This term paper explores the effect of culture on international business. In order to do so, it first evaluates the influence of national culture and then the influence of corporate culture on international management. In the end it presents and analyzes a new framework which argues that these two types of culture interrelate and that both shape international management practices.
In 2010 Wal-Mart Inc. has been the world’s top retailer with revenues of US$ mil 405,046. However, they have never managed to establish Wal-Mart Germany since they have entered the market in late 1997. They left the market with huge losses in 2006.
“In Germany, analysts say, Wal-Mart never got traction in a market characterized by unrelenting price competition, well-established discounters and the cultural resistance of German shoppers to hypermarkets, which sell fresh vegetables a few aisles away from lawn mowers.”
Table of Contents
Introduction
Main Part
The importance of national culture on international management
The importance of corporate culture on international management
A new attempt: national and corporate culture interact
Conclusion
Objectives and Topics
This term paper explores the impact of culture on international business, evaluating how both national and corporate culture influence international management and assessing how these two frameworks interrelate to shape successful management practices in a globalized world.
- The influence of national culture on managerial success
- The role of corporate culture as a control mechanism
- The interrelation between national and organizational cultural frameworks
- Strategies for managing diversity and cross-cultural challenges in multinational firms
Excerpt from the Book
The importance of national culture on international management
“There are currently over 160 independent countries in the world, hundreds of major ethnic groups, and even greater diversity of cultures, and at least 3,000 spoken languages (Adekola / Sergi 2007: 201).”
According to Javed Iqbal, managers often move to foreign countries in order to manage the establishment of a new branch and in order to lead the firm’s international expansion. There they often experience a culture shock. However, he claims that these managers need to get acquainted with the new national culture and apply this knowledge in their management practices in order to ensure successful international business (Iqbal 2010, pp.1f). This is called comparative management which “aims at: i.e., increasing the understanding of principles, theories, and practices in the realm of management in countries other than of one’s own in order to run the international businesses smoothly and effectively (Iqbal 2010: 1-2).”
Moreover Iqbal explains the importance of comparative management through its “interdisciplinary in nature and several fields of humanities and social sciences [affecting] it. […] [All] these influences make management of one country different from another (Iqbal 2010: 2).” The knowledge about potential problems between the entering firm and the national culture is an important aspect which reduces the risk of management failure (Iqbal 2010, p. 2).
Furthermore Iqbal argues that the complete system of the national culture with its eight major areas (education, language, law, politics, religion, social organization, technology and material culture and values and attitudes) has greater impact on international business than the sum of its parts and hence it is necessary to understand the whole (Iqbal 2010, p. 4).
Chapter Summaries
Introduction: Provides a foundation by examining the failed market entry of Wal-Mart in Germany, illustrating the necessity of considering culture in international business.
Main Part: Analyzes the dual influences of national and corporate culture on a firm's international success and strategies.
The importance of national culture on international management: Discusses the necessity of comparative management and the impact of national cultural variables on international business operations.
The importance of corporate culture on international management: Explores corporate culture as a control mechanism that fosters employee identification and competitive advantage, while noting potential risks like xenophobia.
A new attempt: national and corporate culture interact: Examines the interrelation of cultural levels and their combined impact on international management practices.
Conclusion: Summarizes that while both culture types are essential, their interrelation is key for international firms to adapt successfully to global markets.
Keywords
International Management, National Culture, Corporate Culture, Globalization, Comparative Management, Cross-Cultural Knowledge, Organizational Behavior, Diversity Management, Competitive Advantage, Intercultural Competence, Market Entry, Cultural Resistance, Business Ethics, Hofstede, Multiculturalism
Frequently Asked Questions
What is the primary focus of this paper?
This paper examines the influence of national and corporate culture on international management, specifically focusing on how these two forces shape the success of firms entering foreign markets.
What are the central thematic fields discussed?
The core themes include comparative management, the functional role of corporate culture, the dynamics of global expansion, and strategies for managing a diverse international workforce.
What is the research goal of the work?
The goal is to determine how national and corporate culture affect international business and to investigate the interrelation between these two cultural frameworks.
Which scientific method is applied?
The work utilizes a literature-based analysis, synthesizing existing studies, management theories, and practical case studies to evaluate cultural influences on business.
What is covered in the main section of the paper?
The main part details the specific impacts of national and corporate culture, explores the interaction between these levels, and analyzes practical implications for multinational firms.
Which keywords define the paper best?
Key terms include International Management, National Culture, Corporate Culture, Comparative Management, Globalization, and Diversity Management.
How does the author view the failure of Wal-Mart in Germany?
The author identifies the failure primarily as a lack of intercultural competence and a failure to adapt to the specific national culture of the German market.
What are the four levels of culture proposed by Aswathappa?
The levels are National Culture, Business Culture, Corporate Culture, and Occupational Culture, which together form a foundation for multinational management.
How does corporate culture act as a control mechanism?
It acts by fostering group cohesion and shared values, where managers intervene if employees deviate from the organization's accepted behavior, thereby ensuring alignment with firm goals.
- Arbeit zitieren
- Eva Schruff (Autor:in), 2012, The Importance of National and Corporate Culture on International Management, München, GRIN Verlag, https://www.grin.com/document/300251
