How Companies with Overseas Subsidiaries May Consider Wider Social Cultures

Companies engaging with global business often establish overseas subsidiaries to run their business in international markets. The mother companies often control those subsidiaries in matters concerning organizational management. In this regard, the organization is always faced with hard decisions to deal with diverse cultures from different overseas countries where the company establishes business.

In order for such companies to thrive in the international market, it has to engage in the best cross-cultural practices. This should be done not only for the company’s subsidiaries but also in the mother company. This can be done through the formation of cross-cultural teams, training employees on cross-cultural management issues and developing good international negotiation styles. These among other strategies will help the company to deal with wider social cultures as it ventures into the international market through its subsidiaries.

Company subsidiaries often carry out individual business in overseas countries. Therefore, people from diverse socio-cultural backgrounds are involved. For instance, whenever a company’s subsidiaries wish to negotiate with business partners, supplies, customers and creditors from the countries within which they operate, it is often common that they experience cultural variations which may inhibit their negotiations. Due to this fact, theories postulate that the management should be prepared for cross-cultural challenges before engaging in international negotiations (Held, 2004). This enables them to appreciate the cultures of other countries and appropriately respond to the needs of international negotiations.

For effective negotiations, the management should ensure that they have a good communication and interpersonal interaction strategy. This will enable them to be effective in presenting their cases in international negotiations. According to Schneider and Barsoux (2003), companies should make decisions based on processed information. However, this information is subject to cross-cultural variations and preferences. It is therefore necessary for the management to consider cultural hierarchy preferences, red tape and broader involvement (Schneider and Barsoux, 2003). This aspect will drive the organization towards greater success in running and managing its subsidiaries in overseas countries.

Regarding differences on cultural practices and backgrounds, the company should provide proper guidelines on how to handle the inherent differences in cultural practices across nations. Since the company engages in international operations, it is inevitable to interact with people who hold different cultural practices, stereotypes and beliefs. If the company staff is not taught on how to deal with people of such a diverse cultural setting, then it will be difficult to engage in any business activity with them. Therefore, the organization should make the staff to be knowledgeable of cultural diversity and encourage them to appreciate different cultural practices across the world (Held, 2004). The management should develop strategies that can be used to address the challenges faced by cross-cultural management team. The most important way of addressing these cross-cultural challenges is by preparing the employees adequately for them. This can be done through cultural training, cross-cultural team building, expatriate training and involvement in ethical international business practices.

Finally, building teams across cultures is a very vital element which needs to be embraced within the organization at all levels (Held, 2004). It is a necessary tool in planning, evaluation and process. This is more prominent in international undertakings because international operations involve people from different backgrounds and cultural diversity. As the organization engages in international businesses, it is often obliged to transfer its staff to various destinations across the world during the course of their business operations. This brings about the novelty of team building across diverse cultures. The organization should therefore engage its staff in team building with the staff of other international organizations, especially in the countries where the company’s subsidiaries are located.

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