International Management: Culture's Impact and Expatriation Evaluation

This report on international management delves into the critical role of culture in global business operations. It begins by defining international management and highlighting its significance, particularly in managing businesses across multiple countries. The report examines the impact of regional culture on corporate culture, discussing how cultural differences affect various aspects of a company's operations, such as outcome orientation, people orientation, team orientation, and communication. A case study of Tesco's expansion into Japan illustrates how cultural misunderstandings can lead to business failures. The report then evaluates the use of expatriation in the global economy, explaining the roles of expatriates in coordination, control, and knowledge transfer within multinational corporations. It also addresses the challenges of expatriation, including expatriate failure, culture shock, and the importance of cross-cultural training. The report concludes by emphasizing the need for companies to understand and adapt to cultural differences to succeed in the international market.

INTERNATIONAL
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1B.........................................................................................................................................1
Impact of regional culture on the corporate culture ....................................................................1
Example of regional culture affecting corporate culture.............................................................2
TASK 2............................................................................................................................................3
Evaluation of expatriation in global economy.............................................................................3
Implications for the HR are as follows........................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
International management is the activities which are done for the management of the
business in the international market. With the help of international management the organization
which provides it services more than one country can be managed. In this project the role of the
culture in the international business in understood. This project understands the key
organizational and national culture characteristics which helps in management of the business. In
this project the challenges and opportunities which can arrive in international management are
discussed. One of the main aim of the project is to understand the factors which contribute to the
global economy and the demonstration of ethical and accountable internation business policies.
In this project the impact of the regional culture on the corporate culture of the company is
discussed. This project evaluates the use of Expatriation in the global economy by explaining is
roles ,causes and affects.
TASK 1B
Impact of regional culture on the corporate culture
In different countries the culture differs, this creates an impact over the corporate
organizational culture of the company. Company therefore has to deal with people with different
culture in the organization. The diversity of culture in the country effects the diversity of the
employees of the company. Individuals with different background have different traditions and
frames of references. This affects the corporate culture of a company. Culture is a very complex
thing for an organization to deal with. The members of the society has its own morale, belief,
habits, knowledge and capabilities which builds the culture of that society. The culture of the
society consists of a pattern in which develops the social practices. These social practices of the
employees influences the organizational culture of the company (Labadi, 2018). The impact of
the regional culture has the following impact on the corporate culture of the company,
Outcome orientation :
The culture of a society changes the morale and the belief of the individual this affects
the achievements and results. This culture of the company is what decides the goal the
coordinative motive of the company. Due to differences in the culture the organizational culture
is unable to keep its aim and goal similar (Väyrynen, 2018).
People orientation :
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The culture of an organization affects the thoughts of the individuals. The thoughts of the
individual are the belief, habits and the knowledge it shares within the organization. Difference
in the culture due to regional differences affects the individual thoughts which further leads to
change in fairness and tolerance in the company. These situations affect the respect individuals
have for each other.
Team orientation :
In an organization teamwork is very essential. Teamwork is the joint effort of the team
members. Due to change in the organizational culture the individual are affected this changes the
team composition in the organization (Yang, Zhang and Sheldon, 2018).
Communication :
Regional cultural change affects the language in which the individuals communicate to
each other. Therefore, region culture affects the organizational culture of the company.
Communication in the organization is very important for its success and productivity.
Example of regional culture affecting corporate culture
Tesco plc is a multinational company which is a retailer of groceries, food products,
fashion and other home products. The company has been known to expand its business very
often. Outside of UK this company has expanded its business in 11 other countries. It has been
successful in most of the countries. However, it has also failed in certain countries. USA and
Japan are few of those countries in which this company failed and had to pull out its business due
to the major loss it was suffering. In Japan this company first started its business in the year
2003. Tesco began its business with the help of two stores for a total of £139 million. The
company was never successful despite it hard fought efforts for 8 years in Japan. In august 2011
the company sold off its stores in Japan for retrieving the business from this country.
Tesco plc had to return back from Japan as it was very difficult for the company to trade
in high costs and could not fulfil the demands of the customer there. Tesco had invested huge
amounts but could not accurately determine the cultural differences between Japan and the UK.
Japan’s culture is different than that of the UK’s, the country possess many family owned
business which encourage the community and enhance their personal touch. The Japanese people
had always preferred quality products and excellent shopping experience. Tesco had large stores,
which made it difficult for the company to provide great shopping experience to each and every
customer. The Japanese are extremely devoted to products manufactured in their own country,
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but recent times have seen the diverse reaction of the Japanese people to buy the western
products manufactured in Europe, USA etc. To attract the Japanese people and appeal there
mindset to buy the company’s product was a hard task.
While expansion to a new country every company should carry out thorough planning
and research. The culture of every country is different from the another, it is to be accurately
examined and understood. The culture of Japan was different from that of the UK that resulted in
the loss of a lot of money (Wolfestone, 2012). Grocery buying habits of the Japanese were very
different sometimes, they would prefer the local small stores instead of the large supermarket.
