The Impact of Culture on Globalization
An insightful examination of global playground lists down seven key factors for increased globalization. These include developments in technology, liberalization of cross border trade and resource movements, development of services that support international business, and growing consumer pressures. Other factors include increased global competition, changing political situations and expanded cross-national cooperation. There is evidence that globalization has an immense impact on culture and vice-versa (Daniels, John, Radebaugh & Sullivan, 2011).
The integration of people, products, ideas and other aspects of culture has had a tremendous effect on organizational success. According to Daniel et al, globalization has a profound effect on the environment, culture and political systems (Daniels, John, Radebaugh & Sullivan, 2011). The wave of globalization has been accelerated especially on policies that are focused on faster exchange of ideas, technological improvements and elimination of trade and cultural barriers. It is worth noting that as globalization becomes more prominent, the impact of culture becomes more significant making cultural awareness pivotal to organizational success. In addition, knowledge on the impact of culture on globalization is not only important to students, but is a critical success factor in the management of multinational organizations.
This implies that organizations that acquire the capacity to seamlessly integrate cultural values with forces of globalization are likely to attain competitive advantage. Effective cross border movement of technology, services, goods and ideas requires a better understanding of cultural values of both countries. This is more important for multinational national organizations because of their involvement in cross-border trade that transcends across different cultures. To achieve a comprehensive analysis of this topic, this research will focus on Home Furnishing Company because of two reasons. First, the concepts of culture and globalization apply to this organization, especially in its push to gain entry into new markets. Second, I understand the working culture and environment of the organization because I am a team member of its sales management division.
Background and Significance
Multi-National Corporations (MNCs) need to only understand their objective or motive which will influence the decision to invest in a country, but also the cross-cultural differences in their intended markets to make seamless entry into those markets. Kumaravadivelu explains that most of MNCs have multi objectives to make investment in host countries, such as reducing production costs by cheap labor and cheap cost of transportation, advantages of tax benefits, gain technological knowhow and benefit from government policy (Kumaravadivelu, 2008). In the examination of globalization Jeffus sought to delineate underlying issues behind the extent to which organizations participate in a host country (Jeffus, 2007).
Penetrating into overseas market is an uphill task for international business organizations. This is because of the diversity of our social-cultural differences, which greatly define tastes and preferences. Home Furnishing is one organization that has faced the hurdles of international marketing for instance, the penetration of in European market. Most firms assume the penetration in an overseas market is an uphill task; however, at times that is not always the case. Though people speak different language and have different cultural orientation, this does not mean they will not have similar tastes and preferences.
Cross-cultural differences not only have impacts on international trade but also to the domestic market. According to Tian, the changed world makes marketing a cross-cultural process that requires marketers must be well informed with cultural differences nationally, locally, and ethnically to be the winner in the 21st Century market (Tian, 2009). Home Furnishing must realize that venturing into the European market means that they are moving from one culture to another. Therefore studying the market differences in cultural desires of these two groups would positively influence their organization learning perspectives in Europe.
Most scholarly studies allude to the fact that there is need to develop strategic management systems that have positive learning outcomes. Analyzed from the perspectives of cross-cultural management, this report will take case of market in Europe and the corresponding business globalization concepts for consideration by the company. To achieve this intended comparison, the paper will employ descriptive research method via literature review to present workable recommendations.
The objective of this report is to analyse the feasibility of venturing into European market through Germany by a strategic alliance and propose effective approaches in addressing both trust and cultural differences issues. The conventional organization learning mainly applies to Western corporation and because European market attracts MNCs because of its large market, it would be significant that the learning process for local employees is highlighted to existing and potential investors. Another factor that the paper will highlight is the cultural practices of Germans in order to understand how diverse the European market works. Further, recommendations will be presented in this after examining the cultural issues and effective strategies in minimizing conflict between culture and forces of globalization.
Home Furnishing is a horizontal organization, with a less-defined chain of command. The employees play important roles on the way in which decisions are made. This implies that the organization adopts a team work approach in which employees work in teams, with everyone on the team having input. As a sales team leader, I am responsible for nurturing a team spirit and ensuring that specific objectives of the team are achieved and overall sales team goals are met.
A review of the course study materials reveals that key concepts learned widely apply to the organization. These include the impact of globalization on culture, benefits of globalization and the challenges of conflict between forces of culture and globalization. The numerous opportunities presented by globalization appear to tap into a natural sense of entrepreneurialism that is present to a surprisingly large extent in countries that have never before been viewed as being free-market capitalist. The first concept learnt from the lesson materials is the impact of culture and globalization in business environment. This is because it is through the adoption of trade reforms towards more open and free markets that enables these nations to join the emerging global markets and provide businesses with market opportunities in diverse cultural regions. The need to operate within the accepted international rules of trade, adopt supranational recognition of intellectual property restrictions and reap from the benefits of regional and international trade agreements constitute some factors have pushed the closed market countries to develop entrepreneurship.
