Factors to Consider when Aligning a Global Firm
Many companies that operate on a worldwide or multinational platform experience a hard time to integrate their widespread interests. They are faced with the challenge of portraying a standard global outlook while at the same time required to be responsive to the local requirements of the specific locale in which they operate. Organizational culture is an important tool that can be employed to give off a sense of common values and general beliefs. Many companies are putting in more and more effort in the declaration of specific conduct requirements that dictate the operations of workers in the workplace.
There are different types of organizational culture with each representing the objectives of the firms that employment. Factors such as the size of different organizations and the level of interaction that is a prerequisite in a certain field of work dictate the kind of organizational culture to be employed in a certain situation. A company that requires a high level of interaction, for example, needs to adopt a culture that promotes teamwork and group interaction between the workers. Despite the provision of the management of these firms, the employees are usually bound by their local cultures. The environment they grew in, say the Asian ways of life or the modern American society and lifestyle influence their way of working with one another to a great extent.
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Large organizations that have branches in many countries across the world have had a tough time in aligning the culture of the people that work in their organization. Having a near uniform code of conduct, therefore, requires consideration for the local cultures.
Aligning a global firm’s organizational culture
Many organizations today operate in very varied environments throughout the world. These environments are different from one another and citizens of each country tend to stick to their culture and reject all others. This necessitates the adoption of some global values and moral behaviors applicable to the world. There are several factors that the stakeholders in multinational companies need to put into consideration to achieve a uniform culture in their firms.
First, they need to ensure that the values of their organization are duly understood by all their employees regardless of their geographical location (Ybema 2010, p. 5-10). That being achieved then the specific alterations that would be necessary to accommodate disparities brought about by the terrestrial environments would come into play. It should be emphasized that the aim and objective of the creation or adoption of organizational culture in a given company are mainly to portray it in a certain image and bring forth a unique identity throughout the world. Many worldwide or global firms are largely encouraged to establish and uphold a consistent and uniform quality in their manner of employee engagement across the cultural divides that characterize the nature of the diverse workforce at their disposal.
However, employers are greatly discouraged from trying to enclose all their workers in stringent requirements that are usually referred to as cultural straitjackets that they would have a hard time conforming to (Rothacher 2005, p. 10). Failure to conform to such regulations takes away the freedom and good will of the workers that is so crucial in the efficient running of business affairs in the companies. This is among the things that should be considered before the managers of an organized force a particular culture down the throats of workers drawn from a wide variety of backgrounds. Analysts of such managerial patterns and provisions have coined the allegory of thinking global while acting local in light to this phenomenon. For a global organization to portray a given global image across its branches in all the continents of the world, there has to be a provision accommodating the geographical differences. Despite there being such provisions and allowances, the employees need to be guided by a single leadership body that comprises of members that are drawn from the entire scope of the organization operations.
These managers are then required to work as a team to come up with a unique set of rules and regulations as well as the moral obligations that the employees from their respective areas are comfortable with (Meyer 2014, p. 30-35). These executive members of the management represent the diverse scope of the interests of all the employees. The values are then discussed, and a favorable medium of all the proposed items and their interpretations are reached. This is later on used in the drawing of the organization’s general framework as regards the general culture and moral obligations of the employees. This culture is important for many firms because it stands for the corporate atmosphere that enables all the workers to give their best-regarding productivity as well as help them do so in a relaxed and comfortable setting.
These two attributes of a workplace particularly motivate and empower individuals to better their skills and work harder on a day to day basis. Most of the young and highly talented job seekers look for employment with such organizations as they represent the global front in matters employment and training. Modification of the core values of a company to accommodate the geographical differences of the employees greatly helps in pulling all of them together under one global umbrella as opposed to ignoring their differences which would consequently lead to alienation and reduced cooperation (Ybema 2010, p. 5-10). This would eventually bring down the productivity of the workers and eventually drive down the profit margins in that organization. The road to the creation of a strong cultural synthesis within the multinational organizations is very thorny, and very few of them manage to put in place systems that function properly.
