Global Sourcing: Intercultural Challenges

Running head: GLOBAL SOURCING: INTERCULTURAL CHALLENGES
GLOBAL SOURCING: INTERCULTURAL CHALLENGES
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1GLOBAL SOURCING: INTERCULTURAL CHALLENGES
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................3
Breach in Communication......................................................................................................3
Intercultural Behaviour Analysis...........................................................................................4
Intercultural Communication Strategies................................................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

2GLOBAL SOURCING: INTERCULTURAL CHALLENGES
Introduction
Global purchasing or sourcing of raw materials and/or services from the international
market beyond geo-political boundaries is one of the common strategies applied by large-
scale organizations, in aim of optimizing the available resources. While global purchasing
involves a monetary transaction, it is not the only way of sourcing. Global purchasing
strategies are adopted by organizations in order to have control over their suppliers and
reduce the Company’s dependency on them (Monczka et al. 2015). Sourcing of raw materials
or services from all over the world allows the Company to select the optimum supplier from a
vast range of available options. This intensifies the competitiveness amongst the supplier
companies as well as makes the finished product more competent in the international market.
Taking into consideration the mentioned, the Case Study of the internationally
established Swedish Company, the misunderstandings between the Company authorities and
the Chinese manager of the subsidiary in Vietnam, is a key example of the challenges faced
by a multi-cultural workforce (Binder, 2016). Though the Swedish Company’s global
purchasing guidelines clearly mentioned the necessity to obtain supplies from a wide range of
suppliers so that the same supplier supplies not more than 30% of a product, the subsidiary
manager in Vietnam violated the guidelines as he was culturally systemized to trust and rely
on only the individuals from the same ethnicity.
Therefore, this study revolves around the importance of alignment of the business
strategies with its multi-cultural workforce, distributed in different managerial and production
levels to derive the desired results.

3GLOBAL SOURCING: INTERCULTURAL CHALLENGES
Discussion
According to (Achtenhagen, Melin & Naldi, 2013)the case study in discussion reveals
the obstacles in the path of formulating the correct strategizing tool for a Company,
especially in relation to the inter-cultural backlashes and the organization’s internal and
external threats and possibilities.
Breach in Communication
Sourcing of supplies from a multicultural global market has multiple benefits—like
availability of the best quality materials at reasonable price, chosen from an array of available
options. However, working with a multi-cultural workforce has its own demerits and needs a
proficient management system to overcome the challenges (Gomarasca, 2013). A
multicultural workforce comprises of individuals from various geographical locations, ethnic
backgrounds, languages, cultures and beliefs; therefore, having in-depth knowledge about
how to communicate with individuals who share ‘different’ culture, views and beliefs is
important to develop a basic understanding amongst the participatory forces.
The guidelines set up by the Swedish Company required to purchase supplies from a
range of suppliers so that the dependence on each supplier can be kept under control. Having
multiple sources of supply also enhances the competitiveness amongst the supplier
companies and ensures the best quality product at the best price for the buyer Company
(Inemek & Matthyssens, 2013). However, a Chinese manager, who prefers to buy supplies
from Chinese suppliers only, operates the subsidiary of the Swedish Company located in
Vietnam. As a result of this, there was a miscommunication between the two participants—
Swedish manager of the Company and Chinese manager of the subsidiary. As per the
Chinese manager, he failed to evaluate the benefits of having diverse suppliers, whereas the