Influence of culture on international management a study of cosco shipping
Price: 2000 Naira (BSC, MSC)
There is a need for foreign Multinational Corporations (MNCs) to have adequate knowledge in international management. This is necessary due to the possibility of multiculturalism in the country these MNCs operate in. This study considers the diversity of cultures in Nigeria. It analyzes the cultural differences in Nigeria and how it affects the Export System practices of multinational companies operating in the country. The objective of this study was to identify the values and leadership behaviors of managers and their subordinate employees. Analysis was conducted using simple percentages and chi-square test. 112 respondents from COSCO Shipping were selected out of which only 88 questionnaires were returned. The four hypotheses were then tested using a Chi-square to test for relationship between variables. The findings from this study show that culture has a significant impact on international management practices. According to this research, the key to success for MNCs is having the right management and employees in place. To this end, it is very important that the organization is aware of the cultural background of the environment in which they operate.
Key words: International Management. Multiculturalism, Multinational Corporations
1.1 Background to the study
A few firms used the world market that opened to worldwide exchange and extension at an expanded rate, for the most part during the 1990s and mid 2000s. Boundaries to a deregulation framework were restricted and worked with through the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), and the Association of South East Asian Nations (ASEAN).
Because of correspondence, transportation, financing advancements, method of passages to nations, and innovation, Economies turned out to be more opened. There was insight of less troubles when it came to works on including building up organizations past geological limits. Progressed Communications demonstrated a dramatic development, advancement turned out to be more quick when it came to working together past public limits.
In various societies, exercises, insights, and practice of the executives shift, and because of business activities being globalized, combined with a socially assorted labor force there came the expanded requirement for worldwide administration for individuals that comprehends the issues encompassing business and culture to oversee and work with development in diverse organizations adequately.
Global Management is a piece of worldwide business which is a field. It comprises of: International Trade, International Marketing, and International Finance (Nowakowski, 1999). Global Management is the dynamic interaction of a Multi-public Enterprise, such choices are those in regard of preparation, sorting out, driving, and controlling in a multicultural region (Nowakowski, 2000). This outline lays noticeable quality on the job of culture, like diverse abilities, Cross social practices in associations, move of innovation, and so on in directing tasks. (Rozkwitalska, 2007) depicted International Management to be the overseeing of organizations which surpasses a nation’s limits. The International Management field is one which is generally new and it changes quickly. The improved world globalization has achieved different researchers to consider this control. At the point when Transnational companies (TNCs) during the 1990s where dynamic in FDIs (unfamiliar direct speculation), interests in the field improved. Be that as it may, these progressions in the worldwide economy has achieved a considerable amount of issues which ought to be investigated and furthermore impact the development of International Management, consequently this subject is zeroing in on the job culture needs to play in International Management.
Culture is a root. It is established in Anthropology, Geography, Psychology, and furthermore in Sociology. The word culture comes from the Latin word cultura. It is identified with faction and love. Further extending the arrangement, it alludes to aftereffect of human collaboration. (Luthans and Doh, 2009). In light of the examination center around International Management, Luthans and Doh (2009) portrayed culture to being a procured information which is utilized by individuals of a general public to decipher certain encounters and make a social conduct. They further expressed that the gained information sets up mentalities, standards, qualities, and it impacts practices.
Culture is unified with no single definition particularly as a result of its woolliness as an idea. The definitions fluctuate as there are different specialists and researchers from various orders who have expounded on it. A few analysts contend that culture is something created and possessed by a gathering of individuals, while others contend it’s what a gathering of individuals is. Culture to certain analysts is viewed as hcombination of standards, values, sentiments, thinking, jobs, convictions, mentalities, conduct, and so on while some different scientists consider it to be financial matters, language, religion, instruction, governmental issues, innovation, law, the general public and so on (Tayeb, 2003). It is viewed as a key term which is utilized to clarify presence and the idea of social request. As per Cotgrove (1978), culture is alluded to as shared standards and upsides of a social framework that structures the most fundamental part of a general public. Hofstede (1991), characterized culture as the aggregate programming of the psyche that recognizes the individual from one gathering or class from another. In any case, comprehend that culture whether being something individuals are or have, it is a model one. As far as what individuals are, it very well may be identified with associations. It is an administration apparatus which can be utilized to direct practices of individuals (workers) in the association (Tayeb, 2003).
