Research Proposal on "Cultural Diversity Impact on Small Multinational Companies in Global Markets"

Research Proposal 20 pages (5800 words) Sources: 50

[EXCERPT] . . . .

Cultural Diversity Impact on Small Multinational Companies

At times, in their ignorance of another country's cultural values, business leaders of one company operating in other countries may crash head-on with leaders and employees. Ruth Benedict (1887-1948), U.S. anthropologist, stressed that along with cooperating with the existing culture, to avoid head-on collisions in business, company leaders need to possess an intelligent understanding of any country they engaged in business with, as well as that country's ways of life (Columbia World..., 1996). The impact of culture and diversity in emerging markets, now as in the past, routinely challenges a company's success, simulating a barrier to be broken (U.S. Small Business Administration (SBA) Office of Advocacy, 2007). In today's global marketplace, to more effectively manage a small multinational company, business leaders need to understand the local mentality, beliefs, and even linguistic traits of the culture they conduct business in/with. During the proposed dissertation, the researcher plans to explore the impact of cultural diversity on small multinational companies in global markets.

Heart of U.S. Economy

Fifty years ago, as a matter of business, a number of nations, including the U.S., did not routinely, readily respond to other countries' appeals. Cultural clashes sometimes occurred when one country would not necessarily value the rewards another deemed irresistible (Columbia World..., 1996). In the 21st century, albeit as the global market evolved, multinational companies began to drive the growth of the U.S. economy. Consequently, exporting proved vital for many small multinational companies to achieve success.

Currently, small firms constitute the heart of the United States economy as they represent 99.7% of employers in the U.S., and generate 60 to 8O% new jobs annually, the U.S. Small Business Administration (2007) purports. Small businesses account for 97% of all U.S. exporters. In 2007, U.S. companies exported $1,1419 billion in goods and S497 billion in services for a total of $1,646 billion. These exports supported more than 16 million higher paying U.S. jobs, strengthened companies and farms, and improved citizens' tax base; while simultaneously sending export revenue to local communities through restaurants, retail stores, etc. (U.S. Small Business..., 2007). The U.S. SBA Office of Advocacy (2007) reports that small businesses currently create most new jobs in the U.S. In addition, they bring dynamic ideas, innovative services, and new products to the national and global marketplace. Small businesses also account for almost all of the U.S. employer firms and generate a non-farm private output. Basically, small business creation proves vital to the ability to increase gross national product, personal income, and total employment in the U.S. (U.S. Small Business..., 2007). Small global businesses make an important contribution to the U.S. role in the international community, as they serve as linkage among the community, national and the global economy (U.S. Small Business..., 2007).

In the business realm, as each country throughout the world traditionally reflects its unique culture, along with its own language, history, ideology, and perception, however, businesses may still clash. A business strategy in China, for example, may not work in United States (U.S.), just a one in the U.S. could merit disdain in China. In "Keeping Cultural Diversity Alive," a writer identified as "Anonymous"(2008) notes Marlene Ibsen, CEO and president of the Travelers Foundation in Saint Paul, Minnesota to state: "In today's diverse, global society, respecting cultural values and differences - and learning about them - is extremely important, as is promoting a culture within your organization and within your own community that is tolerant, open, and accepting" (Ibsen, as cited in Anonymous, ¶ 2). Diversity, the theme for a recent New Hampshire annual Diversity Conference and Expo for Business and Education purports, possesses the potential to make a company stronger. Diversity may also present an array of additional profitable opportunities ("Opportunity knocks...," 2008). Possibilities, Opportunities and Challenges Amidst the multitude of strengthening possibilities and opportunities, however, cultural diversity also presents a myriad of challenges for the small multinational company. To effectively counter these challenges, speakers at this conference stressed. Businesses need to embrace the diversity, along with its benefits. Companies need to increase their understanding of differences in cultures; promote cultural sensitivity and corporate social responsibility ("Opportunity knocks...," 2008). Cheryl Marihugh (2006) points out in "Corporate Social Responsibility: An Insider's View," that as companies currently face possibilities, opportunities and challenges relating to cultural diversity, more companies adopt corporate social responsibility (CSR) programs. "Broadly, CSR programs are supposed to assess and improve corporate operations in relation to a range of values beyond profit: human rights, environmental protection, contribution to local communities, and workplace diversity, among others" (Marihugh, 2006, ¶ 1). In response to activism around sweatshop conditions in a number of factories, CSR developed programs-codes of conduct which require monitoring of covered conditions. Controversy, however, currently shrouds CSR regarding the question of whether monitoring really be part of CSR.

