corporateculture

1、1 Multinational corporations should impose their corporate culture wherever they operate. Critically examine this statement illustrating your analysis with examples Introduction The corporate culture, as an informal management theory and practice, was developed in the United State in late 1908s. It

2、has become a real challenge for multinationals corporate (MNC), to apply the corporate culture as a control mechanism. There are many Chief Executive Officers in MNCs, such as the Tyco International (the Australian, 2003), regard organizational culture as essential key for success; however, there ar

3、e some literatures present the opposing view to the popularity of the corporate culture. They believe that several factors, such as national culture, organizational structure and level of employees? commitment, will vary the effectiveness of applying corporate culture. In this essay, I am going to a

4、rgue that although corporate culture could be an essential key for MNCs? success, MNCs should not always impose corporate culture to all of their subsidiaries around the world. In addition, leader of MNCs should take different variance, which are national culture, organizational structure and level

5、of commitment, into account when they decide to use corporate culture as a management tool. Main body Extant management scholars believe that there exists a dynamic linkage between the concepts of culture and corporate, in the other words, the corporate culture is embedded in and maintained by organ

6、izational mechanisms, such as recruitment strategies, reward strategies and communication strategies (Morgan, 1993; Hill, 2011). As a result, there is a vast amount of literatures pinpoint that the corporate culture is a source of competitive advantage, and can be imposed as a management tool in a m

7、ultinational corporation (MNC) (Welch* &Welch, 2005). For example, Sorensen (2002) identified the corporate culture as a soft control mechanism that can create an informal communication network through staffs in a MNC. Such strong corporate culture built on shared values and behaviors will incre

8、ase the commitment of employees and support the effective transfer of knowledge, information and resources. According to Fey and Dension (2003), an effective organization should involves 4 cultural traits, which are ,involvement?, consistency?, adaptability? and ,Mission?;2 in addition, Sadri and Le

9、es (2001) suggest a MNC maintaining a positive organizational culture is likely to enjoy many benefit, for instance it is main determination to attract and retain top employees. Wal-Mart, the world?s largest retailer, demonstratesthat how a positive corporate culture can be developed as a competitiv

10、e advantage. The main reason for Waiart?s successis not the massive warehouse or intensive capital but the specific corporate culture. It?s founder, Sam Walton, shaped Wal-Mart?s success.He showed concern and respective for his employees fromthe company?s inception, in which he create an environment

11、 of trust that last to this day. For example, he shared the profit with the staffs and built a strong partnership with suppliers. And he promise to provide “ everyday low prices to keep the midiostl “ Every time WMIart spends one 2011). Until now, this is still ingrained in Wal-Mart?s culture. Walto

12、n as the top leader, he actually perceives culture as a mangaeable variable to drive company?s core value and model the behaviors of his employees. Scholars, Deal and Kennedy (1982) argue that the way to mange people, the greatest resources, is not by computer reports, but by the subtle cues of cult

13、ure. The purpose of culture control is to expect appropriate performance from employees and remove direct supervision in diverse locations. This argument provides a strong support to why Wal- Mart?s small-town value can create a sense of belongingness among staff and suppliers. There are many MNCs l

14、ike Wal-Mart regard corporate culture as the essential key for success; however, more and more management scholars doubt the utility of corporate culture in MNCs. The questions like, whether it will increase the effectiveness of MNCs in different national culture; and some scholars, such as Welch* a

15、nd Welch (1997) critical examine the corporate culture may become a barrier to MNCs? flexibility, responsiveness and innovativeness if the external business environment are diverse and rapidly changing. The flowing paragraphs will focus on the drawbacks of imposing corporate culture may cause, witho

16、ut considering the internal and external environment of MNCs. It may be counter-productive for a MNC to develop and apply the corporate culture as a soft management tool when the influence of national culture is taken into account (Fey & Dension, 2003; Lim, 1995; Welch* & Welch, 1997). It se

17、ems clear that there are some kind of relationship between national culture and organizational culture, scholars like DiMaggio and Powell (1983) use the term ,isomorphism? to describe the phenomenon that dollar foolishly, he wrote, epcooc “ it comes out of our customers? ecokoOsist, 3 the corporate

18、culture of a firm will follow the general contours of national culture. The most famous study conducted by Geert Hofstede in late 1980s shown a clear linkage between the national culture and values in the workplace, he summarized four different cultures, which are ,power distance?, ,uncertainty avoi

19、dance?, ,individualism versus collectivism? and ,masculinity versus femininity?. Therefore, different cultural context will influence values and norms of a MNC, to adopt a similar corporate culture with host countryat the foreign country will limit its success. For example, Fey and Denison (2003) co

20、nducted a survey to illustrate how the effectiveness of subsidiaries in a host country will be affected if MNCs impose similar corporate culture in home country. He chose Russia as the host country because the foreign investment is critically important to Russia?s success, in addition he chose the U

21、SA as home country because the theory of using corporate culture as competitive advantageis first developed and applied in the United States. He was intend to find out that whether the four cultural traits of effective organization in USA, which are ,involvement?, ,consistency?, ,adaptability? and ,

