Business culture in different departments
Considerations of different departments when doing business internationally
A variety of operations keep businesses, especially large corporations, running efficiently and effectively. Common business operation divisions or departments include production, marketing, finance, management and human resource management. Business activities are becoming increasingly global as numerous firms expand their operations into overseas markets. Many American firms, for example, attempt to tap emerging markets by pursuing business in china, India, Brazil, and Russia and other European countries. Multinational corporations, which operate in more than one country at once, typically move operations to wherever they can find the least expensive labor pool able to do the work well
Cross- cultural Management department
The function of management in business mainly has to do with the expertise of efficient organization, planning, direction, and control of the operations of a business. In organizational management, management has two principal aspects. One relates to the establishment of so-called lines of responsibility, drawn usually in the form of an organization chart that designates the executives of the business, from the president to the foreperson or department head, and specifies the functions for which they are responsible. The other principal aspect relates to the development of a staff of qualified executives (Griffin, 2012). Planning in industrial management has three principal aspects. One is the establishment of broad basic policies with respect to production; sales; the purchase of equipment, materials, and supplies; and accounting. The second aspect relates to the implementation of these policies by departments. The third relates to the establishment of standards of work in all departments. Direction is concerned primarily with supervision and guidance by the executive in authority; in this connection a distinction is generally made between top management, which is essentially administrative in nature, and operative management, which is concerned with the direct execution of policy. Control involves the use of records and reports to compare performance with the established standards for work and to make important decisions (Williams, 2010). Cross cultural management as a department is formulated by a company or firm to manage all matters that have to do with cross cultural activities by the company as well as other departments that help to run the cross cultural activities of the company notably, includes international business.
Considerations of the different departments while doing business internationally are inextricably linked to the roles of the department. In cross cultural management’s duty to determine the style of business used in new territories and countries it is prudent to consider the economy of the new territories or countries. . The key reason for this is that businesses are inextricably linked with the economy of the region in which it operates (Walker, Walker and Schmitz, 2003). This is true regardless of the kind of business conducted, its size and its target market in the region. The economy of a region takes into considerations matters such as a region’s financial capabilities, gross domestic products of countries in that region, the purchasing power parity, expenditure capacities and its general ability to support itself financially. Factor such as the stability of the economy should be taken into consideration, as well as the strength of currency and the ability of people to purchase goods. Consideration should be taken as to whether new economies where the business want to venture into are free markets or other types. In such economies business is largely left to business people and the forces of supply and demand. This differs from the economies of Socialist or Communist countries, where governments play a strong role in deciding what goods and services will be produced, how they will be distributed, and how much they will cost. The style of business should be compared to that of the native country and any potential conflicts should be anticipated and prepared for. The effects of the global financial crisis on the region should also be well examined and its effects on cultures in new countries understood so as to enable easy entry into the new countries.
Another key factor that cross-cultural management is the culture of the new country that a business aims to invest in or expand their services to. A common mistake that is usually made by most cross cultural business managers is making the assumption that countries from the same continent or region share the same culture. Walker, Walker &Schmitz (2003, pp.39) observe that the simplistic habit of attributing a homogenous culture to entire regions or nations is both unrealistic and unproductive. Each country’s history is important to it as it has a bearing on its politics, economics, culture and social life. As a result of the diversity at play in a region is hard to pin down one single culture that determines how businesses are run. However, there are still some things that are relatively common across borders. The implications of a countries culture on its business activities should be put into consideration and mitigation strategies employed. Different lifestyles, common behaviour and thought patterns and their potential influence on business should also be considered. In places like Europe for instance, business is generally considered as a serious thing over which unnecessarily joking is generally not unappreciated although the degree of formality varies indifferent countries (walker, walker and Schmitz, 2003,pp.100).In other places such as Latin America however, business is almost always preceded by social interactions (Becker, 2004).The kind of consumers that are the targeted demographic of a business as well as their consumer behaviour should be well examined. The general awareness and education of a particular population or the lack of it is an issue that should be considered as this directly affect consumer patterns. For instance environmental conservation awareness among most Europeans makes the market more receptive to environmentally friendly products as opposed to those that are not (Walker, walker and Schmitz, 2003).
