How Corporate Culture Influence Multi-National Enterprises’ Global Operations?
How Corporate Culture influence Multi-national enterprises’ global operations?
Introduction
It is undeniable that competition in the business area is very fierce. People in the business world must find the best way in order to survive. Business, nowadays, expand their business to other countries as globalization on the rise. They need to remain competitive in a global marketplace with well coordinated and tightly controlled worldwide operations. For multinational enterprises (“MNEs”), the corporate culture is one of the core elements bringing success to its businesses. Yet, cross-cultural conflicts also could hinder the MNEs from optimizing its worldwide operations. In this paper, we will discuss how corporate culture influences the MNE’s global operations.
Control mechanism
Globalization brings challenges which are often under-estimated. Maintaining growth in the MNE’s international business activities requires structural responses, but the evolutionary process will differ across MNEs. The size of organization, rate of expansion, country of origin, footprint of internationalization, management policies and etc determine the required changes in its corporate culture. Many MNEs have difficulty in getting the local management to adhere to the value of the group. Thus it is necessary for MNEs to implement effective control mechanism. With reference to William Ouchi (W. Ouchi, 1981), he suggested that the control strategies could be classified as (1) bureaucratic control and (2) clan control (D. Ulrich, 1997). Despite the control strategies focus on different aspects, both are vulnerable to faulted promotion of the MNE’s corporate culture.
1. Bureaucratic control
Traditionally MNEs emphasize more formal, structural forms of control. Structure results in hierarchies, functional authority and increasingly prescribed job descriptions, selection criteria, training standards and compensable factors. Human resources activities act to implement
Introduction
It is undeniable that competition in the business area is very fierce. People in the business world must find the best way in order to survive. Business, nowadays, expand their business to other countries as globalization on the rise. They need to remain competitive in a global marketplace with well coordinated and tightly controlled worldwide operations. For multinational enterprises (“MNEs”), the corporate culture is one of the core elements bringing success to its businesses. Yet, cross-cultural conflicts also could hinder the MNEs from optimizing its worldwide operations. In this paper, we will discuss how corporate culture influences the MNE’s global operations.
Control mechanism
Globalization brings challenges which are often under-estimated. Maintaining growth in the MNE’s international business activities requires structural responses, but the evolutionary process will differ across MNEs. The size of organization, rate of expansion, country of origin, footprint of internationalization, management policies and etc determine the required changes in its corporate culture. Many MNEs have difficulty in getting the local management to adhere to the value of the group. Thus it is necessary for MNEs to implement effective control mechanism. With reference to William Ouchi (W. Ouchi, 1981), he suggested that the control strategies could be classified as (1) bureaucratic control and (2) clan control (D. Ulrich, 1997). Despite the control strategies focus on different aspects, both are vulnerable to faulted promotion of the MNE’s corporate culture.
1. Bureaucratic control
Traditionally MNEs emphasize more formal, structural forms of control. Structure results in hierarchies, functional authority and increasingly prescribed job descriptions, selection criteria, training standards and compensable factors. Human resources activities act to implement
References: 1. D. Ulrich (1997), Human Resource Champions: The Next Agenda for Adding Value and Delivering results, Boston, MA: Harvard Business School Press 2 3. Peter J. Dowling, Marion Festing & Allen D. Engle, Sr (2008) , International Human Resources Management, 5th Edition, p. 41-43 4 9. Wenli Yuan (2010). Conflict Management among American and Chinese employees in Multination Organizations in China. An International Journal Vol. 17 No. 3, pp 303 10