Convergence of culture and conflicts in international business

Abstract

Purpose statement: The purpose of the paper is to investigate the convergence of culture and the related conflicts via cultural assimilation under the umbrella of globalization, to discuss the conflicts in international relationships and to analyze the conflicts in cooperation of corporate culture among a firm, community and government on the basis of the information obtaining from the journal. Method: Investigation is conducted on the basis of the information from the attached journal, related materials from the fields of culture via internet resources and textbooks as well as personal experience of international business. Conclusion: It is helpful to fulfill the knowledge of the international business of the cultural filed in the areas such as cultural assimilation, international relationships, and conflicts in cooperation of corporate culture and so on. Recommendation: offer some supplements to complete the information and knowledge obtaining from the journal.

Key words: cultural convergence, conflicts, relationships, corporate culture

Content page

1.0 Introduction 3

1.1 Literature review objectives 3

1.1.1 To investigate the convergence of culture and the related conflicts via cultural assimilation under the umbrella of globalization on the basis of this journal. 3

1.1.2 To discuss the conflicts in international relationships based on this journal. 3

1.1.3 To analyze the conflicts in cooperation of corporate culture among a firm, community and government under the analysis of this journal. 3

2.0 Summary of the journal 3

3.0 Literature discussion and analysis 6

3.1 The convergence of culture and the related conflicts via cultural assimilation under the umbrella of globalization 7

3.1.1 The umbrella of globalization 7

3.1.2 Culture convergence, conflicts and the reason analysis 8

3.2 The conflicts in international relationships 9

3.2.1 The incentives of culture conflicts in international relationships 10

3.2.2 The influences of cultural conflicts in international relationships 11

3.3 The conflicts stemmed from culture differences in cooperation between a firm, community and government 12

3.3.1 Conflicts in cooperation between a firm and solutions 12

3.3.2 Conflicts in cooperation between community and government 13

4.0 Conclusion 14

5.0 Recommendation 15

  1. Introduction

1.1 Literature review objectives

1.1.1 To investigate the convergence of culture and the related conflicts via cultural assimilation under the umbrella of globalization on the basis of this journal.

1.1.2 To discuss the conflicts in international relationships based on this journal.

1.1.3 To analyze the conflicts in cooperation of corporate culture among a firm, community and government under the analysis of this journal.

2.0 Summary of the journal

This journal is extracted from American Journal of Economics and Business Administration. It tries to explore the organizational culture in relationships and conflicts in international business via the analysis of these fields including the dimensions of organizational culture, the assimilation of culture under globalization, the influence of culture on economy, the organizational culture and conflicts in international convergence and divergence, the corporate organizational culture and international relationships, the conflicts in international relationships, culture and international business, culture and corporate culture, corporate culture and conflicts in co-operation between a firm, community, new social movements and the role of government.

With reference to the dimensions of organizational culture, the journal summarizes some classical definitions just as the following examples. The first one is three dimensions of culture as Denson and Mishra defined which includes adaptability of the organization, mission or goal orientation and employee involvement and participation. Then it comes to definition of Hofstede, which reported six dimensions of culture including process oriented Vs results oriented, employee oriented Vs job oriented, parochial Vs professional, open system Vs closed system, lose control Vs tight control and normative Vs pragmatic. The third one is Cheng’s exploration in Taiwan. The fourth one is Schein’s definition. And the last one is the six dimensions of organizational culture in Chinese SOEs.

On the part of the assimilation of culture under globalization, this journal summarizes the factors to affect the assimilation, which covers two elements. The first one is the flexibility of national cultures with individual autonomy and egalitarianism can make the convergence of different culture become easy. The second one is the negative effect which leads the divergence or negative convergence of corporate culture. It includes the uncertainty avoidance, power distance and masculine cultural values existing in firms.

