|Individual Assessment Details and Submission Guidelines|
|Unit Title||Managing Across Borders|
|Assessment Type||Individual Assignment|
|Assessment Title and Topic|
The Importance of Cultural Differences for the Global Multi-National Corporation (MNC)
Do cultural differences really matter in an increasingly globalised world?
|Purpose of the Assessment|
and unit learning outcomes (ULO) mapping
|Students are required to apply their knowledge of the unit content from weeks 1 – 5 and demonstrate, through a written argument essay, critical thinking skills with evidence of research and a considered analysis of the topic and its implications for a MNC.|
In the essay, students must address the following key themes including:
The following Unit Learning outcomes are relevant to this assessment:
|Total Marks||20 Marks|
|Word limit||Maximum 1,200 words|
Managing Across Borders
The Importance of Cultural Differences for the Global Multi-National Corporation (MNC)
Do cultural differences matter in an increasingly globalised world?
Cross-cultural management is an important element in international business. This essay has focused on analysing the cross-cultural management perspectives, especially different dimensions of culture, cross-cultural literacy, values and norms as well as advantages and disadvantages of cultural diversity in Multinational companies. It is identified that multinational companies do have different cultural norms. However, it does not have a severe impact on the performance if the MNC's can understand the different values, norms and dimensions of culture.
According to some scholars, cultural diversity acts as a barrier within people because of obvious cultural, religious and linguistic differences. On the other side, several multinational organisations and scholar promote diversity in the workplace, as it enables serving a wide range of customers across the world. Thus, the study seeks to understand the way cultural differences influence the global MNCs and their importance in a growingly globalised world.
The major determinants of culture include social structure, language, religion and education. Further, the key dimensions of culture include power distance, individualism, uncertainty avoidance and masculinity versus femininity.
Explanations of every determinant of culture with examples
Culture is a complicated concept that incorporates belief, knowledge, custom, law, art and other abilities attained a person as a member of the greater society. The major determinants of culture are religion, social substructure, language, education, economic philosophy and political philosophy. The social substructure is the way society is linked within themselves and the way people are controlled. A society can adapt to either group or individual organisation. in an individual organisation, individual qualities are much more focused whereas, in a group organisation, the emphasis is put on group attributes. The recreational institution is an example of social structure, which includes leisure activities preferred by a particular social group that is crucial for human psychology and biology (Bartlett and Ghoshal, 2002). According to Minkov et al. (2017), religion is another important cultural determinant that is the shared belief, which a society observes. Therefore, an organisation must learn the religion of the region, where it operates for avoiding the production of goods not embraced in that region. For example, the four authorised religions in China are Buddhism, Islam, Taoism and Christianity that an MNC must know before doing business in that country. Next, comes, education, which offers skilled labours to the organisations within the society. For example, Kerala is the most educated state of India with a literacy rate of 93.91%. Thus, an MNC seeking for highly educated employees can choose Kerala for business expansion. As commented by Kim (2017), language is another crucial determinant of culture, as it helped reducing communication barriers. For example, before expanding business in the UK, proficiency in the English language can be useful. Lastly, the political and economic philosophies of a country help to determine the strategies, which would be mostly embraced in society. For instance, China’s political philosophy is communism while India is a democratic nation.
Cross-cultural literacy and the dimensions of culture
Cross-cultural literacy refers to the capacity of knowing, understanding and involving confidently in a culture. It is a similarity to literacy. Cross-cultural literacy is essential for societies and individuals, as it facilitates developing related skills like self-reflection and communication that are crucial for dealing with a growingly globalised world (Bullough et al 2017). The major dimensions of cultures are there. Power distance focuses on social equality. It defines the insolences of culture toward social inequalities. For example, Britain considers that inequality within society must be minimised. Next is individualism versus collectivism. UK is an individualistic society like the USA and Australia. People are encouraged to focus on their unique nature and talent and contribute to the society accordingly. On the other side, China is a collectivist society that focuses on achieving shared goals (Bartlett and Ghoshal, 2002). As stated by Goslin et al. (2020), masculinity versus femininity is another important cultural dimension. For example, China is a masculine society, which is driven by success. They can sacrifice leisure activities and families for work. Further, uncertainty avoidance defines the way society deals with the future of uncertainty. For instance, UK scores low in this dimension meaning that the country is not concerned with the future much and they like to change their plans with new information.
Values, ethics, norms and social mobility
Ethics refers to the discipline of morals which deals with the characteristics and activities of human. It remains accords on morals differentiated between wrong and right. The ethical behaviour discusses with what society or a group regards right conduct. For example, business ethics is a typical professional or applied ethics, which examines moral principles and ethical issues occur in a corporate environment Beugelsdijk et al. (2017). As stated by Kelley and Thams (2019), norms refer to the expectation of tight behaviour not the need for that behaviour. These are the ways a person expects all individuals to act in a certain situation. These are casual guidelines regarding social behaviour in a social unit. For instance, shaking hands, not standing near enough to an unfamiliar person are some norms. Goslin et al. (2020) stated that values are shared depiction of what makes a good society or a good life. They are lasting and important ideas or beliefs shared by the people of culture on what is undesirable or desirable, bad or good. Self-respect, freedom and tolerance are some examples of values. These have a significant impact on the attitude and behaviour of people. Lastly, social mobility refers to the movement of families, individuals or other groups of individuals among and between social sections in a community. It is a transformation in social status associated with the current social location of a person in a society. For example, a nurse leaves a healthcare organisation to join another.
The advantages and disadvantages of cultural diversity for MNC and its level of significance
Having a workforce, which is a culturally diverse workforce can lead to competitive advantage for the company operating in a foreign country. Better undemanding of domestic employees, customers, local clients, suppliers, the economic and political environment provides an advantage to the MNCs. However, acquiring a between understanding of different cultures is just an advantage if it leads to improved interpersonal communication (Kelley and Thams, 2019). As opined by Flory et al. (2016), diverse workforce expands the limit of the organisation by introducing new ideas, interpretations and perspectives. It results in improved flexibility, problem-solving skills and creativity in the company. Moreover, the exchange of perspectives and ideas ned open and free interpersonal communication. However, Beugelsdijk et al. (2017) stated that culturally diverse employees can lead to ethnocentrism and over-generalisation that inspires several culturally specific shortcomings. Increased intercultural competency and skills can reduce the emergence of over-generalisation and ethnocentrism. MNCs need to emphasise on cultural awareness, behavioural skills and cultural sensitivity for improving usual intercultural competency. Miscommunication due to lack of cultural competency can contribute to confusion, complexity and ambiguity. As per the viewpoint of Minkov et al. (2017), the advantages of a multicultural employee group can be understood by effective communication. When organisations recruit a diverse range of workers from different backgrounds, they bring new skills inevitably. Thus, overall diversity in the business is also improved.
Culture is the knowledge and characteristic of a specific group of individuals, explained by everything including language, cuisine, music, religion, arts and social habits. Understanding cultural values, norms and ethics are crucial for dealing efficiently with culturally diverse people in MNCs. Before expanding business overseas, MNCs are required to understand the cultural differences exist in the country so that effective business strategies can be developed that suit the country and its people perfectly. It is important to consider different determinants and dimensions of culture for better managing business globally.