In regard to cultural diversity, nevertheless, most companies appear to concur that a number of common concerns challenge their success. Michelle Porter (2003) points out in "Culture-savvy leaders: essential to expat management teams," that for companies operating in the global market to succeed, managers need knowledge and experience of the culture where they conduct business.

On behalf of the European Commission, in "Effects on the European Union Economy of Shortages of Foreign Language Skills in Enterprise," Stephen Hagen (2008) recounts a number of points regarding language and marketing. Hagen asserts that alongside linguistic competence, other components contributing to a successful exporting include organizational factors and environmental conditions. In their quests for global success, businesses experience a number contemporary cultural concerns which include, but may not be limited to variances in/of:

Compliance with a country's laws (Marihugh,2006);

Cultivating language competence (Hagen, 2008);

Managers' knowledge and experience of the culture (Porter, 2003).

PROBLEM STATEMENT

The failure of the manager of the small multinational company to intelligently understand cultural diversity constitutes a challenging concerns, and potentially putrid problem.

The forthcoming qualitative phenomenological study will enhance the reader's intelligent understanding of cultural diversity, which serves as a vital factor contributing to the small multinational company's ability to establish and maintain operations, a 2000 report to then U.S. President William Jefferson Bill Clinton, regarding the small business economy, noted the increase in small business failures as a result of the challenges small business owners face in establishing and maintaining operations. (SBA Office of Advocacy, 2004).

Prior to moving into global markets, some small multinational companies may not possess the resources that provide immediate access to global market research and cultural information. According to Maccoby (2006), as culture and diversity matters, multinational companies should be aware of the cultural differences and expectations before venturing into global markets. The SBA (2000 a) asserts that a lack of cultural sensitivity and consideration may adversely affect the small multinational company's market entry, as well as the acceptance of the business in global markets (U.S. Small Business..., 2007).

PURPOSE STATEMENT

The purpose of the proposed qualitative phenomenological study, the researcher contends, will be to explore the impact of culture and diversity on small multinational companies in global markets, which will simultaneously increase awareness of the value of understanding the social and cultural aspects of the global market prior to entering. Maccoby (2006) purports that as a culture shapes personality, attitudes, and values, businesses should be aware of the cultural differences in expectations before venturing into global markets. Although the proposed study primarily focuses on small multinational companies in the U.S., considerations regarding global markets throughout the world expand its horizons to likely stimulate interest in other countries.

Research Methodology (N.d.) explains that in qualitative research methodology, numerous kinds of studies share common aspects. Rather than proving or disproving a hypothesis, qualitative studies, which are descriptive, examine a particular aspect of the human experience in depth. During the proposed study, the researcher will describe particular human aspects relating to the study's focus. The sample size for the upcoming study will range from a minimum of three small multinational companies to a maximum of five. Instead of comparing identified groups of people, qualitative studies propose to develop ideas and theories regarding human experience(s). In the forthcoming phenomenological research effort, the researcher plans to attempt to 'bracket out' personal biases and expectations, and though not fully possible, the researcher will strive to be to what the data will reveal. The researcher may also include a number of in-depth interviews with several small business owners.

SIGNIFICANCE to RESEARCH

The researcher purports the proposed study to be significant as its examination of the challenges and impact of culture and diversity on small multinational companies in global markets will help fill the dearth evident in current research relating to this subject. From the literature reviewed in planning for the following stud, the researcher noted the challenges and impact of culture on companies in global markets has not been fully researched. As small multinational companies fill a vital position in the U.S. economy (Ibrahim, Angelidis & Parsa, 2004), more studies need to investigate and examine the challenges and impact that culture have on multinational companies working in emerging… READ MORE

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