Impact of Global Strategies on Organizational Culture and Decision Making Process: A Case Study of Apple and Huawei
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This report analyzes the impact of global strategies on organizational culture and decision making process of Apple and Huawei. It discusses the importance of local responsiveness, the impact of globalization on decision making, and recommends planning mode of decision making process for both entities.
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Running head: GLOBAL BUSINESS MANAGEMENT Global business management Name of the student Name of the university Author note
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1GLOBAL BUSINESS MANAGEMENT Table of Contents Introduction......................................................................................................................................2 Impact of global strategies on the organizational culture................................................................2 Impact of globalization on the decision making process.................................................................5 Determination of the current strategies............................................................................................7 Conclusion.......................................................................................................................................9 Reference.......................................................................................................................................10
2GLOBAL BUSINESS MANAGEMENT Introduction In the current global business state of affairs, the decision making and the internal management process is different to that of the traditional approach. This is due to the reason that in the current time, global factors and diversity play an important role for the contemporary business organizations along with the differences in the cultural factors. Thus, there are different models being used by the modern day managers in order to have the effectiveness and efficiency in the business management process (Roh, Hong and Min 2014). In the case of multinationals, it is important to find the perfect balance between the global integration and local responsiveness extent and accordingly the global strategies should be designed. This report will discuss about the impact of the global strategies on the organizational culture and structure along with the impact on the ethical and environmental issues. In addition, this report will also discuss about the impact of the globalization on the decision making process of the two selected organizations, which are Apple and Huawei. On the basis of the identified factors, this report will recommended about how the current strategies of these two organizations can get improved and more effective. Impact of global strategies on the organizational culture According to the economic integration and national responsiveness matrix, there are majorly four options left with the global business in terms of operating in the global market. However, it should also be noted that the global strategic option for the particular business is dependent on the approach of them. In terms of the environmental factors, different countries are having different sets of cultural intent and different companies are having different approach towards it (Hogan and Coote 2014). However, both Apple and Huewei are known for being a
3GLOBAL BUSINESS MANAGEMENT sustainable brand and are initiating extensive process of sustainable activities. One of the major elements of the national culture between China and the United States is the individualism approach of the society. As per the Hofstede’s cultural dimensions, China is having more collectivist society compared to the highly individualistic society of the United States and on the basis of this, the sustainable and environmental factors followed by Apple and Huawei are also different. In the case of Apple, they are more inclined towards the specific sustainable activities such as awareness regarding the employee wastes and reduction in the emission from the premises (Buschgens, Bausch and Balkin 2013). However, on the other hand, Huewei in China is more initiating extensive and national sustainable activities such as plantation program and assisting in the governmental activities. Thus, it is proving the fact that each of the companies is responsive to the local culture in their respective home country. The standardization strategy being followed by the both the entities in terms of their product approach are changed to the multi domestic approach in terms of the environmental
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4GLOBAL BUSINESS MANAGEMENT factors. In addition, it is also identified that global strategies are also having impact on the organizational structure of both the companies. This is due to the reason that organizational structure is designed on the basis of the local cultural factors. According to the Hofstede’s cultural dimension, power distance between China and the United States is different, which refers to the fact that Chinese society is more inclined towards power, authorities and inequalities unlike the American society, which is more liberal and flexible. On the basis of this approach, Huawei is having more hierarchical structure compared to the horizontal structure of Apple. For example, the distance between the top level managers and the low level employees is more in Huawei compared to that in Apple (Choo 2013). However, on the other hand, it should also be noted that Apple is having their operation in China as well where the hierarchical order is followed. This denotes that Apple is locally responsive and they are following multi domestic strategy in terms of their organizational structure in both home and host country. Hence, in terms of the environmental factors, strategies are initiated in bottom up approach in the case of Apple in their home country while the same is initiated in the top down approach in China, which is also denoting their high level of market responsiveness (Awadh and Alyahya 2013). As per the organizational culture, Huawei is having hierarchical culture in their global operations whereas Apple is having clan culture in their global operation. This is due to the reason that the level of centralization of Apple is low compared to that in Huawei. With the help of the hierarchical culture in the global operations, Huawei is following their home country culture and as per the above matrix, it can be denoted as standardization strategy. However, in the case of Apple, they are following clan culture as per their home market culture but are presented in more responsive approach in different countries (Nica 2013). Thus, they are following transnational strategy where the core elements and values of their culture are same
