Subject :Managing across borders
The Importance of Cultural Differences for the Global Multi-National Corporation (MNC)
Do cultural differences really matter in an increasingly globalised world?
In the essay, students must address the following key themes including: 1. Explanations and examples of each of the determinants of culture 2. Cross cultural literacy and the dimensions of culture 3. Values, Norms, Ethics, Social Mobility 4. The advantages and disadvantages of cultural diversity for the MNC and its level of importance.
Assignment Structure Requirements and Guidance:
1. Cover Page [This is essential and must be completed accurately. This is available on
2. Executive Summary - This should be a concise summary of the main argument and the conclusions made.
3. Introduction paragraph – A short paragraph which includes the background, scope and the main points
raised in the essay in order of importance. There should also be a brief conclusion statement at the end of
4. Main Body of the essay contains clear Topic Headings for each paragraph provided.
5. Appropriate paragraphing must be used – each paragraph should include detailed information, which
elaborates on the main points raised in the Introduction. This is where in-text citation is required and
reference is made to specific references and other information obtained from research.
6. Page Numbers must be used – this is best practice and ensures the essay is well presented and formatted.
7. Reference the sources used with correct in-text citation conventions. Follow the Harvard method.
8. Reference List at the end must be in the Harvard Style and be mainly academic Journal Articles.
9. The essay must be within the 1,200 word limit.
10. Check the safe-assign report and modify the submission if it is Medium or High risk.
Subject: Managing Across Borders
Assessment Title: The Importance of Cultural Differences for the Global Multi-National Corporation (MNC). Do cultural differences really matter in an increasingly globalised world?
Multinational companies used to face situation of cultural differences as they expand their business in different markets and deal with customers along with employees belonging to different culture. However, diversity in culture plays an important role overall business growth and development of workplace environment. The essay has highlight benefits with limitation of the cultural diversity, different determinants and dimension of culture.
Cultural diversity focuses on the quality of different or diverse cultures in opposition with monoculture, global monoculture or homogenisation of the cultures similar to the cultural decay. It is concerned with having diverse culture respecting difference of each other at workplace.
The essay sheds light on explanation along with the examples of the determinants associated with the culture. It also highlights cross cultural literacy, along with cultural dimensions the essay will describe values, norms along with the ethics to be followed in the MNC for improving business on global extent thereby with brief explanation over benefits and lamination of the cultural diversity at workplace.
Explanations and examples of each of the determinants of culture
Culture is a set of norms amongst a group of people taking together for constituting their lifestyles. In different nations culture usually is different. However, there are 6 key factors demining culture. Social structure being initial factor concerns with how society links amongst them and how people are effectively organised (Gowers et al. 2018). It is organisation’s responsibility of ensuring its observance while pushing expansion agenda in specified society. Religion being other determinant involves shared beliefs which society observes. Therefore, MNCs should understand society’s religion for providing services accordingly and operating business to cater their needs and protect their interest. Education is another determinant, which company must embrace for operating business to comply with laws effectively to gain competitive advantage. Language being other determinant is important as through its knowledge, communication process becomes smooth in MNC’s (Gowers et al. 2018). Ultimately political and special philosophies are key determinant of knowledge which helps MNCs to ensure tactics for use for encompassing market. For example, success of Walmart in operating its business in the Mexican market was backed by effective ability of the company in learning Mexican’s culture. By transforming shopping habits, forming fresh product sale in small amount Walmart controlled the market. Furthermore, it hired the local managers for controlling staffs that influenced people in incorporating American merchandising cultured which in turn enhanced their competitiveness within Mexican soil.
Cross cultural literacy and the dimensions of culture
Cross cultural literacy is phenomena that focussed on interpretation of ways in which cultural diversity affect business operations. While managing business successfully in different nations the multinational companies are required to focus towards various dimensions of the culture as indicated in the Hofstede’s model for cultural dimensions.
Power distance: This factor concerns with inequality tolerance in society (Favaretto et al. 2016). For instance, people in the UK are very conscious related to equal treatments of every individual that encourages McDonalds to comply with equality laws for managing their interest.
