National and corporate cultures
The term corporate culture refers to the norms, beliefs, practices and values observed in specific organization. It is an established guideline in an organization that dictates on how activities are carried out within that organization. Generally, organizations may break down their corporate culture to cater for specific departments. This is with respect to how these departments are managed, organized and controlled. There are different aspects of a corporate culture that are easily recognized such as the management hierarchy, dressing code and working environment while others are hard to identify (Thorsen, 2009, para. 2-6). These are cultures such as organization’s values and norms. On the other hand, national culture refers to the norms, beliefs and practices exercised in a specific country. It refers to values and customs shared by a specific society.
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General Electricals’ (GEL) and Tungsram’s cultures differed significantly. GEL believes that the success of any organization is based on internal forces. The company believes that by every staff striving to succeed, it is possible to overcome external forces which try to hamper the success of any organization. On the other hand, Tungsram’s culture believes that external forces play a vital role in determining the success of any business. In addition, GEL emphasis on need for layoffs and sell-offs as a method of improving employee performance while Tungsram believes in the culture of paternalism.
In bid to introduce its culture and practices in Hungary and other countries, GEL has embarked on training its staffs in these countries on language and business skills. It also practices employee rotation where staffs are moved from one country or region to another thus disseminating their knowledge and skills to other staffs they come across.
Pros and cons of changing GEL’s European operations to regional or global
By changing its European operations to regional or global, GEL would be in a position to freely transfer experience from one company to another. This is because the move would bring about standardization of operations in all its subsidiaries. Further more; the company would manage to come up with a single brand thus being able to effectively introduce new products in the market. This would help it increase its profit as its products would be easily identified in the market. Despite the move having numerous advantages for the company, there were also some drawbacks accompanying it. By coming up with a single image for all its subsidiaries, it means individual subsidiary would loose its initial brand (Schuh, 2000, pp. 43-54). This would lead to customers who strongly valued its brand losing trust in the organization. For customers who have become accustomed to organization’s culture, changing the practices within an organization would affect their relationship with the organization.
This change would not work out well for all product divisions within the organization. This is because different people have different tastes when it comes to products. Also different products have different production methods (Schuh, 2000, p. 55). Standardizing operations in these divisions would lead to an organization coming up with poor quality products in some divisions as staffs try to stick to the laid down standards.
Methods used by GEL to ensure that there is synergy between its different businesses and countries
To ensure that there is synergy among its different subsidiaries globally,, GEL embarked on investment aimed at ensuring that all subsidiaries are technically equal. In addition, the company uses enterprise resource planning to ensure that there is standardization of operations in its different companies (Zou & Cavusgil, 2000, pp. 52-65). This facilitates when it comes to making transactions between different subsidiaries in different locations as they all follow same procedures.
Schuh, A. (2000). Global standardization as a success formula for marketing in Central Eastern Europe? Journal of World business, 5(4), pp. 43-55.
Thorsen, D. (2009). Definition of corporate culture. Web.
Zou, S. & Cavusgil, S. T. (2000). Global strategy: a review and integrated conceptual framework. European Journal of Marketing, 30(1), pp. 52-65.