The significance of mergers and partnerships with companies in other countries should be examined by cross-cultural management, putting into consideration the resultant mix of cultures and the potential clash of the same. Acquisitions should also be considered and the resultant intercultural interactions considered. The same should be considered about outsourcing business activities. It is also prudent to consider country-specific peculiarities that are involved with different cultures. For instance it would be an unproductive and an unwise decision to launch a particular food product in a predominantly Muslim country during Ramadhan, which is the fasting month. Issues of language should also be given serious consideration when going into a new country or region for business. Mole (2003) asserts that Language is the most important competence in international business. As such if business expansion is being done in a country that speaks a different language, then translation services should be considered as well as the learning of new languages. The use of body posture and gestures to communicate, whether consciously or otherwise is a fact that should also be considered relative to different cultures (Mole, 2003, pp.20).
Much of the elements of risk involved in doing business in both Northern and Western Europe depend on the acceptance of the new product or services. Products or services or their delivery may be particularly unappealing to the customer populace. Expectations need to be met in terms of Quality, pricing and customer service. Kalb (1993) asserts that it is necessary for a business owner to clearly define the type and purpose of business he is starting. In this way he is able to perfect skills and product quality so as to better meet customer expectations.
Overall, cross cultural management has the role to liaise with other departments in the business that are involved with international business, organising and controlling them so as to ultimately make entry into a new country or region business-wise an easy experience. Ultimately the goal is to enter and operate a business profitable in the new region and experience favourable growth of the business as well as the understanding of the new culture so as to function effectively within its context (Johann, 2006).
Human Resources department
The human resource department is responsible for personnel management. It is concerned with people at work and their relations within a firm. The main function of the human resources manager usually includes staff recruitment, training, and welfare. The term personnel management is somewhat misleading in that it is usually line managers who manage the work force, while the main HR managers provide a mainly supportive and advisory service (Montana and Charnov, 2000, pp.211).
Businesses rely on effective human resource management HRM to ensure that they hire and keep good employees and that they are able to respond to conflicts between workers and management. Human resource management specialists initially determine the number and type of employees that a business will need over its first few years of operation. They are then responsible for recruiting new employees to replace those who leave and for filling newly created positions. A business’s HRM division also trains or arranges for the training of its staff to encourage worker productivity, efficiency, and satisfaction, and to promote the overall success of the business. Finally, human resource managers create workers’ compensation plans and benefit packages for employees (Montana and Charnov, 2000).
Human Resources departments have a large role to play when it comes to doing business internationally. Globalization has precipitated an unprecedented growth of international trade. According to a 2006 World Investment report issued by the United Nations, ‘a total of 77,000 transitional corporations with over 770,000 foreign affiliates employed 62 million workers worldwide’ ( Dowling, Festing and Engle,2008, pp.24). These figures give an indication of how rapid the growth of international trade is and show the need for human resources department sin different companies in managing the thousands of new employees.
The international expansion of a business bears implications in terms of the requirement of human resources in the new country of business. Human Resources departments are charged with the responsibility of recruiting personnel for the company whether locally or internationally. This is the primary responsibility of this department. In this regard, HR needs to make consideration s about the whether the nature of personnel required for the job internationally may be recruited from the new countries or locally. If recruitment is done in host countries, then considerations need to be made for the accommodation of the country’s culture in the recruitment process. General levels of education and awareness need to be considered. If HRM department chooses to assign an already existing employee to the new country, then several considerations need to be made such as , the need to provide pre-departure training , provision of language translation services where necessary and arrangement of settlement –housing. Considerations need to be made by HRM concerning the adjustment of employees into new cultures and environments as well as the reception of those cultures on the expatriates. The HRM department should facilitate language –compatibility of employees to the new business areas.
Considerations for the increase in employees on a global basis should be considered. They need to identify and develop talent, not only to work in the new regions of business as well as more Hr personnel to manage them. Most company HRM departments have to enact policies to handle Hr on a global scale. There is a need to align HR policies with those of host countries. The Hr department also plays a large role in the determination of the costs of recruiting new personnel and deploying them into new territories and to take on an advisory role to finance e departments concerning budgetary implications for the same ( Dowling, Festing and Engle, 2008).
