International/Cross Cultural Issues in Organizations PSYC 8756 Walden University Submitted by: Denise Brown, Yolanda Flood Debra

Franckowiak and Samuel Green

Introduction
Cultural synergy is an important aspect of all

multinational and global organizations. Creating cultural synergy is essential for advancing business operations into other countries and across cultural boundaries. Identifying methods and creating solutions are a critical process to creating cultural synergy. The exchange of energy and ideas between cultures is the first step to effectively creating cultural synergy.

Introduction cont.
This presentation will discuss the concepts of synergy

and diversity, identify the advantages and disadvantages of diversity and synergy, how organizations can create cultural synergy as well how to implement synergy within multinational and global organizations. Additionally, this presentation will focus specifically on the McDonalds corporation and how they were able to create, implement and benefit from cultural synergy.

What is Cultural Synergy?

In order to define cultural synergy as it relates to

organizations, perhaps having a clear understanding of what an organization is can be helpful. Harris (2004) uses a unique phrasing that describes organizations, organizations are energy exchange systems (Harris, 2004, p. 359). This visual implies a dynamic process that allows for the giving and receiving between two types of organisms.

What is Cultural Synergy cont.?

Assuming the organisms are people within a complex

culture or organization, then we can begin to see the importance of the exchange that may occur between the people. The energy exchange can be applied in any setting. It can occur in nations, governments, families, associations, as well as organizations. If the exchange is done poorly, it can often result in chaos or inhumanity. If the exchange is done cooperatively, the result is something called synergy.

What is Cultural Synergy cont.?

The very powerful concept of synergy is derived from the

Greek word which means working together but synergy is much more than working together to achieve a mutual goal. True, synergy is a cooperative or combined action, but it is also a byproduct of collaboration between diverse or disparate individuals collaborating in a common cause (Harris, 2004, p. 359).

What is Cultural Synergy cont.?

The truly remarkable point of synergy is the power of the

reality that when ordinary people are allowed to freely exchange opinions and argue points of view, amazing results are possible (Cultural Synergy, 2006, p. 49)! It is because of this result that synergy is vital to the success of global organizations. Cultural synergy requires people working in multinational organizations to be culturally aware. Todays global marketplace forces diverse individuals to capitalize on their unique differences so that they can progress together as is illustrated in our next slides.

What is Diversity?
The U. S. Department of Interior (2012) defines diversity

as a broadly used term to describe many demographic variables that include but not limited to race, religion, color, gender, national origin, disability, sexual orientation, age, education, geographic origin, and skill characteristics. Organizations who embrace diversity can benefit from the vast richness, strength and resilience in a culturally diverse work force.

Diversity Continued
There is still considerable debate over the importance of

diversity within the workplace. When organization choose to recognize the cultural differences of others, it can essentially increase their ability to benefit fully from diversity and aid in creating cultural synergy. Diversity when used effectively by management can be an essential resource to increase productivity across all organizational divisions.

Advantages of Diversity
Diversity allows organizations to create social harmony

among culturally diverse work groups and can aide in increasing intergroup relations (Crisp & Turner, 2011). It is vital that organizations find value in diversity, which can increase the effectiveness of diversity. Diversity allows organizations the ability to reduce costs that can be associated with high turnover and job satisfaction (Bell & Berry, 2007).

Advantages of Diversity cont.

Organization become more attractive to potential

employees and having a diverse work force can also assist in employee retention. Diversity also provides organizations with more opportunities to branch into a variety of consumer markets and increases creativity. Organizations have more problem-solving ability and system flexibility (Bell & Berry, 2007). When used correctly diversity can be used to challenge many stereotypes that may exist among heterogeneous work groups (Crisp & Turner, 2011).

Advantages of Diversity cont.

In instances where stereotyping may exist, group

members should be encouraged and motivated to actively engage in resolving potential cultural conflicts. Diversity can cause problems, but when used as a resource organizations can benefit greatly by creating strategic alliances, joint ventures, and global projects across all types of multinational business efforts.

Advantages of Diversity cont.

Multinational organizations can benefit from diversity by

accepting new ideas and perspectives, new product development and see an increase in communication and cooperation across cultural boundaries (Adler & Gundersen, 2008). Other advantages of diversity are culturally specific which include creating a better understanding of local employees, enhance their ability to market effectively to host country customers, better understanding of the social, legal, economic and political culture of the host country and increased effectiveness of working with local clients (Adler & Gundersen, 2008).

Disadvantages of Diversity
The potential disadvantages of diversity are equally as

vast as the advantages. Organizations can potentially experience high costs when it comes to creating methods, models and solutions for company wide policies (Adler & Gundersen, 2008). Cultural diversity can increase ambiguity, complexity and confusion amongst culturally diverse work groups.

Additional Disadvantages
Work groups can find it more difficult to reach

agreements as well as being able to agree on specific actions to take (Adler & Gundersen, 2008). Culturally diverse work groups can experience difficulty in converging ideas and therefore may encounter miscommunication.