Another relevant concept learned is that business success across diverse cultures has also been equated to benefits of globalization through diversity. Workforce diversity is the interaction among people of different cultures, ethnic groups, gender and age who work together in an organization. The worlds increasing globalization has greatly promoted workforce diversity since people have become part of the worldwide economy with the aim of increasing the level of creativity and to maximizing the profitability of organizations. According to Morgan, diversity is about acknowledging the differences in the way different people approach various issue based on their class, age, gender, cultural background, and race (Morgan, 2006).
Business community and culture have for decades embraced the fact that good business should conform to standard ethics in business management. Appreciating diversity in organizations demand that each individual form a bigger part of the business entity yet they must work together knowing that their objectives and goals are far greater than their differences. It is a major component of business life and forms the very foundation of business stability (Morgan, 2006). Our role in this chain is to facilitate and accelerate the rate at which diversity happen within our businesses. In the cacophony of business management, diversity plays the critical role through which a new organizational paradigm for equality policy-making is anchored. This is because diversity management influences communication cultures, precipitates change, demands the positive contributions of the stakeholders, and determines the levels of productivity and employee satisfaction. A congregation of the above factors is a pointer to organizational success and levels of profitability.
Within the policy of communication, an organization must institute management techniques that have the capacity to overcome cultural and language barriers that constitute the major bottlenecks to effective communication. Ineffective communication results to a state of confusion, lack of employee motivation, lack of employee commitment and the low morale (Morgan, 2006). Work force that comprises of individuals from different backgrounds must coexist in an atmosphere that enhances both respect and understanding. The culture of communication within an organization remains the central factor in determining the levels of work diversity management.
Globalization demands the concept of equality in human resource management and is a pivotal determinant in diversity management and business success. Equality on other had is defined by Kumaravadivelu as “ensuring individuals or groups of individuals are treated fairly and equally and no less favorably, specific to their needs, including areas of race, gender, disability, religion or belief, sexual orientation and age” (Kumaravadivelu, 2008). Equality policy making therefore ensure that communication culture and models are modeled in a manner that take keen cognizance on the diverse groups within the organization. The common challenge that arises from diversity is that different people within an organization have different backgrounds (Kumaravadivelu, 2008).
Discussion and Implications
This section of the plan will revolve around the need to adapt my brands to meet local and regional culture because of the understanding that effective marketing must not only act as a means of linking items that are part of product line and emphasizes the individuality of product items, but also take cognizance of the cultural values of the intended markets. This emphasis can only be achieved in instances where products items fit into the local or regional culture of the target market.
In addition to the above, the adapting Home Furnishing Brands to fit into the European culture is a competitive advantage that is can be adopted by the firm. In essence, this means that a firm that outperforms the others in the primary goal of performance-profitability-has competitive advantage. Value added competitive advantage arises in instances where competing firms attach strong cognizance to the understanding of local or regional culture before launching their product lines (Kotler and Amstrong, 2007). Companies succeed in branding strategies that their rival because their products are positioned to capitalize on their unique characteristics of a local or regional group and which, in one or more aspects, their rivals find hard to emulate. This competitive advantage gives it a basis for outperforming competitors because of the value that firms are able to present to the customer (Kotler and Keller, 2009). These should define the marketing and commercialization plans of the company.
Despite the understanding that an insightful analysis of organizational behavior is key to the achievement of organizational objectives and attainment of competitive advantage, the case of Home Furnishing reveals the company needs to adopt a number of key issues in organizational behavior. These include emphasis on cross-cultural communication, teamwork, diversity management, and strategic planning. The inability to communicate effectively and efficiently with team members and the team leader negatively influences the achievement of project objectives and may diminish the firm’s capacity to blend itself to the European culture of business management. Effective communication remains the most critical management tool in enhancing cooperation and understanding amongst employees across diverse cultures. The process must therefore encompass effective communication culture that is smooth, clear and devoid of misinterpretations.
Planning involves the creation and implementation of strategies on how to improve the quality and efficiency of work. Proper planning allows for effective time management and saves cost and resources. Firms operate in environments encompassed by high risk and uncertainty and as such need a platform to provide principal rationale for the application of strategic planning and forecasting. Furthermore, success in business is primarily depends on forecasting accuracy in planning. Firms must be equipped with the capacity to anticipate and adapt appropriately to environmental changes to hold sustainable advantage over their competitors. These challenges are more profound when firms are gearing towards gaining entry into a new cultural set-up.
Furthermore, strategic adaptation remains the key to achieving organizational efficiency and maintaining a sustainable competitive advantage over competitors. This is because it encompasses formal planning that provides benefits that ultimately produce economic value, ensures the capability for business planning and management and enhances strategic focus and risk management (Fink, Neyer & Kölling, 2006).
A number of research works have paid cognizance to the need for linking measures to actions as a key attribute of good performance in organizations. The quantified objectives are the attributes of the strategic planning process and are best aligned together. The translation of the activities into action plans for the individuals or groups also needs are aligned to the strategic intents. This is because the alignment of the activities and plans has been demonstrated as resulting in improved organizational performance. According to Morgan, tracking the critical process indicators along with the outcome measurements provides individuals assigned with some decision-making space that is ideal for improving performance (Morgan, 2006). Thus, although the outcome measures for objectives are ideally predetermined during the strategic planning process, the indicator metrics should be structured around the action plans developed for the individuals and groups towards the attainment of the envisaged objectives.
