Managing Across Cultures Analysis Marketing Essay

Introduction

The research primarily focuses on two international companies from different continents, with diverse cultures, languages and race Renault and Nissan.

In the course of the research we observe the similarities and dissimilarities regarding the multinational culture as concepts, in our topic comprising of the cultures from two countries France and Japan we intend to view them separately, and gauge the nation’s composition to see the nature of society, depending on the traits like individual or collective with respect to relation between individuals, also to know their ability to adapt to other cultures and how does the Individual form a local culture accept or refuse the influence of other cultures, hence in this regard Hofstede dimensions and theories about individualism can be seen in France as compared to Japan .

In the next step Trompenaar’s dimensions and theory about culture is taken into account, and it is seen that individualism verses communitarisnism, affectivity verses neutrality, and universalism verses pluralism as separate. And try to apply the dimensions from the model on both nations: France and Japan.

By then we may be able to identify properly how Trompenaar’s related multinational companies to managerial areas and how cultures as a concepts can help people to solve problem and the benefits they may have.

Also Hofsted view about cultures: criticism and suggestion about the variation of cultures in the different societies.

A BRIEF

Renault: it’s a French automaker car company was established in France in 1890. The company has a strategy of profitability growth based on three fix points: international expansion, innovation and competitiveness. The company employs almost 130,000 worker all over the world; presence in around 118 countries. The future plans are to enhance the product and set the brand in every country, Renault run by its CEO Carlos Ghosn.

They made an alliance with Japanese company Nissan in 1999. Their aim was to enhance the product and to spread the brand with targeting the .U.S. market.

Nissan its Japanese automaker car company was established in the 1963s in Japan. Located in more than 125 countries, has more than 220,000 workers.

The company was operating very well till 1998 when was faced some financial problems, and were about to collapse. 1999 Renault’s CEO French Company invested money and bought share of Nissan hence an alliance was formed and Carlos Ghosn was appointed as the CEO for Nissan to turn it around, and make it a profitable company, Nissan had a fresh breath with the introduction of new brand to enhance the product and perform better than before.

.

An alliance of two global companies with two cultures:

After the alliance of Renault- Nissan together, they became the first global hybrid company in the world with two different cultures and geographic location, mentalities, languages, employee’s perception, and united under one CEO.

Carlos Goshn: chief executive

He was born in Brazil to a Lebanese parents, raised and educated in the middle east, his first job was in Michelin in south Carolina United states he moved to France and led Renault car company in 1996, was charged to lead Nissan car company in 1999 after the formation of their alliance, he than bridged Tokyo and Paris and ran both firms. Moving forward, closer integration between the two companies is expected to spark fundamental changes.

As he said “I’m going to spend 40% of my time in Tokyo, 40% of my time in Paris and 20% in the rest of the world,”

“It means that I’m going to be relying more and more on very carefully selected people reporting to me.”

Moreover, after years of operating at arm’s-length distance, the two companies are expected to go through a process of rapid integration.

Literature Review

HOFSTEDE CULTURE DIMENSION:

Gerard Hendricks Hofstede is a Dutch writer born on the 3rd October 1928, his work date back to the 1960s on cross cultural differences in different centre of IBM, and he arrived at this conclusion “it is at the middle collective level that most of our mental programming is learned, which is shown by the fact that we share it with people who have gone through the same learning processes but do not have the same genetic makeup”. French (2010 pg54), showing culture affects everything we do, with the model by him, managers have used it as “framework for testing cross-cultural differences” it goes to show that for a manager to succeed, he or she must have to understand these.

Carlos Ghosn, CEO and President of Renault and Nissan, in an interview he said the challenges and problems of the alliance, and it’s multi-culture, that “if the culture is not considered then that organisation is doomed to fail”, he felt the dignity of the of the people must be respected since humans are the greatest asset of an organisation. He is quoted as saying “cross-cultural exchange is an integral part of basic sustainable performance” Günter K. Stahl, Mark E. Mendenhall (2005) the alliance of Renault and Nissan took into account the cultural differences.

To understand how he was able apply this, it will be necessary to see differences in the two cultures, France and Japan, for he has been applying it to his success, that we can see from the income generated by the alliance, some of the differences had to do with what the Japanese refers to as the shushin koyo that is life time employment and promotional based on seniority, whereas the situation is different from that of France, that type of diverse cultural differences was a big challenge for Carlos. To grasp what dimensions of cultures are between the two countries, it will be proper to examine them individually.

