Critical analysis on the way adverse effects of cultural differences due to partnering can be managed.

Globalization is defined as a technological, economic, cultural, ideological and economic change across borders. Rationalization is an increase in social integration in a given area encompassing all economic and social interactions between the units in the region. Globalization and rationalization are contradictory objectives, because in some cases can be the same and, in some cases, can be very different.

Figure 1: Semi globalization

Source: (Kolk,2010)

According to above model, it is much easier for countries and businesses to communicate with other countries. The cultural difference is that values are integrated and maintain the values, beliefs and behavioral rules developed by society, which influence the accepted behavior in a unique way from one social group to another (Guerra, 2010). Cultural differences can be a major obstacle for businesses, such as outsourcing, networking, mergers and acquisitions promoted by globalization and rationalization.

These strategies often lead to the need for cooperation with different cultures. The author can critically analyze how the negative effects of cultural differences on the partners can be managed. Outsourcing is a business practice in which work or work tasks are transferred to a third party. In general, risks increase when the limit between the liability of the customer and the seller is blurred and the division of responsibilities widens. Regardless of the type of outsourcing, the ratio will be successful only if the seller and the customer reach the expected benefits. It is very important to ensure strategic relations in order to keep in mind the situation of the mother and the partner companies.

In many cases, culture is the missing link between a successful partnership and a failure. At the time of outsourcing, employees from different backgrounds come together to work together. Usually, outsourcing takes place in different countries. In such situations, cultural differences play a key role and can lead to misunderstandings and desired outcomes. Most leaders do not understand that outsourcing is generally a union and a partnership where both parties must recognize work, expectations and, above all, culture.

The external service provider is always looking at the required details of the business and the cultural partnership when it comes to partnering. This will ensure a smooth transition and will help both companies understand cultural requirements and differences. This will greatly contribute to the outsourcing of an enterprise to an offshore account, where the potential for cultural differences is very high, which reduces the time and costs at an early stage.

 The only obstacle here is that global networking can be very difficult when networking rules vary across cultures. These cultural challenges can be so powerful that some world leaders often try to avoid networking opportunities. The role of collectors and avoidance of uncertainty are different in networking. The current was also present but has no strong influence. This is essential, but it is not enough for the position and the positions to be maintained, and the transmission of different channels and traditions must be done carefully.

 Formal relations played an important role until the informal relationships entered the game. If an informal relationship does not increase as required, the formal relationship cannot provide sufficient support for the development and expansion of the long-term business process. When the agreement becomes dominant and the partners begin to legitimize a small point, the joint venture is condemned. Confidence building is essential if collectivism and uncertainty are to be avoided.

A clear idea of the difference lies in the fact that networks in other countries are useful. Relationships are culture: interaction with humans has been assimilated to human nature assumptions (Ellis et al., 2006). Power distance encourages official relations where trust in development is less important. If the formal relationship rules, there will be less confidence. Collectivism and high uncertainty encourage people to cooperate closely, and that is why trust is a key issue in these cases.

The more people are uncertain and collectivist, the more confidence they need. In order to build trust, it is essential that interactive partners often use informal and indirect relationships to build their networks. Cultural difference creates a very uncertain environment for the worker and feels precarious, stressed and fearful. Their main concern is to safeguard jobs.  In a range of culturally diverse societies, employees in the target society are less motivated to participate in the process of integration and acupuncture, and it is difficult to express their views and make decisions freely.

This will lead to their withdrawal from the unification and management of water, which will make it difficult to integrate the process of social integration after unification and acupuncture and, finally, after bad purchases. A negative relationship must therefore be expected between the cultural and psychological security of the target society. A greater cultural distance between two companies is the psychological safety of the workers in the companies concerned.

Figure 2: Impact of cultural difference on merge and acquisition performance

                                                                Source: (Jha,2016)

Aguilera and Dencker (2004) are examined the impact of the national culture on cross-border mergers and acquisitions and provided a framework for compliance with the HRM strategy as above. Because national circumstances are grouped in different dimensions such as culture (Hofstede, 1980), economic (Zysman, 1983), the employment system (Marsden, 1999), economic organization and control (Whitley, 1999) or public administrations (Aguilera and Jackson, 2003). 

These factors affect cross-border mergers in different ways. These factors are taken by the decision-maker prior to the decision of the cross-border merger. Cross-cultural administrative surveys have shown that behavioral patterns of individuality and openness vary from country to country (Adler et al., 1986) and influence cross-border mergers and acquisitions (Gersten et al., 1998).

