CROSS-CULTURAL MANAGEMENT (BBSB4103)

FACULTY OF BUSINESS & MANAGEMENT

SEMESTER 6 / 2014

BBSB4103

CROSS-CULTURAL MANAGEMENT

NAME : AMIR BIN TOMPONG

MATRICULATION NO: 860704495583001

IDENTITY CARD NO. : 860704495583

TELEPHONE NO. : 013-8899761

E-MAIL : mirtoms@yahoo.com

LEARNING CENTRE : Tawau Learning Centre

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TABLE OF CONTENTS

Contents Page

1.0 INTRODUCTION OF SONY CORPORATION 2

2.0 CULTURAL SPHARE OF INFLUENCE 3

3.0 EVALUATION OF REGIONAL CULTURE 4

4.0 EVALUATION OF INDUSTRY CULTURE 8

5.0 EVALUATION OF PROFESSIONAL CULTURE 9

6.0 EVALUATION OF FUNCTIONAL CULTURE 11

7.0 EVALUATION OF CORPORATE CULTURE 12

8.0 SUMMARY 14

REFFERENCE 16

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1.0 INTRODUCTION OF SONY CORPORATION

Sony Corporation is a multinational conglomerate corporation headquartered in

Tokyo, Japan and one of the world’s largest media conglomerate with revenue of ¥6.493

trillion (in 2012). Sony is one of the leading manufactures of electronics, video

communications, video game consoles and information technology products for the

consumer and professional markets. Its name is derived from Sonus, the Greek goddess

of sound.

Sony Corporation is the electronics business unit and the parent company of the

Sony Group, which is engaged in business through its five operating segments, which is

electronics, games, entertainment (motion pictures and music), financial services and

other. These make Sony one of the most comprehensive entertainment companies in the

world. Sony’s principal business operations include Sony Corporation (Sony Electronics

in the U.S.), Sony Pictures Entertainment, Sony Computer Entertainment, Sony BMG

Music Entertainment, Sony Ericsson and Sony Financial Holdings. As a semiconductor

maker, Sony is among the Worldwide Top 20 semiconductor Sales Leaders. The

company’s slogan is make believe.

Sony offers a number of products in a variety of product lines around the world.

Sony has developed a music playing robot called Rolly, dog-shaped robots called AIBO

and a humanoid robot called QRIO. As of 1 April 2012, Sony is organized into the

following business segments: Imaging Products & Solutions (IP&S), Game, Mobile

Products & Communications (MP&C), Home Entertainment & Sound (HE&S), Devices,

Pictures, Music, Financial Services and All Other.[26] The network and medical

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businesses are included in the All Other. Sony Corporation is the electronics business unit

and the parent company of the Sony Group. It primarily conducts strategic business

planning of the group, research and development (R&D), planning, designing and

marketing for electronics products. Its subsidiaries such as Sony EMCS Corporation (6

plants in Japan), Sony Semiconductor Corporation (7 plants in Japan) and its subsidiaries

outside Japan (Brazil, China, England, India, Malaysia, Singapore, South Korea,

Thailand, Ireland and United States) are responsible for manufacturing as well as product

engineering (Sony EMCS is also responsible for customer service operations). In 2012,

Sony rolled most of its consumer content services (including video, music, and gaming)

into the Sony Entertainment Network.

2.0 CULTURAL SPHARE OF INFLUENCE

Culture is the collective programming of the mind which distinguishes the

members of one human group from another. Other than that culture is patterned ways of

thinking, feeling and reacting, acquired and transmitted mainly by symbols. Culture also

is the guider of selection of appropriate responses in social situations, social interactions,

business interactions. The influence of culture in business can be explored in several

cultural spheres. However, it is difficult to identify which of the many spheres of culture

is more dominant regardless of whether there is a boundary which separates a country,

company or function from one another. These cultural spheres of influence interact in

complex ways, notably when doing business in a foreign country. In France, for example,

the pharmaceutical business culture is very different from that of the tyre producers such

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as Michelin. Different locations and types of industry in France have different business

cultures and practices, although they are all in the same country.

