Thriving in a Competitive Global Context Business Environment
Question :
How you critically evaluate the three cross-cultural risks. But the task mentions that "You MUST use robust industry examples to support the points you make." add one specific industry to apply the relevant issues.
Answer :
Introduction
This paper focuses on identifying the challenges that have been faced by an organization while operating in a global or international market. The challenges of operating in an international market will be analyzed in the context of the automobile industry. For example, Toyota Motors is one of the largest automobile companies in the world based in Japan. It operates in many countries and hence it has to manage its organizational culture because people from different cultural backgrounds work in Toyota Motors. One of the significant factors that have a significant impact on Toyota Motors is a cross-cultural risk. Culture of different places significantly vary and hence it is important to identify and analyze the cultural differences in the market so that the organization can significantly deal with the cultural differences and function effectively in the market. Apart from the cultural differences, there are several other factors as well that affect the performance and productivity of the organization in the international market such as political factors, social factors, legal, and environmental factors (Cherunilam, 2020). But this paper focuses on identifying and analyzing cross-cultural risks that affect the functioning and operation of an organization in the international market.
Challenges faced by an international business
As it has been discussed that an international organization faces several challenges in the international market and hence it is important for the organization to keep a close eye on those factors in order to function effectively and efficiently in the international market. Some of the key challenges are the following that Toyota Motors can face in the global market.
• International company structure
• Cultural differences and communication difficulties
• Foreign laws and regulations
• Currency rates
• International accounting
• Political risks
• International accounting
• Selecting the right global shipment methods
• Worldwide environmental issues
• Universal payment methods
• Supply chain complexity and risks of labor exploitation
All these factors have a significant impact on the performance and productivity of an organization. If these factors will not be managed and controlled effectively, the organization cannot survive in the international market as the competitors will capture the market share and kick it out of the market. Thus, effective strategies should be developed to address or deal with these factors to ensure the effective growth and development of the organization in the international market.
Organizational hierarchy
Culture also determines organizational hierarchy or in other words, it can be said that organizational hierarchy significantly varies between cultures. It is not an organizational hierarchy only that varies widely between cultures but the attitude towards the role of management also varies significantly between different cultures. Cultural norms dictate the practices of organizations and based on the cultural norms the management and the employee of the organization behave in a certain way (Davies et al., 2017). Cultural norms also dictate whether junior or middle-level management can speak up in the meeting or not, whether they can question the decision of the senior management or not, etc. The attitude of the management of the organization depends on the societal value of the country as well as the level of social equality in the country. For example, in Japan, people value social hierarchy, respect for seniors, as well as relative status. Thus, such practices are also practiced within the organization. The social hierarchy helps in defining the role and responsibility of the members of the organization. It also reflects that the senior management commands respect. The senior management also expects a certain level of formality as well as deference from the junior team members.
The mater of concern is that such practices are not practiced in the United States of America. People in the United States of America do not believe in hierarchy and they do not give a certain amount of respect to the senior management and the senior management also does not expect a certain level of respect and deference. Thus, it can create a challenge for senior management if he or she is from Japan and his or her colleagues are from the United States of America because the senior management will expect that his or her colleagues will give a certain amount of respect to him or her but his or her colleagues will not give him or her respect. Therefore, there will be a conflict between the management and colleagues that will affect the performance and productivity of the organization at large (Lee et al., 2017). Thus, it is important for an organization operating in the international market to deal with such cultural differences effectively so that it can ensure high performance and productivity of the organization.
Toyota Motors has employees from the United States of America as well as Japan. The cultural practices of Japan and the United States of America are significantly different from each other that affects the organizational hierarchy. People from the United States of America do not believe in the hierarchy while people from Japan believe in hierarchy and respect the top management.
Workplace etiquette
The formality of address is one of the significant considerations while dealing with business partners as well as colleagues from different countries. It is important to know whether they prefer surnames or titles or only being on the first-name basis acceptable. It significantly varies across organizations. It has been found that some of the Asian countries such as China, South Korea, and Singapore use formal surnames such as Mr./Ms. while people in Canada or the United States of America use only the first name (Ahmad, 2018). Thus, it can create challenges within an organization if people from China as well as the United States of America are working together in an organization.
Apart from this, the concept of punctuality also differs significantly between different cultures in an international organization. As the idea of being on time varies across cultures, it can often lead to misunderstanding as well as a negative perception of culture. For example, people of the United States of America prefer to arrive at a meeting a few minutes earlier while the people of Mexico or Italy may arrive at meeting several minutes after the scheduled start time and it is still considered "on time."
Differences in etiquette also bring differences in attitude towards rules and regulations, organizational confrontation, as well as assumed working hours. In some cultures, it is believed that if an individual is working for long hours, he or she is committed to the goals and objectives of the organization. It is a sign of commitment and achievement. However, in some cultures, it is considered a lack of efficiency as well as reprioritization of personal or family time.
Toyota Motors also experiences challenges due to differences in the attitude of people towards rules and regulations. The attitude of people towards rules and regulations differs due to cultural differences.
Recommendation
Toyota Motors should focus on managing organizational culture effectively and efficiently. It is very important to make employees aware of the importance of cultural differences in order to achieve the goals and objectives of the organization. Toyota Motors should promote teamwork within the organization. It is important to have an open mind towards the culture as well as embrace the different dynamics of shared teamwork rather than focusing on promoting individual differences. A set of right behaviors should also be promoted so that people from different cultural backgrounds can respect each other. An effective communication channel should be established and focus should be on one common language so that the right message can be delivered (Al-Bayati et al., 2017). A set of policies and procedures should also be developed effectively in order to guide every individual within the organization and direct them in the right and common direction to achieve the goals. Toyota Motors should also focus on managing conflict within the organization in order to ensure higher efficiency and effectiveness of employees.
Conclusion
Cultural differences play a very significant role in international organizations because due to cultural differences the organization can enjoy several new opportunities or may face several challenges. Cultural differences bring a pool of talented workforce within the organization whereas it also brings various barriers or challenges for the employees and the management of the organization such as communication barriers. Therefore, it is important for an international organization to focus on these challenges and develop strategies to deal with them in order to ensure higher organizational performance and productivity.
References
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