Culture Affects International Business Management Essay Example
A critical analysis of how culture affects international business management, with specific reference to culture in the HSBC and Dell companies
International business is the result of gradual evolution of Globalization. As the development of international business, Multinational Corporations (MNCs) emerge. The term Multinational Corporation refers to business corporations that have two or more companies in different countries with one of the countries being the host country. (Baumueller, 2007) Culture involves habits, beliefs, values, laws, ways of life and work. Further, culture is the artificial part of the environment. (Phatak, Bhagat, Kashlak, 2005a) Recently, culture shock has been a severe problem in international business management. MNCs have to face the problems of cultural conflict which occurs in different countries. Cultural differences in international business are one of the crucial challenges which MNCs have to face and overcome. Moreover, the companies’ culture not only affects the brand image, it is also connected with the management of employees, the sale of the product and the satisfaction of the customers. Management styles need to be adaptable in order to mesh with the cultural elements in diverse areas.
This essay will analyse the important position of culture in international management. This analysis will consist of four aspects. Firstly, this essay will analyse the problems of cultural conflict in the MNCs. Secondly, it will analyse the success of HSBC bank in cultural management. Thirdly, it will analyse the failure of cultural management of Dell computer company in China in its initial years. Finally, it will offer solutions for the cultural conflict.
The problems of cultural conflict in the MNCs
In 1982, Peters and Waterman (cited in Kelly, 2009a) indicated that culture is merely concerned with the marketplace, it is not important for management. However, Ahlstrom and Bruton (2010a) argue that a series of issues are
International business is the result of gradual evolution of Globalization. As the development of international business, Multinational Corporations (MNCs) emerge. The term Multinational Corporation refers to business corporations that have two or more companies in different countries with one of the countries being the host country. (Baumueller, 2007) Culture involves habits, beliefs, values, laws, ways of life and work. Further, culture is the artificial part of the environment. (Phatak, Bhagat, Kashlak, 2005a) Recently, culture shock has been a severe problem in international business management. MNCs have to face the problems of cultural conflict which occurs in different countries. Cultural differences in international business are one of the crucial challenges which MNCs have to face and overcome. Moreover, the companies’ culture not only affects the brand image, it is also connected with the management of employees, the sale of the product and the satisfaction of the customers. Management styles need to be adaptable in order to mesh with the cultural elements in diverse areas.
This essay will analyse the important position of culture in international management. This analysis will consist of four aspects. Firstly, this essay will analyse the problems of cultural conflict in the MNCs. Secondly, it will analyse the success of HSBC bank in cultural management. Thirdly, it will analyse the failure of cultural management of Dell computer company in China in its initial years. Finally, it will offer solutions for the cultural conflict.
The problems of cultural conflict in the MNCs
In 1982, Peters and Waterman (cited in Kelly, 2009a) indicated that culture is merely concerned with the marketplace, it is not important for management. However, Ahlstrom and Bruton (2010a) argue that a series of issues are