Considerations have to be made for international labor laws and country-specific laws when exporting employees to new territories. This is because employees have to respect the laws of countries in which they operate. Expatriates are often forced to bear tax liabilities for both the host country and their native country. As such HRM has the duty to shield the employee against such tax burdens so as to make sure that such factors do not become a deterrent factor to potential employees (Dowling, Festing and Engle, 2008).Tax equalization procedures should be set in motion.
The culture of new countries and their potential implications on employee job satisfaction should be considered. Johann (2006) suggests that HRM departments should consider the common beliefs and behaviour systems in a certain region, so as to better adapt its policies to them as well as effectively train their employees on the same. Important cultural and societal consideration such as the importance of power distance. This has to do with power distribution in an organization and how the same is perceived by employees, especially lower-ranking ones. Individualism verses collectivism and masculinity versus femininity in a society should all be considered as factors that could possibly have an impact on employees ( Johann, 2006,pp.6).
Ease of relocation and re-settlement for expatriates should be considered and any extenuating circumstances be dealt with. Factors such as availability of infrastructure, social amenities as well as essential services such as hospitals in the new areas for employees are a worthy consideration for HRM departments. This is because HRM is charged with the responsibility of employee welfare. Matters to do with the employees’ health and relative comfort should be taken care of and any potential threats to the same, considered.
Issues of potential risk exposure to employees depending on circumstances surrounding host country should be considered. Ideally, employees should be shielded from as much risk as possible. Still a risk allowance should be given in addition to the regular salary so as to act as a form of compensation for the risk exposure ( Dowling, Festing and Engle, 2008).The threat of terrorism in the world today has become a source of great concern to businessmen. As such business activities in potential threat areas should attract larger risk allowances for employees on the ground.
In Cases where a firm is outsourcing services from another company in the host country, then it is prudent for HRM department to consider the level of quality of employees offered by the service provider .In such cases HRM department has a duty to research on laws about wages in host countries so as to ensure that they remunerate workers fairly in respect to heir context. As such the effect of change in currency and the difference in currency strength should be considered so as to ensure workers as justly remunerated. The HRM department needs to consider the implication of employee needs and to consider the general cost of living in specific regions where the company seeks to start business. This is essential in deciding what offers to make to employees in terms of remuneration. Consideration also needs to be made by the HRM about whether personnel administration would be done from one point or whether a de-centralised system would have to be adopted, and different members of the HRM team deployed to different countries internationally. This is largely dependent of the size of the company and the nature of the business.
HRM may need to consider the kind of personnel fronted by leading competition in the market and seek out ways to ensure that employees are better than theirs.
Finance
Finance involves the management of money and this is the key function of the finance department I a firm. All businesses must have enough capital on hand to pay their bills, and extra capital to expand their operations. In some cases, they raise long-term capital by selling ownership in the company. Other common financial activities include granting, monitoring, and collecting on credit or loans and ensuring that customers pay bills on time. The financial division of any business must also establish a good working relationship with a bank. This is particularly important when a business wants to obtain a loan. The overall goal of finance departments is to maximise profits for the firm and shareholder by proper management of funds (Chandra, 2008, pp.6).
Corporate finance departments basically deals with how businesses raise and spend their money ( Griffin, 2012). Companies spend or invest funds in projects that might make the firm more profitable, such as a new factory or an improved product. Corporate finance involves selecting projects that maximize profits and make the best use of a company’s funds. Sometimes businesses can fund these projects on their own. Other times businesses must raise funds from outside the company. A corporate finance department also involves finding the best way for businesses to pay for their projects.
Marketing
Marketing is the process of identifying the goods and services that consumers need and want and providing those goods and services at the right price, place, and time. Businesses develop marketing strategies by conducting research to determine what products and services potential customers think they would like to be able to purchase (Moore and Pareek, 2010). It involves the application of marketing strategies with the end goal of meeting a company’s needs (Moore and Pareek, 2010, pp.7).Firms also promote their products and services through such techniques as advertising and personalized sales, which serve to inform potential customers and motivate them to purchase. Firms that market products for which there is always some demand, such as foods and household goods, often advertise if they face competition from other firms marketing similar products. Such products rarely need to be sold face-to-face. On the other hand, firms that market products and services that buyers will want to see, use, or better understand before buying, often rely on personalized sales. Expensive and durable goods—such as automobiles, electronics, or furniture—benefit from personalized sales, as do legal, financial, and accounting services.