And in the field of the influence of culture on economy, this journal puts the entire situation under the umbrella of globalization. Meanwhile it comes up with the conclusion that cultural influence on economy lies on the parts of innovation, efficiency, equity as well as goals. And the cultural values also have a casual connection with governance system such as the influences on firms’ governance norms. At the same time, it emphasizes the side effects of globalization on the poor.

And then it explores the part of organizational culture and conflicts in international convergence and divergence. In this part, the journal firstly emphasizes one of the toughest cultural barriers to converge is the conflict between the aims of politics and the highest economy. Then it focuses the role of altruistic culture’s norms and values, which is the main reason for the style of economic governance and corruption. At the same time, it puts forward the idea that the political culture also plays an important role in the convergent evolution.

In the field of corporate organizational culture and international relationships, this journal gives a clear definition of corporative culture and emphasizes that it is the organizational characteristic not of individuals. And then it elaborates the influences of corporate organizational culture in international relationships. It can facilitate the coordinate activities among the members of organization more tacitly to reach agreement. And then it concludes the more and more important role of culture impact on the environment of economy, society as well as politics.

With respect to the part of conflicts in international relationships, it analyses the main reason of conflicts is due to the cultural differences. Meanwhile, this journal summarizes some fields of cultural differences and their influences, which includes the language barriers, the soft area of corporate culture such as cultural practices of information collection and communication, cultural norms and so on. Then it gives a general view of the results of cultural conflicts such as the inefficiencies of corporate alliances, the failure as a role to produce merger and so on.

In culture and international business part, it advocates the function of corporate culture in enhancing the flexibility of an organization to endure, adapt and transform to meet the needs of its international business. Concerning the part of culture and corporate culture, to begin with, this journal gives a complete definition of culture in business area. And then it summarizes five functions of corporate culture such as the influence on the function of diverse groups in business, offering guidelines for organization members to deal with business activities, the reflection of the environmental situation as well as the condition of cultural net work and so on.

At last it comes to the field of corporate culture and conflicts in co-operation between a firm, community, new social movements and the role of government. In this part, it gives a clear definition of subculture conflict and intergroup conflict at first. And then it offers a pragmatic means to handle these conflicts that is to develop suitable conflict management norms on the basis of the true situation of each company. And then it analyses the conflicts in cooperation between a firm, community, new social movements and the role of government via real cases in international business practices.

  1. Literature discussion and analysis

3.1 The convergence of culture and the related conflicts via cultural assimilation under the umbrella of globalization

3.1.1 The umbrella of globalization

To analyze this part, this journal firstly gives globalization a definition which emphasizes the integration of the whole world. And according to the journal and Griffin, R and Pustay, M (2010, p. 35), we can know that globalization can be defined as the inexorable integration of markets, nation-states to reach around the world farther, faster, deeper, and cheaper than ever. And meanwhile this journal approves the idea that globalization has positive influences which are just as McDonald, F and Burton, F (2002) mentioned in their book that globalization makes the international trade, capital flows, migration, the exchange of technology and foreign direct investment in international business much easier under the hyper integration of the whole world. And at the same time this journal also emphasizes the side effects of globalization. It makes the poor poorer due to it weakening the poor countries’ position and letting them face hyper competition world widely, which is new information for me to fulfill my knowledge of globalization and then I can finally understand why besides the proponents of globalization, there are still great many opponents against globalization. For example, G8 summits has a typical image of fighting against globalization of several parts in the world and some developing countries resist globalization strongly due to their humble situation towards competition with some western countries in several areas such as the weaker competitiveness of their workers compared with the workers from developed countries (Leung, K et al. 2005).

