Thursday, February 28, 2013

IMPACT OF CULTURE ON MNCS LEADERSHIP



 IMPACT OF CULTURE ON MNCS LEADERSHIP
Impact of culture on MNCs
Over the period, the development of technology and economic advancement has resulted in the generation of crucial aspects of the economy which has further necessitated the formation and enhanced performance of the companies. The attributes of market has also been enhanced thereby prompting increased interaction of the market factors and the continued development of the market. In view of these developments, the geographical boundaries that have continued to exist between nations have been waived through the consideration of regional integration (Adams, & Graban, 2011). In this regard, the aspect of international trade has emerged as a consideration of the aspect so globalization. The leading factor that characterizes regional development and international trade is the attribute of multinational corporations that has sorted to increase their participation in various nations across the globe.  According to the analysis of the research conducted, multinational corporations are companies with global strategies with production geared towards satisfying the global nations and markets (Bass & Stogdill, 1982). These companies have developed ideal incentives that will enable them to satisfy the global market through the aspect of large scale production top enable global market supply and further they get the advantage attribute to large scale production which is the derivation of the economies of scale. In the wake of developments of the multinational corporations, the aspect of culture has continued to play a significant role in the development and operation of the corporations in the national economies. Over the period, various findings have stated that culture is one of the extremely crucial aspects that are crucial in the determination of performance of the business because it is responsible for stipulation of the prevailing rules and regulations. The concept of cultural differences across the global nations is one of the crucial factors that enhance a critical challenge for the performance and establishment of the MNCs. In reality, the attribute of culture has continued to pose immense challenge because different cultures have different regard for the aspects of gender, labor and significant behaviors that are crucial in the enhancement of performance. Certainly, the consideration of global depiction of labor is based on the consideration that global economies should be established to improve the rights, security, livelihoods and opportunities of the people and families around the globe (Bandura, 1982, Cullen & Parboteeah, 2005). This aspect will be crucial because it will seek to enhance performance of the communities thereby leading to the increase in the output of the individuals. In the wake of the realities regarding the contributions of culture and its importance in enhancing organizational performance, various multinational corporations have highlighted that it is extremely crucial for the corporation to consider the attributes of cultural leaders.
Over the period, the consideration of culture and its impact on the performance and output of the organizations has been the subject of discussion for a critical period and critical theories have been enhanced to help in the establishment of the factors those results in the consideration of development.  One of the leading psychological researchers, Hofstede’s expressed his opinion on the aspect of culture by stating that cultural practices in the society or practiced by the community have immense influence on the formation of behavior and values of the community members. In this regard, the theory is critical because it helps the members in understanding the aspects of increasing cross-cultural relationship that is beneficial for the usage by international management and cross-cultural communication (Hodgetts & Luthans, 2003, Hoffman, Bynum, Piccolo & Sutton, 2011).  The aspect of cross cultural relation has been of immense consideration on the establishment of organizational performance because culture has immense contributions in the formation of organization culture. In order to explain the attributes of culture, Hofstede’s highlighted the different attributes that formed the subcategories of culture and these include individualism-collectivism, power distance, uncertainty avoidance and masculinity-femininity amongst others. The development of these margins has been of immense benefits to the development of the multinational corporations because they help the marketers and various managers to understand the attributes of cultural differences. This understanding is crucial because it enables the managers and markets to choose ideal market for the distribution of the goods. Critical analysis of the dimensions of cultural dimensions provided by Hofsteed shows the following.
Individualism
 This dimension considers the extent to which society members are integrated into groups. The dimensions consider the fact that individual normally coexist in group and this existence is depicted through the consideration of the groups or the individuals. Individualistic societies are largely concerned with the attributes of personal achievements and individual rights and the people in the society are expected to stand for them selves when choosing affiliations. On the other hand, collective societies are generally concerned with the welfare of the whole group and they exist in various groups (Hofstede, 1980). In the attributes of collectivism, the people I the society have large extended families which are used for protection in the exchange for unquestioning loyalty. In this view, the difference in the various cultural depictions is highlighted by the different existing tributes of individualism and collectivism.
Power distance
Power distance is another incentive used by the theorists to highlight the differences between various global cultures and this concern the development of the family structure. Equal distribution of power is essential for some communities while some communities accept the attribute of power distribution. The illustration of power distance is the provision in which the less powerful member of the organizations and institutions accept and expect equal distribution of power. Normally, the cultures that endorse low power distance usually expect and accept democratic and rational views. Under this system, subordinates are normally comfortable with decision made by the superiors and they have the right to question the integrity of the decisions made and they notice the power of the other contributors based on their formal position (Hofstede & Bond, 1988). This depiction shows that various nations have various cultures with regard to the subordinates and their contributions.