Globalization is a catchall term for many processes that are at the heart of the global economy: the spread of instant global communications; the rapid growth of international trade, global capital markets (markets in which national currencies are traded), and foreign investment; and the emergence of a new breed of global corporation. The global economy is the product of all these things, and more than the sum of them. It is a revolution that enables any entrepreneur to raise money anywhere in the world and, with that money, to use technology, communications, management, and labor located anywhere the entrepreneur finds them, to produce goods or services that can be sold anywhere there are customers.
The overriding concern of any marketing department is to attract new customers into a business and ensure retention of existing customer ( Moore and Pareek, 2010,pp.8).As such internationally marketing involves doing the same on a larger scale and to a greater, global audience. Marketing departments therefore have the responsibility to ensure that company products or service are both known and preferred by customers in their areas of business. In this light one of the greatest considerations for marketing department in an international context is its ability to communicate and engage with its intended or targeted population concerning a product. Considerations therefore need to be made by such departments about who the targeted population is and their behaviour patter, It needs to be considered whether products or services will be offered to an entire population or a chosen demographic, or whether different products are adapted to suit different segments of the market. Moore and Pareek (2010, pp.11) assert that segmenting a market allows marketers to identify which groups the most attractive targets for business. It should then take on an advisory role, to help direct both management an finance departments on which the best places to invest are and which demographics to target in a given population in relation to products or services offered.
Considerations need to be made by any marketing department concerning the ease of breaking in to the market and establishing respectable brand name and brand equity. Moore and Pareek, 2010,pp.14) observes that on of the key ways of establishing a strong brand is to ‘create enough points of parity to be able to be considered as part of a product category, and enough points of difference, to be distinguished against competing brands. Marketing has to consider ways I which they will be able o promote brand awareness in new regions as well as any cultural, technological or other factors that may make this process difficult of hinder it.
Marketing departments should also consider an dmake provisions for whether or not their existng market programs can be standarddised and used across international markets or if it would be best to devise country-specific marketing plans and systems.
References
Walker, D.M., Walker, T.D., Schmitz, J. (2003). Doing Business Internationally: The Guide
to Cross-Cultural Success. New York: McGraw Hill Professional.
Moran, R.T., Harris, P.R. &Moran, S. 2012.Managing Cultural Differences.Google Books.
Retrieved on July 18, 2012, from http://books.google.co.ke/books?id=axn5MYNP31QC&printsec=frontcover&dq=kiss,+bow+or+shake&hl=en&sa=X&ei=7E4NUNT0EYuY0QWXl_3fCg&ved=0CDAQ6AEwAA#v=onepage&q=kiss%2C%20bow%20or%20shake&f=false-
Becker, T. H., 2004. Doing Business in the New Latin America: A guide to Cultures, Practices
and Opportunities. West Port: Praeger.
Becker, K., 2000.Cultureand InternationalBusiness.Palgrave: McMillan.
Johann, R.2006.Cross-cultural Management :The Case of the Daimler- Chrysler
Merger.Norderstedt :GRIN Verlag.
Aggarwal,S.2008.Barnd Management :A Theoretical and Practical approach. New Delhi:Global
India Productions.
Dowling,P.,Festing, M.,and Engle,A.D. 2008.Internatuional Human Resource
Management:Managing people in a Multinational Context.
Halligan, B. And Shah, D.2010.Inbound Marketing:get Found Using Google , social Medi and
Blogs.Hoboken, NJ:John Wiley &sons.
Briscoe, D., Schuler, R., and Tarique, I.2012.InternationalHuman Resource Managemnt. Third
Ave. NY:Routledge.
Madura, J. 2011. International Financial Managemnt.Cengage Laerning
Evand, D.2008.Social Media Marketing:an Hour a Day.xxxxxxxx:John Wiley &sons.
Griffin, R.W.2012. Management 11thEd. Mason, OH:Erin Joyner
Williams, C. 2010 . Managemnt.Ohio: Cengage Learning.
Montana ,N., and Charnov, B.H.2000.New York: Baron’s Educational Series.
Chandra, P. 2008, Financial Management. New Delhi: Tata McGraw Hill.
Moore, K. and Pareek, N. 2010.Marketing:The basics ,2nd Ed.New York:Routledge.