Culture is verifiably evolved. it includes values, regards, mentalities which are being shared by individuals from a gathering or society, and affect their way of life, be it material or non-material which shapes the two major parts of culture. (Tayeb, 1988). This definition hopes to clarify that individuals from a local area gain proficiency with the common attributes through various phases of socialization measures, such include: language, family, religion, formal schooling, and so on it is not necessarily the case that individuals from such local area act a similar way or have similar qualities and mentalities, they have a huge contrast.
Culture is known to be assorted, and various countries vary dependent on their standards, philosophy, conviction, and so on There are a few different ways to inspect contrasts in culture in various countries and furthermore decide their effect on worldwide administration. Culture can influence the exchange of innovation among countries, mentalities displayed by the executives of an association, their philosophy, and even business-government relations. In particular, culture influences individuals’ perspective and how they act (Luthans and Doh, 2009).
In Nigeria, a business set up is formal and in social terms a proper way is received and individuals show regard to position, age, and rank. Nigerians accept that life flavors individuals and they gain from encounters. Nigerians don’t differ with somebody more established than themselves, they bow to old individuals and regularly, one who is a place of power. Not at all like the way of life embraced in the United States, they have set up social qualities, such incorporate; Independence, Freedom, Competition, Individualism, Self-dependence, and so on
The Material Culture is unequivocal, like result of businesses, innovation, and so forth They are apparent, they incorporate relics, houses, handiworks, expressions, and so forth They address culture of any general public. The non-material is described into information, theory, ethics, language, values, philosophy, conduct characteristics, and so on these are now and then meant as verifiable parts of culture which are procured by individuals from a general public. They are neither noticeable nor unmistakable yet showed through the mental condition of individuals (Aluko, 2003).
Two huge viewpoints are determined in International Management, being key administration and multifaceted administration. In leading the global methodology, it requires perceiving the worldwide climate, for example, it’s monetary, political, legitimate, and innovative and above all its social measurements, which could all be summed up as public culture. It includes dynamic concerning passage into unfamiliar business sectors and proprietorship. Issues identified with social contrasts could in like manner be found in speculations acquired from Cross-Cultural Management field grew autonomously by International Business scholars.
This investigation targets zeroing in interests on factors that can be found in both the material and non-material part of culture, and break down the significant impact they have on International Management.
1.2 Statement of Research Problem
Individuals are affected by the cultural milieu wherein they are raised and live in, and it propounds the instance of social contrasts in associations. Thus, when in a far off country, chiefs need to comprehend the cultural qualities, practices of representatives they work with, their experience, language, how they convey, and their adherence to religion, what measurement they characterize themselves with. Directors likewise need to comprehend the climate as a rule, what example of shared fundamental suspicions to receive in specific areas.
In worldwide business, a significant issue being recognized is a director’s solid inclination for socially comparative conditions (Oudonhoven and De Boer, 1995). Likewise, significant difficulties looked in doing global business is viably adjusting to existing different societies, which includes one understanding the distinctions of existing societies, insight and qualities (Granell, 2000). Ahiauzu (1986) laid accentuation on culture getting generally worthy among social researchers, particularly administrators and scholars that administrative examples and worker practices are to a great extent culture-bound. All in all, Culture pervades a wide cluster of choices made in worldwide enterprises which bodes well on the grounds that these partnerships are overseen dependent on discrete qualities, convictions and needs utilized in nations which they execute tasks.