Tesco had decided to establish themselves in Japan all by their own, which was not beneficial,
had they collaborated with some respected Japanese brands or hired the right local expertise they
would have been much more successful. While entering any new market it is best for any
company to consider trans-creation, or creative translation. Trans-creation is the process of
maintaining the intent, style, tone and context of a language to covey their message in other
language. This could be used by Tesco. Tesco had the proper financials for commencing the
project but lacked in the knowledge of the cultural differences of the UK and of Japan.
Collaborating with a recognized brand in Japan would have increased their chances of making a
position in the market (Heyne, 2017). While Commencing their business in Japan Tesco had only
half of its stores out of 129 which were in profit, which made them retreat their decision of
expanding in Japan and selling their shops in Japan. Tesco had made some assumptions of the
country which failed as they stepped in the real world.
TASK 2
Evaluation of expatriation in global economy
Expatriation
An expatriate is a highly skilled and developed employee with special expertise in a field,
who is sent to a foreign location of the same company to work on the other unit of that company,
for a temporary basis generally. There are two categories of expatriates, PCN (Parent Country
National) and TCN (Third Country National). The PCN is that person whose nationality is same
as that of the corporate headquarters of the company and the TCN is that person who is a
national of the country other than the MNC’s (Multi National Company) home country and the
country of subsidiary. The growth of globalization has increased the number of expatriates in the
world (Zhang and et,al., 2020).
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Role of Expatriates
For a company to be successfully established in other countries it is very important to
have the right person with specific skills. This requires the people to move from their respective
country to the country, the company desires to be established. Expatriates are those people who
leave their country to establish the company’s project to be established in the foreign country. It
is the role of the expatriates to appoint and look after the new employees from the desired
country and train them as to achieve the desired goal of the MNC (Baluku and et.al., 2019).
Coordination and Control
Expatriates are used instead of host country nationals as they possess greater
understanding of the headquarter rules and regulations which helps in promoting these rules in
the foreign country. Instead of hiring the host country national an expatriate is prioritized
because of their huge commitment to the company’s goals.
As the multi-national companies are growing and reaching far more countries there is a constant
need of coordination and control among the organization to establish the organization's
integration in the host country. The role of the expatriate is to facilitate well-defined coordination
and control of subsidiaries to achieve the organization's integration in the MNC’s units
internationally. Expatriates play a vital role in controlling the local activities and the subsidiaries
which are of high importance to the company’s headquarters.
Knowledge transfer and Expatriates
In today’s business world the competitive success of a business is extremely based on its
intellectual capital and less on the strategical finances and physical resources of the company. In
today’s world to get a competitive advantage, integration of the embryonic organizational
abilities and sharing the different features of the multinational culture and way of working is
crucial to the organization. Since such sharing and implementing of the multinational culture and
operational abilities is extremely hard to imitate. To knowledge transfer means the process which
affects the organizations unit in the host country by the experience of the expatriate which
provides much consideration in the international business. Expatriates play essential role in
today’s world as they perform knowledge related functions such as the development of the local
staff, passing the skills from the headquarters to the host country organization, developing the
future leaders, developing trust in the employees, implementing the knowledge and practice
function’s which will improve the productivity of the subsidiaries.
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Expatriates Failure
The inability of an expatriate to adjust in the host country environment is generally
known as Expatriates failure. The diminishing performance and premature home coming to the
home country before the completion of the foreign assignment. Expatriates are important for the
operational and strategic success of the company, but the percentage of the expatriates failure are
increasing day by day. These failures apparently depend on the host country. Expatriates failure
has cost the MNC’s with huge amount of losses The most common problem faced by the MNC
is doing business in overseas countries. The persons performing overseas in foreign countries
gave a lower level of performance in comparison to their performance in their home country
(Lepoutre, 2020).
Culture shock
Expatriates faces a complete cultural change as they move to the host country from their
home country. The person would feel nervous because of the cultural differences and norms of
the culture of the host country. When people move to the host country which is highly different
from their home country there is high probability that the person would face high level of
cultural shocks and differences. It is a whole psychological process for the personnel who is
moving to the host country, whether it be emotionally religiously or physically.
Cross Cultural Training
It is highly crucial for the expatriates to attend the cross cultural training in order to
facilitate expatriates cross culture adjustment. Cross cultural training can be referred to as the
process to increase the person’s ability to adapt the host countries culture and simultaneously
working in the foreign country. The better the cross cultural training the better person’s future
endeavours in the foreign country. This training helps the expatriates develop their understanding
of the host countries cultural differences. If the companies do not provide the cross countries
training programmes, there are higher chances of the failure of the expatriates (Prihadyanti and
et.al., 2021).
Pre- Departure Training
The Pre- Departure training is the stage of the cross cultural training after the expatriates
have reached the destination country. This pre-departure training provides the essential
knowledge of the host country to the expatriates. For example, the customs of that country, the
cultural imperatives, the business etiquettes of that country, the dress code of the countries
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related to the business and also a great knowledge of the host country’s language. During the
period of the pre departure training the expatriates must be told that they may face ambiguous
situations during the assignment. It depends on the expatriates on they tackle such different
situations which they face in the host country. A good pre-departure training can result in a great
and higher chances of the growth of the business in the foreign country.