The first is what he calls power distance, which has to do with inequality that is endorsed by the many in the society, Carlos had to recognise the gap between the two countries and use it to the advantage of the company “all societies are unequal, but some are more unequal than others.”On the diagram given by Hofstede, Japan is ranked at 54% and France is at 68% on the list, the difference is not much but there is still difference

The second one had to do with individuality, these is where ties are either lose or ties, from the diagram the percentage of Japan is 46 while that of Franc is 71% showing the that Japan or more of a collective society than France.

Another great distinction between the two countries is masculinity, that is rate of which competition high, and the between the it is really great, with Japan on 92% showing a lot of gap between men value and that of women, while that of France is just on 43%, a gap of 49% between the two countries, meaning what you will use to motivate the Japanese will not be the same for France.

Uncertainty Avoidance was next on the list of the dimension, this refers to level of which a country tries limit it risks through laws and rules, it was noted by him that those in this are not expected to show express emotions. Japan is on 92% and France is 86%.

On Long Term Orientation, this gives the level of being persistence, which is having a sense of shame if achievements are not met .Japan is ranked 86% while that does not apply to France.

Carlos felt the best way to achieve result was through a strategy which insists that every employee must respect the identity of a fellow colleague, for he mentioned that if that is not done, then organisation will not last. Another strategy employed by him was that of investing in the training in cross-culture training “having over 1500 employees from Renault learn about the Japanese business culture and 400 Nissan employees study the French culture”, and inter transfers between them, With the believe that it will bring about successful organisational management. Renault-Nissan Alliance Case Study (2010)

CRITICISM OF HOFSTEDE WORK

Although the work of Hofstede has been applauded by so many, it has come under some criticism, that the work was in fact related to just IBM, that it does not represent the sample of the nationality. A question was asked if the dimension did cover the dominant aspect of the culture, and it is believe to be limited in its application. (ibid pg 58). It was noted that it is not culture alone that contribute to economic growth but rather technology that the relationship between the national growth and culture is not enough, and culture can’t provide the reason why there is decline in growth. Stahl et al (2005). But whatever the criticism it has contributed to social science.

Analysis of the Problems

Empirical studies suggest that creating well-functioning social relations with Japanese is challenging because of group-oriented behaviour, negative attitudes toward foreigners, indirect and suppressed expression, and different social manners and relationships with the opposite gender. (Tanaka and Fujihara 1992; Hsiao-Yuin 1995; Jou and Fukada 1996) [1] . One possible reason for the low frequency of intercultural interactions in homogeneous Japan is the limited integration and deferential treatment of foreigners. Ebuchi (1991) [2] . The case analysis is done for Renault and Nissan alliance, which are international companies operating in different continents of the world, with the geographical coverage of their manufacturing units worldwide hence the socio cultural challenges it faces are in a global context are seen mostly with their diverse culture which pose a barrier and hinder in the smooth flow in their day to day interaction with their counter parts it is evident as both the company have was the language barrier as both the companies were from different part of the world France and Japan, hence language was a major concern as per the ceo mr Carlos Ghosn when he took charge of the company it was difficult for him to communicate and hence it was with the help of a interpreter he was able to put across his plans and strategy for Nissan forward .The Ceo of Renault and Nissan perceived cultural differences were not a handicap it was the dawn to the collaboration of technology and resources joining forces to make something new, it was a practical business approach to the problem of Nissan which was going through a financial crises and the management in Nissan were conscious of the severity of the situation hence they had no issue in accepting the strategy led down by Ghosn . In today world the differences in culture are being used more and more as ways of listening to what different people can bring to the table to achieve our objectives for the future. So, it is a careful selection of best practices and best approaches. Hence the cultural diversity is strength as people are focussed to learn from their counter parts.

Challenges

After the alliance Renault and -Nissan faced the biggest challenge was to bridge the gap of cultural differences that were between the two companies by the Lebanese Brazilian business man Carlos goshn was able modify the outlook of Japanese counterparts for instance the Japanese are collective organization where in all the decision was taken unanimously under general consensus whereas the ideology of the new (CEO) Goshn had a individualistic approach where he would take the decision on his own without any formal discussion among the board, in another instance as language was a tremendous barrier to the mode of communication Carlos goshn imposed English as the work language within the company so that the cross cultural tams within Renault and Nissan could improve collaboration with each other while working, another aspect that was difficult is Japan is a land of traditional values hence it was tough for the counter parts from France to keep in mind to respect the basic value of communication.