In this manner, there exist an issue of unfamiliar Managers that frequently have high inclination of disregarding the distinction and uniqueness of different societies, particularly where the organizations they oversee work in and of which unmistakably influences the business activities. For example, the manner in which organizations are directed, their disposition toward time, the correspondence setting of the way of life, and so forth This investigation endeavors to distinguish these issues and give answers to questions identified with styles and approaches utilized by unfamiliar Managers, their philosophies, and in particular, Employee’s impression of their administration style.
It isn’t exactly clear if International administration works with the impact power distance has on the authority style of diverse administrators. Nigerian culture is portrayed with High Power Distance considering the way that authority is relegated on grounds of training, experience and age. Practicing authority upholds centralization of forces. This will besides produce an interest for administrators that have the ability expected to manage individuals from assorted societies. This recognizes how significant it is for unfamiliar association to be socially delicate and are equipped for changing their initiative styles to the force distance of the way of life of the climate they work in.
Moreover, the issue related with culturally diverse correspondence happens where a general public think that its hard to move messages among themselves. At the point when correspondence is fumbled, it prompts misconception, doubt and aggravation among individuals in the association. A need to guarantee a powerful multifaceted correspondence among individuals from different societies in an association is prominent. To guarantee that specific commitments will be made corresponding to this space dependent on discoveries.
Issues identifying with social construction (Individualism-community) and choices made by the administration of an association is impressively respected significant. Bochner and Hesketh (1994) contended that individuals from individualistic societies are less likely to work in a group and individuals from a collectivist culture have high likelihood to work all the more successfully in a group. Corresponding to the over that targets giving an outline of how independence cooperation of Hofstede (1980) impacts administrative choices, the investigation hopes to abuse certain constraints and add to information on its effect. COSCO Shipping operating in Nigeria consists of people with diverse cultural background, there is need for these COSCO Shipping to understand the uniqueness and difference in the Nigerian culture when making decisions that directly affect the stakeholders of the organization to initiate an effective international management practice and favorable working environment.
1.3 Research Objectives
The overall purpose of this study is to determine the impact culture has on international management.
Therefore, the objectives are to:
i. Examine how the existing cultural differences influences transfer of technology in COSCO Shipping.
ii. Ascertain how the cross-cultural management practices of COSCO Shipping influences their operations.
iii. Determine the relationship existing between subordinate’s values at work and leadership behaviors exhibited by managers
1.4 Research Questions
Ahiauzu (1986) contended that there is certainly an expanding collection of writing in regards to inquiries of the impact of culture on authoritative conduct yet in particular are of low quality involving draws, cures which are western information and dream based. Accordingly, there exists the issue of an absence of exploration zeroing in solely on the effect of culture on International Management. Also, all things considered, little is thought about the nature and selectiveness of the Nigerian ‘culture’ contrasted with that of exiles and its effect on International Management. Considering these limits, an endeavor was made in this examination to give answers to the accompanying exploration questions:
i. In what way does the Cultural Differences existing in the organization influence its transfer of technology?
ii. In what way does the cross-cultural management system of COSCO Shipping influence their operations?
iii. Is there any existing relationship between the values of subordinates at work and the leadership behaviors of managers in the organization?
1.5 Research Hypotheses
Hypothesis is a tentative statement of truth put forward and used as a basis for further investigation by which they may be approved or disapproved. Hence for the purpose of this research to be achieved, the following null hypotheses stated will help in verifying the research statement.
i. Power distance has a significant influence on the leadership style of cross cultural managers
ii. Cross-Cultural Communication does not influence management practices
iii. Social structure does not affect decisions of cross cultural managers
iv. Employees attitude toward time does not influence managers decisions
1.6 Significance of the study
The discoveries in this exploration work, looks to show how much job culture plays in accomplishing a fruitful worldwide administration. Additionally notwithstanding the assemblage of information, it will give more extensive information to understudies in foundations who center interests around here and furthermore instruct the two representatives and bosses in different associations, especially staff and the executives COSCO Shipping, on the need to comprehend their way of life, and that of different nations for the most part those that they have organizations set up in, to advance worldwide cooperative energy and mix.
