Technology and Innovation.
TECHNOLOGY AND INNOVATION
According to Sakiki Fukada-Parr the prominent author of a UNDP report on technology and development suggests, electronic communications help make societies less hierarchical. He quotes "no one can see the cut of your suit, and no secretary blocks your path to the minister's office." "Junior employee's who would never have dared knock on a chief executive's door might send him an idea electronically".
(The Economist (US), Nov 10, 2001)
Cetron & Davies, [2001]) believes businesses have come to rely on technology for increased production efficiency and more appropriate communication operations.
Competition is mounting in the business world and organisations must take advantage of the latest technology in order to improve their business functions. Organisations must change the way they act, think and operate internally as their work environment becomes more technologically advanced. All businesses across the world have sufficient communications tools that make global management much easier. Devices such as e-mail, fax machines and satellite communication are all tools that enable managers to communicate at an extremely high pace.
(Heiko [1989]) suggests that technology implementation will be heavily influenced by cultural factors, such as technological advances between foreign operations. He observed that Just-In-Time approach of inventory management has been favourably received in Japan, leading to considerable savings. However, this is not the case in other countries and believes this is down to unique cultural conditions in Japan such as concern for space, and a deep group oriented devotion to duty, all of which match the requirements of (JIT ) techniques. In conclusion (Heiko [1989]) states that the Japanese culture can provide a environment where JIT techniques can expand and develop. (Klien and Ralls, 1995) adds that the more complexity facing an organisation, concerning culture, the less willing the orgainisation is to implement technology on a wider basis. This may lead to greater opportunity costs by not adopting the latest techniques across various units, for fear that the results are uneven.
Although global firms can benefit from global efficiencies, it is not always appropriate where technology is concerned. Nike for instance has a plant in Indonesia where labour costs are low and have access to better distribution channels and production costs are also low. (Samli, [1985]) argues that although there are benefits, consideration has to be given to the fact that labour skills are extremely low and training of employee's will have to occur in order for them to do their job.
On the other hand (Dougherty [1995]) suggests that the exchange of technology across national borders is essential. Ford not only transfers technology to foreign countries but also tries to learn from locals. The exchange of expertise and information among people from around the world assists in broadening perspectives and also assists research and development in transferring information between divisions successfully. This increases the key mass in R&D so that organisations are able to attract better people.
Innovation enables organisation to improve the quality of their output, enter new markets, try out new technologies and develop alternative applications for existing product categories. For organisations must adapt to changing competition, markets, and technologies.(Dougherty [1996])
(Venkatraman, MacMillian and McGrath, [1992]; Shane [1995]) suggest that innovation within global organisations may be hampered by cultural barriers. It is important not to block innovation by organisational rules or routines. Based on findings from Hofstede's cultural indices they suggest that cultural barriers may slow down transfer from one unit to another in a multinational organisation
(Cox,[1991] argues that using cultural heterogeneity leads to greater innovation and more efficient marketing strategies for the different types of customers worldwide. He also suggests that because employee's come from different backgrounds different perspectives are achieved, therefore creating improvements. (Mejia ...
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(Venkatraman, MacMillian and McGrath, [1992]; Shane [1995]) suggest that innovation within global organisations may be hampered by cultural barriers. It is important not to block innovation by organisational rules or routines. Based on findings from Hofstede's cultural indices they suggest that cultural barriers may slow down transfer from one unit to another in a multinational organisation
(Cox,[1991] argues that using cultural heterogeneity leads to greater innovation and more efficient marketing strategies for the different types of customers worldwide. He also suggests that because employee's come from different backgrounds different perspectives are achieved, therefore creating improvements. (Mejia & Palich, [1997]) also argue that heterogeneous teams function better than homogenous ones because of cultural differences learning experiences.
On the other hand (Keller and Chinta [1990]; Snodgrass and Sekaran [1989]) argue that expertise and technical know-how are more difficult to develop when differences in cultural backgrounds exist. They state that this plays a major role in the transfer of technology between business units. [Empirical research by Davidson and McFetridge [1985]) also supports this belief that cultural relatedness enhances the flow of technological know how and the sharing among business units of a global organisation.
