.

There are different factors which may make an organization diversify its workforce thus effecting its operations. A company may diversify the workforce as a strategy to market its products. With the high rate of globalization the ability of a product to sell well comes from people in all forms of life and for a company to make sure that it products sell well and reach a diversified number of people, it employs people from all walks of life for special purposes. Another factor which may make a company diversify its workforce is that it may be a legal requirement by the state to do so, so that it can maintain its contracts with the government and also to avoid discrimination in employing their workers. Social responsibility can also make an organization diversify its work force so that the less advantaged in the society can benefit from that by giving them freedom to earn their living in different ways which suit themselves. (Foster and Harris, 2005)

Culture has its own negative impacts which include reduction of cohesion within the group, for example men working alone give a less turnover as compared to when they are working together with women, and also whites working alone bring lesser returns as compared to them working with blacks. These problems can be solved by making the employees of an organization realize the importance of diversification. It is important for organizations to embrace the workforce diversity because it creates a good environment where everyone feels appreciated and this may motivate the employees to work well and produce good results.

There are many reasons as to why culture should be considered by the marketing managers when formulating policies and include the following: Since international marketing is concerned with exploring new markets in different countries there is need for the marketing managers to understand fully the social structure of the target market. Social structure is a basic social unit that individuals live in and how they do things is defined by this structure. Marketing policies should be formulated with particular consideration of the target market desires and wants. Organization's products and services should be designed in such a way that the social culture would prefer. (Howard, 1993)

Social culture is also very important in that some communities are subdivided in two categories that will help the firm to market their products and services efficiently. For example in Japan the social status of an individual is usually determined by the standing of the group he/she belongs to. This stratification of the society affects the operations of any business dealings. Many people from different cultures perceive themselves in terms of their backgrounds thus shaping the way they relate in respect to other classes. This in turn may lead to what is referred to as animosity between the classes or strata thus making cumbersome for the entire management of an organization and particularly the marketing managers to achieve co-operation between the employers and the employees especially if they come from diverse culture, thus affecting the business activities of the organization which may lead to low productivity. (Hofstede, 1980)

The other reason as to why culture forms a central core of marketing policy is that of religion. Religion is a system of shared beliefs and rituals concerned with the sphere of the sacred or the supernatural and it usually affects the way of carrying out business and especially international marketing. According to latest research ethical systems consists of moral principles that are used to shape and guide behaviour and thus affects business activities. Over the world there are various religions that includes Christianity where it is estimated that about 205 of the world's total population profess this kind of religion, Islam is another system which has about one billion followers, Hinduism which has around 500 million followers and believed to be the oldest religion, Confucianism which has around 150 million followers in Japan, china, among other Asian countries, and Buddhism which is reported to have 250 million adherents especially in India.

With diversity of religion systems international marketing has become difficult to be carried out because of the differences that are involved between religions. For example, Islam religion is viewed to be receptive to international marketing and it is aid to be favouring market based systems of conducting businesses. This religion always allows free enterprise, legitimate profits through e-commerce and trading activities. The Hinduism on the other hand is said to believe in reincarnation and thus does not encourage entrepreneurial activities like the Protestants. So marketing policies formulated by marketing managers should consider the diverse religion before going international. This way the organization can be able to meet the needs of their potential customers. (Howard, 1993)

The other reason why it forms a central part of marketing policy is that of language. Language differs in different countries and organizations should consider this aspect before going international. For example any organization who wants to go international must address the issues such as translation, non-verbal communications, and personal skills among others. Language is very important in business dealings as well as communicating with the different markets. The marketing policies should be such that the element of language barrier is solved, for example if an American organization would wish to diversify to china; the organization should ensure that the workforce especially the marketing managers should be equipped with Chinese language in order to meet the demands of their customers.

Another main reason as to why culture forms a central core of the marketing policy of any firm wishing to go international is that of education aspect. It is evident hat formal education imparts knowledge, conceptual, mathematical skills, values, and standards to people which affects the way of conducting businesses. With particular regard to international business differences in education will give some organizations competitive advantage because the availability of skilled and educated workforce will be a major boost. If the marketing managers are highly skilled and competent as compared to that of other firms they will be able to come up with viable marketing structures and strategies that will foster survival and growth of the business. It is also argued that education determines the promotional materials that may be used in a particular market and thus the organization can respond to challenges brought about by globalization for example introduction of new technologies.