5GLOBAL BUSINESS MANAGEMENT across the world but are implemented in more locally responsive form. This local responsiveness strategy of both the companies is helping in meeting the different environmental and ethical standards in different countries. In the recent time, Huawei faced the ethical issue by facing the baninbusinessintheUnitedStates,whichfurtherstrainstheimportanceforlocal responsiveness (Clauss 2017). Huawei in this case, followed their standardized approach in meeting the ethical standards of the United States and failed. Impact of globalization on the decision making process Emergence of globalization is also having impacts on the decision making process as well due to the reason that the current process in the decision making is more diverse and complex with the involvement of the various global factors. For example, prior to the emergence of globalization, decision making process was more unified with the involvement of the few national business factors. However, with the introduction of the global trends, thus unified process got diverse and more global factors got involved. Both Apple and Huawei are global multinationals and have their business in different countries (Schmoldt et al. 2013). Thus, the decision making process for them cannot be done only on the basis of their home country trends. For example, Apple can have decision making process only on the basis of the trends and patterns in the United States rather they have to consider all the diverse factors in their different foreign markets. Thus, the core approach of the decision making process got changed after the emergence of globalization. One of the major examples of impact of globalization on the decision making process is the product strategy of Apple. They are selling only the top and newly introduced models in the American and other western countries while on the other hand, they are locally manufacturing the older models in the Indian market. This is on the basis of the
6GLOBAL BUSINESS MANAGEMENT diverse global factors relevant due to the imposition of globalization (Garcia-Penalvo and Conde 2014). According to Mintzberg, there are majorly three options available for the contemporary business entities in terms of the decision making process and each of them is effective in different business situations. Though Huawei and Apple operating in the same business sector, they still are facing the different business situations. Moreover, they are following different organizational cultures based on which, the decision making process should be designed. In the case of Huawei, entrepreneurial model of decision making will be the most effective due to the reason that they are following hierarchical culture in the organization (Negulescu 2014). Thus, the power distance is more and top level managers are the key authorities in the decision making process. With the help of the entrepreneurial mode of decision making, Huawei will be able to maintain their existing organizational culture and decisions can be made more radical and bold without many complexities. On the other hand, it is recommended that Adaptive mode of decision making process will be more effective for Apple due to the reason that they are already enjoying the market leadership status in the global market and is known for their innovative approach. Thus, it is important for them to ensure the long term business sustainability and viability rather than having aggressive business approach. With the help of the adaptive mode of decision making process, strategy will be designed on the basis of their existing problems and thus the issues for Apple can be solved and in addition to their existing innovative approach, market leadership status can be maintained (Liu et al. 2016). The existing clan culture followed in Apple will also be favorable for following the adaptive mode of decision making process because identification
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7GLOBAL BUSINESS MANAGEMENT of the existing issues and designing strategies on the basis of that will be involved different stakeholders across different levels and clan culture is the most accurate choice for this. Lastly, it is recommended that planning mode of decision making process will also be effective for both Huawei and Apple. This is due to the reason that both the entities are operating in complex business situations and thus they are having the need for effective planning process inhavingthemostfeasiblealternatives.Forexample,inthecurrentchangingbusiness environment, it is important for the entities to have the information of the change on periodical basis and strategize accordingly. This can made possible with the help of the planning mode of decision making. Planning process can be initiated both in the case of hierarchical and clan organizational culture and thus it is applicable for Huawei and Apple. Determination of the current strategies Even though both Apple and Huawei are following different decision making process and they are largely being successful in their global operations, a few issues are also identified. For example, due to the adaptive decision making process of Apple, they are having different approaches in different countries and the core values are getting diluted. For example, Apple is positioned as innovative and utilitarian brand in the market of the United States while on the other hand; it is positioned as the premium and high end brand in the developing and Asian markets. These positioning statuses are being made according to the local issues and market factors but diluted the global branding of Apple. On the other hand, the entrepreneurial decision making strategy of Huawei is facing issues in terms of locating the ground level issues. For example, facing the ban in the United States is mainly due to the non compliance of their business process with that of the US standards.