MARKETING
According to (Barlett [1996]; Beamish, Killing, Lecraw and Morrison [1994]) they are all in agreement that distinct consumer preferences will emerge due to cultural differences. This is expected to lead to the requirement of customisation of the marketing mix and product strategies. This suggests that production in one country may not suit production in another. High Uncertainty Avoidance Countries like to buy reliable, predictable goods. In addition to this, although there are divisions (Takeuchei & Porter 1986) believe culturally related countries such as (America & Canada) can more successfully share market activities and knowledge than those in culturally unrelated countries such as (America & India). With the capacity to cross-sell products in culturally related markets, which reduces information gathering expenses and the uncertainty linked with targeting markets that are totally unrelated. Culturally related countries may find it beneficial to share knowledge regarding market research, sales forces service networks, distribution and advertising, therefore lowering costs. However, (Alder, P [1987]) argues that this kind of sharing is a lot more demanding, suggesting that the differences are not just language but that it is a matter of "value's, mind set and market reactions" Take for instance the advertising campaign concerning the Marlboro Man. This campaign suited America as society is seen as "individualist" according to (Hofstede 1984). On the other hand, this campaign was a failure in Columbia because society is seen as "Collectivist"
This now leads on the issue of "marketing standardisation". This issue has been defined by (Banerjee, [1994]} as the "determination of common communication objectives and budget" whereas (Wills & Ryan, [1997]) includes in there definition "creative and media decisions involving the whole corporation".
The issues of marketing standardisation and global marketing have usually been considered in terms of the reliability of the marketing mix elements for a company that enters numerous international markets. Since the 1960's, standardisation of international marketing strategy has been the focus of many studies (Elinder, [1961]; Buzzell, 1968; Jain, [1989]), It is still unclear however, whether it is done for the savings linked with standardisation or for the maximisation of the firms products, but the underlying principle of standardisation is to maintain a global image. Rau & Preble, [1987] has carried out considerable research on this topic. Multinational Corporations are faced with difficulties when deciding standardisation of advertising across different countries. (Boddewyn, [1991]; Jain, [1989]). According to (Solberg, [2000]) there are two important organisational factors that relate to the degree of standardisation in international markets. Firstly, market knowledge at the level of headquarters (HQ) of local market conditions and secondly HQ's control of subsidiaries i.e. (Influence on their marketing decisions). In addition (Martenson, [1987]; Rau & Preble, [1987]; Tai & Wong, [1998] suggested that MNC's needed to have a certain degree of control over their subsidiaries in order to implement decisions.
(Hite & Frazer, [1998]) state that, MNC's with a well-known and global image i.e. (Coca cola) tend to apply more control over their subsidiaries in order to maintain the image of the corporation or product (Hill & James, [1990]) especially if perceptions of consumers are similar across countries. (Britt, [1974], Jain, [1989]). However, in the case of Matsushita in the electronic industry this was not the case as each subsidiary had a separate identity, which resulted in major success. This then leads on to market development. (Jain, [1989]; Duncan & Ramaprasad, [1995]) suggest if similar levels of market development are achieved in both home and host countries marketing standardisation would favour MNC's. However, this would depend on the competitive positions in home and host countries of the MNC. Higher degrees of marketing standardisation may be adapted (Jain, [1989]; Henzler & Rall, [1986]) if similarities prevailed in the competitive context that would allow HQ's to make easier decisions regarding competition and to enhance control over the subsidiary and to adopt more beneficial standardisation strategies. (Doz and Prahalad, [1984] Michell & Bright, [1995]).
STAFFING AND TRAINING
As multinational firms globalise they must learn to co-ordinate efforts among an increasingly culturally diverse workforce and environment. Nowadays people tend to be very defensive of their cultural identity and caution by others has to be taken so that insult is not caused. Through the years success of Japanese organisation's global strategies has encouraged American firms. Although many point out the advantages, cultural diversity may leads to conflict, misunderstanding and lack of cohesion.