Pre-Departure Visit
A pre- departure visit is referred to as the expatriates trip to the host country before the
beginning of the assignment. Many companies allow their expatriates to visit the host country
before there assignment, this helps the expatriates in gathering the knowledge of the host country
through their own eyes and perspective.
Post- Departure Training
The Post-departure training is very useful, but should also be continued in the host
country. A few days of pre-departure training cannot fully prepare the expatriates, and hence the
post departure trading should be conducted in the host country upon the arrival of the expatriates.
Pst departure training can be very useful in order to diminish the cultural shock of the host
country to the expatriates. This training also includes the knowledge of the host country’s tax
system, schooling for the expatriates children, getting a local bank account and many more. All
these training programmes helps the expatriates in familiarizing the host country (Rees and
Smith, 2017).
Training Methods and Types
Training methods and types should be allotted in accordance with the diversity of the host
country’s culture. The diverse the country’s culture longer and specific methods of training
should be adopted by the companies to provide the expatriates.
There are three types of cross cultural training methods; Cognitive, behavioural and affective.
The method which uses conferences and non-participative sessions and resemble the distribution
if the information is known as cognitive method. The behavioural method focuses on the
expatriate's ability to improve the communications skills of the host country. An effective
method which improves the expatriate's ability to tackle the diverse situation faced by them in
the host country and develop their problem solving skills. Training and orientation are two of the
most crucial factors which will further affect the results of the expatriate's assignment which is to
establish the organization with same or higher productivity in the host country.
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Implications for the HR are as follows
The diverse culture of the country should be properly analysed by the company and be
adapted by the expatriate. The expatriate or the HR director could face serious culture shock as
every country has its own cultural background and environment. HR director should keep in
mind that the culture of the host country is very different from that of the home country of the
person. Thus, hiring some locals who have correct knowledge of the countries market and
business rules can be beneficial to the company in achieving the company’s goals. The HR of the
company should utilize the training and development method in order to handle the employees
which have difficulties in adapting to expatriation. The company can teach the employee the new
language which they will need to learn in that particular country. With the help of proper training
the individuals can be successful in the expatriation into a new country with a completely
different culture.
Training of the expatriates is one of the most crucial process for any company in respect
to the host country where the expatriate is going to move for the commencement of the business
in the foreign country. Training and developing the person with respect to the host country refers
to increasing the knowledge of the expatriate of the host country’s culture, environment, laws,
and all the etiquettes of the country. Without proper training and development, the expatriate
could not face the real on time problems in the host country. The proper training and
development of the expatriate can result in higher chances of the organization to be more
successful in the foreign country. The expatriate should know all the basic and the information
needed to commence and forming the right team for the organization which can perform in the
correct manner.
CONCLUSION
With the help of this project it can be concluded that the use of expatriation for global
expansion of business has it effects and causes on the company. This project is successful in
understanding the impacts of regional culture over the corporate culture of a company. With the
help of proper example the company proved how culture affects the business in different
countries. This project helped in understanding the role of the culture in the international
business. In this project the key organizational and national culture characteristics which helps in
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management of the business is understood. With the help of this project the challenges and
opportunities which can arrive in international management are discussed. The main aim of the
project was to understand the factors which contribute to the global economy and the
demonstration of ethical and accountable internation business policies.
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REFERENCES
Books and Journals
Baluku, M.M., and et.al., 2019. The role of selection and socialization processes in career
mobility: explaining expatriation and entrepreneurial intentions. International Journal for
Educational and Vocational Guidance. 19(2). pp.313-333.
Heyne, S., 2017. Culture and female labor force participation in international comparison.
Labadi, S., 2018. Historical, theoretical and international considerations on culture, heritage and
(sustainable) development. World Heritage and Sustainable Development: New Directions
in World Heritage Management, pp.37-50.
Lepoutre, J., 2020. When losing citizenship is fine: denationalisation and permanent
expatriation. Citizenship Studies. 24(3). pp.339-354.
Prihadyanti, D., and et.al., 2021. The Changing Nature of Expatriation: The Emerging Role of
Knowledge Transfer Readiness. Journal of the Knowledge Economy, pp.1-46.
Rees, C. and Smith, C., 2017. Applying critical realism to the MNC: Exploring new realities in
staffing and expatriation. In Multinational corporations and organization theory: Post
millennium perspectives. Emerald Publishing Limited.
Väyrynen, T., 2018. Culture and international conflict resolution: A critical analysis of the work
of John Burton. Manchester University Press.
Yang, Y., Zhang, Y. and Sheldon, K.M., 2018. Self-determined motivation for studying abroad
predicts lower culture shock and greater well-being among international students: The
mediating role of basic psychological needs satisfaction. International Journal of
Intercultural Relations. 63. pp.95-104.
Zhang, Y., and et,al., 2020. Are culturally intelligent professionals more committed to
organizations? Examining Chinese expatriation in Belt & Road Countries. Asia Pacific
Journal of Management, pp.1-31.
Online
Wolfestone, 2012., Tesco international marketing gone wrong.[Online] Available trough:
<https://wolfestone.co.uk/insights/blogs/tesco-international-marketing-gone-wrong>
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