Each worker detects mergers and acquisitions in different ways on the basis of cognitive assessment. The information available is influenced by this cognitive assessment. Psychologically safe workers are involved in socio-cultural integration and help the organization achieve predefined objectives to be combined and acquired.    Visibility of leadership has the potential to influence the psychological safety of targeted workers by involving them during and after the merger and supply process. A remote cultural environment can contribute to the growth and success of merging firms by introducing different skills, resources, etc. But if it is not managed properly, it can be disastrous.

References

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Aguilera, R.V. and Dencker, J.C., 2004. The role of human resource management in cross-border mergers and acquisitions. The International Journal of Human Resource Management, 15(8), pp.1355-1370.

Aguilera, R.V. and Jackson, G., 2003. The cross-national diversity of corporate governance: Dimensions and determinants. Academy of management Review, 28(3), pp.447-465.

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Triple Bottom Line’ is the all-encompassing strategy for growth and sustainability.

The growth of the organization is a cycle. The organization of the growth phase should be fully concerned about the competitive advantages or the need to change in any other way within the organization. The growth of the organization should be sustainable and sustainable and be seen as a corporate social responsibility (CSR).

This approach suffers from an imbalance in which increased attention is given to the environmental pillar in relation to society (which includes the human side) three times its sustainability. On the other hand, the coherence of the three-line approach is based on the structure of the Triple Bottom line, since the concept is clearly based on a combination of social, environmental and economic guidelines.

Organizations that use experience and intelligence must provide a common environment, provide people with tools, and create a climate for learning and testing new ways of doing business in the marketplace. An institution that can collect all the information and distribute it to its employees is a huge advantage for an organization that will never know what its people know. The development of the information economy requires fundamental change in organizations and facilitates their learning, development and partnership.

As with the three basic principles mentioned above, it focuses directly on the real pillars of growth, such as people, the environment and the economy. By exploring strategic capabilities, competitive advantages and improved customer service, the author can clearly state that people, the environment and the economy are the foundation of these concepts. Burger King India can be taken as an example.

It was put out hamburger and added a masala burger to the menu and recruited local workers into the stores. Burger King created strategic capabilities using a brand name and social aspects to create and improve competitive advantages by offering local sentiment through the menu. Local recruitment is important to provide better service to clients with a focus on cultural aspects. It is clear that strategic capabilities, competitive advantages and improved customer service are pillars of organizational growth and sustainable development, but in fact they have focused on people, the environment and the economy in order to achieve sustainable development.

According to the authors view, if the organization focuses on three strategic sub-rating capabilities, competitive advantages and better customer service will be created automatically and can effectively achieve growth and sustainable development for a long time instead of focusing only on a limited period of time. If a recommendation can be issued to the author, on the basis of a critical review that strategic capacity, competitive advantages and better customer service as pillars of growth and sustainable development are outdated concepts and the Triple Bottom Line commitment is a comprehensive strategy for growth and sustainability.

Critical review on, “Strategic capability, competitive advantage(s), and superior customer service as pillars of growth and sustainability are out-of-date concepts.

The growth of the organization means different things for different organizations. In fact, many of the company's parameters can choose to measure its growth. The most important criterion is the one that shows progress against the objectives of the organization. The majority of firms have a profit, so net income, income and other financial information are often used for signs of "low margin" growth. Other business owners can use sales figures, number of employees, physical expansion or other criteria to assess organizational growth.

According to the London Institute of Personnel and Development, (2012) most of the organizational sustainability is the principle of strengthening environmental, social and economic systems. This principle is essential because the concept of sustainable development (Colbert and Kurucz, 2007) helps enterprises to develop at the expense of future needs (Boudreau and Ramstad ,2005). Strategic capability means the ability of an organization to promote its long-term viability or competitive advantage.

If the organization's capabilities do not meet the needs of the client, the organization cannot survive. To effectively manage and improve costs, it is vulnerable to those who can do it. However, if the objective is to gain a competitive advantage. It is important to note that if an organization wants to create a competitive advantage, it must have the capacity that is valuable to its clients. This may seem obvious, but in practice it is often neglected or misunderstood. Administrators can claim that a distinctive organization is only valid because it is distinctive.

 The different capacities of different organizations are not, in themselves, the basis of a competitive advantage. A competitive advantage can be obtained if the competitor has a unique or rare ability. This could happen in the form of unique resources. In service organizations, unique resources can be intellectual capital, especially talented people. A competitive advantage could also be based on a rare mandate.

The superior customer service is more than solving the customer's problems and is familiar with the business products. It contains it permanently, but goes further. Customer service is a measure that ensures the customer's needs by providing qualified, useful and quality service and assistance before and after the customer's needs are met.

