In today's corporate world, companies are investing in foreign countries to extend their global reach. Multinational companies (MNCs) have a challenge since they have to cope with the cultural differences in the countries they operate. Due to globalization, today's workforce is getting more diverse and multicultural. Therefore, it is imperative for MNCs to manage and deal with cultural differences. This paper's principal focus is to explore an article on MNCs and discuss how it relates to the course material.
The article selected is the 2019 article written by Bhavesh A. Kinkhabwala, a highly respected university professor. The article is titled "Strategies to Deal Cross-Cultural Differences by MNCs." It explores the cultural differences in MNCs and draws out strategies that MNCs can use to manage cross-cultural differences. This article is related to the course material as it discusses one of the topics discussed in class: managing cross-cultural differences. According to the course material, culture can be similar or quite different across countries. This poses a significant challenge to multinationals because managers of MNCs are forced to find ways to address such differences. The way MNCs manage their businesses in their parent country and foreign country differ.
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Both the article and the course material provide some examples of cultural differences across countries. The course material provides insights into cultural practices specific to some countries, including China, Russia, India, France, Brazil, and the Arab countries. In contrast, the article provides insights into the cultural difference between western (America, France, & Russia) and non-western countries (India and Arab countries). These countries are similar or different in many aspects, including employees' behavior, leadership style, organizational hierarchy, and communication style. Basically, the western and non-culture sharply differ in a number of core characteristics and values. For example, the former value individualism and quality, whereas the latter value collectivism and hierarchy. Table 1 gives an overview of these differences.
Table 1: Core Characteristics and Values -Western Culture vs. Non-Western Culture
Source: Kinkhabwala, D., & Bhavesh, A. (2019)
Besides, both materials outline strategies for managing cross-cultural differences. Among them is building multicultural teams as it is more effective and powerful than single-culture groups. According to Kinkhabwala & Bhavesh (2019), multinationals should first conduct research about the culture of different countries before venturing into those countries. MNCs should first acknowledge the existence of cross-cultural differences and then effectively deal with and manage them. While addressing the challenges in each country, MNCs should stick to their vision and business ethics. An excellent way to go about this is to conduct a SWOT analysis ("Strength, Weakness, Opportunities, and Threats" analysis). The MNC should conduct this analysis in light of the cultural aspects of the country in which it is venturing into. The company should then inculcate intercultural competence by transforming challenges into opportunities. Besides, the MNC should adopt an inclusive approach or contingency approach to not only ensure cultural comprehension but also adaptability.
To sum up, today's workforce is more diverse and multicultural. Thus, when extending their global reach, MNCs should develop an organizational culture that provides a shared sense of identity. No one is perfect, and therefore, there cannot be a perfect MNC. However, prior strategies to deal with cross-cultural differences can "pay the dividends." This paper outlined a number of strategies that MNCs and other organizations can employ to manage and deal with cross-cultural differences. Prime examples include building multicultural companies, conducting prior research, and ensuring cultural diversity. Besides, companies can deal with cross-cultural differences with their vision, organizational culture, professional idealism, ethics, and transparent communication.
References
Kinkhabwala, D., & Bhavesh, A. (2019). Strategies to deal cross Cultural differences by MNCs. Research Guru: International Journal of Multidisciplinary Subjects, vol. 13 (1); 467-476.