8GLOBAL BUSINESS MANAGEMENT It is recommended that the global strategies of both Huawei and Apple should be based on the importance of different stakeholders. This is due to the reason that in the decision making process, effective management of the internal and external stakeholder is important. In the previous section, it is already recommended that planning mode of decision making process should be followed by both the organizations and in this mode, determination of each of the stakeholders is important for gathering the information. One of the most important stakeholders is the customers. They are having least interest in the organizational process but having high power in determining the organizational success. Thus, as per the above Mendelow’s matrix, customers should be kept satisfied. In this case, transnational approach of internationalization should be followed in meeting the individual expectations of different customer segments along with maintaining the core value and elements. It is also identified that employees are also important because diverse workforce is evident in the global business. They are having high interest but low power and thus as per the above matrix, they should be kept informed about the
9GLOBAL BUSINESS MANAGEMENT changes in the organization. Planning process will be more effective if the employees can be kept informed as they will work accordingly. Conclusion This report concludes that globalization and global business trends are having number of impacts on the management process. In this report, management process of both Huawei and Apple is analyzed and different factors are identified. It is identified that both are following local marketresponsiveapproachintermsoftheirorganizationalcultureandstructure.Itis recommended that the planning mode of decision making process will be beneficial for both the entities in the long term.
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10GLOBAL BUSINESS MANAGEMENT Reference Awadh,A.M.andAlyahya,M.S.,2013.Impactoforganizationalcultureonemployee performance.International review of management and business research,2(1), p.168. Büschgens, T., Bausch, A. and Balkin, D.B., 2013. Organizational culture and innovation: A meta‐analytic review.Journal of product innovation management,30(4), pp.763-781. Choo, C.W., 2013. Information culture and organizational effectiveness.International Journal of Information Management,33(5), pp.775-779. Clauss, T., 2017. Measuring business model innovation: conceptualization, scale development, and proof of performance.R&D Management,47(3), pp.385-403. García-Peñalvo, F.J. and Conde, M.Á., 2014. Using informal learning for business decision making and knowledge management.Journal of Business Research,67(5), pp.686-691. Hogan, S.J. and Coote, L.V., 2014. Organizational culture, innovation, and performance: A test of Schein's model.Journal of Business Research,67(8), pp.1609-1621. Liu, H.C., You, J.X., Li, P. and Su, Q., 2016. Failure mode and effect analysis under uncertainty: Anintegratedmultiplecriteriadecisionmakingapproach.IEEETransactionson Reliability,65(3), pp.1380-1392. Negulescu, O., 2014. Using a decision-making process model in strategic management.Review of General Management,19(1), pp.111-123. Nica, E., 2013. Organizational culture in the public sector.Economics, Management, and Financial Markets,8(2), pp.179-184.
11GLOBAL BUSINESS MANAGEMENT Roh, J., Hong, P. and Min, H., 2014. Implementation of a responsive supply chain strategy in globalcomplexity:Thecaseofmanufacturingfirms.InternationalJournalofProduction Economics,147, pp.198-210. Schmoldt, D., Kangas, J., Mendoza, G.A. and Pesonen, M. eds., 2013.The analytic hierarchy process in natural resource and environmental decision making(Vol. 3). Springer Science & Business Media.