Strategic capabilities, competitive advantage (s) and better customer service are integrated directly on the organization’s revenue and marketing process and are interdependent. If the capacity is not strategic, it is difficult to achieve a competitive advantage if the organization does not have competitive advantages, it is impossible to provide a better customer service. Although these three concepts are processes and must take into account external aspects, such as cultural aspects.

References

Bloch, A.M., Leonard, N.E. and Marsden, J.E., 1999, December. Potential shaping and the method of controlled Lagrangians. In Proceedings of the 38th IEEE Conference on Decision and Control (Cat. No. 99CH36304) (Vol. 2, pp. 1652-1657). IEEE.

Colbert, B.A. and Kurucz, E.C., 2007. Three conceptions of triple bottom line business sustainability and the role for HRM. People and Strategy, 30(1), p.21.

Critical analysis of the organization’s strategic capability and the competitive advantage(s).

Each company must have a certain strategic capability of survival and success in a competitive business environment. The strategic capabilities that a company needs over a period of time are determined by the threats and potential of the legalistic forces and the future business environment. If there is a balance between strategy and strategic performance, the organization's performance will be optimized for a particular business environment (Ulrich,1991).

The business strategy has become identical with seeking competitive advantages, while the concept of competitive advantages is surprisingly confusing (Rothaermel,2016). The fundamental task of strategic management is to build and maintain the competitive advantages of businesses that will enable us to achieve a higher than average business result. The development of competitive advantage is equal to the success achieved by a particular organization. Despite ongoing discussions, the concept of competitive advantage is generally accepted in the area of governance and plays an undeniable role in the theory and practice of strategic management.

The company's profits are the result of its competitive advantages. As a result, successful investment managers emphasize that the company's competitive advantages give it the opportunity to defend and increase profits. The perception of the inability to defend and increase profits would have prevented sharp investors from investing. Competitive interests are grouped together either as a business or as a consumer (Lash,2007). There are, however, countless types in each group, and it is therefore clear that the competitive advantages must be unique to each company.

Change should be seen as an evolution towards another environmental balance of the company, rather than on the basis of a dramatic difference between the two business environments. The new business environment may require a completely different scientific and technological base, a completely different production system, and often a different distribution and marketing system. As a result, the transition to the business environment requires a new balance between strategy and strategic capability.

There are strategic capabilities such as financial stability and market share etc. of the companies which have value stock. The stock values have been decreased because of the bad perspective of general public or company is being done unethical manner (Gutiérrez,2014).  As described above shifting to another business environment could be great answer for increase the value of stock through capturing more strategic capabilities.

The following is an example for usage of strategic capability and competitive advantage for better outcome. Warren Buffett used capital to acquire control of Berkshire Cotton Manufacturing, an established but struggling textile company. The company merged with Hathaway Manufacturing and bought shares in two insurance companies. The company's name was Berkshire Hathaway. Insurance companies were returned a stable cash flow that has been invested in stocks and bonds to make funds available for the payment of claims. The company's equity portfolio was $7.2 million, so Buffett took over and within two years, the portfolio has increased to 42 million euros, and the profits of the insurance company are much higher than those of the company's textile sector.

But transformation could be dangerous when company gone for another owner who has unique processes and strategies rather than existing processes and it could be a fail of strategic capabilities because of the struggles of employees to adopt to the change. According to the approach of Warren Buffet, think as the owner of the company not as an investor before buy it and work with management. It is a great manner to identify current strategic capabilities and enhance them by identifying organizational environment accurately without putting cost or effort for change and without gone for huge strategic plans.

In the 1970s, Berkshire bought three other insurance companies and launched five more. Buffett closes the company's textile and transforms Berkshire Hathaway into a portfolio company. Berkshire has a number of other companies that produce good returns on equity without debt. In 1993, the Berkshire-Hathaway insurance company posted sales of 2.0 billion euros and gained 176 million euros after tax, or about 37 percent of its operating profits. In this case company well established brand name is the competitive advantage and it has been used to enter for new industry using strategic capabilities within the company and within the advantage of value investment strategy. After becoming success in insurance, it has been developed its strategic capabilities to enhance competitive advantages.

References

Bloch, A.M., Leonard, N.E. and Marsden, J.E., 1999, December. Potential shaping and the method of controlled Lagrangians. In Proceedings of the 38th IEEE Conference on Decision and Control (Cat. No. 99CH36304) (Vol. 2, pp. 1652-1657). IEEE.

Lash, J. and Wellington, F., 2007. Competitive advantage on a warming planet.

Ulrich, D. and Lake, D., 1991. Organizational capability: Creating competitive advantage. Academy of Management Perspectives, 5(1), pp.77-92.