International Management: Cultural Issues, Expatriate Failure, and Globalized Economy

This document explores the key effects of regional cultural issues, discusses expatriate failure in regard to cultural adjustment, and examines the factors contributing to the notion of a globalized economy in the field of international management.

International Management
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Table of Contents
Introduction......................................................................................................................................3
Part 1................................................................................................................................................3
TASK 1...................................................................................................................................3
TASK 2..................................................................................................................................3
Key effects of regional cultural issues...............................................................................3
Part 2................................................................................................................................................5
Discuss the expatriate failure in regard to cultural adjustment..............................................5
Impact of Culture...............................................................................................................5
Cross cultural adjustment..................................................................................................6
Reasons for Expatriate Failure...........................................................................................6
Discuss the factors that contribute to the notion of a globalised economy. ..........................8
Ethical considerations in International business................................................................8
International policies and standards...................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
Organisational culture is the style of operations within a company. It is often implied and is
reflected in business operations like business hours, office setup, employee hiring and benefit
decisions, turnover, clients’ policy, etc. (Al Saifi, 2015) KPMG is an acronym for “Klynveld
Peat Marwick Goerdeler”. It is a multinational professional services network. It was founded in
1987 and has its headquarters at Amstelveen, Netherlands. It operates in more than 150 countries
around the globe and provide services related to financial audit, tax and advisory. Thus, it is
naturally affected by cross border cultural differences.
Part 1
TASK 1
(Covered in PPT)
TASK 2
Key effects of regional cultural issues
Whenever a company operates in different countries. It faces multiple issues like whether
they will be able to make good returns on money they have invested in new country or not,
whether they will be able to make their business plan a success in a new country or not, whether
they will be able to adjust with the local business environment or not, etc. All these issues are to
be handled by human resource working in that organisation (Anning-Dorson, 2016). Companies
either send their expert managers to manager new projects or hire locally. KPMG provides
financial and tax consultancy related services. KPMG fosters partnership with local professionals
as member firms to carry out its operations. Client services are provided by member firms. Each
firm has a separate legal entity. Every member firm has to take responsibility for its management
and the quality for its work but they have to work in accordance with the quality standards
provided by KPMG International. KPMG International does not provide client services. KPMG
send its expert professionals in different countries as expatriates to manage its management and
global advisory operations according to their global standards. It encounters many problems in
making expatriation policy a success. Few are below mentioned:
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 Language issues – Global concerns may follow English as language of operations
but local employees prefer their local languages to interact. Not knowing those
languages make it difficult for expatriates to adjust into new culture and foster co-
ordination and co-operation with localities. I believe KPMG would not encounter
such issue in a significant manner for they primarily provide services through
member firms which are already well versed with the local culture. Moreover,
language training is provided to expatriates beforehand for those countries which
does not have English as primary language.
 Cross-cultural differences – These issues are the differences that are found in
various cultures, traditions and norms (Fitzpatrick, 2017). For example, KPMG has
established a global work and quality standard which is required for member firms
to follow as organisational culture. Whenever global experts are required to work
with a different culture then theirs, say Japan, experts incorporate their local
traditions such as bow in place of handshake in their global standards to make them
feel more involved. KPMG has been providing services to multiple countries for so
long now. Therefore, I believe that they would have developed such international
practices by now that are so general in practise that it can be practised into most of
the countries. They already have culture training in practise to avoid escalation of
any cultural embarrassment to the company.
 Different Business Environment - Not only traditions but local laws, rules and
regulations also differ in different countries (Fu and et.al., 2015). Changing
policies, different laws, etc. can also create different issues for companies. KPMG
has clear agreements with their member firms to follow all laws and regulations of
country they are working in before commencing operations in them. KPMG
provides financial and tax consultancy to its clients and thus, it can be assumed that
they already indulge in updating their knowledge about political policies, changes
in rules and regulations, etc.
 Adjustment Issues – Companies often train only few persons as cross culture
experts. They expect same individuals to adjust in all countries but not everyone is
able to adjust everywhere. Many a times expatriates are not able to adjust in those
cultures which are drastically opposite to their home culture even after having
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trainings. This becomes one of the major reasons for expatriate failure. I believe to
avoid such issues only KPMG have most of their business operations by local
member firms. For global experts they shall choose different person for different
countries which are versed with the visiting culture.
Part 2
Discuss the expatriate failure in regard to cultural adjustment.
In present scenario where globalization is as extraordinary as anyone might imagine, and
global rivalry in the realm of business sets gigantic difficulties to international organizations, it is
basic to make progress toward arrangements significantly more to be fruitful in the global field.
All together to dispatch items and offer types of assistance that are serious on the global market,
associations need to prepare their faculty so as to outfit them with the skills important for being
effective in business exercises in a global situation. Internationalization in the realm of business
has been heightened by the formation of global auxiliaries, collaborations, consolidation and
acquisitions, just as transnational key organizations bringing about an expanding workforce
living and working in a far off nation (Al Ariss and Sidani, 2016).