However, it is discerned from the report that there is need to integrate strategic planning with a greater focus on cultural knowledge in the entire internationalization process. Project managers and team members must read from the same script and adopt collective approach to managing cultural divisions. Firms operate in environments encompassed by high risk and uncertainty and as such need a platform to provide principal rationale for the application of strategic planning and forecasting. Furthermore, success in business and project management primarily depends on forecasting accuracy in planning of a firm. Firms must be equipped with the capacity to anticipate and adapt appropriately to environmental changes to hold sustainable advantage over their competitors.
Furthermore, the organization must take cognizance of diversity. Workforce diversity is the interaction among people of different cultures, ethnic groups, gender, and age who work together in an organization. The worlds increasing globalization has greatly promoted workforce diversity since people have become part of the worldwide economy with the aim of increasing the level of creativity and to maximizing the profitability of organizations. The psychological understanding of different personality traits has the capacity to affect the workplace because other employees may perceive some differences as negative and thus cause discomfort to others.
This would not only affect the spiritual culture of the organization but may also affect the primary collective responsibility and team work within the organization. In the understanding that appreciating diversity in organizations demand that each individual form a bigger part of the business entity yet they must work together knowing that their objectives and goals are far greater than their differences, it is important to ensure diverse cultures are promoted. It is a major component of an organization’s life and forms the very foundation of organization’s stability. This issue becomes more poignant in the analysis of the company’s case especially when viewed from the perspective of interpersonal relationship among the team members in its resolve to venture into the European market.
Potential Risk Factors for Consideration
Learning at corporate level can be either an individual process or a collective effort initiated by the management. Knowledge gained is a product of organization learning and diverse social environment that brings different people to work in one place offers the best opportunity for cultural integration. Employment of a multi-cultural workforce of the company in the development of the project will definitely call for a number of initiatives. The management of cultural differences will be a critical positioning tool that bestows consumer loyalty and oils their economic mantle.
Technology and Competition
Modern day business operations rely on information and communication technology and this is the main driving reason behind home furnishing company push to forge an alliance with an established firm in the international markets. The firm must harness ICT as a resource for driving strategic management. Online social networking industry has undergone transformation for over 80 years following scientific and theoretical frameworks via which community interact and connect in relationships. In modern business environment, business leaders consider ways through which they can add value and make more profit by analyzing these relationships. Organization learning should recognize the power of technology in product improvement and enhancement of information sharing and expanding market avenues. Despite the fact that there is stiff competition posed by high end competitors, the strength of this business venture lies on the correct identification of the market segment.
This analysis provides meaningful insights on the challenges as well as strategies the home furnishing company must examine and adopt to not only gain entry into foreign markets, but also develop an effective strategy in gaining competitive advantage in the new markets. It is noted that strategy selection forms a key factor gaining entry into new markets.
Recommendation 1: Take Cognizance of the Forces of External Environment
The ability to synthesize the forces of external environment in a new cultural set-up is a determiner of a business entity’s ability to integrate itself into the new culture. The selection of the strategy should be followed by a clear delineation of the cultural vision. Furthermore, there is need to develop flexible structures in responding and adopting change that takes closer looks into the cultural aspects. Leaders of change must have the capacity to develop key tactics in dissipating resistance to change. The case provide valuable lessons on the need be flexible to external forces on the execution and implementation of an expansion plan. This forms an important strategy in anchoring new approaches in a new culture.
Recommendation 2: Pay Close Attention to Cross-Cultural Management
The result of the report proposes that company must pay cognizance to key issues in internationalization issues such as trust and cross-cultural management in order to reap a bundle of technological evidence from the envisaged alliance. These are key issues that must be entrenched in the project to ensure delivery and achievement of the set objectives. However, these key issues must blend seamlessly with each other and aim towards the pursuit of excellence by developing key skills and traits among team members. These integrate a set of practices aimed at the promotion of improvement and long-term planning. The project philosophy must center on developing strategic intents, and thus entails greater team involvement to facilitate teamwork.
Recommendation 3: Focus on Organizational Learning
Conventional organization learning is a process whose proper organization and management brings service quality in business entities. Home Furnishing must distinguish the main components of organization learning because it must identify specific sources of operational hitches. Most organizations identify the organization, the people, and knowledge as the main components of organization learning.
Organization learning should be tied to structural organization framework and in order to succeed as a business. The cases of decentralized organization structure require a well-laid communication channel to convey message from top to bottom. Horizontal communication system requires flat communication system to necessitate passage of information directly from CEOs to junior staffs and vice versa.
Recommendation 4: Be Sensitive to the Complex Local Context
Effective approach to entry in a new cultural environment involves the gaining of the knowledge of the social phenomena by appropriately paying attention to the socially constructed meanings that businesses face in the context of its operations. Success in cross-cultural operations involves being sensitive to the challenges of the local environment, considering the cultures and roles of close associates and serving their needs, while at the same time having determination to make a positive contribution. This means that to effectively achieve the intended goals and purposes, there is the need to fully come to the realities of the existing local context.