Global Scale Operations And National Culture

After maximizing sales on the national scale, most businesses are left with only one option if profit margins are to be increased. Businesses are forced into the global market that is characterized by factors, which had minimal effects at the national scale, for example, national cultures. Diversity in national cultures becomes a challenge because the businesses were initially tailored to thrive in one national culture. The global market questions the suitability of the businesses’ products, staff flexibility, and structure. Success at global scale operations requires an objective analysis of the relationship between globalism and culture, which identifies routed mapping and adaptation, increasing cultural intelligence, and the forceful introduction of standardized goods as possible approaches to circumvent the complexities of the relationship. Relationship Between Globalisation and National Culture Achieving globalization for most business has proved challenging and, consequently, understanding the link between globalization and national culture, a significant undermining factor, is crucial.

According to Ghemawat, the Enlightenment-Era ideal is a widely adopted approach when dealing with globalism that has proved to be impractical because world citizenship has failed to erode the bond created by race, ethnicity, and nationality as suggested by Kant (93). Ghemawat’s argument implies that globalism is an abstraction rather than the reality for most companies because of the collective thinking that distinguishes groups, particularly, national culture. Prusak’s posits that the world is flat because of the global connective network, which exists due to technology (19). Considering the world to be flat, in this sense, presents a subjective approach of global relations because it openly fails to address the contribution of aspects of national culture. Ghemawat continues to explain that the global network has done very little in reducing the distance between national cultures since it is aimed at eliminating the distance (95). It is apparent that the existing global network has not removed the pre-existing cultural restrictions.

Therefore, businesses are left with the challenge of establishing a global presence across multiple cultures, which puts pressure on their products, employees, and organization structures. Natural cultures are structured along six dimensions that dictate the customization of products, which significantly undermines the economies of scale for global businesses. Hofstede’s model for culture classification identifies six dimensions that allow for the statistical analysis and comparison of national cultures with limited similarity: power distance, uncertainty avoidance, individualism or collectivism, masculinity or femininity, indulgence or restraint, and long term or short-term orientation (8).

Based on these six measures, nations provide unique business environments so that a company's product may thrive in one nation and fail in another. Despite the global network in existence that facilitates interaction, to some extent, most nations have retained their identities. Notably, only 10% of the world’s population leave their country of origin, and an outstanding 98% of telephone calls are local (Ghemawat 94). These statistics reinforce the concept of distinct national cultures because it shows that there is little evidence of global citizenship, whereas local citizenship is well established. Accordingly, global companies are forced to tailor their products and marketing strategies to fit the needs of each nation, thus, increasing overall production and marketing costs, which lower the economies of scale. Contrary to common belief, there are critical issues due to national cultures that companies attempting to operate on a global scale have to circumvent.

Approaches for Addressing the Challenges of National Culture Rooted mapping is a useful tool for the development of an expansion strategy for global companies. A rooted map is a comparative map that is developed based on national perspectives that are deemed crucial for market penetration, often, drawing on similarity to the product’s country of origin (95). The challenge caused by national cultures can be avoided, though not entirely, by rooted mapping, which points out target nations that have a higher probability of accepting a foreign product, preferably in its original form. The rooted mapping may identify target nations but does not ensure easy integration. The adaptation, aggregation, and arbitrage approaches are critical for successful entry into a new market because they attempt to narrow the divide caused by national culture on the economies of scale (97). For businesses aiming at global operations, it is necessary to adopt a combination of these strategies in tailoring their products. Specifically, adaptation has proved more effective in most cases (97). Adapting company products, image, and policies to the preferences of a nation's population appears to be quite useful probably because it aligns the company, as a whole, to the national culture. Root mapping followed by the combined implementation of adaptation, aggregation, and arbitrage policies increase success for global scale operations. Another element of global businesses that requires modification is the employees’ interaction with foreign markets by increasing cultural intelligence.

According to Thomas, cultural intelligence allows for staff to effectively interact with a foreign market because they possess the skills and knowledge to operate in diverse cultural environments (207). Cultural intelligence is developed by understanding the cultural aspects of the new market, which makes an individual capable of handling cultural issues that are related to the business. Thomas argues that survival and, ultimately, prosperity in the globalized operations requires individuals with high cultural intelligence who can cope with the pressure of a culturally diverse workforce and market (209). Cultural aspects in the environment affect employee relations to each other and the target market. Thereupon, companies should strive to equip its employees with the necessary skill and knowledge to effectively operate in culturally diverse environments. Operating on a global scale requires businesses to develop training programs, which increase the cultural intelligence of the employees to ensure that the lack of awareness of a nation’s culture does not undermine penetration into foreign markets. Conversely, there exists an alternative method that lacks sensitivity towards national culture because it is designed to reshape the market to a company's standardized product radically. Levitt suggests that businesses should not attempt to adapt to national cultures, but forcefully change the cultures to adjust the market's taste to prefer cheap standardized products, with high quality and reliability (102). This argument implies that global operations can be achieved by leveraging economic convenience against individual cultural preferences. If businesses intend to work on a global scale efficiently, they should operate with one singular goal in mind, that is, achieving a higher economy of scale.

The economic benefits, such as lower prices for higher quality goods, are expected to cause a population to ignore the allure of customized goods and, consequently, their national culture. Levitt's argument does not agree with Ghemawat’s because the latter encourages companies to tailor their goods to be accepted while the former encourages companies to provide the foreign market with an economically sound product and conformity will follow. Both techniques have had instances of success. Therefore, it is crucial to identify standardization of goods as a possible strategy. Global companies have to work around the challenges presented by the diversity in national cultures on the global scene. National cultures have a profound effect on the globalization of businesses. Mainly, the dimensions of each nation’s culture usually vary causing the need for product customization. Therefore, expansion requires strategic planning. Rooted mapping enables the identification of ideally open markets for a company's product. Adaptation, aggregation, and arbitrage policies work to ensure product acceptance in the market. Within the organization, there is the need to increase the cultural intelligence of employees. Additionally, it is possible to strategize against the effect of national cultures through developing standardized products. It is impossible to successfully set up global operations without consideration for the implications of national cultural diversity.