This minority of companies manage to do so through the building of a global culture adopted by all the branches while still maintaining some degree of flexibility to allow for the variations presented by location. There are a few stumbling blocks that can be identified when a certain firm is on a quest to establish a global culture in many instances (Meyer 2014, p 30-35). The first such obstacle is the notion of enforcement of the headquarters mindset. Here, the headquarters of the organization provide directives to all the subsidiary arms of the management regarding the culture to be adopted in the day to day functions of the firm. The different geographical locations and environments are ignored, and the people working in these places cannot relate well to the contents of such directives. The headquarter mindedness is detrimental to the spirit of cooperation and many employees from cultures that do not resonate well with the particular one being used by the top management feel aggrieved and thence tend to withhold from fully performing their tasks well (Rothacher 2005, p. 10).
They also find hard to adapt appropriately to the culture transfer, and people usually find a hard time to leave their way of life behind in favor to new regulation or requirements that are imposed on them from external sources. If at all they accept these ways of conduct, many will still resort to their traditional morals and values thus disregarding and undermining the will and purpose of the very organizational culture that the management seeks to achieve (Singh & Verma 2010, p. 36). The main misdoing of such an approach is that the culture emanates from the executive headquarters geographical locations culture and fails to put into consideration the diverse cultural representations that need to be put in place.
The second challenge to the alignment of organizational culture among the different subsidiaries of a global organization is the idea of cultural strength. Many a time, some cultures in specific subsidiaries are wrongly regarded as stronger than those that exist in other subsidiary arms of those organizations (Meyer 2014, p. 30-35). Such an approach is mostly disapproved because it is too simplistic and does not encompass the complex issues that surround the operations of different cultures in their particular geographic locations. For a company to be regarded as one that possesses a functional global culture, it has to set up some core values that should be shared by all its subsidiaries worldwide. These beliefs and values are usually formulated to represent the collaborative combinations of practices obtained from the vast variety of the company’s worldwide operations. This set of beliefs function as the guidelines that dictate the dos and don’ts of the worldwide operations of the company in question and form the cornerstone of its global organizational culture.
Despite having this global outlook, however, does not remove or negate on the local differences that are imminent as you shift from one subsidiary to the next (Rothacher 2005, p. 10). The local provisions are far more crucial than they are usually acknowledged to be. This is because the base values laid down for such organizations can be viewed as parameters that function to guide the interpretations by the local employees. It is important for an organization that wishes to align its culture globally to break away from headquartering centered mentality and approach. It should adopt mechanisms that uphold the allowance of different cultures involved to be expressed freely without one trying to impose itself upon the others because of one reason or the other (Singh & Verma 2010, p. 36). It is impossible to create a global culture when an organization puts a lot of preference of a single corporate station, be it the headquarter center or otherwise and such an arrangement is bound to bring about confusion and slackness among the workers that do not subscribe to that particular culture (Ybema 2010, p. 5-10).
Although such an approach occasionally works in the realms of human resource and its management, it’s completely null when it comes to organizational culture. It is, therefore, necessary for global firms to come up with cultural hubs that bring together the subsidiaries from the same geographical area into a smaller group that can easily cooperate since their culture are similar or vary in a minimal extent. Several modern-day companies are presently making use of the cultural hub ideology to create a network of cultural clusters which have a joint set of beliefs and values while each hub has its own set of a cultural provision that is unique and is only applicable to the member branches. When coming up with such hubs, the management of the organization is tasked with the duty of identifying some subsidiaries within a specified locale that have one or two values in common. These are then clustered together and made to adopt the same culture that applies to that specific locality.
Despite the hurdles that can be witnessed along the way, it is doable if the management acknowledges the challenges and deliberately goes ahead to face them carefully (Ybema 2010, p 5-10). The most effective ways of handling such difficulties may include the need, for example, to incorporate all their international subsidiaries in a joint management procedure that would require all the units to operate using the similar mechanisms on a day to day basis. This has to go hand in hand with prompt responsiveness and sensitivity to local preferences and practices while considering all the aspects of production starting from the development of their products to the way they conduct business. A good way to look at this ideology is to picture a product that is produced by a certain multinational company (Meyer 2014, p. 30-35).
