Company's Attitude Towards Structure And Management Style example essay topic

Before analysing how culture whether it be national or organisational influences the organisational structure and management style of an organisation we must first attempt to define what exactly is meant by the term culture, once we have done so then we can move on to see how it affects a company's attitude towards structure and management style. So what is culture? Well culture has been defined by many people; Geert Hofstede conducted a large-scale research study of IBM subsidiaries across the world. Arguing that culture is collective programming which does indeed affect behaviour, while doing this he identified four dimensions of culture: power distance; uncertainty avoidance; individualism; and masculinity (Mullins, L.J., 2002: 37-38). Hofstede then put each country into categories depending on whether it was high, medium, or low in relation to the four dimensions.

But this method is not without criticism as it tends to generalise and doesn't allow for regional differences. On the other hand S.P. Robbins (Mullins, L.J., 2002: 35) notes that: 'Most people are unaware of just how their culture will affect them. Culture is like fish to water. It is there all the time but the fish are oblivious to it. ' And as this idea takes more of an individualist's point of view it takes into account where the person comes from, the social beliefs and the morals and ethics instilled in them as they were brought up. These are just two point of views as to what culture is, as it is such a difficult concept to define without argument for the purpose of this essay we " ll use the following definition; It may be usefully conceived as a distinctive pattern of values and beliefs which are characteristic of a particular society or sub-group in that society (Mullins, L.J., 2002: 36).

These values are likely to be passed down through the generations, being taught at school, in the home through family influence. This topic of culture is coming up more and more in relation to business as a result of companies expanding their operations abroad so as to increase their markets and to try and cut costs. As a result of this globalisation not only companies but, managers too are facing an increasing number of challenges. As a result of this ever increasing globalisation companies have to diversify their workforce as they expand abroad and as foreign nationals come over here to work. And due to this globalisation managers of large multi national companies may find themselves working abroad in a foreign environment or jetting between plants in various countries, thus they need to learn how to be aware of the fact that what might pass as ok in one country with one culture may not necessarily pass in another no matter how similar both populations might seem to be on the surface. Companies are handling these new challenges in different ways some are rising to the challenges and finding new ways to adapt and meet the changing needs of their ever growing and diversifying customer and employment base.

And as they do so they are setting up and restructuring their corporate values to encompass the cultural differences of respective countries, and at the same time they are bringing with them their own values and beliefs, as well as their own organisational methods with them and learning from organisational structures and methods already in place. One company which is attempting to meet these challenges is HSBC it's not only doing so on the foreign front but also on it's domestic market. The management at HSBC have decided that the best way to ensure customer and employee satisfaction is to employ people in managerial positions who have some local knowledge. For example when in 2001 HSBC went in and bought an 8% stake in Bank of Shanghai and got with it an opening to a market which had been previously difficult to get access to, it also gave then an advantage as they got with it a wealth of local knowledge and in exchange it brought it the knowledge, experience and international reach of the HSBC group. "The Bank of Shanghai has a wealth of knowledge about China's domestic banking sector. In return, we offer the international reach and experience of the HSBC Group", said Mr. Eldon.

(Taken from the BBC news website). This attitude towards change has HSBC go form strength to strength on the global market, buying stakes in various banks in different countries. The attitude towards diversity at HSBC seems to be one where when they go into do business in a country they learn all they can about the regional beliefs and customs, by doing this they make themselves seem more culturally aware, for instance in Brazil they are relaxed about time keeping and meetings may run on for longer than planned so it is necessary when planning your meetings to leave plenty of time in between, as they tend to start off with a small talk and have an informal air and never rush off at the end as it may be seen as a rude gesture and this can lead to breach which may be difficult to repair, whereas in the UK punctuality is important and meetings will take on a formal air and business associates are usually quite reserved upon first meeting, but in general they become warmer and more open the more you get to know them (HSBC website. ). HSBC not only tell us about the different customs followed in each of the countries they operate in they also talk about the different attitudes towards management. For example in Canada although you have a hierarchical management approach, there is still an open-mindedness and people are encouraged to air their opinions and ideas and there is democratic approach to meetings.

In Japan there is a very formal and hierarchical feeling towards management where older associates will generally be of senior rank, despite this the group identity usually prevails and all decisions are made within the group there for eliminating the singling out of individuals for praise or criticism. And it is HSBC's implementation of this local knowledge into their management structures and style's which has seen it win the award for Global Bank of The Year for the second year in a row. This is even more evident when you take a closer look at their operations here at home in the United Kingdom, where they have become the first of Britain's high street banks to offer Islamic mortgages. In doing this they have spotted a gap in the market due to the growing number of Muslims in the country Last year a report from market analyst Datamonitor estimated that demand for Islamic mortgages in the UK was so strong that gross advances could reach lb 4.5 bn ($7 bn) in 2006. (HSBC web page), and responded by offering a financial solution which doesn't hold Muslims to the mercy of their conscience "Some (Muslims) are wracked with guilt because they have broken Islamic law. While others' values are beyond question, they are more pragmatic in order to keep a roof over their family's head.

