The key to being an effective manager is understanding the concept that all people are different. As such, in some respects, they need to be managed as individuals. This is not to say a manager cannot have a particular style or approach to management, but the idea that a style can be tailored to meet the needs of a particular group. This becomes even more important with multinational companies. In fact this idea becomes the foundation of effectively managing groups of people in different cultures. The goal and understanding should be adapting the organizational Culture to the culture of the region.
According to Alvesson, (2002) Organizational Culture is how companies share ideas, values, rules, and expressions as a means to doing business. Conversely, culture within social structure is “the learned aspects of human society” that distinguish groups from each other (Jenks, 1992, p. 8). What becomes necessary when managing at the multinational level is the understanding that these two ‘cultures’ must co-exist in order for the business to be a success. The four value dimensions put forth by Geert Hofstede provide a solid framework to begin a cross-cultural analysis for management purposes. The four dimensions revolve around distinguishing countries from each other based on values (Geert, n.d.).
While all the values are important to the framework I find the first dimension of individualism-collectivism the most intriguing when considering the management of multinational corporations. As Hofstede defines this value represents “the degree to which people in a country prefer to act as individuals rather than as members of groups” (Hofstede, 1994, pg. 6). This is imperative as a manager tries to implement an ideology or methodology into a new culture. Here the manager gets the most information that can be used to tailor their approach.
There can be consequences to companies that do not put a significant amount of importance on culture as they move into new markets. An article released earlier this year in the Wall Street Journal spoke about Wal-Mart backing down its growth in China. As Chief Executive Doug McMillion said at a news briefing, “We’ll grow, but our goal is not to be the biggest retailer in China. Our goal is to be the most trusted” (Burkitt, 2015). It appears that the Chinese society withdraws from inclusion in companies or trends that are unknown or different from usual. This resembles what Hofstede would call ‘uncertainty-avoidance’. It sounds that Wal-Mart realized this before too much growth in China occurred. Had that been the case they may not have won over the Chinese culture and instead scared them away from the way in which Wal-Mart does business. Of course the opposite can also happen. Too much of a focus can take away from the core reason the company is doing business in a particular company. That could range from sales to research and development. While it would be an achievement to embrace the culture it would be pointless if the work is not accomplished.
References
Alvesson, M. (2002). Understanding Organizational Culture. London, GBR: SAGE Publications Ltd. (UK). Retrieved from http://www.ebrary.com
Burkitt, L. (2015, April 29). Wal-Mart Says It Will Go Slow in China. Retrieved December 2, 2015, from http://www.wsj.com/articles/wal-mart-to-open-115-stores-in-china-by-2017-1430270579
Geert Hofstede. (n.d.). Retrieved December 2, 2015, from http://www.geerthofstede.nl/dimensions-of-national-cultures
Hofstede, G. (1994). Management Scientists Are Human. Management Science, 40(1), 4–13. Retrieved from http://www.jstor.org/stable/2632841
Jenks, C. (1993). Culture. Florence, KY, USA: Routledge. Retrieved from http://www.ebrary.com