Culture vs. MNCs leadership
Over the period, the consideration of culture has become significantly recognized and various international businesses have taken to the attribute of adopting the provisions of Hofstede’s cultural theories of cultural diversities. With the continued development and expansion of the MNCs, the aspects of culture has been of immense influence thereby leading to the consideration of adopting cultural diversity program in the management of the multinational corporations. The investigation into the aspect of cultural issues in the understanding of the organization leads to the development of the fact that leaders can utilize the effects of organizational culture to direct subordinates to the highest level of motivation to enable them increase their outcome for the organization (House, Hanges, Javidan, Dorfman & Gupta, 2004). The consideration of leadership behavior is in consideration with the elements of organizational culture and this shows that performance of the organization is based on the reigning culture within the organization.  In reality, organizational leadership is one of the critical aspects that lead to the establishment of performance and therefore the leaders must consider the attribute of adapting to the changeable satiations in the organization. The realization of self efficacy of the leaders of the MNCs is an extremely crucial incentive that leads to the enhancement of performance the establishment of these factors are based on the consideration three elements that have been identified as the crucial attributes leading to the establishment of ideal leadership programs. Overall, culture has grown and developed into an important aspect that is considered in the business world because of the leading contributions that it has impacted on the leaders of the various companies.
Cultural dimensions have the impact of transforming leadership behaviors
The contributions of leadership of the organization have the impact of transforming the organization and increasing profitability. Over the period the relationship between cultural diversity and leadership efficacy has attributed to immense fall of various organizations. The attributes of high power distance has been ascertained to have lower regards for the others and this leads to the emergence of low self esteem. In reality, this kind of leadership is detrimental for the performance of the organization/corporation and ideal incentive must be initiated to ensure the attributes of transformation of the leadership styles are enhanced.
Cultural dimension has relations with leadership self-efficacy
The development of self motivation theory of leadership has marked a critical aspect towards the establsihment and performance of the multinational corporations. This theory also proposed the establishment of the theory that proposes the attributes of positive behavior and how the positive behavior influences the consideration of the leadership self-efficacy (Kirkpatrick,  & Locke, 1996, Rost, 1993). The consideration of self efficacy is one of the attributes that enable the leadership of the organization to employ the usage of ideal factors that are aimed at ensuring increased performance of the organization. Adoption of self efficacy will ensure that the leaders adopt the visions of the Corporation and provide feedback to the other members and this gives room for the aspect of evaluation which is critical for the establishment of performance. On of the benefits of cultural contribution is the aspect of transforming the self interest of the leader and influencing the leaders to think of the attributes of the corporations. In this regard, the consideration of culture is considered as an ideal event that enhances performance of the multinational corporations.

Cultural differences between Australia and China
The recent past has witnessed the emergence of significant development is the aspect of the economy and in the establishment of international business. With the emergence of globalization, the consideration of regional integration has taken toll and various businesses have established their subsidiaries across the regional borders. On the verge of this development, the consideration of cultural differences has continued to be a significant problem that hinders the performance and operation businesses (Ruvolo, Petersen, & LeBoeuf, 2004, Stevens & Campion, 1994). Over the period, the consideration of culture has stated that culture is extremely vital for the establishment and performance of the business incentives and this consideration has resulted in the development of cross cultural diversity programs. Analysis conducted to identify the differences between Australia and China has cited significant differences I their cultural depictions. The usages of Hofstede’s dimensions are crucial in illustrating cultural difference between the tow nations.
Individualism
Individualism dimension shows the degrees to which the cultural relations are represented through the integration of various groups and the consideration of this is crucial because it helps highlights how members exist in the community. Analysis of the Australian economy has shown that the country scores 60% and is therefore considered to be highly individualistic. In this country, self interest is regarded and groups are not recognized in the society. The people are self reliant because they look up to themselves and the society (Schein, 2004).  On the other hand, China scores 20% and this shows that groups and welfare of the society are significantly enhanced. Chinese have special attribute for face recognition that enhances unity amongst the society and the people. In this regard, these nations have different cultures in their system and the conduction of business in these cultures requires the aspect of understanding the cultures.
Power distance
Power distance forms an exceptional aspect of deterring the difference in the culture, Australia culture have special regards for the junior officers and the subordinates because the nation scores 36% on the grid scale showing that Australian organizations have aspects of convenience. Communication is also participative, informal and direct. On the other hand, China scores 80% on the scale showing high disparities that characterizes the nation and this is characterized by the following. Greeting done according to age, status is recognized by age and the senior staff must make significant announcements (Shamir, House & Arthur, 1993). The establishment of the cultural differences above shows the increasing concerns for the need to analyze and study the national cultures before the consideration of expanding the multinational corporation to the regional and global markets.

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