Globalization in Business
Introduction:
Globalization calls for a strategic business model that supports creation and sustaining of competitive ad-vantage at an international level (Pfeiffer, Goodstein, & Nolan, 1992). The effects of Globalization on the strategic business are homogenous which refers to convergence and heterogeneous which is divergence.
The convergence as stated by (Pascale & Maguire, 1980) that the strategic behavior will be similar when the countries develop their markets liberation, develop their institutions and adaptation of new technologies. People will show the same values and word activities and this will make the strategic behavior of the business become similar. (England & Lee, 1974; Kerr et al., 1964).
Organizational cultural convergence:
According to (Ralston et al, 1997) convergence described as the process where the countries share the same values. When convergence applied to organization it means the integration of the organizational cultural difference to be reduced, this will reflect of the organizational success as convergence will mobilize the communication between people from different organizations by reducing the difference between them as stated by (Napier, Simmons, & Stratton, 1989).Convergence will increase trust between organizations specially when two different companies integrate together and apply the convergence system. So, convergence will be associated with knowledge transfer between the integrating organizations.
Organizational cultural Divergence:
The divergence considers the national cultures without technological or economic growth as the main factor in shaping the managers attitude and beliefs (Hofstede, 1980). “globalization is not about convergence to best practice, but rather about leveraging difference in an increasingly borderless world to gain differentiated positions and advantages”(Guillén, 2000).
Organizational cultural crossvergence:
Ralston et al (2007) defined the crossvergence as the development of new techniques and values rather than the old systems which depends on soothing in-between convergence and divergence. ”organizational cultural crossvergence is a form of organizational cultural integration that results in a new and unique organizational culture that is "something different‖ from the former cultures of both the acquiring and the acquired firm. Thus organizational cultural crossvergence is conceptually distinct from organizational cultural convergence.” (Sarala, 2010)
Understood in this way, organizational cultural crossvergence implies new identity-building in M&A, which is defined as the creation of distinctive beliefs, values and norms characteristic of the new merged organization (Hogg & Terry, 2000).
The complexities of diverse perspective between headquarter and subsidiaries:
Convergence integration of different organizations help the organization to build their platform as the similarities become larger and the differences become minor; this will facilitate knowledge transfer within employees.
Napier, Simmons, and Stratton (1989) stated that the there is a better communication within an organization when there is a culture convergence. The complexity of diverse perspective between the headquarter and subsidiaries arises due to some factors like the local rules and governmental issue that might create restriction for some employees and different behavior, Also the diversity of employees might rise the difference in beliefs and values. Regarding the benefits of crossvergence is that it creates an environment of mutual understanding and trust between different employees.
Reference:
Gupta, V. and Wang, J. (2011). Globalization and convergence-divergence debate: strategic perspectives for emerging markets. Journal of Business \& Economics Research (JBER), 1(2).
Hogg, M. and Terry, D. (2000). Social identity and self-categorization processes in organizational contexts. Academy of management review, 25(1), pp.121--140.
Kerr, C., Dunlop, J. T., Harbison, F., & Myers, C. A. (1964). Industrialism and Industrial Man. New York: Oxford University Press
Mead, R. & Andrews, T. G. (2009) International management. 4th ed. Chichester, England: John Wiley & Sons
Napier, N., Simmons, G. and Stratton, K. (1989). Communication during a merger: The experience of two banks. Springer, pp.119--136.
Pascale, R. T. & Maguire M. A. (1980). “Comparison of selected work factors in Japan and the United States”, Human Relations, 33: 433-455.
Ralston, D.A. (2008) ‘The crossvergence perspective: reflections and projections’, Journal of International Business Studies, 39 (1), pp. 27–40, Palgrave Macmillan
Sarala, R. (2010). Cultural differences, cultural convergence and crossvergence as explanations of knowledge transfer in international acquisitions. The University of North Carolina at Greensboro.