HR and Corporate Culture
Global Strategy is very important. For the corporation, Global Strategy is important for the corporation because operating in a new country will is essentially a newly opened market that would drive both sales and profits. For many corporations that have “exhausted” the market or is competing in mature markets, this is a welcome addition. Foreign markets also offer valuable resources that may make the corporation more competitive. For example, operating in low-wage seeking countries such as China would make production more cost effective. If costs are lowered, customers naturally benefit. A corporation operating in this scenario will pass on its cost savings to the consumer, making its market position more attractive. If it can do so successfully, then operating overseas has given this corporation another layer of comparative advantage over its competitors. Trade between countries is also a worthwhile activity for international organizations because in the long-run it brings the cost of products and services to a more competitive level, thus helping provide equitable distribution of wealth to all countries.
Culture is defined as the collective program of people and the distinct collective thinking separates a group of people from another group. Culture can also be defined as a way of thinking, of feeling, of reacting to internal and external factors and can be conveyed using symbols. In many societies, culture is a learned behavior and in business terms is a critical factor for success. Culture is important because it affects the behavior or the consumer; it influences consumer demands and decision making, and determines how a brand is established. For MNEs the understanding of culture drives the type of management framework and managerial decisions that are taken by an organization. According to Dr. Geert Hofstede (2013) in his article “Integrating Corporate Practices and National Cultural Values” the national culture relates to a person’s core values and is learned by the individual early and is held deeply. On the other hand, organizational culture is learned by the individual and is composed of a set of guidelines that are necessary for learning and fulfilling a particular job or task.
For MNEs, the competitive advantage of adapting to local environments is held high because it is very difficult to succeed when cultural barriers are faced. Management strategies that include managing Human Resources and Culture (both national and corporate) include strategies such as employing locals, by having a fluid organization of globally adept managers, of recognizing that flexibility in the work place is as important as any other tool a corporation may have. The company should succeed in assimilating its corporate culture and the different national cultures of the countries it operates in. This way, the company can successfully mesh the practices that are effective as a corporate culture with the intricacies that must be known for each respective national culture. The company will retain the competitive advantage, proving that the fittest, in this case the quickest to adapt, shall survive.
Hofstede, G. (2013) Integrating Corporate Practices and National Cultural Values. Retrieved from http://geerthofstede.nl/dimensions-of-national-cultures
Lynch, R. (2012). Global Strategy. Global Strategy. Retrieved from http://www.global-strategy.net/categories/Whatisglobalstrategy
Quick MBA (2012). Global Strategic Management. Retrieved from http://www.quickmba.com/strategy/global/