The other reason as to why culture forms a central part to marketing policies is that of material culture which is considered to involve tools, work of arts, and technology that is used in international marketing. A sound marketing policy should consider channels of distributions and advancement of technologies that will boost the organization's goals. For example, the marketing policies formulated should provide direction on utilization of new technologies like that of e-commerce to improve the efficiency of the firm operations. This is cost effective and also saves time of the firm which can be used in generation of more income.

As Cateora and Ghauri (2006) state that 'for the inexperienced marketer, the similar but different' aspect of culture creates an illusion of similarity that usually does not exist" is a statement that shows that the concept of culture is significant and the managers of firms need to fully understand it so that they can increase their productivity. Culture varies from one country to another and marketing strategies and policies should be formulated in such a manner that it does not contradict the way of doing things or living by the target population.

Global events and competition affects almost all modern businesses and organizations are increasingly facing challenges as a result of the ever changing cultural environments. The economic and political linkages involving the migration of money, products, and people across national boundaries together with ideas and values have increased the pace of change, ambiguity, uncertainty, and unpredictability in contemporary business. This has significantly affected the cultures of different people in the world because sometimes individuals are forced to adapt to cultures that are new to them.

Challenges Faced While Managing Cultural Differences

Challenges that are experienced by organizations while trying to manage a diverse workforce. These challenges are more than simply acknowledging the differences people have in their day to day activities. In summary, it involves;

Recognizing the value of differences

Mitigating effects of discrimination

Promoting inclusiveness in the organization

Bad behaviours and negative attitudes are barriers to organizational development because they harm working relationships and reduce productivity. These behaviours and attitudes include; discrimination, punishment, stereotyping and prejudice especially when they are applied during hiring and promotions or even firing the employees from the organization. They are considered not only inhuman but also not a good public image for the organization Despite the fact that existence of diversity in the organization is appreciated throughout the diverse sectors ranging from government institutions, universities, non-governmental organizations, multinational firms, industries and other sectors that require a huge workforce, they are only viewed as human protection rights and legal compliance requirements.

Culture as a potential performance barrier-inefficient communication

Previous research has shown that the presence of a significant diverse force within an organization can lead to a reduction in productivity of some kind of redundancy. This has been attributed to the following reasons; to start off; the efficiency of communication is reduced within an organization where a diverse workforce is available. The language barrier for example is a best example to describe this. It is difficult for people from all parts of the world to adopt the same language at the work place. (Hofstede, 1980)

Taking an example of an engineer who is very experienced, knowledgeable and hardworking but does not know the English language and in the same note, the engineer wants to work in the U.S. things will not only be difficult for the worker but also for the supervisor and the management of the organization. Although the engineer would do his or her duties well, the communication channel which is critical to how the organization is run will not be addressed fully. The short term implication of inefficient communication would be conflicts within the organization.

Conflicts

While trying to manage a diverse workforce, the management of a company will be experiencing difficulties arising from conflicts. People are naturally jealous or inclined towards people they consider their own. Therefore, employees within an organization are diverse in gender, race, education, religion or any other issue of diversity. This means that the employees will be involved in many misunderstandings including the conflict of social disparity, religious conflict or any other form of discrimination. Conflicts are related to all forms of isolation or discrimination and that it is the main contributor to fights, poor performance and lack of cooperation among people in the organization.

Frustrations

Team work is useful for an organization in that, people are able to share their ideas or problems thereby providing workable solutions to issues. It has been researched that people are from different backgrounds and with varied skills tend to form a strong teamwork. On the other hand, they are more susceptible to workplace harassment which is bad for the organization. The organization in this case, has a lot to lose if it does not act quickly. Some managers may want to employ people who are only known to them because they trust that they can work peacefully without any interference.

Low morale/motivation

Organizational development dictates that every individual gives his or her best to the organization they serve. Employee satisfaction is the key to the economic success of any company. Some studies have suggested that people with diverse backgrounds find it hard to motivate themselves as a result of the differences on how they approach issues. Employer and employee relations are very important in ensuring that a company realizes its mission and team spirit is built. In fact, it has been researched and found out satisfied employees usually translate to satisfied customers. Hence, with proper policies and administrative skills, managers can create satisfied employees even without the utilization of teamwork strategies. This approves that organizations need to have people who poses some form of similarities to avoid misinterpretations of its policies, guidelines and schedules. (Hofstede, 1980)

Lack of social attraction

In addition, a diverse workforce will most likely be having problems of social attraction among the individuals. Social issues within the organization are important especially when it comes to building workable group work. Lack of social interaction is very costly to the organization. In situations where the organization wants to promote corporate social responsibility in the community, social interaction will be very important as the employees will be the ones to spearhead the activities. If these employees are so diverse that they can't work together mainly because of their religion, language or gender, then it becomes difficult for the organization to meet its objectives.

