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Managing Organisations

“A national culture can be defined as the collective programming of the mind acquired by growing up in a particular country” (Hofstede, 1991)” National culture contains the foundations and key elements of culture but is termed national to stereotype and show the key features of a particular nation. The culture of a national is built up by several components usually consisting of language, political context, social organisation, education, values and attributes, religion, legal context. (Tayeb 1989)

Although these factors have usually been considered by organisations within their own cultures the ever increasing impact of national culture among multinational firms and societies themselves has brought about new considerations for organisations within their own cultures as well as multinational organisations within others. As we can see from the quote above by Hofstede he is describing above how national culture can be imbedded in a person or societies mind set. In other words how the history, beliefs values and attitudes of the nation are embedded into their society.

The following essay will discuss what elements are contained within a national culture and what factors affect it. We will also go into detail on how National culture affects an organisation and how there are two broad debates between convergence

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and divergence in terms of how researchers feel it effects organisation. Examples cases from several organisations will be also used to describe the kind of problems that organisations have incurred or could have incurred with national culture. Firstly before we discuss the effect on organisations of national culture we need to understand the components.

However there is a problem in it is not easy to clearly define the characteristics of a culture especially in terms of comparison with other cultures. Hoftsede uses the four dimensions of culture to solve the problem of comparison however this will be discussed later on in the essay. A common basis in which is used to describe culture is described by Tayeb 89 who describes the culture environment of an organisation He concludes that there are several complex and diverse factors that need to be taken into consideration. These are language, political context, social organisation, education, values and attributes, religion, and finally legal context.

Lets firstly take Language. Language is the first expression of a nation culture and can act as the content and nature of the culture it represents. For example the Italian language may give off a sense of historic artifacts, and romantic stylish settings. A middle eastern language will give off a completely different expression to that of Italian. However a major concern with language is there are over 3000 different ones among a number of nations of less than 200.

This can make it a very big challenge for businesses to communicate among other cultures outside their own. Although luckily for business improvements in technology allows for more speeder international communication and the ability for technology to be able to help in translation. However with technology enabling wider access to different cultures it is still important for management to have the access and ability to be able to communicate where technology can’t help. If companies are not able to communicate within their international market then they are very unlikely to meet their potential and at worst fail completely.

Religion can also have an effect on a culture and organisation. Religion can vary greatly from one culture to another. Lets take for example Hinduism. Hinduism is very wide spread among the Indian subcontinent and can have a very big impact on not only the local economy but also the for organisations coming in from outside the local economy. Hindu ethics tend to be based on keeping a bond within a family unit, this means that in terms of the economy many of the businesses are family owned with hierarchies based on family relationships. This can prove difficult for outside companies to break into the economy with much of the workforce working within its family and also the hindu idea of keeping within its own culture and having a resistance to outside cultures such as western societies.

Hindu’s also have a veneration of the cow. This means that due to the belief of the cow being a special symbol then it is against their belief to undergo the killing and consumption of cows. This religious belief would cause problems for companies wanting to supply beef products to the culture. A classic example would be Mcdonalds. When McDonalds went into the country to sell its product it clearly had to consider the effect of national culture. As McDonalds main product is the BigMac they had to consider the culture they were entering and so therefore in the Hindu culture they decided to sell chicken products instead in the effort to succeed among that culture.(McCarthy Cdrom, financial time 17th may 1998)

Another example of national culture effects with McDonalds would be when they entered the Asian market. McDonalds had to adapt their marketing. For many years McDonalds had used a white faced clown to promote their product. However in certain parts of Asian a white face represents death. So obliviously McDonalds didn’t want to promote their as being death. So therefore to succeed within the Asian culture they have had to adapt their marketing strategies. (P.Jones , Loughborough University 2000)

The Political context of a national culture can also affect an organisation. The business government relationship can affect organisations greatly. This relationship varies greatly among different cultures. The relationships can go from one extreme to another. Take for example the socialist cultures of the Russians/Chinese within these economies it is very hard to determine which enterprises are government and which are commercial. In these cultures the government controls many of the businesses.

Railways, electricity, food suppliers would all be operated by the government with any commercial enterprises being closely monitored and regulated. However among western capitalist economies it is clear which are government controlled and which are commercial enterprises. There are a greater amount of opportunities among these nations for enterprise and rules are slightly more flexible. Countries such as the United Kingdom in the past 7 year have recently sold off rights to railways, electricity and have a very open economy with plenty of opportunity.

But as businesses are frequently becoming international as well as domestic the business government relationship is becoming a critical factor. It is important that the organisation tries to avoid conflict as it can easily occur between the international business and the home country. The objectives of the home national are likely to be in conflict with that of the business. An international organisations main objective is likely to maximise its potential profit and exposure on a worldwide basis. However it is likely to conflict with the home nation’s interests. They are likely to be concerned by their economic growth, employment, and domestic growth.

If in anyway the home government feel that the firm is affecting this then it is likely that conflict may occur as a result. Therefore it is a good idea for organisations undergoing investment within a nation to understand the government’s objectives. A nation is not likely to welcome a multinational firm should it be bringing in its own staff from its home nation and also affecting the businesses of the nation it is investing in. The multinational firm needs to be employing localised workers and working within the nation to help benefit their economy and growth as well as the community in which they work. Many multinational firms tend to offer sponsorship to local schools/college or local sports teams to gain acceptance and approval of the local community and government. An example of this would be European firm C & A (Founded in Holland In late 1800’s).

Before they pulled out of the English market in 2000 they used several tactics to keep a good government business relationship. One of the biggest high profile tactics used by C&A was to enter a sponsorship deal with Loughborough University in 1991/92 and produce a degree course based on retail management (www.Lboro.ac.uk). This Sponsorship allowed bigger funding into a degree course as well as supplying the economy of Britain with specialist and highly trained workers. All of which did not come as an extra a cost to the government. Therefore C&A are providing a benefit to the economy and growth of the country.

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