Organizational culture

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Evaluation of Cultural Influences on Different Sizes of Companies

It is very common that when people walk into a hotel, a shop, or the office of a company, they always get a first impression about the organization. For instance, they are wondering what signs, symbols and signals they will get, how friendly the atmosphere will be, and how the staff will approach and deal with them. Huczynski (001) analyzed that these were all aspects of organizational culture which also includes corporate mission, structure and so on. Moreover, he also argued that culture had a direct impact on organizational strategy and performance. As it is well known, culture will vary from organization to organization due to the different natures and characteristics of organizations. Thus, the cultural affects will also vary. The following essay will evaluate how organizational culture might affect the management of multinational companies and small companies from three different aspects.

Firstly, companies with different cultures will have different corporate structures due to the close links between culture and structure in an organization. Generally speaking, multinational companies have a complicated corporate structure, such as a multidivisional or matrix structure. Capon (000) states that the structure that an organization adopts will determine the location of power which define the power relationships and designate the fundamental linkages between the seats of power and control. That is to say, in multinational companies, the relationship among each functional area or division and the location of power are more complex. Each

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department might have its own subculture which means a set of values shared by a minority. As Claver (0004) said different subcultures exist that can be taken advantage of in order to transform the organization's global culture in multinational firms. The harmonious co-existence of core culture and subculture in a multinational company facilitates the strategic process of management to achieve the ultimate objective of the company. On the other hand, if subcultures are not coherent to the core culture of the whole organization, it might cause misunderstanding and hindrance between the communication of each department and the whole company. Conversely, small companies have a simple corporate structure. They are too reliant on the originator and entrepreneur who work with a few employees and who seem to be heart and soul of the organization. As a result, it is not very surprised that in a small company there might not be a clear boundary among each employee's duty and different managerial sector.

Next, organizational culture might influence employees' behaviours differently in multinational and small businesses. In multinational companies, employees often come from all over the world and have various cultural backgrounds. Due to this cultural diversity, many more regular employees and managers are required to master cross-cultural management skills. Thus, they can perceive and evaluate situations in numerous ways and then agree on the best decisions and directions. In contrast, the culture in small entrepreneurial firms is homogeneous. Employees always share similar culture to each other. Therefore, unlike multinational companies, decisions might be decided quickly but much less strategically. Moreover, training is a very important part of the management process. Therefore, Singh (000) pointed out that

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cultural influences on management of different sizes of companies also cover training and development. In multinational companies, managers have to deal and communicate with their counterparts in other countries. As a consequence, transcending cultural barriers is a focal point of training practice. Multinational firms with strong organizational cultures tend to have a homogenising influence on the values of employees. There is a good example illustrated by Singh (000) training in McDonald's restaurant is not only aimed at imparting skills, but more importantly, to also inculcate the McDonald's culture in their employees, so that they will uphold and perpetuate the desired McDonald's image. However, employees in a small company often deal with domestic market and customers only, and they are not required to have much management skill. Therefore, the leaders of most small companies do not pay much attention to training their employees. Naturally, people will not have more personal development opportunities in a small company.

Finally, multinational companies and small businesses will have different strategic thinking about their business. For instance, Morden (1) explains that organizational value sets, perceptions of priority and necessity were taking on a global perspective in multinational companies. The leaders of multinational firms always lay emphasis on long-term commitment and persistence with regional and international markets with internationalization of mission and outlook. Put simply, their visions and perspectives about their businesses are wide. They have thought strategically to keep from falling behind and go ahead of the competition. As Adler (1) indicated, global firms must understand cultural dynamics to formulate their strategies, to locate production facilities and suppliers worldwide, to design and market culturally

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appropriate products and services. Also, in multinational companies, there are both strategic planning and shorter-term planning. Due to having a more complicated corporate structure than small firms, different divisions in multinational companies produce individual plans in order to record the strategic ideas and analyses clearly in accordance with overall company planning.

However, the situation in small firms is quite distinct. The majority of small businesses are short-run oriented. In other words, they have not given much thought to long run and do not have internationalization of mission and strategies. Lasher (1) explained three reasons for this there is not enough time to think ahead carefully, the managers of small firms do not think it is important to make detailed plans for longer periods and they do not know how to execute it. Small companies often focus on day-to-day decisions which typically involve the firm's internal environment. For example, what quantity of a particular product should make or what should be the price of a particular product. They always lack long company history and experience, so they do not produce business planning ahead until the firms need money or for expansion needs.

In conclusion, culture is a critical feature of successful organizations. Due to multinational companies and small companies owning different values, missions, routines and so on, the affects on their managing might vary. Besides of the aspects mentioned in the above text, there are still other influences by culture in multinational companies and small companies. In principal, what managers should do is to realize such different affects and develop a culture that supports a firm's strategy. Otherwise, a cultural mismatch will mean corporate management is fighting an uphill battle every day.

Bibliography

Adler. N. J (1) organizational behaviour (rd), South-Western College Publishing

Capon. C (000) Understanding Organizational Context, Prentice Hall

Claver. E et al (000) Analysis of a culture change in a Spanish telecommunications firm, Business Process Management Journal, Volume 6, No 4

Huczynski. A & Buchanan. D (001) Organizational Behaviour (4th), Prentice Hall

Lasher. W. R (1) Strategic Thinking for Smaller Business and Divisions, Blackwell Business

Morden. T (1) Business Strategy and Planning, McGraw-Hall Book Company

Singh. H (000) effects of culture on training, WWW.insight.iese.edu, cited on rd May 00-05-16

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