Impact of Culture
To put it quickly, culture could be perceived as a mutual significance framework (Stahl
and Tung, 2015). It suggests that the condition, which is more inclined towards expanded
communication between representatives of various societies, is more open to, and sometimes,
straightforwardly requires an expanding number of transient excursions for work to unfamiliar
nations or even long haul unfamiliar tasks. These international tasks are, be that as it may,
helpful both for exiles just as for the organisations. Foreign tasks increment ostracises global
points of view, increment the capacity to impart more adequately with individuals from socially
differing foundations, or better fathom business patterns. Advantages for the association that are
emerging from global tasks may incorporate inter-subsidiary correspondence and coordination
because of the corporate methods of reasoning and vision, which are probably going to be moved
along with the ostracise. Likewise, contends that the utilization of exiles can assist the
association with shaping connections with have nation governments, neighbourhood
organizations, or other intrigue gatherings. This type of association is probably going to furnish
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the association with an upper hand over rivalry, particularly when the association is the first
among contenders to make this type of association, and consequently liable to pick up the
'principal mover advantage. Hence, it could be contended that the accomplishment of an exile in
an unfamiliar task expands an association's general effectiveness just as productivity (Barmeyer
and Franklin, 2016).
Cross cultural adjustment
Cross Cultural adjustment is refer as diverse alteration as the cooperation among different
person with an unmistakable culture. These cooperation practices were imparted through
languages. The articulation of culture is different in different nations, and upbringing of exiles
incorporates four measurements.
 Self-adjustment: Self-change basically fortifies the prosperity of an ostracize, that is few
people get the feeling that they are regarded and trusted.
 Other adjustments: This is a basic factor in building up a perpetual and well built
kinship with neighborhood individuals and being comfortable to speak with nearby
individuals for better upbringings.
 Cognitive feeling: This factor referred to diminishing weak links in relational
connections, decrease doubts among people, and evading false impressions brought about
by social contrasts (Brewster, 2017).
 Cultural toughness: Different nations present particular social attributes. Ostracizes of
transnational endeavors in certain nations show various types of disappointment
including position disappointment, stress, clinical protection, amusement, food and
working abilities of associates.
Reasons for Expatriate Failure
Expatriate (ostracise) disappointment isn't tremendously normal, yet it actually occurs.
Regularly the explanations behind it are both of two things – individual, or because of inadequate
help and help from a international (worldwide) portability group. Given the groundbreaking idea
of such migrations, it is obvious that there are some of the time significant issues – it is anything
but a move everybody will be ready to make (Eberwein and Tholen, 2017).
1. Culture Shock
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Culture stun is frequently one of the usual and common factor behind ostracize
disappointment. It happens where an applicant is not ready to adjust in the new culture and their
task want them to be peaceful in accepting the new culture irrespective of their known language,
their existing laws and regulations. While along with this there are various component which
makes the competitor unfit for the job role that is improper planning and data availability as for
competitor the characteristics and needs are not fulfilled. The effect of cultural shock is majorly
seen in the Middle East where according to different situations the laws and regulations specially
for ladies cripples. However, for those who can handle the up-and-comes and are socially
adaptable, these tasks can be extraordinarily attain and completed.
2. Family Stress
In present scenario the global tasks are quite hard for the individuals and for families it is
much harder. Migrating the whole family from one place to other is not easy and is full of
troubles that is there are problems like career of kids, medical care, issues related to essential
items, etc (Boss, Bryant and Mancini, 2016). Language boundaries and lodging needs creates
problems as it become difficult for individuals and families to adjust in new culture as they are
not able to understand others viewpoints as well as not able to make other understand their own
viewpoints and requirements. There are still chances and phenomenal encounters that may take
place in the global task and may lead into damage. As along with work stress it become difficult
for individuals to handle the family problems and difficulties.
3. The Global Mobility Team
A reasonable and well planned Global Mobility teams and group are fundamental to the
accomplishment of a worldwide task. They are answerable for the formulation and development
of all help for an up-and-comer: data about the neighborhood culture, transport, lodging, school
look, etc help and various other essential things of day by day life. In the event that the group
didn't provide sufficient information or help, the person who is shifting have to perform many
tasks which are much more than their expectations and also cost expenses to the organisation in
moving from one place to another(Hüttner, 2018).
4. Responsibility Overload
Along with managing and handling the new job position there are many other factors
such as culture and environment of new place which brings difficulties for the individuals. The
staff members at new place may create troubles and difficulties for the new individuals who have
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to handle the staff pressure too along with other problems. Over-burden of duty may effect the
individuals in negative manner that they many face excessive pressure of work, stressed,
nervousness, dissatisfaction and many more.
5. Poor Candidate Selection
Due to improper and poor selection of candidates in the organisation where selection is
done on the bases of the overall requirement of headquarters insight of according to the need of
job role, the results obtain are not up-to the mark. Moreover candidate may look perfect the role
but his personal needs and desire often make them the bad performer in the organisation.
