Most multinational corporations (MNCs) need not enter foreign markets Essay

Most multinational corporations (MNCs) need not enter foreign markets to face the challenge of dealing with multiculturalism. Explain your answer - Essay Example For the purpose of analysis, the notion of cross-culturalism is explored with Hofstede’s dimensions with discussion of the cases of Wal-Mart and Google to reach to the conclusion that expansion in foreign markets is almost never in the long run interest of multinationals. Research bears witness to the fact that differences in cultures across countries account for differences in management and leadership styles of MNCs today (Gerstner & Day, 1994). In today’s globalized world, it is imperative for MNCs to appreciate and adapt to diversity in cultures and mould their management styles accordingly in terms of cognitive information processing and emotional, behavioral and motivational mechanisms (Earley, 2006). Considering the fact that many developed (western) nations are setting up businesses (as MNCs) in the less-developed (Asian/ Eastern) societies, it is increasingly important for managers to appreciate and understand the differences that exist between the eastern and western societies. Research by Hofstede (1980, 1991, and 2001) identifies key dimensions that account for variation between the Eastern and Western cultures, including masculinity, power distance beliefs, uncertainty avoidance and long term orientation. On one end of the continu um are the Eastern societies that rank high in terms of high power distance beliefs, collectivism, long term orientation and conformity. On the other end lie the Western societies that are more work-oriented, have low power-distance beliefs and are inherently individualistic in nature. Furthermore, increased influence of multinational corporations has given rise to the need for interaction amongst employees and managers of different cultures (Adler, 1983). This has given birth to the concept of cross-culturalism which attempts to examine the attitudes, behavior and relationships across managers (and people in general) of