A research done by Allan in 1978 showed that more blacks are not being employed in companies which are considered 'white owned' in the United States. Of the few who were employed in these companies, there were cases of isolation and discrimination which meant that the blacks and the whites do not get on well together in the organization. The organization therefore becomes less productive in some way. If the recent issue concerning Microsoft which indicated that only 5% of its employees are black, then the organizational diversity is getting little appreciation.

Recruitment difficulties

During the diversity management process, it becomes difficult to recruit the best in the market. Dealing with people of different backgrounds makes work difficult for the human resource officers especially the rigorous process of selection, interviewing or retaining potential employees in the organization. Sometimes, the organization is not able to collect all the people from the different countries or races to come personally to get the necessary selection process. Diversity management therefore requires extensive skills by human resource officers (Howard, 1993)

High costs

High costs are usually incurred while trying to manage a diverse workforce. It is usually very hard to deal with the needs of a diverse workforce. To solve issues arising as a result of differences in ethnicity, race or education, many organizations will need the services of a company counsellor in order to provide counselling services. Dealing with such issues as conflicts require that companies spend a lot of revenue to reconcile and bring people to a harmonious situation.

The costs of dealing with persons from different locations or religious groups may affect the organizations in some way. Religious persons from various groups have different beliefs on certain issues required by their religious faiths. Some Protestants such as the Seventh Day Adventists may require that they be left out of duties during these days. Other people may want to be free on Sundays and so on. In the long run, the organization will be losing lots of money in the process of giving every member of its organization. (Howard, 1993)

Unrealistic expectations

Companies which try to employ diversity tactics in order to fulfil certain targets in international markets may be in for a rude shock as their expectations may be too high. Individual expectation in an organization may also be unrealistic in that people would want to be associated with certain organizations just because of the perceived image either in the press or in the market place. Some persons from different regions may for example wish to join Microsoft as part of a strategy to meet their expectations in terms of technology and finances. In the process, Microsoft may turn to be one of the companies which do not recognize individual differences as the main driving and harmonious force within the company. Finally, ones career development is partly fulfilled and people will seek for further fulfilment elsewhere. The company will experience high workout rates in the form of resignations because people will be leaving the company because of dissatisfaction.

Legal suits

Incidences of discrimination have led to increased number of legal suits against many companies. While trying to manage diversity, the issue will most likely arise as consequence of addressing the negative implications of diversity. Some companies in America have found the going getting tougher as a result of their diverse workforce. When the company tries to discriminate even against the disabled persons in their workforce, will find itself getting bad publicity and in the long run bad image. In November, 2002 when the New York Times ran the headline that described the extent to which discrimination against the blacks in Texaco Company.

This implies that marketing managers should come up with policies that will ensure that the culture of different markets is not affected when undertaking business activities. Usually the inexperienced managers would ignore the aspect of diversity in culture a situation which leads to low production and thus low productivity. A good example of diversity in culture is the way of dressing that different people in different countries have adopted. For example some countries have their national dresses and thus to sell new clothes in those areas becomes cumbersome and thus marketing managers have the responsibility to review their strategies to manufacture the clothes that fits the citizens of those people.

Methodology

Research Design

This study necessitates the researcher to identify the ways of helping companies in deciding when they should be going into some sort of alliance with foreign companies to attain their goals, to open a branch locally and run it themselves, or simply work through agents. The researcher will mainly concentrate on the issue concerning the workforce diversity how best it can be applied by organizations in their attempt to boost their profitability levels. Given that this study is an exploratory research it will based on; desired activities and time-based plans, research questions, selection of sources and types of information required, outline of procedures for every research activity to be carried out and also it was based on the framework that specified the relationships among the samples identified for this research purpose.

Sampling Procedure

Before adopting the suitable sampling technique several factors for example; cost of conducting the research, time constraint, accuracy of sources to be utilized, availability of population respondents, physical impossibilities of acquiring all the necessary items in the target population and the destructive nature of certain tests ought to be considered in detail in order to avoid minor mistakes in the course of conducting this research.

