And the exposure to foreign cultural goods frequently brings about changes in local cultures, values, and traditions. Some societies accept without question the concept of a hierarchy, while others demand justification for unequal power, Hofstede says. Examples of Cultural Problems in the Global Workforce Language. This means that executives of multinational companies need to adjust their leadership style based upon the power distance view of the host country's national culture, for example, by adopting a collegial style in countries that reject hierarchies. Doing business across national boundaries requires more than just exporting a concept that is successful in the United States. Randi Hicks Rowe is a former journalist, public relations professional and executive in a Fortune 500 company, and currently a formation minister in the Episcopal Church. What Are the Cultural Problems Encountered by Multinational Companies? For example, the new availability of foreign foods in a market—often at cheaper prices—can displace local farmers who have traditionally earned a living by working their small plots of family-owned land and selling their goods locally. Because of the need to build these connections, business deals might take five times longer to complete in China than in the United States, reports Business Insider. Religion. Want to explore some examples? Understanding these dimensions helps determine compensation structures; for example, if collectivism and cooperation are strong cultural attributes, companies will reward employees as a team based on team performance. Differences in concepts of time can pose challenges for multinational companies; one example is in how meetings are run. Hofstede's other dimensions are the degree to which societies feel uncomfortable with uncertainty, how much priority is given to tradition vs. education and innovation, and whether societies are restrained or indulgent in meeting needs and wants. Corporations on Local Mores, © 2017 The Levin Institute - The State University of New York, The Influence of U.S Corporations on Local Mores, Other Cultural Challanges of Globalization, The Influence of U.S. Most expatriate failures are not due to technical or professional incompetence. Multinational companies also are challenged by different communication styles that affect developing strong relationships with partners or clients. In these cultures, patience is required to build the relationship outside of the board room. For example, Western communication style is straightforward and direct, but people in India and China are more accustomed to a less aggressive approach. The main causal factors involve difficulties with cultural adaptation: culture shock, spousal adjustment, communication barriers, interpersonal conflicts, lifestyle changes, local business practices, and isolation. She has been published in Security Management, American Indian Report and Tech Republic.She has a bachelor's in communications, a master of arts in Christian education and a master of business administration. Although there is no consensus on the consequences of globalization on national cultures, many people believe that a people’s exposure to foreign culture can undermine their own cultural identity. Although there is no consensus on the consequences of globalization on national cultures, many people believe that a people’s exposure to foreign culture can undermine their own cultural identity. Corporations on Local Mores. Workplace Values. One problem encountered by multinational companies is differences in workplace values. Monochronic cultures, such as the United States and Germany, value punctuality and keeping to schedules, reports Iowa State University's Center for Excellence in Learning and Teaching. Next: The Influence of U.S. The first of these is power distance, which deals with how society views inequalities among people. Another of Hofstede's dimensions is the degree to which a society believes that individuals are expected to care for themselves and their immediate families vs. those societies in which an extended family or group will care for all its members. Local culture is everywhere. Copyright 2020 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Geert Hofstede, a researcher and published author on workplace culture, has identified six dimensions of national culture that affect employee values. In polychronic cultures, such as the Middle East or Latin America, maintaining relationships and socializing is more important than the schedule. The expansion of trade in cultural products is increasing the exposure of all societies to foreign cultures. One problem encountered by multinational companies is differences in workplace values. And the exposure to foreign cultural goods frequently brings about changes in local cultures, values, and traditions. Example Community Problems: Adolescent pregnancy, access to clean drinking water, child abuse and neglect, crime, domestic violence, drug use, pollution, mismanagement of resources, lack of funding for schools and services, ethnic conflict, health disparities, HIV/ AIDS, hunger, inadequate emergency services, inequality, jobs, lack of affordable housing, poverty, transportation, violence, racism and … A third dimension is competitiveness vs. cooperation. By enhancing cross-cultural training and adapting to local needs, multinational companies can succeed in bridging cultures. A third challenge is that cultures tend to view time differently. Academia.edu The Cultural Difficulties Likely to be Encountered by a Global Company, Business Insider: The 5 Biggest Challenges Businesses Face When They Expand to China, OrientPacific.com: Overcoming the Problems of Cultural Differences to Establish Success for Multinational Management Teams, USA Today:Global Companies Find Cultural Training Is More Than Etiquette. Geert Hofstede,... Communication Styles. Companies that require workers to be creative and take risks to invent cutting-edge products might need to find a way to link innovation with the country's traditions to gain worker buy-in. The globalization of the production and distribution of goods and services is a welcome development for many people in that it offers them access to products that they would not otherwise have. Local culture resides in our relations with the local environment and landscapes, in our local music and artistic expressions, in our community’s history and contemporary social issues, and in our family’s stories. It is also increasing international trade in cultural products and services, such as movies, music, and publications. Globalization, of course, does more than simply increase the availability of foreign-made consumer products and disrupt traditional producers. However, some are concerned that the changes brought about by globalization threaten the viability of locally made products and the people who produce them. Cultural differences can be challenging, leading to misunderstandings between employees and management as well as between the company and its customers and partners.
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