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

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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