Probabilistic type of sampling technique will be chosen since the sample identified gives each and every respondent a known likelihood of being included in the sample selected. For that reason, the research will be conducted using simple random method of collecting data because it will be difficult to reach all the participants in the population. Under this technique, the selected sample gives the person identified the opportunity to have an equal chance of being incorporated in the research work.

Target population

The target sample will be mainly those diverse workers who are involved in day to day operations in various organizations. However, some middle level and top managers will be considered and given an opportunity too to air their views. A total of fifteen respondents will be identified and questionnaires administered to them. However, the administering of questionnaires as a tool of measurement will be based on the willingness of the respondents to adhere to the instructions thus in the process answer the questions in their best knowledge.

Time frame

The study is scheduled to cover a time period of 15 days. During the whole process of conducting the research, the researcher will be present and will answer questions which may require some clarification without partiality or prejudice.

Techniques for Data Collection

Since a sample of the population will be identified the researcher will utilize both open and closed questionnaires to collect the required information from the respondents that will be selected from the sample identified. This method is considered and found to be effective and efficient to the researcher since he will only drop the questionnaires to the respondents and collected them at a later date. The reason for choosing both open and closed questionnaires to be administered is that it will give the respondents an opportunity to answer freely to set of questionnaires that will be administered to them during the study.

Recommendations

The marketing managers should always note that not all people are the same and that different individuals prefer some products that others do not prefer. The other example is that of foods that are being imported and exported from one country to another. Marketers should conduct a research on the food that fits different cultures and learn to avoid making assumptions that all cultural practices exhibited by one culture is the same with that of other group of population. That is different groups of people are unique on their own way and their needs and desires should be met difficulty. A good example that also shows diversity in culture is that model Maslow's hierarchy of needs whereby there are basic needs, safety needs, social needs, esteem needs, and self respect and it should be fulfilled in that order. Though the model does not reflect truism, it shows that each and every individual has different culture and if the needs that fits his culture are met then positive results can be obtained. (Cullen and Boteeah, 2005)

International marketing management practice is the greatest concept that must be understood clearly by all managers and Chief Executives Officers of MNC's before going global. This factors influence the different cultures that the individuals have adopted. It involves identifying the suitable approaches to managing the aspect of culture and understanding all the advantages and disadvantages of each approach before going global in any business undertaking.

Research indicates that international marketing has led to prosperity to all and the main ingredient to it has been the ability to manage different cultures through formulation of good marketing policies which have been employed by firms in order to increase their market share and profits. Due to modernization and advancement in technology, most businesses are beginning to explore international markets for better profits and opportunities. In the recent past, trading activities has become increasingly global in some way because of the need to gather and increase the company's financial bases. Better understanding of cultural environment of different countries, advancement in technology including communication efficiency and better international relations has contributed to the promotion of the international marketing. (Hofstede, 1980)

The aspect of culture has however become a great challenge to the success of international marketing management but most companies are rising to the challenge. To take advantage of the world being global village and to achieve greater investments and better marketing opportunities in the international market, it is necessary that primary and secondary market research is done by the marketers to ensure that information regarding to the different cultures of the target markets in countries desired are known. (Cullen and Boteeah, 2005)

Conclusion

Diversity management in the organization is a reflection of how the changing world and market place will be in the future. Diversity will enhance respect for individual differences within the organization and hence able to create a competitive advantage in the organization. Diversity management in the organization is able to benefit associates through the creation of safe and fair environment for all. The paper above has described the challenges and successes that are experienced while managing diversity in the organization.

The successes include; getting the best from the labour market, human talent, increased market share, fulfilling organizational values, development of good leadership qualities, organizational flexibility, creativity and innovation, problem solving ability and marketing strategies. On the other side of the coin, the challenges are;

Diversity as a potential performance barrier, workplace harassment, conflicts, low morale and motivation, increased legal suits etc Organizations must therefore undertake the first step to become more diverse in not only its employees but also towards policies, programs and work-life balance. (Howard, 1993)

There is no single recipe for success that must be desired from diversity. The main determinant that needs to be clearly understood is the basis of teamwork provided by the management of the organization. Diversity management in an organization has become a comprehensive process needed for creating a workplace environment that includes everyone regardless of their diverse nature. In doing so, the organization will be in a position to reap the benefits of diversity. Managers and supervisors for example, need to be very aware of personal biases to able to critically integrate the employees to the company's values and culture.

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