INFLUENCE OF CULTURE ON INTERNATIONAL MANAGEMENT
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INFLUENCE OF CULTURE ON INTERNATIONAL MANAGEMENT
Chapter One: Introduction 1.1 Background of the Study
Several companies took advantage of the global market, which increased international commerce and expansion, primarily in the 1990s and early 2000s.
The General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), and the Association of South East Asian Nations (ASEAN) all aimed to reduce and facilitate barriers to free trade.
Economies grew more open as a result of advancements in communication, transportation, finance, modes of entry into countries, and technology. There were less obstacles encountered when it came to procedures involving the establishment of firms across geographical boundaries.
Advanced Communications demonstrated exponential growth, and innovation got more rapid when it comes to conducting business beyond national lines.
Activities, perceptions, and management practices vary across cultures, and as business operations have become more globalised, coupled with a culturally diverse workforce
there has been an increased demand for international management for people who understand the issues surrounding business and culture well enough to manage and facilitate growth in cross-cultural businesses effectively.
International Management is a subset of international business, a field. It consists of three components: international trade, international marketing, and international finance (Nowakowski 1999).
International management is the process by which a multinational enterprise makes decisions regarding planning, organising, leading, and controlling in a multicultural environment (Nowakowski, 2000).
This definition emphasises the importance of culture in performing operations, such as cross-cultural abilities, cross-cultural practices in organisations, technology transfer, and so on. (Rozkwitalska, 2007) defined international management as the management of businesses that operate beyond the borders of a single country.
International management is a relatively new field that changes quickly. The increased globalisation has prompted a number of scholars to research this field. Interest in the topic increased as transnational corporations (TNCs) began to engage in FDIs (foreign direct investment) in the 1990s.
However, these changes in the global economy have raised a number of challenges that must be addressed, as well as the evolution of International Management; thus, this topic focuses on the role culture plays in International Management.
Culture is the root. It has roots in anthropology, geography, psychology, and sociology. The word culture derives from the Latin word cultura. It is linked to cults and worship. It refers to the outcome of human connection, which broadens our awareness.
(Luthans, Doh, 2009). Based on their research on International Management, Luthans and Doh (2009) defined culture as a learned knowledge used by members of a community to interpret particular events and shape social behaviour. They also said that learned information shapes attitudes, norms, values, and behaviours.
Culture lacks a single definition, owing to its ambiguity as a concept. The definitions vary because researchers and intellectuals from numerous disciplines have written about it. Some academics say that culture is something created and held by a group of people, but others argue that it is what a group of people is.
Some academics define culture as a collection of norms, values, feelings, thinking, roles, beliefs, attitudes, and behaviour, whilst others define it as economics, language, religion, education, politics, technology, law, and society (Tayeb, 2003).
It is regarded as an important concept used to describe existence and the nature of social order. According to Cotgrove (1978), culture is defined as the shared rules and values of a social system, which is the most important feature of any community.
Hofstede (1991) defined culture as the collective mental programming that distinguishes members of one group or category from another. However, it is critical to recognise that culture, whether it is something people are or have, is an exemplary one.
People may be associated with organisations. It is a management technique that can be used to shape the behaviours of individuals (workers) within an organisation (Tayeb 2003).
Culture evolved with time. It consists of values, esteems, and attitudes shared by members of a group or community that influence their lifestyle, whether material or non-material, and shape the two main parts of culture. (Tayeb. 1988).
This definition seeks to describe how individuals of a community acquire shared qualities through several phases of socialisation, such as language, family, religion, formal education, and so on. This is not to argue that members of such a group behave similarly or have the same ideals and attitudes; they differ significantly.
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