22、mission?, will provide positive effect toward foreign subsidiaries under Russia?s context. He concludes that although the general corporate cultural model can be applied to Russia from the UAS, there should be some changes as the specific economic and political environment in Russia. For instance,th

23、e ,involvement? attained unique meaning in Russia; in USA, it means give the decision right to lower-level manager, however in Russia even though the decision right is delegated to middle manager, they are more likely to come back over, asking top manager to decide on the issue. According to Elenkov

24、 (1997), the Russia score ,87? in ,Uncertainty avoidance?in comparison with the United States that only score ,46? in such dimension, based on the Hofstede?s four dimensions of national culture. It will take a long time to change the behaviors of employees in foreign subsidiaries, and headquarter ma

25、y not receive expected performance from foreign subsidiaries during the period of adaption. Furthermore, the business environment is going to be more diverse becauseof the globalization, being flexible and adaptable is becoming an important factor of success. Witt (2002) suggests that firms in diver

26、se national context might be better to emphasize bureaucratic or other ,non-cultural? control mechanism. Diversity, changeability and global competitiveness, as Welch* and Welch (1997) comments, are the desire factors for MNCs. However, corporate culture as a control purpose is very difficult to be

27、change. For example, norms of a top manager may have been profoundly modeled by the past corporate inculcation process and become a kind of personal adherence. Such individual may become a source of resistance when company face radical change, in case of replacement of new Chief Executive 4 Officer,

28、 the whole value system of company may change and managers have able to take new approach and follow new strategies as quick as possible. Welch* and Welch (1997) categories individuals in a company into different level of commitment to corporate value system and summarize that employees, who have st

29、rong commitment to espoused values, will be harmful to company health because they limit the ability of being flexibility, responsivenessand innovativeness. Therefore, MNCs should not always impose corporate culture to all of the subsidiaries around the world without considering theemployees?degree

30、of commitment to corporate value. The different culture between the home and host country, in addition with the vertical differentiation of MNC will influence the decision of imposing corporation culture. The vertical differentiation determines in where a MNC?s hierarchy and decisionmaking power is

31、concentrated, Hill (2011) split it into centralization and decentralization. Decentralization will increase the level of autonomy by allocating the decision right to lower-level employee, and according to Nohria & Ghoshal (1994) the innovative firm with less centralized structure is more likely

32、to create share values in an aim to control their international subsidiaries. Yong and Tavares (2004) conclude that because the greater the autonomy of subsidiaries, there is more uncertainty about the subsidiaries actions and goals. Therefore, the traditional control mechanism such as bureaucratic

33、control mechanism become less feasible, and headquarters become more reliable on using cultural control. For example, Brown and Eisenhardt (1997) suggest that it is better for a firm to operate in the form of decentralization and applying corporate culture as subsidiaries? management mechanism in kn

34、owledge-intensive industry. Because a positive corporate culture enables a quick reaction to change, which is a critically important in technological innovation. However, there are also some scholars, such as Willams and Triest (2009) contradict the ideas of using corporate culture as soft control a

35、t subsidiaries, he suggeststhat headquarter need to consider the tension between shared values and decentralization of firm?s structure. So, whether to adopt organizational culture as a management tool is very depended on what kind of organizational structure a MNC is. Conclusion To sum up, corporat

36、e culture is becoming more and more poplar among the managers, they believe an outstanding MNC should have their own corporate culture that will strengthen the internal control. However, whether a MNC should impose corporate culture wherever they operate and how strong the corporate culture should b

37、e are controversial issue. In previous paragraph, advantages of corporate culture and factors that may vary the effectiveness of 5 corporate culture have been discussed to argue that corporate culture could be applied as an efficient ,informal management tool?, but it should be more careful to consi

38、der whether corporate culture is positive in different kinds of MNC, in terms of organizational structure, level of employees? commitment. In addition, the corporate culture should not always be applied in the same way within the all the subsidiaries due to the cultural difference between the home c

39、ountry and host country. (1722) Reference Brown, S.L., & Eisnhardt, K.M. (1997). The art of continuous change: Linking complexity theory and time-paced evolution in relentlessly shifting organizations. Administrative Science Quarterly, 42/1, 1-34. DiMaggio, P.J., & Walter W.P. (1983). The ir

40、on cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48, 147 T60. Fey, C.F., & Dension, D.R. (2003). Organizational culture and effectiveness: Can American Theory Be Applied in Russia?. Organization Science, 14/6, 686-706

41、. Hosfsted, G. (1980). Culture consequences: Internatioanl differences in work- related values. Beverly Hills: Sage. Hosfsted, G. (1991). Cultures and organizations: software of the mind. London: McGraw-Hill. 6 Hill, W.L. International Business: Competing in the Global Marketplace, 8th ed. New York:

42、 McGraw-Hill/Irwin, 2011. Lim, B. (1995). Examining the organizational culture and Organizational performance link. Leadership & Organizational Development Journal, 16/5, 16-21. Morgan, M.J. (1993). How Corporate Culture Drive Strategy . Long Range Planning, 26/2, 110-118. Noria, N., & Ghoshal, S. (1994). Differentiated fir and shared values: Alternatives for managing headquarters-subsidiary relations. Strategic Management Journal, 15, 491502. Nelson,