Implementing Synergy Across Cultural Boundaries

Integrating brand name and customer satisfaction A visionary approach to marketing by integrating traditional narrow focus with brand orientation to become more of a market-driver than market-driven (Kumar, Scheer, & Kotler, 2000). This synergistic approach is especially compatible with organization perceived to have strong principles and values like McDonalds (Kumar , Scheer, & Koller, 2000).

Benefits of Implementing Cultural Synergy

Corporate decision making, government policies,

corporate structuring improvement. Building relationships between corporations and government provides direction for strategies and selecting structure or restructure goals and government will not have to intervene or respond to created risky acquisitions when they are partnered throughout (Park & Kim, 2008).

Synergy Risk & Responsibility

Corporation responsibility can extend benefits that can

dramatically impact government system, family system, religious system, medical system, and eco system. The larger the corporation and impact the greater the need for those corporations to integrate principles of that improve and advance the local population while maintaining its global identity.

Synergy Risk & Responsibility Feminist & Liberation

Identifying women and producing more opportunities,

instead of more of the same workplace restrictions and position dominance by males. Integration of Liberation psychology and Feminist psychology strategies through corporations and academic system. Researchers have reported that amalgamating both psychologies participants in programs were better appreciated supported rationale for female inclusion.

Synergy Risk & Responsibility Explicit & Implicit Diversity Issues

Corporation must maintain awareness of historical

Asian/American relationships. Corporations risk using resources that benefit them but are not responsible stewards and can evoke attention from humanitarian organization to be responsible and receptive to the health and welfare of it citizens e.g. Human rights Access to treatment Masculinity Freedom of Speech

Synergy Risk & Responsibility Empowerment & Gender Equality

Gender transformative programs should capitalize on the

synergies between womens empowerment and working with men from gender equality (Blankenship et al., 2006; Gupta et al., 2008; Dworkin et al., 2009).

Improving Outcomes
Early development i.e. communication and partnering, in

relationships both government and indigenous residence, by corporate leadership can impact corporate culture both explicit and implicit systems producing synergy that respects human rights of all people, resources, and roles inclusive of diversity (Pulerwitz et. al., 2010).

Negative Implications
Through a process of anti-trust law enforcement and the

defunding of governmental services trans-industrialism and synergy structurally supports decreasing diversity in commercial culture (Meehan, 2005). Neo-conservatives

Further Negative Implications

Meehan (2005) illuminates how corporate synergy works

to define creativity as more of the same and to saturate and resituate media venues with more of the same. It also provides structural impediments to diversity in its simplest form. But breaking synergy into five components i.e. recirculation, repackaging, reversion, recycling, and redeployment it is easy identify and distinguish between practices in order to trace the types of activities that proliferate thousands of individual products united under a single brand (Meehan, 2005).

Creating Cultural Synergy

Some cultures are more synergistic in that they are more

cooperative while other cultures are more comfortable with individualism, competition and conflict (Harris, 2004, p. 361). When behaviors are more unsynergistic or uncooperative, the result is often followed by isolation, conflict, and sometimes even violence (Harris, 2004, p. 361).

Creating Cultural Synergy cont.

Because of this, it is important for global leaders to build

skills related to the development of synergy as well as conflict resolutions. Often times, additional training in listening, empathy, role playing, trust, and team building can also is valuable to building a more synergistic environment. Global leaders who promote cultural synergy also influence social change and are able to improve system effectiveness (Harris, 2004, p. 362). Adler (1997) describes a culturally synergist culture where the best of each culture is melded together without hurting the other.

Creating Cultural Synergy cont.

The ability to respect other opinions as well as diversity

enables leaders to solve problems cooperatively. This type of environment is considered a high-synergy organization where problem solving is conducted in a three step fashion. The first step is to describe a situation or problem from the perspective of ones own culture, then describe from the perspective of each of the cultures involved. The second step is to understand what historic and cultural assumptions exist and use role reversal to identify similarities and differences between our own cultural assumptions and those of other cultures.

Creating Cultural Synergy cont.

Last, investigate many alternatives. Allow individuals from

all cultures involved in the problem to offer solutions. The resolution should be compatible with all but not imitate any one cultures solution, thus allowing for a new pattern in the new culture (Adler, 1997).

McDonalds Cultural Synergy

Synergy is the resolution of two or more cultural

organizations creating cohesive working conditions, (Adler & Gunderson, 2008). McDonalds a worldwide conglomerate of global success is credited to cultural synergy. The resolution includes a relationship and a respect for the leadership, international strategies viewing high cities creating joint ventures that benefit established companies in foreign countries.

More on McDonalds
McDonalds credits global success of Western success

with Eastern values, which is demonstrated by using local concepts of produce in the menus, (Chang, Cheng & Chien, 2011). Asian cuisine is vegetarian. Synergy was created when McDonalds prepared local dishes of the culture. The introduction of multicultural management with advancement of methodology research revealing an analysis of cultural influence on McDonalds corporation for cross-cultural management was the resolution of synergy.

