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Review on Journal: the Relationships Among Cross-Cultural Management, Learning Organization, and Organizational Performance in Multinationals

Review on Journal: the Relationships Among Cross-Cultural Management, Learning Organization, and Organizational Performance in Multinationals

REVIEW ON JOURNAL ARTICLE: THE RELATIONSHIPS AMONG CROSS-CULTURAL MANAGEMENT, LEARNING ORGANIZATION, AND ORGANIZATIONAL PERFORMANCE IN MULTINATIONALS Chich-Jen Shieh, I. -M. W. -J. (2009). The relationships among cross-cultural management, learning organization, and organizational performance in multinationals. Social Behavior and Personality , 37(1), 15-30. This paper written by (Chich-Jen Shieh, 2009) emphasize on the relationship among cross- cultural management, learning organization and organizational performance in multinationals.

The author wants to analyze the relationship between the three variables like “Corporate Cross-cultural Management”. “Learning Organization” and ‘Organizational Performance’. This issue comes to the author’s concerned because of the world now becomes global. Many people from the various countries works in the Multinational Enterprise (MNEs) in the host country. As all aware, these people have many differences in term of their cultures, religion, history and society, which certainly give rise to cultural conflict for many reasons including ethnocentrism, culture misreading and different cultural attitudes.

Due to this, very high failure rates in joint venture which about 30% to 40% generally resulted from the neglect of cultural differences. The methodology used by the researcher is first by divided the corporate cross-cultural management into four dimensions: Localization Construction, Multi-cultural Coexistence, Cultural Conflict, and Cultural Mergence (Schein, 1985). Whereas the Organizational Performance was divided into five dimension: Motivation Models, Leadership, Organizational Culture and Environment, Work Design, and Human Resource Management policy (Chien, 2004).

Learning Organization was divided into five dimensions: Personal Mastery, Improving Mental Models, Building Shared Vision, Team Learning and System Thinking (Senge, 1994). 793 questionnaires about the variables of Corporate Cross-cultural management, Organizational Performance and Learning Organization distributed to the directors and staff of 250 multinationals in the Suzhou Industrial Park the most densely settled location for multinationals. The questionnaire used 6-point Likert scale.

The researcher conducts four hypotheses in this study which are; H1 state that a positive correlation exist between corporate cross-cultural management and organizational performance. H2 state that, a positive correlation exists between learning organization and corporate cross-cultural management. Whereas H3 claims that a positive correlation exists between learning organization and organizational performance. H4: learning organizations has an impact on the correlation between corporate cross-cultural management and organizational performance.

H4 hypothesis was split into four sub hypotheses, H4a, H4b, H4c, H4d. H4a indicate that learning organization can enhance the positive correlation between the localization construction dimension and the five dimension of organizational performance. As for H4b the hypothesis is learning organization can enhance the positive correlation between the multicultural coexistence dimension and the five dimensions of organizational performance. H4c state that learning organization can enhance the positive correlation between the cultural conflict dimension and the five dimensions of organizational performance.

The last H4d hypothesis assumes as learning organization can enhance the positive correlation between the cultural mergence dimension and the five dimensions of organizational performance. The results of Pearson’s correlation analysis showed that the four dimensions of Corporate, Cross-cultural Management have a positive correlation with Organizational Performance. Therefore HI is tenable. Learning organization has a positive correlation with the four dimensions of Corporate-cultural Management. Therefore, H2 is tenable.

H3 is considered tenable when learning organization has a positive correlation with the five dimensions of Organizational performance. As for H4a through H4d, the situation can be summarized as follows: the relationship between localization construction and both organizational culture and environment and human resource management policy can be enhanced by Personal Mastery toward positive correlation. The relationship between localization construction and both motivation models and organizational culture and environment can be enhanced by improving mental models toward positive correlation.

The relationship between multicultural coexistence and the five dimensions of organizational performance can be enhanced by improving mental models toward positive correlation. The relationship between localization construction and three dimension of organizational of organizational performance can be enhanced by building shared vision toward positive correlation. The relationship between multicultural coexistence and human resource management policy can be enhanced by building shared vision toward positive correlation.

The rationale behind the study is to provide the good solutions to the organizations in managing the cross-cultural workforce, but the variables are quite complex to understand. The researcher needs to simplify the variables so that it can help the reader to understand it well. In this research, the Independent variables (IV) are Cross cultural management, Learning organization and Organizational performance. In Cross cultural management, managers have to take consideration four dimension whish is localization construction, multicultural coexistence, cultural conflict, and cultural mergence.

Meanwhile, to encouraging communication and cooperation enables the members to understand and solve problems and accordingly implement continual improvement to enhance competitiveness. Thus, factors affecting a learning organization include system thinking, personal mastery, improving mental models, building shared vision and team learning. Organizational performance is an aggregative indicator referring to the degree of achieving organizational objectives.