3.0 EVALUATION OF REGIONAL CULTURE

Regional culture refers to the spatially defined communities that share values,

attitudes, opinions, lifestyles, symbols and behavior that are unique to a particular

community. Regional culture evolves from time to time. We will look at some of the

factors that result in this evolution as shown in Figure 3.0 below.

Figure 3.0 : Factors for regional evolution

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In order to elaborate more on the factors that result in the regional evolution of a

state or country, let us take the example of Perak, the most developed state in Malaysia

after Selangor.

a) History

Based on the history of Perak, it was at the peak of development in the

past due to its mining activities and vast resources such as tea plantations

and limestone hills. The British settlement in Perak also brought glory and

fame to the state.

b) Politics

Politics in Perak has always been stable due to its loyalty to Barisan

National, the leading political party in Malaysia.

c) Economy

Tin-mining, trading, tourism and many other activities have been

developed to make Perak a developed state. Perak’s evolution mainly lies in

its vast natural resources which have been generating profit and stability.

d) Language

The state’s emphasis on English as one of the languages which need to

be learned has also made Perak more developed than states like Kelantan

and Terengganu which put more emphasis on the Malay language.

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e) Religion

Perak’s official religion is Islam, similar to other states in Malaysia.

Even though religion does not play a big role in the evolution of Perak, it

helps Perak deal effectively with other states which have adopted Islam and

other Muslim countries.

f) Geography

The state is located strategically along the Straits of Malacca. This

encourages trading activities and the promotion of beaches and islands

located along the straits as tourist destinations for Perak.

Knowing the culture of a given place will give you a picture of why an industry

thrives in certain areas. Cultural influences according to area can be divided into two

categories: within national borders and beyond national borders. Knowledge and

understanding of cultural differences between one area and another is very important

although both areas are located in the same country. Operating a business in the state of

Kelantan is different from operating it in the state of Selangor. Retail stores in Kelantan,

for example, have to provide separate payment counters for males and females, which is

not the case in Selangor. These differences in the operation system of businesses may

create problems if the culture of an area is not identified properly. As mentioned earlier, if

a company decides to open a branch in Kelantan and provides non-separate counters for

customers, the state government can sue the company due to its insensitivity in dealing

with the culture of the government who prefers any business organization operating in the

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state to have separate counters for men and women. There are also countries which are

divided into two parts, causing cultural differences. It could be a north-south divide, as in

the case of North Korea and South Korea, or an east-west divide, as in the case of East

Germany and West Germany. South Korea is regarded as more liberal and welcoming to

visitors compared to North Korea which is ruled by a very strict regime and is quite

conservative in dealing with outsiders. If we look at history, Malaysia was divided into

several confederated and non-confederated states. Today, the confederated states such as

Perak and Selangor enjoy better economic development than non-confederated states

such as Perlis and Kedah. Companies located in Kuala Lumpur, Paris, London or Tokyo,

for example, have cultures which are different from companies located in smaller cities or

urban areas. Multinational companies such as Toyota and Honda are known to be the

catalyst of the economy of villages. These companies operate factories to manufacture car

parts in rural areas in the United Kingdom and United States. Many companies have

moved their headquarters from large urban center to rural areas, which improved the

quality of life of the rural people.

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4.0 EVALUATION OF INDUSTRY CULTURE

Industry culture can be identified by looking at various firms involved in various

industries. Organizations within the same industry are expected to share similar norms

and values. Different industries will have different cultures and it is due to different task

environments such a, Nature of decision-making, Nature of products or services, Rate of

technology change, State intervention, and Market characteristics.

According to Gordon (2001), the industry culture evolves from various sources

such as:

a) The industry environment and characteristics such as customer

requirements, competitive environment and societal expectations, and

“right things to do” in the industry;

b) Strategies, structure and business process developed by management

of organizations in the industry.

c) The outcomes of demand for performance and survival in the industry.

