Impact of National Culture on the Business Strategies adopted by the MNCs

In this document we will discuss about Impact of National Culture on the Business Strategies adopted by the MNCs and below are the summary points of this document:- The importance of national culture for multinational corporations (MNCs) in their business operations. National culture is defined as the attributes of a nation's people, including traditions, beliefs, and customs, and it plays a crucial role in determining the strategies used by MNCs. The success of MNCs depends on how well their strategies align with the national culture of the countries they operate in. The article emphasizes the need for MNCs to take into account the national culture when developing business practices and strategies. The Hofstede model of national culture is one of the most important tools for MNCs to gain insight into the culture of a particular nation. The article also highlights the impact of national culture on the entry strategy of MNCs, their establishment of strategic alliances, and the products or services they offer in foreign markets.

Running head: NATIONAL CULTURE AND BUSINESS STRATEGY
Impact of National Culture on the Business Strategies adopted by the MNCs
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1NATIONAL CULTURE AND BUSINESS STRATEGY
As opined by Moore (2016), national culture can be defined as the conglomeration
of all the essential attributes of the people of a particular nation like traditions, beliefs,
customs and other attributes. Liou, Chao and Yang (2016) are of the viewpoint that the notion
of national culture not only forms an integral element of the identity of the people of a
particular nation and also the manner in which they behave as well as perceive things. More
importantly, the entity of national culture also plays a pivotal role in the determining the
manner in which business is being conducted in the concerned nation (Harzing and Pudelko
2016). The net result of this is that the organizations are required to take into effective
consideration the entity of national culture not only for the kind of business practices that
they adopt but at the same time for the strategies that they choose to use (Kumar and Pansari
2016). The strategies that an MNC devises or uses in a particular nation need to be in
synchronicity with the national culture of the concerned nation for it to be success. This essay
will analyze the role that the element of national culture plays within the framework of the
strategies which are being used by the MNCs for the process of its business operations.
Hotho, Lyles and Easterby‐Smith (2015) have articulated the viewpoint that the term
‘strategy’ can be defined as a high level plan of action which is being adopted by an
organization to attain the objectives or the goals that it had outlined for itself. Moreover, as
opined by Rao-Nicholson and Khan (2017), the organizational mission strategy can best be
defined as the summary in which the concerned organization perceives its beliefs as well as
roles towards the attainment of the objectives or the organizational goals. On the other hand,
Halkos and Skouloudis (2017) have argued that the effective usage of the different kinds of
strategies often requires the organizations to undertake a thorough analysis of the business
market or environment in which they are operational but at the same time to take into
consideration the entity of culture of the people for whom their products or services are
intended. More importantly, in the contemporary times it is seen that the organizations are

2NATIONAL CULTURE AND BUSINESS STRATEGY
offering ‘behavior specific products or services’ so as to cater to the demands of the
increasingly diverse customer base that they focus on (Kostova, Nell and Hoenen 2016). This
is important from the perspective that if the products or services offered by an organization
are not in synchronicity with the demands or the needs of the customers then it is more likely
that they are not going to opt for it (Sampath and Rahman 2018). In this regard, mention
needs to be made of the organization McDonald’s which offers a menu in America that
comprises of different vegetarian and non-vegetarian food items and others. However, taking
the national culture of India into effective consideration, the organization have restricted
itself to vegetarian food items only and very few outlets of the same offer non-vegetarian
food (Kostova, Nell and Hoenen 2016).
According to Li et al. (2017), the ‘Hofstede’s model of national culture’ is one of
the most important tools which offer an insight to the different organizations regarding the
national culture of a particular nation. More importantly, as argued by Brannen, Piekkari and
Tietze (2017), the model under discussion by way of illustrating the elements of the national
culture of a particular nation also offers them an insight regarding the changes or
amendments that the organizations need to make within the framework of the business
strategies followed by them and also the kind of products or services that they are offering. In
this regard, it needs to be said that the notions of strategy and culture are greatly interrelated
and the entity of culture itself can be seen as a strategy which is being used by the individuals
to understand as well as solve issues or problems which have evolved over the years (White
et al. 2016). Furthermore, this enables the organizations to understand the manner in which
the people and the environment are correlated to each other and thereby helps them to use this
correlation for the growth as well as development of their business.
Novitskaya and Brewster (2016) are of the viewpoint that one of the major impacts of
the entity of national culture becomes apparent in the entry strategy which is being followed

