Cultural differencies and people management Essay

Cultural differencies and people management - Essay Example Understanding the culture of host country and consideration of cultural differences is important for companies in the international arena. The importance of cultural importance has been widely studies and research on it indicates that possessing a sound knowledge of the culture of markets in which businesses operate is of paramount significance. The Importance of cultural differences At the international level, have a good understanding of the cultural differences between the global market and the national level is critical in building long-term relationships and achieving business success. For example, in majority of Asian cultures, operating business is not limited to the confines of working hours, but rather can be extended to blend into social situations such as meals where opportunities are exploited to build bonds, making understanding and appreciation of the local culture an essential factor (Morrison, 2006). Cultural differences also play a significant role in determining the type of entry mode to be adopted by a company that is thinking of venturing into international markets. An example given by Morrison (2006) that can be cited as an area where the importance is clearly defined is in joint ventures where cooperation and trust is key to maintaining long-term business success. It is important for firms that going into joint ventures in the international market to critically analyze the culture of host country and come up with ways of blending the culture of different locations into a distinctive corporate culture in order to augment the sense of corporate identity. However, international managers need to appreciate that this comes with considerable challenges especially when strong national cultures clash in the case of global mergers (Morrison, 2006). In order for strategic alliances between firms in a different cultural setting to remain successful, it is important to maintain consistent corporation that ensures risks associated with opportunistic be haviours are minimized. Therefore, there is need to develop a higher level of trust between joint ventures, and cultural difference can be effectively used a measure of the different levels of trust between among countries. For example, it has been argued that masculinity can negatively impact joint venture projects, and individualism seems to have negative effects on the voluntary joint management of a firm, depending on the national cultural setting that a company operates under (Lee et al., 2011). In addition, the cultural difference of countries can be an important factor in determining the type of wholly owned subsidiary investment to be considered by international organizations. For example, a greater level of difference in culture necessitates that firms have stronger business controls, and firms operating in such markets are more likely to prefer wholly owned subsidiary as a way of entering into international markets. Therefore, the cultural difference increases the benefits of a company by acquiring n existing firm in the new foreign market since the organization entering the market has the opportunity of learning the different norms and routines unique to the host country from the acquired subsidiary. This plays a significant role in maintaining the success of the company as it ensures that firms make sound