While produced in one country and widely liked and purchased in that country, the scenario might not be as rosy in the foreign countries for example. The firm, therefore, needs to adopt the product preferences of the target audience or better still open a production plant or subsidiary at the locale of the target market. This subsidiary will represent and stand for the basic values of the mother company to a large extent and at the same time offer the much needed local touch to the product. This move will enable the local people to associate better with the product hence like it better than they would the imported version of the same product. It also helps when a unique style is adopted so that the buyers can distinguish between and acknowledge the local culture in the product being offered. There is usually a big problem when foreign companies try to bring their own culture from across the world and impose it on a different market. The local market rejects merely the product despite it being a costly venture by the manufacturer leading to racking up of huge losses that will eventually lead to the collapse of such firms.
A good example of a total fail is the story of a German luxury automotive manufacturer that was doing very well before it made this career-ending mistake. The sales and marketing department of the famous Daimler Company had recorded very impressive profit margins in 1998, and the management felt the need to expand the business. They moved swiftly and acquired the United States mass production car maker called Chrysler. There were minimal shared values between the two companies, and the management had a tough time. What ensued was piling up of losses upon losses, and the property acquired at an estimated price of $36 billion was sold off nine years later at a paltry $7.6 billion.
Failure to be responsive to the local environment is the best explanation to the stalling of international expansion visions that many companies have nurtured for a long time. This problem affects all products of the economy and the grocery store sector does not stand immune to the idea. Giant grocery store Wal-Mart has continually experienced unmatched success in the United States market and the Canadian market as well. The store, however, failed to augur well with countries such as Germany and South Korea necessitating withdrawal of ambitious plans of expansion that had been laid down in these two countries (Rothacher 2005, p. 10). This withdrawal brought two huge points to light. First, it is challenging to run huge multinational companies with branches and subsidiaries scattered throughout the world. Second, trying to impose a central set of conduct requirements and culture or business ethics on a diverse variety of markets does not work.
This is major because different nationalities naturally have unique preferences that differ largely with other nationalities. In effect, many modern-day companies adopt a hybrid mechanism of handling business (Singh & Verma 2010, p. 36). This entails the creation of a central unit that functions as the governing management arm that specializes in strategy development and several local units that remain true to the beliefs values and preferences of the local people in their areas of operation.Due to the challenges that have been mentioned above, many companies with multinational market bases prefer to maintain that distinct look to appeal to the local population. The grocery store giant Wal-Mart has shifted from this approach altogether and now prefers to acquire local companies with their unique products and unique brand names as opposed to imposing the Wal-Mart brand and products on them.
This functions to alleviate the urge by the locals to seek that which they can relate to at the expense of the huge multinational enterprises. A good example of such an acquisition by the retailer is Asda in the year 1999. Through this venture, Wal-Mart became the largest retailer in the United Kingdom. If the strategy of adapting to the target market were not employed in the U K market by the Wal-Mart management, huge losses would have been incurred thus affecting the operations of the retailing company in that region forever. While targeting to expand operations, many firms have opted to come up with up to standard strategies of doing the same. Running large enterprises with a vast of branches worldwide is not easy, and many management teams need to pay close attention to the fast-changing world. It is essential to maintain a uniform organizational culture to give the company management an easy time running the firm effectively.
This paper has exhaustively covered the factors that should be taken into keen consideration should one opt to align the organizational culture of a large multinational firm or company with several subsidiaries spread across a wide range of nations. It has been arrived at through the deductions herein that it is a cumbersome exercise that requires intense skill and patience as well as informed decision making alongside exceptional observational tendencies. It has been established that intentions of wanting to control the workplace of such huge multinational organizations strictly from the headquarters of the company are ill-informed and could be the problem that ails many large firms in the United States of America and the world at large.
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