Since just as Leung, K et al. (2005) described that globalization is an inevitable trend which has a tight relationship with the culture change and transformation. In this journal it advocates the connection between culture change and globalization. On the basis of such connection, it investigates the cultural assimilation under the umbrella of globalization. Because of the trend of cultural integration aroused by globalization, the idea that there must be a process of different culture from different countries or regions to become more integrated or be changed to meet the need of globalization is advocated by this journal. Cultural assimilation is a typical representation of this trend, which is not only supported by this journal but also approved by Leung, K et al. (2005). And according to this journal, we can summarize that the so called cultural assimilation is a response to these differences of difference culture which encourage the dominant culture to absorb the minority, which acknowledges the changes in culture and the trend of convergence. And the idea towards cultural assimilation of this journal is accordance with what Ashraf and Galor (2007) mentioned in their article that cultural assimilation let culture converges and becomes more and more integrated.

3.1.2 Culture convergence, conflicts and the reason analysis

The culture convergence namely the cultural assimilation just as the journal describes that it has two forms. On one hand, culture converge can be a positive one which may lead to cultural innovation. The culture innovation is the creation of a new culture which is the process of selecting and redefining these original cultures (Angel 2006). And thanks to this idea of the journal, I can conclude that cultural innovation is full of creativity, it can reduce the culture barrier of international business. For instance, the popularity of Chinese Kung Fu in Hollywood business is a typical culture innovation of convergence, which shows the cultural assimilation and diffusion in international business (Leung, K et al. 2005). On the other hand, culture convergence can also be negative. According to the idea of this journal, a negative convergence of corporate culture may occur on the process of mutual influence of different culture which may lead to several divergence and conflicts. In this journal it puts forward the reasons for the conflicts during the process of cultural assimilation including power distance, uncertainty avoidance and masculine cultural values.

Based on that point of the journal we can make a discussion on why these three factors will arouse conflicts. According to Hofstede definition of cultural dimensions we know the following issues (Hofstede, G 1984, 1998, cited in Item international n.d.). Power distance represents the inequality between the less powerful members and the more powerful members of organizations or institutions. And uncertainty avoidance emphasizes too much about the uniqueness of truth which often makes the members of this culture more emotional. And masculine cultural values emphasizes too much on the dominate role of man in the society which easily arouses the controversial topic of discrimination toward women. And then we can understand why the journal comes up with the idea that cultural conflicts in the process of convergence are mainly due to the above three factors. That is because of the three factor’s characteristics of inequality, over emotional mood as well as ignorance the role of women (Hofstede, G 1984, 1998, cited in Item international n.d.).

3.2 The conflicts in international relationships

3.2.1 The incentives of culture conflicts in international relationships

In this journal, it summarizes several incentives of culture conflicts in multinational corporations (MNCs) including the structural level element of society, language, soft area of corporate culture and so on. It shares lots of similarities with Griffin, R and Pustay, M’s view of cultural elements affecting international business such as social structure, language, communication, values and attitudes (Griffin, R and Pustay, M 1999 cited in Junior, VM, Meyer, B & Murphy, JP 2006).

Firstly, in the fields of social structure as well as values and attitude, the journal puts individuals’ personality, attitudes, mind-set and so on under the spotlight, which is culture embedded. So it is easy to observe that individuals from different culture may wear difference personality, attitudes, mind-set towards their work. For instance some people from one culture may feel not too much responsibility over the work while others take the work so seriously, which may lead conflicts inside the MNCs (Junior, VM, Meyer, B & Murphy, JP 2006). Another example is about the personal service of Japan. Just as Sugaware, H (2009) described that in McDonald’s of Japan, the customers will receive very well and kind service due to the culture that Japanese take personal service as a big part of their job. And according to the idea from Venture Japan (2009), Japanese take customers as an important part and they believe the good service for customers can bring benefits for their companies. So according to the above examples and ideas we can make a conclusion that a company should have proper plans based on the culture of the host countries when doing business in host countries or else there may be some disputes and disagreements in the business relationship with each partners just like an international company should have appropriate plans in customer service part when doing business with Japanese companies.