Firms in the banking industry, for example, have a different culture from firms in

the insurance industry, where banking industry have customer driven and sales oriented,

when insurance industry have performance driven, workers who emphasize on client

network and more aggressive in securing client individually. Meanwhile, in high-

technology industries, innovation is very important. In these industries, exchange of

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information and interaction among members are necessary. Technological advancement is

more important than client requirements.

5.0 EVALUATION OF PROFESSIONAL CULTURE

A professional is an expert who has certain skills such as doctors, lawyers,

engineers, consultants, designers and scientists. Professional culture is related to the

principles of workers. It is a complex ensemble of values, attitudes, symbols, rules and

practices, emerging as people react to the requirements and situations they confront as

members of a different professional group. Professional cultures also include the “proper

behavior” and distinctive image of a profession. In the United States and Malaysia, for

example, professionals such as doctors or lawyers are not allowed to advertise their

services through the mass media. Professionals also have their own dress code which

reflects their profession. For example, a doctor wears a white coat and a judge wears a

black robe. Professionals also differ in their values and beliefs. For example, medical

doctors and lawyers differ in their missions and methods.

There is a connection between the professional and national cultures of a country.

For instance, we can get the best medical experts from the United States, trained

engineers from France, computer experts from India and so on. The growing need for

professionalism is pushed even further by the trend for organisations to become networks

of specialists. The difference between general and specific skills is becoming an

important issue in determining which level of professionalism is higher. As decision-

making is pushed down the ranks and as workers are being empowered, there is greater

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autonomy and responsibility. Therefore, workers must adhere to professional principles.

Professionals acquire judgement through these three methods:

a) Intensive training.

b) Supervision.

c) Socialization.

Organizations which require professionals include hospitals, government bodies,

universities, engineering firms, law firms and so on. They recruit the best trained

professionals who have the skills required. Often, recruitment is done based on the

criteria fulfilled by candidates. The simplest example is the recruitment of graduates from

various universities. An employee who has been trained at University Malaya has a

perspective which is different from that of an employee trained at University Sains

Malaysia. Meanwhile, from an international perspective, Professor John Van Maanet, a

professor from the Massachusetts Institute of Technology (MIT), said that MBA

graduates trained at Harvard are more likely to have a generalist approach and work well

in teams. On the other hand, MBA graduates trained at MIT are more likely to be

specialists and perform well in individual assignments.

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6.0 EVALUATION OF FUNCTIONAL CULTURE

Functional culture is becoming more important nowadays in firms. The various

divisions of a firm such as finance, production, marketing and research and development

have different cultures. We can clearly see the differences when we compare these two

divisions:

a) Production Division.

The production division is physically more active and operates using energy to

produce products. The employees operate in dirty and noisy places and are

occasionally exposed to hazards.

b) Finance Division

Employees of the finance division work in an office which is quieter and does

not require much physical energy. They manipulate numbers rather than

machines. The reasons for the differences that exist in a finance division can

be found in the external environment, such as stakeholder demands.

Employees of the finance division work in an office which is quieter and does not

require much physical energy. They manipulate numbers rather than machines. The

reasons for the differences that exist in a finance division can be found in the external

environment, such as stakeholder demands. Which functions are most highly valued is in

part determined by the nature of the industry. In pharmaceutical companies, R&D may be

the most valued. For consumer goods, marketing has the biggest say.

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The interaction between functional and national culture can be seen in the way

functions are valued by different countries, as reflected in the salaries of department

heads. For example, in Britain, the head of the finance department heads the list, whereas

in Germany, it is ranked fifth. In Germany, the highest salary is paid to the head of R&D.

Holland, on the other hand, pays the highest salary to the head of the sales department.