McDonalds cont.
A cultural clashing could occur if companies operated in

multi-cultural globalization of trade and manufacture international enterprises with different cultural backgrounds using different value judgments (Chang, Cheng & Chien, 2011). According to Bernsteins Black Book (2011), in the Chinese market alone, there are 1.3 billion mouths to feed. Therefore, it is not surprising for Western cultures wanting to tap into that market.

McDonalds cont.
Bernsteins Black Book (2011), reveals that other

Western companies also tap into this market, such as, KFC, Pizza Hut, Starbucks and Dunkin Donuts. The case study revealed similarities in consumer demands. Does the food taste good? Is it attractively priced? Does the food live up to high quality and is the food safe? These questions were asked of three person households, which is the norm for China to assist in strategizing the production needs of this culture. The population increase raises the potential for increased profit for future outlook.

McDonalds cont.
Susnien (2008), denotes the organization as a joining of

multiple constituencies and interests of stakeholders. Researchers are aware that stakeholders can be internal or external. It is observed that organizations with the same type of stakeholders share common risks and experience the same ups and downs in operating a company. Identifying these risks allows for synergy to be created when necessary. Susnien (2008) also revealed observation of organizational relationships with stakeholders who demonstrated their capacity of wealth.

McDonalds cont.
This wealth is created for stakeholders such as

employees who need good working conditions and increased career opportunities. It is also created for customers by way of products and service benefits that exceed in greater value than the price paid as well as for investors, communities and governments. These stakeholders are viewed as intangible assets to an organization.

McDonalds cont.
Talented people creating and launching new and

improved products are viewed as intangible assets, (Susnien, 2008). The relationships of stakeholders are a source of opportunity and competitive advantage. This recognition is essential to creating synergy. The relationship can increase the stability in hard economic down turns.

McDonalds cont.
McDonalds is said to have gone back to the basics of

placing the customer first, and by doing so have allowed the menu to expand and be inclusive of providing the best experience for customers (Esteban, Lien & Young, 2008). The study revealed that when McDonalds started taking the transition of greater emphasis on healthier cuisine more seriously and increased the markets shifting in taste, the slight decline in profits rose.

McDonalds cont.
The fast food industry (Esteban, Lien & Young, 2008)

was not the only industry affected by cultural synergy. Apple computers eliminated the silo mentality within its Research and Development (R&D) then consolidated R&D functions into one product development group answering only to one manager, as they then focused on better customer service; saw a change in the bottom line profits also.

McDonalds cont.
Walt Disney nurtured and leverage corporate synergy by

transforming the company into the largest corporate empire. The new CEO Eisner, centralized corporate functions, such as, marketing, wider view of strategic planning using more input from senior management and pitting financial forces against each other while providing necessary financial support to create this competitive culture, (Esteban, Lien & Young, 2008).

Conclusion
Cultural synergy is an approach to problem solving

between two or more cultures. According to Adler & Gundersen (2008), there are three steps of cultural synergy; cross-cultural description, cross-cultural interpretation, and cultural creativity. The process of these steps creates synergy cooperation so that there is no chaos or inhumanity between the organizations.

Conclusion cont.
As cultural synergy is defined in the presentation, the

collaboration between diverse or different individuals participating in a common cause serves both organizations (Harris, 2004, p. 359). Synergy allows the creation of two types of assessments. The first is a social impact assessment and the second is an impact assessment which allows an organization to measure the engagement of the stakeholders. The impact assessment was produced in both Asian and American organizations.

Conclusion cont.
As this presentation highlighted, synergy allows diverse

groups of individuals the opportunity to become something greater than what currently exists. The concept was highlighted in our presentation with the McDonalds case study. As was illustrated, both the Asian and American communities not only embraced the differences between the two cultures, but were also able to present ideas that the McDonalds organization implemented.

Conclusion cont.
This collaboration allowed for a win-win scenario which

demonstrated the amazing power of a synergistic environment! Both cultures learned from one another through collaboration among multiple stakeholders that were not only diverse in thought processes but also in cultural background. As Susnien (2008) points out, the relationships created by stakeholder interests from both organizations, became the catalyst for cultural synergy.

Conclusion cont.
As mentioned in previous slides, a synergistic culture

respects all forms of diversity. In order for an organization to be able to create a culture of synergy, the leadership must be able to study and understand the culture they personally came from. Once this is accomplished, the leader will discover that having diverse opinions and integrating diversity in the organization will assist others in discovering stereotypes that turn out to be myths.

Conclusion cont.
Additionally, leaders find that in multinational

organizations, these new found relationships allows for an immeasurable opportunity to become creative. This creativity often leads to new inventions and product development. This type of collaboration not only benefits the organization, but can also have lasting effects upon the political environment, the economic environment, and the legal environments in the global marketplace.

Conclusion cont.
Although there are many challenges in relation to

creating a synergistic culture, McDonalds corporation illustrates the extreme advantage of working in a multicultural environment. Even though McDonalds initially did not know that the Chinese manage businesses based on trust, shared entrepreneurial success, and shared market responsiveness, McDonalds chose to learn this differentiating factor and they incorporated this philosophy into their Asian market. The cooperation between the East and West in this example is the perfect illustration of synergy in a multinational corporation!

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