Global Business Environment

Discuss the difference between the concept of ‘national’ and ‘corporate’ culture. Analyse the reasons why cross-cultural differences can act as an impediment to business success. Throughout this essay I am going to look at how culture can differ within an organisation on a national level as well as a corporate level and then go on to suggest ways in which theses differences can affect the success of a business. Firstly I feel a few key terms need to be defined and clearly understood to allow the question to be answered properly.

In my opinion theses terms would be ‘national’ and ‘corporate’ culture, along with cross-cultural differences. Even within a culture there are many groupings and levels that are present within each individuals mental outlook. These include cultural layers such as, national culture, regional culture, gender, generation, social as well as corporate culture. I will touch on these all very briefly in the main body of my essay but concentrate mainly on the national and corporate layers of culture. (www. tamu. edu)

National Culture can be described as, “ The result from one nation attributing characteristics to another, which can result in stereotyping and prejudice. National culture needs to take account of differences in the groups and communities which all contribute to national culture. ” (www. pearsoned. co. uk) If stereotyping and prejudice are occurring in the workplace this can have many detrimental effects on employees and their motivation or ability to work as part of the organisation. I will pay more attention to how this could possibly affect business success later on in the essay.

Corporate culture can be described, “ The basic assumptions and beliefs held by employees about the organisation they work for. ” (www. ucs. com) Corporate culture will affect the interaction between diverse groupings within the workplace and like national culture, is very likely to have and effect on how the workforce perform. I am going to start the main body of my essay providing an outline of the concept of national culture and move on to the concepts of corporate culture, before comparing both of them to find out any ways in which they may be different.

I am aware that not all firms are going to view success in the same way and ways can vary differently from firm to firm. For clarity I will touch on how different firms could view the term ‘being successful’ and measuring their own success. I will then look at what those aspects that may be considered as a cross-cultural difference and how these factors are going to impede the organisation’s success. Finishing with a few basic ideas on how to avoid the problems brought about by cross-cultural differences and how to manage these to become a potentially more successful organisation.

Finally I am going to conclude on any findings from my research and in a short summary, link those findings back to the essay title. A national culture attributes certain specific characteristics from one nation to another. This can be in the from of stereotyping and grouping all members of a nation together in the same way. An example of national culture could be that the British drink far too much and have a tendency to become violent, giving rise to hooliganism especially in the context of football. To tarnish all football fans with this prejudgement would be incorrect as only a small minority are responsible for causing the trouble.

On the other hand corporate culture refers to an individuals own personal views concerning the organisation they are working for. These views and ideas are likely to be brought about from the employees own experiences in the workplace and are probably going to vary and change over time as they work for the organisation. The difference between national and organisational or corporate culture would be that national culture is more associated with the nation as a whole and less about the individuals ideas. Where as corporate culture deals more with the individuals personal outlook on things concerning the work environment.

The prejudice that comes with national culture may be forced upon the individual which is not the case for corporate culture, which allows the individual to build up beliefs through their past experiences. (www. tamu. edu) With globalisation becoming a much more common factor to consider for many businesses, this poses the problem of cross-cultural differences as barriers that have to be overcome if the firm is to stand the best chance of being successful. Globalisation can have huge benefits for a firm’s success if it is carried out in the right way and attention is paid to details such as cultural differences.

However the firm could end up paying heavily if they over look the importance and significance of cross-cultural differences for the employees they are working with. Cross-cultural differences may include such issues as the communication used and methods of transferring information between cultures and departments, the standards used in different areas, different cultures are likely to have different ways of solving the same problem, also the area within the organisation over which any information is dispersed. (www. itapintl.com)

The problem if communication between cultures is a tough one, as the same gestures is likely to have different meanings in different areas and cultures. A good example of this would be the fact that in Bulgaria shaking your head up and down means no rather the side to side in many other places. Along with gestures, words and phrases can have different meanings which could cause confusion when carrying out business across cultural lines. Also different cultures make different assumptions when faced with the same situation.

In international projects these differences could make or break the outcome from the start if processes and agreements are not clear to both cultural sides. Miscommunication is thought of as the largest cross-cultural barrier that has to be overcome by an organisation, to achieve potential success. (www. itapintl. com) The above problems would be made more aware at the national culture level but it is important not to forget the cross-cultural differences will still be occurring at the organisational or corporate level.