Secondly, in the language field, this journal confirms the role of the influence of language on conflict in corporate culture. The different languages and different interpretation may lead misunderstanding among individual workers in MNCs and even result in inside disputes and conflicts (Charlotte Mecklenburg n.d.). Thirdly, it comes to the communication part. The different styles of communication as this journal describes such as the way to collect punishments and rewards, adopting open or close means to communicate and so on may result in different outcome. For instance, in China as Chen (2004) as well as Ongwatana, P and Chordia, G (2008) mentioned that Chinese people prefer face to face communication and emphasize Guanxi so much in their business relationship. So we can get that in the market of China, it is necessary for international companies to build Guanxi net work and use face to face communication to build the business relationship or else, it may lead lots of divergences and conflicts.

3.2.2 The influences of cultural conflicts in international relationships

Due to the differences stemmed from different social structure, language, communication styles, values and attitude, there may be several conflicts just as the above item mentioned in MNCs. And according to the view of this journal, there will be some discussion about the influences of cultural conflicts in international relationships in the following. Firstly, as the journal describes, cultural conflicts may affect the efficiencies of corporate alliance with its crucial partners such as communities, new social movements, governments, other players and so on. Secondly, cultural conflicts will also become one of the main factors to produce failure of merger. Thirdly, cultural conflicts should be largely responsible for the failure of performance between two organizations. These opinions of this journal are agreed by Doh, J (2009) in his book, he mentioned culture conflicts may cause problems in corporate alliance, international joint venture, merge and so on due to the uncertainty and misunderstanding in the relationships. This information from the journal help me to investigate why some business alliances dysfunction. For example, as Griffin, R and Pustay, M (2010) described in their book that a marketing alliance of AT&T and Italy’s Olivetti finally failed due to their incompatibility with each other. And now, based on the information from this journal, we can get that culture difference between the two companies may be one of the key factors resulting in their incompatibility.

3.3 The conflicts stemmed from culture differences in cooperation between a firm, community and government

3.3.1 Conflicts in cooperation between a firm and solutions

Just as this journal mentioned, when doing international business, an international company may face cultural conflicts in cooperation part, which includes subculture conflicts and intergroup conflicts. Subculture conflicts are related to group membership, which means that the conflicts are due to the blending of different cultures from different groups following with ambiguity, misunderstanding or misinterpretation, which shares the similar idea with Author Stream (2009). Because the variation of cultural characteristics becomes the main factor of subculture conflicts in international business, it is recommendable by this journal and Author Stream (2009) to focus on minimizing individual variation so as to manage these subculture conflicts. And from the investigation of this journal, I can deepen my knowledge of the influence of subculture on international business and the means to handle them. And I can finally know why some MNCs focus on developing norms which is a reasonable way to constrain individual variation and moderate subculture conflicts just as the journal described.

Based on this journal and the view of Hewstone, M and Greenland, K (2000), intergroup conflict is the situation that antagonistic actions are taken by groups to one another so as to get scarce resources and control some outcome. To handle this kind of conflicts, the journal suggests using not only norm building but also corporate culture shaping to moderate group diversity and intergroup conflicts. It emphasizes the role of corporate culture embedment to different groups on managing these conflicts. Base on this opinion of the journal, I can finally understand why some MNCs focus corporate culture building so much. For example, Samsung Electronics treats corporate culture building as an important issue, which helps the world famous multinational company conquers a great number of culture conflicts in its international business and facilitates it becoming more and more successful (Choi, H & Roh, S 2009).

3.3.2 Conflicts in cooperation between community and government

This journal also mentions that when a multinational company comes to a new market it may encounter cultural conflicts among its own culture and the local community as well as government. These conflicts are due to the difference language, sets of values, objectives and other cultural factors, which easily rouse the emotion of protectionism from the local community and government. This idea is also agreed by Rowley, CK (2002). Rowley, CK (2002) mentioned that protectionism from local community and government is because of the strong feeling of nationalism, over protecting the traditional values of its own and the fear of changing. After the absorption of the idea of this journal on protectionism, I can easily understand why the rice price in Japan is fives times than the world price, the consumers of America have to pay six times price for sugar and the foreign cosmetics in Chinese market have an incredible high price than the world price, which are all due to the protectionism of these countries’ government (Elwood, JR & Miller, VH n.d.).