This exploration will give to associations, worked on information on the different qualities of the social factors picked, likewise the different regions recognized which will be influenced by this factors in this associations.
1.7 Scope of the study
The aim of the study is to determine how culture affects international management. So therefore, the research will be based on data obtained from the staff and management of COSCO Shipping.
1.8 Outline of chapters
This research work is made up of five chapters, Chapter one centres its focus on the introductory section of the research study. This includes the background to the study, statement of research problem and related issues to the research methods amidst other parts. Chapter two focuses on the literature review, it looks to examine other literatures that have viewed and written on this topic as well as the variables included. The third chapter of this work focuses on the research methodology, the fourth chapter has to do with the analysis of data gotten, presentations, and interpretation of the data gotten. The fifth chapter focuses on the discussion of findings, and finally the sixth chapter is on the summary of work, conclusion and contribution to knowledge. In addition to this outline is the references and attachment of sample questionnaire been used to obtain data in respect of the research.
1.9 Definition of terms
Culture: According to (Savignon & Sysoyev, 2002) the authors defined culture as a systems formation which comprises various forms of belief, values, norms, artifacts, etc. and it is transferred generationally from one to another, of which such characteristics, differentiates people with discrete features i.e. origin, socioeconomic class, gender, ethnicity, political views, race, religion.
Societal Culture: Societal Culture is the shared values, norms, beliefs, understandings, assumptions, goals, etc. that are learned from an earlier generation, which is being imposed by earlier and current members of a particular society, and being passed on to generations that succeed them (Deresky, 2014).
National Culture: According to (Hofstede, 1980) Culture is a collective programming of the mind distinguishing the members of one group or category of people from another”. of which the category is referred to as the nations, regions within or across, ethnicities, religions, occupations, organizations, or the genders.
Organizational Culture: This is the implicit, invisible, inherent and informal awareness of an organization that directs individuals behavior (Scholz, 1987). According to (Schein, 1992) it is a pattern of shared basic assumption that the group learned as it solved its problem of external adaptation, and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as a correct way to perceive, think and feel in relation to those problems
Cross-Cultural Communication: this is defined as the process people from diverse cultural milieu communicate among themselves, and how they endeavour to communicate across cultures. Intercultural communication is a related field of study.
Cross-Cultural Management: This refers to the process of sharing meaning by transmitting messages through media such as words, behavior, or material artifacts amongst different groups of people from diverse array of culture (Deresky, 2014).
Leadership style: this is the means of providing direction, implementing strategies, and motivating people, workers/staffs. As seen by employees in an organization, it is the total pattern of explicit and implicit actions performed by their leader (Newstrom, Davis, 1993)
International Management: This is the management of business operations of organizations that conducts their businesses in more than one country. It involves having knowledge, skills and expertise of the business methods of such countries, the regulations of the nations where they operate, local customs and laws, negotiation procedures, currencies, etc. (Business Dictionary, 2017).
Management: this is a process which involves, planning, organizing, coordinating, controlling, staffing, and directing resources of an organization with the sole aim of achieving the set objectives of the organization efficiently and effectively.
Managerial Decisions: Managerial decisions are those choices concerned with the activities of an organization, such will include the firms size, decisions on market growth, employee remuneration. It therefore is the act of making a choice about something concerning a firm after consideration has been done.
Transfer of Technology: this is the process of transferring technology such as knowledge, skills, methods of manufacturing, innovation, teaching technique, etc. from one place to another. it moves from its origination to various places and amongst people. Transfer of technology often occurs amongst universities, businesses, governments, across borders, through investments, license, trade, training, etc.
Human Resources: Human resource refers to the people that staff and operate an organization. It is the part of the company or a department responsible for the employees’ welfare, recruiting new employees and training job applicants, as well as administering employee-benefit programs.
1.11 Schematic Model Of The Study
Researchers Model, 2020
A model showing the variables chosen and how they affect each other.
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