Thursday, December 12, 2019

Cultural Challenges That Influence Multinational Operations

Question: Discuss about the Cultural Challenges That Influence Multinational Operations. Answer: Introduction This report will majorly dwell on Subway Company. Subway is a fast food restaurant that has its origin from The United States of America. (Sinha, 2017, 29) it has most of its branches all over the world and one of them being in India. The fast food restaurant deals in selling salads and submarine sandwiches. The fast food restaurant has its owners being the Doctors Associates and is among the most known fast food restaurants in the world that is in a constant fast growth. The restaurant has its headquarters. Subway brand becomes the largest brand in the world. Its menu varies from country to country depending mostly on where religious requirements are present. The restaurant has its international headquarters in Milford, Connecticut. The main product offered by subway is the submarine sandwich. Other products offered by subway are: - salads, Paninis and also wraps. Baked goods are also present in any subway outlet. There are various benefits and limitations that comes with setting up a fast food I a particular country considering economic, social, political and most importantly as will be discussed later in the report, the cultural factors. The research shows the various challenges that subway undergoes being an international company across borders. The report as a whole shows how Multinationalism are increasingly on the rise. (Schatzker Bloomberg News (Firm), 2013, 10) This is brought about by diversity both in terms of knowledge and new approaches to business. When it comes to culture various multinational organizations face some drawbacks in its operations when it comes to the worldwide market. Purpose of report The purpose of this report is to answer the question on cultural challenges that influence multinational operations. Examines how the challenges can be overcomed and various ways in which the subway company is combating this challenges. The subway company is used as a reference company for this research. Scope The growth of the multinationals firms not only signaled a fundamental changes during the 90s but its maturity has its importance to the society, ecological and social structure of the world. Though there are various challenges that affect this multinational firms, they still strive for success Various Issues Symptoms of issues In the company in question, subway fast food restaurant, there are certain signs that show that the company is facing challenges in its vast operations internationally. (Ribeiro, 2015, 12) Signs such as low customer level, low profit margin and low presence of manpower. Implication of issues This issues only mean that the company will undergo losses. The popularity of the particular fast food will go down and this can sometimes lead to closure of the company. Identification of issues When the customer level goes down, the fast food company should realize that what they are offering is not liked by most of the people from when where they are working. Justification of issues This type of issues that are in involved are usually justified by the fact that they cause damage to the company. When they occur normal functioning of the company goes down. Expected results and solution When issues of threat are noticed in a company and especially one that deals with fast foods then they can result to closure of the business. When this issues are identified they should be solved immediately. (IEEE Annual Computing and Communication Workshop and Conference, IEEE Las Vegas Section,, Institute of Electrical and Electronics Engineers, 2017, 76) Discussion/ analysis of the report Culture refers to peoples way of living, basically the type of norms that are accepted and shared in a particular society. (Nichols, 2017, 111) There are three areas whereby that can show how culture affects international businesses. This are communication, etiquette and the protocol of the organization. Vary is seen in different countries according to what is accepted and what is professional. One of the fastest growing economies in the world is the Indian economy. This is as it has increasing foreign businesses on the rise in its locality. There are various benefits that come with doing business in India and on the other hand challenges are also there. One of the major contributors to the challenges are the cultural challenges. This challenges can cause major losses to the company as a whole. (Symposium), In Rayadurgam, In Tkachuk, 2016, 16)To avoid the various challenges understanding of the culture of Indian social and business culture. The following are the cultural challenges that influence multinational operations. Political factors These are various concerns particularly in the government policies and various ways in which administration takes place. The political factors then affect the regulation of international trade unions. When there is political stability then international businesses become smooth in terms of handling. Political unrest leads to closure of some of the international businesses. Economic factors The demands for goods in the international market is dependent on the economic growth rate. The economic growth rate can be high on some countries and at the same time be low in some other countries. This factors are put across while setting up international companies. (Mente Recorded Books, Inc, 2014, 143) Technological factors The determinant of multinational companies around the world can also be determined by the availability of technology in the vast areas. This mainly refers to the particular host countries. The type of personnel in this particular countries should have undergone through training. The connectivity of the particular country also should be an issue of concern. This makes the businesses to follow a modern way of operation. (Lewens, 2015, 12) Social factors Social factors religion and culture are among the main social factors that affect the international market in terms of the quality of product or services and also functional features of the business. Cultural effects in India that influence multinational operations When reference is put to India the following cultural challenges affect the multinational operations in the business market. This shows the type of cultures portrayed by the people of India. (Kumar, 2010, 19)The subway fast food company becomes the center of study as it is an American company based in India. The cultural challenges then include: - Attitude towards authority High importance and a high status is put on the authority in India. This is because of the fact that the roots of Indian origin is traced to Hinduism. The type of communication in different levels is almost closed. Suggestions from lower employees will not be shared by their superiors no matter how valuable they are. Business should understand this factor and come up with ways in which it can be cut down to suit the particular company. (Kelly, 2017, 17) The cultural norms dictates how employees in the middle or junior levels feels in accordance to how they feel expressing their views, asking the management on various decisions that are made in the organization. This shows the various ways in which different personnel have different roles is a particular organization. This can show that the people in lower position show a lot of respect to those in senior positions. The organizations that plans to do business in India should strive to bring about change in the society. (Keller, 2017, 20)Subway Company struggles with this challenge and the major advantage is that the rate of diversity in terms of the company workforce is high and this provides for different people from different origins to come together. This makes the Indian culture to somehow be diluted and hence making the company have a different view on both the senior employees and the junior ones. This