So from the above study it has been concluded that various factors need to be considered
while selecting the candidate for the job role. Basically a balance need to be found while
selecting, that is personal needs and desires of the candidate and the responsibility for job role
should match(Jaeckel, 2016).
Discuss the factors that contribute to the notion of a globalised economy. .
1. The actions on factor related to the external environment need to be taken while keeping
up accountability and ethical integrity as they helps in characterizing the challenges in the
business. The responsibility and duty of business undertaking is continually liable to
address. The current corporate administration and business morals in the international
fund related matters has created the need for new and superior system of business morals
and ethics. As due to enhancement in the technology many fraud and undesirable
practices are taking place in the international market. The changes in the corporate social
and natural activities will develop better methodology and the fraud and misleading
activities will get reduced and it will prove great support in the notion of a globalised
economy. (Kourula, Pisani and Kolk, 2017).
Ethical considerations in International business
As organisations are growing and establishing themselves in the international
marketplace so its very important for them to consider the lawful and moral issues taking place at
global level along with the mission, vision and goal to get the success in the business (Wallace
and Sheldon, 2015). At the point when organisations decide to expand business in other countries
so its important for them that they should consider the moral difficulties along with the profits.
The most seen moral issues in the international business organisations are problems related to
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working guild lines, the working environment, political and economical issues and many more.
Organisations operating in international market need to consider the business environment of
new place along with the government rules and policies and its mandatory for them to follow all
the rules and regulations in order to survive in new marketplace. Each culture and country has
different set of customs, code, ethics, preferences, taste, etc. which need to be considered and
fulfilled by the organisation operating in new workplace. The customer requirements also differ
according to the countries and their culture so its very important for organisations to provide
products and services according to the needs and desires of the customers. Moreover
organisations need to function according to the moral and social qualities in order to win the
customer trust and accomplishing success to the business. (Lundgren, 2016).
International policies and standards
 Corporate strategies and guidelines kept up on the corporate intranet site "Strategy
Central" give extra direction on a large number of the subjects remembered for this Code
(Mügge and Stellinga, 2015). Approaches and guidelines might be refreshed
intermittently and workers are liable for acting as per any changes. Likewise, some
specialty units and organizations of Principal have officially received extra approaches
and codes of ethics with respect to circumstances that may emerge in association with
their specific business exercises. Representatives of these substances are relied upon to be
comfortable with, and maintain such strategies and codes explicit to their jobs and areas,
in expansion to the Global Code of Business Conduct and Morals. KPMG is a worldwide
organization and is focused on consenting to the laws of the nations in which we work.
Despite area, workers are expected to direct business in a way that adjusts with our
guiding principle of Integrity. No report, or set of archives, can cover each legitimate or
then again ethical (moral) inquiry that emerges in the work environment. Representatives
may experience circumstances in which the moral (ethical) commitment may not be clear
or they are inexperienced with the significant assortment of law. At the point when a
choice isn't clear, representatives are normal to request help in settling on the correct
choice (Luthans and Doh, 2018).
 The development in the ethical structure for business are providing more grounded base
to the activity of virtues and moral thinking. Corporate governance is referred as the
process which brings together the financial and social objectives and among individual
and shared objectives. The administration system is there which provide support in the
proficient utilization of assets and similarly to require responsibility for the allocation
(stewardship) of those assets. The point is to adjust as close to as conceivable the interests
of people, organizations and society. This definition features the significance of corporate
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administration in giving support in make progression in the business, and furthermore in
giving the responsibility and straightforwardness to guarantee the fair dissemination of
the subsequent riches. At long last the essentialness of corporate administration in
improving the solidness and value of society perceives a more certain and proactive part
for business (Madsen and Scribner, 2017).
Conclusion
From above report, it can be concluded that culture of an organisation is a system of
common belief that reflects the core values of a company. Organisational culture develops
around its organisational structure. Multinational companies often face problem in maintaining
same culture throughout. Biggest problem they face are cross cultural differences. They evaluate
local culture and adopt those values in their work culture to create a localised culture. They also
provide multiple trainings to their expatriates to adapt to foreign business environment.
Business ethics refers to the actualization of proper business arrangements and practices
concerning seemingly questionable subjects. The law as a rule establishes the pace for business
morals, giving a fundamental rule that organizations can decide to follow to increase public
endorsement. Business ethics is over and over again imagined as a lot of burdens and
imperatives, impediments to business conduct as opposed to the persuading power of that
conduct appropriately comprehended, morals doesn't and ought not comprise of a lot of
restrictive standards or rules. It is the ideals of morals of temperance to be somewhat a
characteristic part and the main thrust of an effective daily routine very much experienced. Its
inspiration need not rely upon expound soul-looking and consultation yet in the best
organizations moves alongside the simple progression of international relations and a common
feeling of mission and achievement.
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References
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Wallace, M. and Sheldon, N., 2015. Business research ethics: Participant observer
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