Opportunities

The alliance of Renault-Nissan had brought a change in the functionality of the working of the Japanese management which have a collective set up of decision making whereas as compared to the French counterparts which has a inclination towards individualistic way of management, Japanese were advanced with technologies hence Renault had the opportunity to bank on the production with good technology as French were good with the strategic management hence it worked hand in hand for the company to co-exist together.

Recommendations

Every employs has to undertake the cross cultural training to understand and respect each other, the other aspect is Language English was introduced as working language to smoothen communication between the counter parts.

Conclusion:

The progression towards globalization was evident in the automotive industry across the world. For surviving the competition, several automaker organizations were shifting towards alliances. The highly successful collaboration is between the organizations that possess ancillary strengths and weaknesses. The same was with the case of Renault-Nissan. The alliance of Renault and Nissan was to neutralize the weaknesses and needs of the companies mutually. The information about the companies is briefly described and the reasons for the strategic alliance were included for a better understanding of the case.

This alliance of the companies involved crucial cross cultural issues such as diversity in their cultures, barrier of physical distance in associative projects and linguistic barriers. However, the cross cultural issues were resolved by the CEO Carlos Ghosn. With the introduction of the English as the common language, and the termination of the 21,000 employees, closure of five companies and introduction of double hierarchy system by the CEO resolved the critical cross cultural issues. With the discussion about the CEO in the case study reflects his role in managing cross cultural issues in the alliance. Hofstede dimensions and Trompenaar theory in relation to the case study were discussed. But both the theories are criticized as they are not applicable completely in this case.

Criticism:

This part of criticism involves the discussion about the relevance of Hofstede theory in the alliance of Renault and Nissan. The applicability of the Hofstede dimensions in culture, it is crucial to focus upon those factors of dimensions that indicate the highest difference in the cultures. The alliance of Nissan and Renault is critical on cultural grounds due to the fact that Nissan is of Japan origin and Renault is a French company. The under discussed dimensions explain the applicability of the dimensions of Hofstede theory. Firstly it is crucial to discuss the dimension of “individualism vs. collectivism”, because the individualism is high in France whereas collectivism is high in Japan. Group involvement and group based collective work is evident in Japan on the other hand; individualistic approach towards performing the tasks is seen in France work culture. This difference in dimension could show its impact on the management style of work of the alliance of Renault and Nissan. The other important dimension that needs to be discussed is “femininity vs. masculinity”; the masculinity is more in Japan while it is very less in France. The equality in genders is very closer in Japan which is strongly opposite to France. Owing to this dimension it could be inferred that the inculcation or the integration of the employees under the alliance of Renault and Nissan in both the companies must undergo a compromise. These two dimensions describe our observation of criticism about the alliance of Renault and Nissan.

Reflective report:

The following approach of understanding the concept of managing across cultures through the case study of Renault-Nissan is done by us as a group work formed by the team of four members. Our team is comprised of members with varied cultural reflections comprising of members from India, Nigeria and France. The practical implications involved in the group are experienced by us in our group work. The team approach in completing this group task can be explained by applying the theories of Tuckman.

Tuckman theory application in our work: According to Tuckman, all the groups formulate their team with the stages of “Forming, Storming, Forming, Performing, and Ending/Dorming.

Forming: this phase refers to the early phase to acquaint other group members in the group. The key responsibility is to develop a friendly and favourable environment for the group members. This stage was reflected in our group work too, in the early stages there were differences in opinions but eventually with a friendly environment existed between us.

Storming: This phase is about the power concerns that arise in the group relating to power and influence. This phase was also experienced in our group and this surpassed by frequent and some dialogue that took place to resolve the issues of the team members.

Norming: This phase is neutralizing phase with rules and regulations that were set up in the group. Being a student group, we did not find the utilization of establishing rules and regulations because we resolved the issues in a friendly manner.

Performing: This phase is during which the group issues are resolved and cleared. This phase witnesses the delegation and implementation of the tasks in the group. We found the applicability of this phase in our group work which is reflected in delegating the tasks of performing the course work.

Ending: This is the end phase of the group work. This was evident in our group work with the understand ability and knowledge about the case study and the academic theory related to it.