  1. Conclusion

The following conclusions are on the basis of the above analysis. Firstly, from the investigations on the convergence of culture and the related conflicts via cultural assimilation under the umbrella of globalization, it broadens my view of the influence of globalization that besides the positive effects, it also has side effects on the poor such as making the poor poorer. And the culture change and transformation can also be related to the trend of globalization, which have two forms. The culture change can result in positive culture convergence and negative culture convergence. And I also get that the positive culture convergence may lead to the innovation of culture, which represents the integration of different cultures and is a fantastic creation. Meanwhile, the negative culture convergence may lead cultural conflicts which are due to power distance, uncertainty avoidance and masculine cultural values. This idea is totally new for me and fulfills my view of culture shock.

Secondly, from the investigation on the conflicts in international relationships of this journal, I can get a general view of the factors related to culture conflicts in international relationship areas, such as the different social structure level, language barriers, different communication styles as well as different values and attitudes. And at the same time, I can also get the information about the influence of cultural conflicts in international relationships including the efficiencies of corporate alliance, failure of merger and the poor performance. Due to the gaining of the information, now I can analyze why there are several world-famous MNCs failed in functioning well in Chinese market, because they don’t have deliberate investigation about the elements of Chinese culture which lead to the poor performance in the relationship with Chinese partners (Aesplus 2006).

Thirdly, on the basis of investigation from the conflicts in cooperation of corporate culture among a firm, community and government, I get the following useful information. On one hand, the conflicts in cooperation of corporate culture between firms include two forms such as subculture conflicts and intergroup conflicts. The ways to moderate these conflicts are summarized by this journal as building corporate norms and shaping strong corporate culture, which I appreciate so much. On the other hand, this journal also analyses the conflicts among local community and government and summarizes why there is the advent of protectionism.

By and large, this journal really gives me a lot of useful knowledge in the areas of cultural issues of the international business, which for me is a great gift to facilitate my future study and career related to the cultural field of the international business.

  1. Recommendation

Although this journal has already contributed a great deal of information on the field of culture in international business to my knowledge, it is still recommended to be more complete on the basis of the obtained information from other experts of the cultural area in international business.

Firstly, in this journal it emphasizes too much of the influence of the powerful countries towards less powerful countries under the trend of globalization such as one of the aim of G8 summit as the above item mentioned. Although we have to acknowledge the aggressiveness of powerful countries’ culture on other countries, it is necessary for this journal to mention the cross influence of each culture towards each other in the trend of globalization ((Leung, K et al. 2005), which will make the journal more systematic. And the following example can justify the cross influence of each culture towards each other and even the culture of developing countries can influence the international business. Let’s just take the development of Chinese traditional medicine (TCM) in Europe as an example. According to the information from CCE365 (n.d.) and PricewaterhouseCoopers (2009), more and more European pharmaceutical companies have recognized the market potential of TCM and develop cooperation with come Chinese local pharmaceutical companies actively, which is the typical representation of the powerful influence of the culture from developing culture on the international business.

Secondly, when referring to the incentives of culture conflicts in international relationships, it is also recommended for this journal to refer to the role of religion, education background, political structure, legal characteristics and so on. Just as Ball, DA et al (2006) described in their book that the above elements are so curial to affect the success of international business relationships with the partners of multinational companies, so it is also necessary for this journal to refer to these fields to make it more complete.

Thirdly, although this journal comes up with some solution to moderate the cultural conflicts in cooperation between firms, they may be not enough. Teambuilding is a recommended strategy for MNCs to remove culture barrier in the inner part of the firm, which can help the staff work as a team and develop trust among them via solving some problems in the practice of teambuilding (Ehow 2010).

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