Analyzing the Impact of Regional Culture on Multinational Companies

This report provides a comparative analysis of organizational culture versus regional culture, focusing on a financial company with headquarters in Germany and branches in South Africa, Shanghai, and Brazil. It identifies the key issues multinational companies face when operating in diverse cultural contexts, including adapting to local rules and regulations, communication styles, employee motivation, and customer expectations. The report further discusses the influence of regional cultures on decision-making processes, company policies (such as labor laws and training practices), and marketing strategies. It highlights the challenges of adopting a universal business model due to varying customer attitudes and buying behaviors, using Tesco and Asda as examples. The report also addresses language barriers, currency differences, and the need for organizational culture adjustments to accommodate regional preferences, ultimately concluding that companies must tailor their operations to align with the cultural nuances of each specific region to ensure success. Desklib provides access to similar solved assignments and study resources for students.

INTERNATIONAL
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
Task A..............................................................................................................................................2
Task B..............................................................................................................................................2
Impact of regional cultural issues on multinational corporate culture ........................................2
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................6
1

INTRODUCTION
International management is a practise in which individual understand about the
international economics, changes in the international corporation and also creating global
strategies of business. In this there are different skills on which the management is done that are
critical thinking, problem solving skill and many more. This report will evaluate the comparison
on the organization culture with regional culture of a financial company having head branch in
Germany and more branch at South Africa, shanghai and Brazil. Further it will determine the
impacts and issues of organizational culture and culture of multinational company when they are
operating their business internationally.
Task A
Covered in PPT
Task B
Impact of regional cultural issues on multinational corporate culture
There are number of issues that any multinational company uses to face while they are
operating in different country in the world (Burritt And et. al., 2020). The regional culture
system or individual culture is greatly influencing the corporative business culture with different
aspects.
 When a company is entered the new market then there are different rules and
regulation of that particular country which have to followed by the company to
sustain there. The managerial functions are also being affected of corporative
culture while operating in regional culture (Luthans and Doh, 2018). The
communication is being changed as people at different place uses to communicate
in different style and manner. They are not comfortable when different mains of
communication is being used upon them.
 The employees who are working for the company in regional areas are also being
motivated with different style at different places so if the corporate culture is
being changed when the people of regional culture are not able to be motivated
with the existing style which is used by company.
 The people of organization are also uses to expect something from the
organization where they are performing their activities (Kratzer, Meissner and
Roud, 2017). When the company enter in regional culture then people of that area
2

have different expectation then the people who are working in corporative culture
(Kalafatoglu and Mendoza, 2017). This influence company managerial function
as well as operational functions.
 The decision-making is also get influenced by this as organizational cultural have
to take decision keep in mind the people and tradition of the regional culture in
which they are operating.
 The policies which are make by the company are also influenced by the regional
culture such as labour laws, training practises which are affecting the e culture of
the company when they are expanding their business in some other region.
 The business are being fail to adopting the universal model of business as the
attitudes and buying behaviour of customers are impacted due to certain culture.
Whenever company enter the new marketplace the model for performing the
business activities should be modified to reflect the preference of the customers
present over their (Arditi, Nayak and Damci, 2017). For example Tesco is a
multinational company who is having its head quarter in Welwyn garden city, UK
if they are processing the operational and managerial activities in Asia then they
have to modified their products category as well because people in the UK and
Asia have different product preferences. In this Tesco have higher risk as they are
operating in the regional area and people are totally different in that area from the
organizational culture. They may get fail to operate in that area because the risk is
high due to different preference of the people at different places.
 The organizational culture and regional also have different people who are using
different language to transfer their information and also communicate between
each other while working for the organizational goal (Bouranta and et. al., 2019).
It become difficult for the company to change their operational language and
perform the using different language. The customers are present in each culture
needed to consume the products which is better in the market. So it becomes very
hard to offer best quality at a reasonable price because the customers are also
having different type of mentally (Kampf and et. al., 2017). Some customers
preferring the best quality and ready to pay for that and other buyer in the market
3

are in search of cost effective product which are less in price and higher in
satisfaction.
 When the organizational culture come into a regional culture then they also face
issues to market their products because in different places marketing is done in
different styles and manner. So the marketing people of the company also have to
adopt the way people are able to attracted towards the products and perform the
marketing accordingly.
 For example when company like Asda who is an international company uses to
operate in more than one company than they have to uses the universal applicable
methods. When the Asda is selling their product internationally and having its
network in more than one country then they should use in e-commerce website to
sell their products. They should undertake the well-known international payment
method such as Yandex, pay pal and many more tool which are used for
international payment. Without using their kind tool and methods Asda can not
able to continue the business in regional area.
 The different nations are also having different types of currency and when the
Asda who is having their headquarter in UK. They will change the prices as per
the current rate of currency have in the regional area (Döhner and et. al., 2017).
The price is to changed as per the power of the currency in which area the goods
are being sold. if the currency rate is not being Major then the profit of the
company get affected or may company also face lose due to this.
 The organization culture of company also get influenced when the company go in
regional culture (Harzing and van Ruysseveldt, 2017). For example as Sainsbury
is an international company, and they are having flat system in the corporative
environment and when they go into some other country then their organizational
culture is also get influenced, and they have make change if the people of the
culture prefers hierarchy structure then Sainsbury have to change accordingly.
CONCLUSION
This report concludes that the organizational culture and regional culture are having
different aspects as people preference and style of performing their activities are different. The
4

organization have to make changes in their rules and regulation as per the preference of people in
that particular nation or region. The financial company is being operating in Germany, and they
are having their branches in South Africa and other region then company have check and make
sure that rules should match the preference of the people in that area. Further it concludes that
regional culture get influence when multinational company operates in their area. As the
company's decision-making, style f leading the people over their and management of human
resource is being smilier for all the branches.
5

REFERENCES
Books and Journal
Arditi, D., Nayak, S. and Damci, A., 2017. Effect of organizational culture on delay in
construction. International journal of project management. 35(2). pp.136-147.
Bouranta, N. and et. al., 2019. The key factors of total quality management in the service sector:
a cross-cultural study. Benchmarking: An International Journal.
Burritt, R.L. And et. Aal., 2020. Multinational enterprise strategies for addressing sustainability:
The need for consolidation. Journal of Business Ethics. 164(2). pp.389-410.
Döhner, H. and et. al., 2017. Diagnosis and management of AML in adults: 2017 ELN
recommendations from an international expert panel. Blood. 129(4). pp.424-447.
Harzing, A.W. and van Ruysseveldt, J. eds., 2017. International human resource management: A
critical text. Sage Publications.
Kalafatoglu, T. and Mendoza, X., 2017. The impact of gender and culture on networking and
venture creation. Cross Cultural & Strategic Management.
Kampf, R. and et. al., 2017. Generational differences in the perception of corporate culture in
European transport enterprises. Sustainability. 9(9). p.1561.
Kratzer, J., Meissner, D. and Roud, V., 2017. Open innovation and company culture: Internal
openness makes the difference. Technological Forecasting and Social Change. 119.
pp.128-138.
Luthans, F. and Doh, J.P., 2018. International management: Culture, strategy, and behavior.
McGraw-Hill Education.
6