These differences are mentioned below. An organisation is unlikely to be structured in exactly the same way if set up in more than one country and this is going to affect the way in which day to day tasks are carried out in different places. Such things as distributing power and information throughout departments in the workplace are very varied in different countries. An example of this would be the way in which information is passed through a firm in Germany compared to that of an American firm.

The German firm is likely to keep information within set departments and only inform those who need to know. Whereas as an American firm is likely to move information across departments more freely. (www. itapintl. com) When talking about success in business there can be many interpretations and people will view success differently. Especially in different cultures when looking at the emphasis that is put on financial success it is clear to see it varies greatly. A good example of this would be the different outlooks between the Chinese and American culture.

America places business as it’s main priority with success being seen as achieving wealth. Economics are put first in the American outlook and the culture is very individual based. This places large emphasis on financial gain as being the measurement success. (www. 1000ventures. com) This differs from the Chinese outlook with China placing emphasis on building relationships and respect is given for wisdom and ability. This is not to say that China view no success in financial gain, as this is the baseline for business activity. (www. 1000ventures. com)

Schneider and Barsoux state how, “each country has its unique institutional and cultural characteristics, which can provide a source of competitive advantage at one point, only to become liabilities when the environment changes. Managers therefore need to evaluate the extent to which national culture can interfere with their company… ” (Mullins ’07) This shows that if national culture is nurtured in the correct fashion by management then it can most certainly be advantageous to a business’ success. However the flip side to this could be that if nurtured incorrectly projects undertaken are likely to be unsuccessful.

It is proving to be a very important issue that has to be looked at and approached with care by managed as in the United States the Department of Labour released statistics showing how between 1985 and 2000 only around 15% of new entrants into the workforce in the USA were white males. This obviously shows just how diverse the workforce is becoming and how much of an important factor culture in the workplace is for management. For all businesses success is determined by reaching corporate goals and objectives.

Those goals and objectives are very likely to vary between different organisations and could be anything from breaking into a new market and merely surviving at first, to reaching set profits or targets in their current market. Avoiding the problem of cross-cultural differences can greatly help the organisation to achieve success. For this to be done attention to those details mentioned above must be taken (communication etc. ) The main problem for firms may be confusion in communication methods, by paying fine attention to this any confusion can be reduced.

Removing confusion can be done by, clarifying what is expected, removing general details, summarising information and decisions as well as simplifying any language used. (www. itapintl. com) In summary, when looking at the differences between national and corporate culture, it is easy to see that national culture refers to a much larger and impersonal outlook towards a nation, where as corporate culture is more about the individuals feelings towards their employer based on experience. Cross-cultural differences can include such things as communication and information sharing within an organisation and how these are carried out.

If approached correctly then the differences have little detrimental effect on success if any but if incorrectly approached or even over looked by management the impact on success is going to be severe. From looking at my findings I feel that cross-cultural differences are very closely linked with the success of a business and there are many reasons for these differences impeding success. I feel communication, or the lack of clarity when communicating between cultures is the main reason for not being successful in a task. References Mullins L. J.

2007, ‘The Organisational Setting’ in ‘Management and Organisational Behaviour Eighth Edition’- Financial Times Pitman Publishing imprint, 2007 www. 1000ventures. com [ http://www. 1000ventures. com/business_guide/crosscuttings/ccd_ex_china-us. html ] Available: < http://www. 1000ventures. com/business_guide/crosscuttings/ccd_ex_china-us. html > Accessed: 12/03/08 www. itapintl. com [ http://www. itapintl. com/mngdifintproj. htm ] Available: < http://www. itapintl. com/mngdifintproj. htm > Accessed: 12/03/08 www. pearsoned. co. uk [ http://wps.

pearsoned. co. uk/wps/media/objects/1513/1550326/glossary/glossary. h tml ] Available: < http://wps. pearsoned. co. uk/wps/media/objects/1513/1550326/glossary/glossary. html > Accessed : 12/03/08 www. tamu. edu [ http://www. tamu. edu/classes/cosc/choudhury/culture. html ] Available: < http://www. tamu. edu/classes/cosc/choudhury/culture. html > Accessed: 12/03/08 www. ucs. com [ http://www. ucs. mun. ca/~rsexty/business1000/glossary/C. htm ] Available: < http://www. ucs. mun. ca/~rsexty/business1000/glossary/C. htm > Accessed: 12/03/08