"HSBC's initiative frees them from this dilemma and is the first step to delivering a level playing field for Muslims seeking financial solutions in the UK". (Iqbal As aria, spokesman for the Muslim Council of Great Britain) (HSBC webpage). It is clearly evident that the management structure of the company seems to be one of a mix between hierarchical and that of a global matrix structure you have a system where there is one company overseeing what goes on internationally, while at the same time relinquishing some of it's power to the local headquarters. For example HSBC holdings look after the interests of the company as a whole but allows it's regional headquarters to modify it's policies to fit the cultural beliefs of the countries they operate in, so there for you may get the same services packaged differently depending on the country you are in, or you could even find that there's a complete absence of one particular service, for instance foreign banks In china are restricted from opening accounts for it's 1.3 billion inhabitants therefore in order to tap into this market HSBC bought a stake in the bank of shanghai in order to get the experience of the Chinese market before the regulations are relaxed in 2004 (BBC News web page). This approach to management, and organisational structure allows HSBC to operate successfully in the various market places which it finds itself and as a result not only has it won the award for Global Bank of the Year tow years running but it's also won the award of Bank of the Year Asia-Pacific, and received 'best bank' awards in two country categories: Hong Kong and Malaysia, in 2002.

Another company trying to tackle the growing cultural and managerial problems which globalisation is bringing with it are McDonalds. They have been operating since 1955 when the first outlet was opened in Des Plaines, Illinois, U.S.A. Since then McDonalds outlets have sprouted up all over the world, today they are part of the lives of people living in 119 different countries, from the US to Kuwait (McDonald's web page). At home in the US they have won awards for their approach to management and their employment and work handling of ethnic minorities. They have built diversity into their core business systems, they " ve even made it part of their manager training programmes (McDonald's web page). Reading the facts and statistics for their US operations you get a good idea of just how diverse their work force is: o McDonald's has the largest number of minority and female franchisees in the quick service industry. o More than 37% of all McDonald's US Owner / Operators are women and minorities. o McDonald's has the largest number of minority and female franchisees in the QSR industry. o We believe the combined sales of the Company's African-American licensees constitute the largest African-American enterprise in the county. o We believe McDonald's Hispanic franchisees represent the largest single Hispanic business in the country.

(McDonald's web page). This diversity has won the company a number of awards including being named in the "Top Fifty Companies for Diversity List" (DiversityInc. com, 2001), "Best of the Best" (DiversityInc. com, 2002), "top ten diversity champions" (Pat Harris, working mother magazine, 2001), "Top Fifty Places for Minorities to Work" (Fortune, 2002). If you where to look at these facts and statistics at face value it looks like McDonalds are leading the way in cultural diversity, and while they must be commended for what they have achieved if we take a look outside the US we get a much broader view of the company. In 2002 McDonalds long running global expansion faltered when they were forced to pull out of Bolivia, where they had poorly judged the local culture and it's economy, in a country where the average monthly wage was about fifty pounds, selling a burger and fries at two pounds each was always going to limit the demand for the good.

As one chef at a nearby local fast-food chain which sells pizzas and steak sandwiches put it "In other countries like England or the US McDonald's is a cheap option, but here you can buy a burger for two Bolivianos (lb 0.17; $0.27)", (BBC web page). It's because of this complete disregard for the countries individuality, just because lb 2 ($3) is cheap for a person living the UK or the US doesn't necessarily mean it's just as cheap for people living in other countries. This forced pull out of the country in 2002 has gone and left the door open for one of its main rivals (Burger King) to learn from McDonald's costly mistake and try to turn it to their advantage. This is not the only time where McDonalds have been guilty of misinterpreting the views of the local population, their approach to global expansion has been one of standardization and up till the recent past that attitude has served them well but with the growing shift from the view of globalize brand being king towards the "think global, act local" or "globalisation" attitude (BBC web page). McDonalds are changing along with public opinion in France they have dropped Ronald McDonald as their advertising image and gone for a more Gallic icon in the form of Asterix in an attempt to move away from the legendary unease with the sort of mass-market American culture that McDonalds have come to epitomist, it's not something as simple as changing their advertising methods they have also changed their attitude towards catering for the individual countries needs, for example they don't serve beef or pork in their Indian chains of the company so as not to offend the local Hindu or Muslim population (BBC news web page). This change of approach towards cultural identity on the part of McDonalds has come about due to the ever changing and growing need for cultural identity.

For this purpose the management structure is one of a combination between that of a matrix style and a hierarchical style, where there are presidents for each region i.e. Asia / Pacific, Europe, and US and South America, each with a number of executives answering to them and they in turn answer to the executive vice-president for world operations and systems who in turn reports a single president and chief operating officer to McDonald's worldwide restaurant group. Both companies (HSBC and McDonalds) have a large and diverse global customer base, and as a result have to meet the tough challenge of catering for a wide diversity of customer needs. Both have taken a different approach to how they go about this, for HSBC it is a case of first buying a stake in a local bank of the country it wishes to set up in and using this banks local knowledge and strategies to fit with the local culture as they did when they bought into the bank of shanghai, where as when we look at McDonalds we find a firm which has always worked on the principle of standardisation and although this worked well in the past it is no longer the case (with drawl from Bolivia), and they are finding out that they now have to change this approach and accommodate local interest and cultural beliefs and opinions as they have done by leaving out beef and pork products from their restaurants in India and changing their advertising image in France from that of Ronald McDonald to Asterix. What is most clear from looking at the two examples above is that if a company whether it is in the banking industry or the catering industry, or whatever field it caters for, Is to survive let alone expand on the global market it can no longer take a standardisation approach to business it now must take into account changing cultural attitudes and adopt a management style that can change and meet the new demands a global market will place on it.