brings a balance in the workplace of ideas, command and consultancy rate. Time concepts The culture of India is referred to as a polychromic. This means that the priorities of different people change at different times. (Jovine, 2015, 38) It means then that their priorities usually change depending on the importance and punctuality attitudes attend to be relaxed at some point. Most organizations and particularly subway company is usually strict on the regulations of punctuality and creation of deadlines to particular undertakings. The decision making process is usually of a particular time frame and this contributes to the success of such organizations. Subway addresses this issue by employing different personnel from different states and there making the culture of polychromic to go down. Though this still remains to be a challenge because most of its workforce are people of the Indian origin. Adherence to rules India has created a society that runs on assumptions that are set in a particular manner. In different countries of the world rules and regulations are the major determinants of the day to day survival but this is a different case in India as etiquette and norms becomes the major determinants. The way in which rules and regulations contain a low level of adherence makes it have numerous challenges on the economic market. (Green, 2017, 65) This makes setting up of businesses in India difficult for requirement is to follow the rules and regulations of the home country. Subway Company faces this as one of the challenges that occur to it on the day to day operations. Obesity policy control Governments in different parts of the world introduced a type of tax known as fat tax to all fast food restaurants. This was to tax all fast foods a 15% in order to make the foods expensive and discourage the consumption low as a lot consumption caused obesity to their citizens. India is one the countries that was involved in this and this therefore makes subway company undergo challenges such as low income. (Gautam, 2017, 87)The Subway Company has done numerous efforts to combat this by either reducing the level of spices in their products to make a lot of people consume them without fear. Building relationships As hard work and focus towards certain objectives of a business are the cultures of businesses in different part of the world, in India the situation is different as their culture is more focused on the relationship and building trust on each other. This causes difference as there are people from different ethnic groups, the traditions are different, languages are not same and different histories make working as a unit become difficult in India. (Gautam, 2017, 65) Subway Company faces this challenges at the employee level as cooperation becomes difficult. This is also seen as customers tend to visit places with people of same relationship as theirs. Collaboration becomes a major challenge in its operations and dealing with this will make the rate of production to be high. When this problem is addressed the also the customers familiarize with the particular business. Levels of English Difficulty is seen in the understanding of the Indian English. This causes a major challenge as there are different vocabulary and expressions in the Indian English. There is also the presence of heavy accents which make communicating with the Indians become difficult. This is that way even though most of the university graduates and Indians are living in major urban centers. Many organizations face this challenge of communicating with the Indians. Sometimes organization dont interpret the Indians well. This is due to the poor education they went through and thus speak broken English. (Ganeri, 2013, 43) Communication style Communication by the Indians is usually indirect. Their communication is that of high context. They communicate in such a way that they base argument on the basis of relationships, their emotions and their body language and this is where they put high importance. (Fisher, 2017, 6) They usually have no proper communication and often will say not use the phrase no. This therefore is another big challenge and can cause a lot of problems as communicating with someone used to the normal becomes difficult. Subway Fast Food company faces this challenge mainly through communicating to some of the employees and also most of the customers. This challenges in India can be very harmful to organizations that set up business premises in India. Noticing these challenges is one thing and how, what and why questions behind these challenges is the other thing that is of great Importance in formulating what kind of strategy to develop to be able to combat these challenges. (Braunias, 2017, 10) The various ways in which Subway Company has taken to combat these challenges becomes a good way to educate other companies that intend to do business in India. The Subway Company has developed a lot of relationships with the Indian people and this makes it have numerous opportunities to combat the challenges that are present. Through this development is seen as the numerous ways in which Indians has embraced this fast food as a whole. The way in which the companies has reduced the usage of less spices in their products has also helped in its vast operations in the region. The subway company is increasingly becoming popular in the vast Indian nation and this makes it develop ways of combating this ever growing challenges that are always present. Effective communication required for a good business to take place is one major objective of the company to continue with the provision of various products to the country. (Alperson, 2013, 32) For success of any business effective communication is required and Subway Company has ventured in this greatly in India. The greatest risk is when the message being communicated gets lost in terms of translation. This is a common challenge in Indian as Indians can easily translate information differently. The fact that Indians find difficulty in understanding or speaking English makes it difficult to do business in India as English is a main language in the business world. The main concern should always not be on the language but how the message is conveyed and this is addressed well by this multinational company that is overtaking the market in India. The main way in which we can make business easy in the globe is by learning how to portray the subtle non-verbal communication between the various cultures that are present in the world not only the type of language used to portray the particular types of messages. Conclusion Different cultures have certain similarities though sometimes what is common in one culture might be offensive on another culture. The form of body language in which is used should be clear and if not then someone should always ask questions for clarification. Before engaging in business activities on a particular part of the world, research is needed in order to find out what to do and what not to do for the success of the business. Also the way in which communication is done on the particular part of the world is also very important for the planning of the business strategies for maximum success. Cross cultural communication is one of the major challenges of multinational businesses and this should be approached with a lot of concern for maximum understanding. This maximum understanding leads to high yields in the business. Foreign culture when disrespected can lead to destroying the particular effort of undertaking a business opportunity. When engaging in the international market companies should always have in mind certain some pieces of advice It is important to know the cultures and customs of the host countries. If the first approach becomes difficult this should give reason for more research on the particular state. Understand what is required of foreign businesses in the particular country. 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