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Multinational Corporations Cultural Factors
A multinational company must consider an abundance of characteristics when entering a new market or beginning fundamental cooperation with another culture can be described. Even though it is problematic to foresee and estimate all such nuances, managers should make significant efforts to become flexible in international business relations (Moran et al., 2007). Among such issues can be considered customs and traditions, specifics of behavior, attitudes toward the roles of different people in society, and the extent of tolerance, morality, and ethics.
In this case, there is a logical need to divide this type of international business cooperation into at least two levels. In the case of transnational cooperation at the level of financial or commercial services, remaining at the level of communication and logistics most often interacts with people whose leadership qualities are universal (Cohen & Bradford, 2005). Such leaders cultural intelligence level is high, and they do not hesitate to respect others cultural particularities or to exclude their customs and norms from interaction processes. An example of this type of cooperation would be general international trading when differences between countries often do not play a significant role.
The concerns become more complicated at a lower and denser level of cooperation. For instance, these issues arise when a company wants to enter another countrys market or actively explore the profitability of investments. In this case, a companys leaders from a country external to a particular market face the challenge of building relationships in a foreign culture (Moran et al., 2007). It causes various difficulties; for example, the favored method of giving women high managerial positions because of their higher commitment is almost unacceptable in Muslim countries (Sczesny et al., 2004). In addition, corporate mistakes are prevalent because of the difficulty in understanding the local business practices and mentality or the inability to see new opportunities in time.
Difficulties interpreting local laws and moral and ethical norms can be no less critical problems. An example is the lack of success of the global McDonalds corporation in China. Due to the inability to follow the actions of local managers and comprehend their culture and behavior, the company was forced to sell most of its business in this country (Ronggang, 2017). Thus, the deficiency of leadership in the region and incomplete understanding of Eastern culture resulted in a financial and reputational loss.
The choice of the management style that can be implemented to overcome possible cultural barriers that harm international business relationships is challenging due to the peculiarities that every region has. The critical issue is the client-centered approach to business and establishing relationships in international corporate communication (Cohen & Bradford, 2005). In other words, the manager should be flexible in their contact with people from another culture and react to their changes in attitude on time. From one point of view, this management style aims to establish close contact with business representatives from another culture, which increases the corporations profitability. From another perspective, this approach requires much effort from the manager, and a positive result is not guaranteed. It adapts to the management style to cultural differences controversial. At the same time, the domestic management style needs to become more flexible and consider these peculiarities when going global. Otherwise, the corporation will not lose potential clients and markets due to misunderstanding the target audience from another cultural background.
References
Cohen, A. R., & Bradford, D. L. (2005). Influence without authority. John Wiley.
Moran, R. T., Harris, P. R., & Moran, S. V. (2007). Managing cultural differences: Global leadership strategies for the 21st century (7th ed.). Burlington, MA: Elsevier.
Ronggang, C. (2017). Why once-loved McDonalds now has an image problem in China. SixthTone.
Sczesny, S., Bosak, J., Neff, D., & Schyns, B. (2004). Gender stereotypes and the attribution of leadership traits: A cross-cultural comparison. Sex Roles, 51(11-12), 631-645.
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