Organisations are becoming more alert of the importance of diversity to their business activities and acknowledge that by recruiting, promoting and training a diverse range of individuals in the long-term are a major asset to the organisation in reaching out to their customers. (Tung, [1993]) states that cross cultural training process, helps in the development of building relations between individuals or groups, especially individuals/groups with diverse cultural backgrounds. (Welch [1998]) defines cultural training as "any form of guided experience helping people to live and work more contentedly in another culture". Such training encourages understanding about differences and acceptance of the multicultural work environment and helps create and retain effective work teams and expertise in dealing with multicultural management (Hartenian, [2000]) describes the multi-cultural workforce as a workforce that excludes no one, from top-level management to low-level employee's. He sees the multi-cultural workforce has one of the main opportunities for an organisation. Take for instance the IBM perspective. IBM have established research labs around the world because the issue of a globally diverse workforce is of the highest importance. This in turn allows the organisaton to gather ideas from people who experience different economies and cultures
Although multi-cultural workforces are beneficial to organisations in relation to performance and profitability, they can be very hard to manage. According to (Hill, [92]) the key to managing multi-cultural workforces is the realisation that majority and minority cultures do not always share experiences. To solve this managers can adapt different strategies such as: developing programmes that promote awareness of different cultures, recognise common links among different ethnic groups and express concerns and confusions. (Hill [1992]) believes that if organisations use these strategies, economic benefits will be reaped. This may be easier said than done, (Harisis & Kleiner, [1993]) argue that the implementation of such workforces are extremely difficult. They say that not only within American society and businesses but on a world wide scale there are widespread barriers. Such barriers include unwritten rules and double standards for success which are often unknown to women and minorities, stereotypes and their associated assumptions and lack of communication about differences.
In global organisations it is essential that effective cross cultural training occurs in order to help individuals obtain both the knowledge and the tools needed to reduce misunderstandings and improper actions (Black & Mendenhall [1990]) suggest that multi-cultural training provides individuals with greater self confidence and decreased narrow-mindedness about people from diverse cultures. In addition (Barlett and Ghoshal [1990]) also pointed out that establishing a multicultural training programme improved the company's ability to operate more efficiently in different cultural environments. Although many multicultural training programmes are undertaken to enhance cultural diversity they are not always successful. According to (Woods [1992]) a systematic approach should be taken towards training. (Woods [1992]) established a four step cycle:
Firstly was to specify certain job task of individuals and assess the needs of the corporate culture. Secondly is the identification of training objectives. Thirdly was the establishment of the proper training content in which the following was used;
sensitivity training, cultural awareness and orientation programs. In addition
(Cox, [1993]; Gamio & Sneed, [1992]; Tung, [1993]) introduced the communication competency program. In the final stage (Milkovich & Boudreau [1991]) stated that training programs need to verify whether the training is successful in junior members of staff's performances at work. The cycle used was concerned with the effectiveness of the training, however, (Mendenhall & Oddou [1986[ & Tung [1981]) found factors that deterred individuals. These included lack of specialised trainers, cost and perceived lack of usefulness. Research carried out by (Gamio & Sneed [1992]) found that the deterrence factors are of major importance. Take for instance the catering industry. Mangers in restaurants may blame high staff turnover rates on lack of multi-cultural training, therefore using these rates as the reason to ignore the need for training programs. (Jackson [1991]) believes that heterogeneity among team members contributes to high turnover rates within organisations. Researchers may find that the relationship between cultural diversity and staff turnover is of major importance to all organisations.
According to (Kossek& Lobel [1996]) the topic of diversity has raised considerable attention over the past decade and is a must for all businesses.
In today's business world global leadership is critical not only for global strategies but for ensuring cultural diversity, which involves in depth knowledge from business ethics to cultural motivatiors. Organisation's are going global because of slow growth in domestic markets and to capitalise on areas such as marketing, research and development, training, technology, production and many more factors. Organisation are fast realising the importance of diversity. Cultural diversity is the idea that cultural identities should not be ignored but in contrast be maintained and respected. The literature which is going to be presented in this paper will examine four main issues. In my opinion these issues are of major importance for global firms. The first issue is the strategies which global firms adapt follw . Secondly, the concept of Technology and Innovation. This section will in detail provide literature from researchers who believe global firms benefit from cultural diversity in this field. It will examine how technology is changing the business world. Thirdly, the marketing issue. This section will provide relevant literature on how global firms can benefit in relation to standardisation of marketing and how advertising campaigns are perceived by different countries. Lastly, the concept of Staffing and Training. This in my view is one of the most important issues. Global organisations can have all the capital in the world but with out the correct leadership and staff, failure is certain. This topic will in detail will put forward the notion of cross-cultural training and will examine whether or not this is a good idea for global organisations. All the topics mentioned above will have cases for and against by the relevant researchers in each field. I feel this is necessary in order to establish a good understanding of the literature review I am conducting. According to (Tallman & Jiatao [1996]) diversity has gone from being a moral/legal issue are both into a business necessity.