Collectivism vs individualism: As instance, people at UK prefer working in team and Americans prefer individualism (Bryant 2018). Therefore, MNCs such as Tesco must follow culture of people accordingly structure its workplace.
Femininity vs masculinity: For instance, masculinity is in dominant position and femininity is rising in countries like Australia and UK that could help MNCs such Amazon to promote men’s wear in other countries and women’s wear in Australia and UK to meet their needs (Hofstede Insights 2020)
Time orientation: For instance people are very conscious of time in US that is helpful for MNCs such as Morrison’s to design effective strategies such for ensuring fast delivery of services.
Values, Norms, Ethics, Social Mobility
In order to improve business in different nations MNCs are supposed to comply with effective norms associated with customer’s rights, and customers’ protection, data protection, adhere to effective marketing or advertisement ethics in order to protect the interest of the customers, employees and other stakeholders thereby and ensure effective social mobility in business (Karimi et al. 2017). It is helpful for the companies to gain social role thereby sustain business effectively. Furthermore, obedience of effective environmental laws and taking initiative of minimising use of resources could help companies represent strong corporate values to the society.
The advantages and disadvantages of cultural diversity for the MNC and its level of importance
With the increase in competitive rivalry in the business environment, it has become important for the corporate entities to manage cultural diversity in business it plays an important role in developing successful innovation in the business thereby helps the MNC in improving business activities on global context effectively and sustainably. However, though being remarkably important for MNC business functions cultural diversity possesses certain challenges or limitation that might disrupt business improvements.
Enhanced innovation is effective outcome of the cultural diversity positively being correlated to the diverse perspectives as well as experiences (Jana 2017). It helps MNCs involve invite of ideas from the employees belonging different cultural backgrounds while forming strategic decision of resolving any issue. Diversity also is proven of making group smatters as they for better and creative solutions as compared to homogeneous groups.
Effective bonding with diverse customers is key outcome people possessing effective cultural perspectives. Development in cultural diversity during sale of services or products by MNCs results in development of probability of interpretation of needs for much diverse audience.
Attraction and Retention
The cultural diversity within workplace is helpful for MNCs in gaining trust of stakeholders thereby retain them into business effectively. Occasionally they make ‘diverse’ hires however; it does not last due to improper relations maintenance amongst people (Minkov et al. 2017). Therefore, creation of truly inclusive setting involving welcome of differences could result in attraction and retention of more people belonging of different culture background. It is helpful for multinational companies in improving productivity, scope with profitability of the business.
One amongst key demerits of the cultural diversity is tendency of creating the language barriers. The social segregation usually happens when the speakers of the two languages that are mutually unintelligible live equally. The language issues generally are temporary in nature; however, resultant separation could endure, as demonstrated in the segregated neighbourhoods along with ethnic ghettos (Pager 2019).
Sometimes, workplace barriers could develop from the cultural diversity. The white staffs occasionally feel discriminated institutionally against within the diverse workplace perceiving the diversity instruments for being form of reverse inequity (Frijnsd et al. 2016). However, African-American staffs usually have feeling of being specifically discriminated against within diverse workplace, specifically during possess of all-white team of management in workplace.
It could take place as an outcome of linguistic and cultural diversity. Within Europe, as an instance, tension amidst Muslim minority along with substantially secular majority considers being frequently attributed into incommensurability of secular and Islamic values (Button, 2018). Tension developed by the culture is the thought for being exacerbated by the economic diversity, as the European Muslim populace frequently are disadvantaged within employment because of shortage of the educational opportunities.
In confirmation to the discussion made above, it could be deduced that as Multinational companies operate business in different markets or nations, it undergoes multiple cultural backgrounds. Dealing with customers and managing employees at workplace belonging to diverse culture in challenging and strategic task for MNCs. Therefore, focus over different determinants associated with cultures such as religion, education, lifestyle and others helps the companies manage their stakeholders thereby maintain a strong relationship with them in order to ensure sustainable growth in business. Additionally, cultural diversity, along with having key benefits also possesses certain demerits which are likely to create a negative implication over growth of MNCs.