The purpose of this section of the analysis is to address issues of working in a multinational company in various countries with various types of culture and different systems of employment relations.
Due to the word limit, I will select my analysis on national culture, rules and regulations and Diversity across-cultures.
Introduction
Everything a person does is determined by the culture where he/she come from: national culture. Hofstede (1980a) assumes "that national culture is a 'common component' (p. 38) of a wider culture which contains both global and sub-national constituents." He also added that national culture is implicit; core; systematically causal; territorially unique; and shared. These alleged characteristics are first described, and later challenged. Moreover, he describes culture as 'mental programming', as software of the mind', as 'subjective'. Likewise, Rossi (1989) speaks of the unconscious infrastructure', and following by Schein (1985) who defines culture as the 'basic assumptions and beliefs that operate unconsciously'. Cultural 'systems' and social systems are treated as analytically distinct but related - the latter being theorized as the dependent variable.
National Culture Determinist
Knowing more about the national cultures you are opting to deal with should be the first step in this learning process of an organization and his employees. When considering expanding his market across cultures and employing staffs from various countries, Home Furniture's CEO need to be aware of the national culture of the countries they are planning to operate to as there have been some researches who may paid inadequate attention to the factors explaining the wide variation in governance structures found in different countries (Dalton and Kesner, 1987; Shleifer and Vishny, 1997). Furthermore, previous research has stressed change in the political and legal restrictions on ownership and control, particularly how government regulations affect the ways companies are owned and controlled, and the processes by which ownership and control change (Prowse, 1990; Roe, 1994). It has also been argued that "board crises, investor activism, and market globalization increasingly call for international corporate governance reform, it is important to understand how corporate governance structures vary across countries" (Jenkinson and Mayer, 1992; Roe, 1993). Hofstede (1980; 1991) has identified five main dimension of national culture including: power distance, individualism-collectivism, uncertainty avoidance, masculinity-femininity and long versus short-term orientation.
Hofstede's Cultural Dimension
Power Distance Index (PDI): Hofstede (1980; 1991) define the power distance as "the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally." The CEO need to be aware of China's organizational culture which has large high Power distance. High PDI is accepted and tolerated in their cultures to preserve their social order and distribution of power. The organization in this culture is centralized while in country in low power culture, the organization tends to be more decentralized.
Individualism (IDV): Individualism refers to the need of getting ahead while collectivism is the need to belong. According to Hofstede (1980), individualist values in the organizational terms have been associated to preferences for individual decision making over group consensus. Collectivism always refers to a group and is highly valued in societies e.g. US, European countries.
Masculinity/femininity (M/F): Masculine values Stereotypical are considered to be assertiveness, competitiveness, ambition and the need to acquire material possessions. Femininity is described with a value orientation stressed on caring for the others (Hofstede, 1980; Very et al., 1997). Masculine culture link with performance orientation, managerial decisiveness and stressed on proactive competitive behavior while femininity culture favor social orientation prevails, merit pay, performance -contingent, preservation of relationship and well balance quality work-life issues which are consistent which are feminine culture (Jaeger, 1986; Hofstede, 1991; Schuler and Rogovsky, 1998).
Uncertainty Avoidance Index (UAI): organization with high uncertainty avoidance cultures, member tend to follow and rely on clear procedures, well-known strategies and clear rules to enable them to reduce uncertainty and therefore be able to cope with their discomfort with unknown situations (Hofstede, 1980). In organization with low uncertainty avoidance cultures, organization's members do easily cope with unfamiliar situation thus more tolerant of different ideas, concepts and approaches e.g. US.
Long-Term Orientation (LTO) versus short-term orientation: this fifth dimension deal with Virtue regardless of Truth. Organization's values linked with Long Term Orientation are thrift and perseverance; values associated with Short Term Orientation are based on fulfilling social obligations, respect for tradition, and protecting one's 'face'. However, the dimension applies to Asian countries as well as countries without a Confucian heritage.
National culture is a component of formal norms regarding an organization structure.
Indeed, the Home Furniture's CEO has the obligation and legal authority to control corporate activities as well as monitoring those activities; they have the duty to protect shareholders interests (Bacon and Brown, 1997; Fama and Jensen, 1983; Lorsch and Maclver, 1989). They have to responsibilities to ameliorate strategic decision, retention of the top management, evaluate and reviewing employees and corporate performance. The CEO should ensure that the products they buy are from suppliers that have fair and ethical labor practices and forestry operations that do not participate in illegal logging as they have corporate social responsibilities toward their employees, suppliers, environment, community, and government etc...
The company needs to implement a culture that promoted diversity, equal opportunity and creativity in every aspect of the business and across-cultures where every stakeholder needs to be treated with respect. Any kind of discrimination is rejected. Home Furniture's CEO need to stress the importance of positive human resource management practices -employee retention, health and safety, reward, training and development (with consistent expat programme) across-cultures, etc- as well as the need to study the practices adopted by a major multinational company toward this end.
The CEO need to look at or analyze the effect of culture on employee morale and the relationship between culture and performance.