3NATIONAL CULTURE AND BUSINESS STRATEGY
by a MNC for the process of entry or expansion into a new business market. As opined by
Torbiörn (2017), the MNCs for the process of establishment of strategic alliances or for the
purpose of joint venture need to take into effective consideration the culture that is being
followed within the framework of the MNC with which it is entering into collaboration. In
this regard, it needs to be said that the MNCs should always try to enter into a strategic
alliance with the kind of MNCs which is in proximity with the culture that is being followed
within their framework (Stahl and Tung 2015). This is important from the perspective of
ensuring the fact that the work of these organizations is being conducted in an effective
manner and also they are being able to attain the desired growth that they had anticipated. For
example, if the cultures within the framework of the two organizations are completely
different then this can not only create conflict of interest between the two but at the same
time hinder the attainment of the common objective which initially led to the collaboration.
According to Moore (2016), the role played by the element of national culture also
becomes evident in the kind of products or services which are being offered by an MNC in
the foreign business market. For example, it is seen that the organizations rather than
following the strategy of standardization are required to follow the strategy of adaptation
when they are trying to expand into the business market of other host nations. Rao-Nicholson
and Khan (2017) are of the viewpoint that this is important from the perspective that the
national cultures of diverse nations are different and thereby to ensure the success of the
products or services the MNCs need to modify the services or products offered by them. This
can be explained on the basis of the fact that the entity of national culture greatly determines
the preferences as well as the taste of the people of a particular nation and thus it becomes all
more important for the organizations to amend the kind of products or services that they offer
in the host business markets. A typical example of this is the inability of the organization

4NATIONAL CULTURE AND BUSINESS STRATEGY
Walt Disney to embrace the national culture of France which in turn led to the failure of the
theme park of the concerned organization in the nation of France (Tréguer-Felten 2017).
Li et al. (2017) are of the viewpoint that the process of strategic management requires
the organizations to take into effective consideration the organizational as well as
environmental factors. More importantly, in the MNCs it is seen that the workforce that is at
their disposal is a diversified one because of the difference in the national cultures of these
diverse individuals (Gomes, Barnes and Mahmood 2016). The net result of this is that the
organizations are required to formulate the kind of organizational culture as well as strategies
which are in synchronicity with the different attributes of the Hofstede’s model (Hua et al.
2017). For example, it is seen that regardless of the quality of a strategy it will not offer
fruitful results to the organizations unless it is in synchronicity with the workplace culture
which is being followed by the concerned organization and also the kind of business
environment it is operational in (Markman 2018). In this regard, mention needs to be made of
the organization Apple which over the years had developed one of the most diversified
workplaces. More importantly, taking into effective consideration the national cultures of
these employees it had been able to foster the kind of workplace culture which focuses not
only on performance but also the wellbeing of the employees as well (Sampath and Rahman
2018). More importantly, entity of national culture also plays a pivotal role in the kind of
promotional strategies which are being used a MNC for the promotion of the products or
services that they offer. Furthermore, the kind of corporate as well as business culture that an
organization had evolved also contributes in a significant manner towards the identity or the
image of the concerned organization and thereby directs their market or business prospects as
well.
To conclude, the above discussion makes it apparent that the entity of national culture
wields a significant influence on the strategies which are being followed by a MNC for the

5NATIONAL CULTURE AND BUSINESS STRATEGY
process of their business operations and also for the attainment of the business goals that they
have outlined. More importantly, the past literature which had been written on the above
mentioned topic also affirms the viewpoint that the different MNCs in order to be success
need to take into effective consideration the factor of national culture for the formulation as
well as implementation of different kinds of strategies. Furthermore, the past literature also
reveals that this is important because of the fact that the entity of culture affects the business
of MNCs at all levels and thereby the success or the failure of the MNCs greatly depends on
the extent to which the strategies devised by them are in proximity with the national culture
of the host business market in which it is operational. Thus, it can be said that the past
literature is an important tool which highlights the correlation which exists between the
elements of national culture and business strategies.

6NATIONAL CULTURE AND BUSINESS STRATEGY
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