7.0 EVALUATION OF CORPORATE CULTURE

Corporate culture is a blend of the values, beliefs, taboos, symbols, rituals and

myths all companies develop over time. It is influenced by the industry, business and

product of a given company. The concept of corporate culture emerged in the early 1980s

when Americans tried to follow in the steps of the Japanese to gain competitive

advantage. It is believed that the Japanese’s corporate culture was the secret weapon

responsible for the success of Japanese firms. However, Peters and Waterman (1982) in

their book, In Search of Excellence, said that we do not have to be like the Japanese to

achieve excellence. They provided examples of strong corporate cultures in US

companies such as IBM, Disney and Delta. Many multinational firms focused on

strategic planning, structure and systems in the previous decade. These firms have now

changed their directions and determined their mission and philosophy in order to create

greater coordination and integration. Corporate culture derives from the influence of the

following elements:

a) Founding Figures and Turnaround Leaders

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The founder of a company plays an important role in making a company a

success. The founder influences and shapes the company’s culture through his

or her personal values and beliefs. For example, the late Anita Roddick, who

founded The Body Shop, demonstrated her personal values in her actions

through innovation and a strong sense of social responsibility. Leaders can

also influence and change the culture of a given organization such as Sir John

Harvey-Jones who changed the meaning of Imperial Chemical Industries (ICI)

to Innovative, Competitive and International.

b) Unique Company History and Stage of Development

Administrative heritage also influences the culture. Different structures,

standard operating procedures or routines that evolve over time shape culture

by prescribing specific behavior and reinforcing certain values and beliefs.

For example, the Ford Motor Company started with a functional structure and

grew through vertical integration in order to have better control over supply

and distribution. At Ford, control was highly centralized. Meanwhile, General

Motors began with a divisional structure as it was created by merging several

of its subsidiaries and grew through related diversification.

National culture interacts with corporate culture in ways which may converge to

create opportunities for competitive advantage, such as the corporate culture of BMW

and Audi which is influenced by German engineering, and the culture of McDonald’s

which was established in the United States. Even though corporate culture can provide

opportunities, it can also cause difficulties as shown in the example below. Disney, which

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managed to attract many tourists to Disneyland, California, opened two other Disneyland

branches in Japan and France. Disneyland in Tokyo was so successful that it was visited

by 50 million tourists in 1998. Meanwhile, Disneyland in France was less successful due

to the culture of the Europeans who find it hard to accept foreign cultures, particularly

American culture. As a result, the French Disneyland sustained losses amounting to $1.5

billion in 1994. This huge amount of losses not only brought failure to Disneyland but

also made a long-term impact on Disney’s effort to establish itself in a country. The

failure to adapt the corporate culture of an organization according to the culture of a

particular country not only creates minor problems but can even bring a huge impact to

an organization, such as illustrated in the Disney example.

8.0 SUMMARY

There are five cultural spheres of influence which is regional culture, industry

culture, professional culture, functional culture and corporate culture. Regional culture is

the most critical as each organization has a comprehensive culture of its own. This culture

is controlled by the local population, e.g. Japan is known for its discipline, harmonious

environment and the practice of joint decision making between workers and factory or

industry owners. Industry culture depends on the environment of an organization. If the

organization is an office or administrative center, the employees will dress smartly.

However, for those working as engineers and in workshops, informal attire is more

appropriate. Professionals such as doctors, engineers, lawyers and judges have their own

culture. In every organization, the functions of divisions are very important in ensuring

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smooth operations. The organization has a functional culture. Functions in a company

depend on the type of sector and products produced. It also depends on the size of the

company. Corporate culture elevates a company to a higher level of efficiency and creates

a better vision. This culture depends on current trends and developments as well as rival

companies. Organizations have different cultural spheres and some might have more than

two cultural spheres. These spheres can bring about changes in companies and make

them more dynamic and productive.

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REFERENCES

Shaafius Blog. "Cultural sphere of influence” May 2011

http://shaafiu.files.wordpress.com/2011/05/cultural-spheres-of-influences-std-11.pdf

Assoc. Prof. Ing. Mansoor Maitah “How culture affects your business”

http://www.maitah.com/wp-content/How%20culture%20affects%20your%20business.pdf

Sony Corporation
http://www.sony.com/SCA/

Sony Pictures Television

http://en.wikipedia.org/wiki/Sony_Pictures_Television

Regional Culture Strategy Inc., New York, 1981, ISBN 0-446-34794-9

http://www.spc.int/hdp/index2.php?option=com_docman&task=doc_view&gid=386&Itemid=4

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