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Managing across Cultures. International Organisation and Multicultural Groups

Essay 2018 1 Seiten

BWL - Unternehmensführung, Management, Organisation

Leseprobe

Content

Introduction

Comparison using Hofstede’s work

Analysis of the Merger

Conclusion

References

Introduction

In the globalised world, it is important to be aware of the cultural differences as this can have an impact on the management of multicultural groups, international organisations and managing across culture due to globalisation (Thomas and Peterson, 2018, p. 155). Globalization refers to the multifaceted and complex phenomena or a form of capitalist expansion where there is an integration of the national and local economies into the global market economy. The pros of globalization include reduction of trade barriers between nations, promotion of economic growth, reduction of prices due to competition between nations, promotes the development of poor countries through injection of foreign technology and capital and an increase in the market for companies and organizations. The cons of globalization include effects on workers due to poor pay in poor countries, loss of jobs in rich nations as companies transfer the jobs to such countries, exploitation of tax havens by MNCs, and labour exploitation, among others. The report’s main aim is to offer an analysis of the cross-cultural challenges that Worldpay – a UK-headquartered global payment processing company -will face as a result of the merger with Vantiv, a company that operates in the same sector but is from a different country – United States. The report will also explore how the merger will lead to challenges for the new international teams within the organization. The FinTech industry faces a number of practical challenges. First, the industry was faced with cryptocurrency crashes. In December of 2017, the crypto-currency were trading at $14,000 but in December of 2018, the currency were trading at lower than $3,500. This is a major challenge for the FinTech’s that invested in the Crypto (Noonan, 2018, para 2). Secondly, the industry is also faced with Data overloads for instance City Ventures faces data overload challenges ranging from regulation to security (Noonan, 2018, para 7).

Comparison using Hofstede’s work

Hofstede Analysis will be applied to compare the two countries in terms of how any differences can impact the merger between Worldpay and Vantiv. The comparison of the two countries is shown in Figure 1.

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Figure 1: Country comparison – US and UK (Hofstede Insights, 2018).

Power distance

The two countries are similar in their view that they are both low power distance (PDI), which is characterized by the belief that inequalities should be minimized. This will have no significant impact on the merger as the two cultures believe that inequalities should be reduced (Hofstede Insights, 2018).

Individualism

The UK and the US have a high score in the individualism thus there is a general belief that an individual should look after him or herself. Since the two countries are high on individualism, this can affect the merger of Worldpay and Vantiv as the sets of negotiators will seek happiness through their individual or personal fulfilment (Hofstede Insights, 2018).

Masculinity

Both the US and UK are masculine societies where people are highly driven and success oriented (Hofstede Insights, 2018).

Uncertainty Avoidance (UAI)

Low UAI in both the US and UK has the connotation that they are comfortable in situations that are ambiguous, do not focus on detailed planning and are flexible to changing and emerging environment (Hofstede Insights, 2018). This will not have any impact on the merger as the two countries are similar in this dimension.

Long-Term Orientation

The UK has a score of 51 thus the dominant preference between traditions and pragmatism cannot be effectively determined. This is the area of difference between the two countries as the US scores 26 (Hofstede Insights, 2018). Americans focus on the analysis of new information but the majority of Americans may not be pragmatic as they have very strong ideas of what is evil and what is good. The main challenge that this difference can pose is the short-term nature of performance measurement where individuals strive for quick results. This may affect the major in terms of communication about results, negotiations etc.

Indulgence

The UK and the US are both indulgent societies where people exhibit the willingness to please their desires and impulses, have fun, enjoy life and spend as an individual wishes (Hofstede Insights, 2018). There is a belief in hard work and hard play thus there will not be a challenge to the merger.

Differences between the UK and the US

The UK PDI works under the pretext that fair play should ensure that people are treated equally while the US works under the implied belief that since each person is equal, there are salient inequalities that exist based on power. This is a cultural challenge for the merger as the power held by individuals may affect negotiations and communication in the post-merger period (Hofstede Insights, 2018). With regards to long-term orientation, Americans analyze information to check its truthfulness but may not be pragmatic as they hold strong ideas about what is right and what is wrong as well as a drive for quick results. This is not the case for the British as they tend to have pragmatism as well as the maintenance of tradition.

Analysis of the Merger

Decision Making

The decision making at the new merger between Worldpay and Vantiv will be impacted significantly by the consideration of risk. Proctor et al. (2011, p. 158). The risk perception has an impact on the decision making as research has shown that “perceived risk is quantifiable and predictable” (Johnson and Tversky, 1984 as cited in Proctor et al., 2011, p. 158). Kay (2010, para. 2) noted that decision making is based on “[estimating] the respective weights…in what may be called moral or prudential algebra”. Risk perception is different across cultures thus the differences in the risk perception between Worldpay and Vantiv can be overcome challenges to decision making through the development of normative ways used in the management of conflicts that can arise from decision making (Gelfand, Leslie, Keller, and De Dreu, 2012, p. 1131). Green (2017, para 1.) stated that decision making has always been based on risks thus the two companies in the merger will have a great potential in making decisions and weighing up of risks.

Decision making is impacted by ethical dilemmas in decision making, such as consequential models and rule-based models. Consequential model is based on the consequences or outcomes of the decisions to help in determining whether a given decision is ethical while the rule-based models focused on the view that there are certain fundamental rights that must be held rather than focusing merely on consequences (Thomas and Peterson, 2018, pp. 193-4; Ali, 2010, p. 707). Rule-based is thus premised on ensuring that individuals are treated as an end rather than as a means to an end as is the case of consequential models (Thomas and Peterson, 2018, pp. 193-4). In the management of the merger between Worldpay and Vantiv, the focus should be on the contribution to the sustainable development, respect for human rights, local capacity building, capital formation, good governance, trust, non-discriminatory practices, proper risk management and stakeholder engagement (Thomas and Peterson, 2018, pp. 155-157). The management style of the merger should thus be participative based on the good governance and stakeholder engagement, which are important elements in the cross-cultural decision making.

Negotiation

The mearger would be negatively impacted if the new organization made up of Worldpay and Vantiv does not adopt an integrative negotiation process. Worldpay – the UK organization- may hold that people need equality while Vantiv, the US organization, may hold that inequalities can be inevitable due to the different power structures. This has an impact on the negotiation as the merger would be faced with behavioural and psychological challenges (Imai and Gelfand, 2011, p. 84). The negotiations would be faced with lack or little cooperative motives as the American company negotiators may have a greater concern for self as they are more accepting of inequalities that exist due to power differences.

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Details

Seiten
1
Jahr
2018
ISBN (eBook)
9783346041746
Sprache
Englisch
Katalognummer
v498858
Note
Schlagworte
managing cultures international organisation multicultural groups

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Titel: Managing across Cultures. International Organisation and Multicultural Groups