Organizational performances include motivation models, leadership, organizational culture and environment, work design, and human resource management policy. There are four hypotheses that stated by the researchers: Firstly, (H1) the first hypothesis researcher’s state that they want to know is there positive relationship between corporate cross cultural management and organizational performance. Second hypothesis, (H2) the researchers want to know is there positive relationship between learning organization and corporate cross cultural management.

An addition, (H3) the researchers state that is there positive relationship between learning organization and organizational performance. The fourth hypothesis, (H4a) the researcher state that is the learning organization has impact relationship between corporate cross cultural management and the five organizational performances. The fourth hypothesis, the researcher state that is the learning organization can enhance the positive relationship between localization construction dimension and the five dimension of organizational performance. The researchers also want to investigate is the learning organization can enhance the positive relationship between multicultural coexistence dimension and the five dimension of organizational performance. ~The researchers also want to investigate is the learning organization can enhance the positive relationship between cultural conflict dimension and the five dimension of organizational performance. ~The researchers also want to investigate is the learning organization can enhance the positive relationship between cultural mergence dimension and the five dimension of organizational performance.

The purpose of this study is to analyze the relationship between the three variables which are “corporate cross cultural management”, “learning organization”, and “organizational performance”. The corporate cross cultural management was divided into four dimensions which are localization construction, multi cultural coexistence, cultural conflict and cultural mergence. The organizational performance was divided into five dimensions which are motivation models, leadership, organizational culture and environment, work design and human resource management policy.

The learning organization was divided into five dimensions which are personal mastery, improving mental models, building shared vision, team learning and system thinking. This research wants to study the relationship between the three variables such as corporate cross cultural management, learning organization and organizational performance. So in this research the correlation method is used to analyze the three variables. Thus, the researcher used the Pearson s correlation analysis to analyze the relationship of the variables.

The Pearson correlation is used to find a correlation between at least two continuous variables. The researcher used the t Test to show that each variable is significant and influence to another variable in this study. The population choose is in Suzhou Industrial Park where the most densely settled location for multinationals in Hua Dong region of China. The subjects were directors and staff of 250 multinationals in the Park. One thousand questionnaires were sent out, and 850 returned with 793 valid to further analysis.

The sample was composed of 128 questionnaires returned from the integrated circuit industry, 127 from the computer and accessories industry, 168 from the telecommunication industry, 176 from the photoelectric industry, 89 from the precision machinery industry and 105 from the hardware industry. The data from this research only covered on the Suzhou Industrial Park in China. However the data that to be used in this study can be used to another research which related on study about the relationship of cross cultural management, learning organization and organizational performance in multinationals.

The researcher employ appropriate methodology since the purpose of the study is to analyze the relationships among the cross cultural management, learning organization, and organizational performance in multinationals. In this study, the researchers using the questionnaires where 1000 were distribute and 850 returned with 793 valid to further analysis. The returning rate was 79. 3% where it is quietly good for getting the data. From the research conducted, result shows that Corporate Cross-Cultural Management is positively significant with organizational performance.

Therefore, H1 is able to prove by this research. With the good cross cultural management, corporation could promote the capability of its organization communication, assist expatriates to enhance cross cultural skills, increasing level of cross cultural adaptability in an organization, staff can obtain sufficient information and mutual understanding, make staff feel inspired, facilitate team work and also able to increase staff satisfaction and performance. In this situation, organization able to obtain maximum benefits.

Researcher also found that there is a positive relationship between learning organization and corporate cross-cultural management. That is mean, H2 is accepted. One of the characteristics of a learning organization is the prossession of a corporate culture which encourage change and adaption. Organization that face dramatic changes of environment and certainly encourages staff values of coorperetionand innovation usually required a strong corporate culture. Staff satisfaction and perofrmance can be enhance through better corporate cross cultural managemen and it is also help rapid adaptation among employees.

Furthermore, H3 also is tenable when finding indicates that learning organization positively related with organizational performance. A learning organization can train staff in the mechanism of system thinking, participation and innovation. Only when staff are willing to learn voluntarily and change personal existing cognition on current operation can teams be set up by members with the same inclination. This is the premise of the establishment of a learning organization that will facilitate the building up of a climate and criteria for the organization to learn together.

It is also one of the important factors that effect organizational performance. Result also explained that relationship for localization construction and organizational culture and environment of the entire sample (sample size 793) was lower than that of the partial case identified for personal mastery element (sample size 213). Moreover, localization construction has a lower connection with motivation model for entire sample compared to partial case identified by emphasis on improving mental.

Beside that, relationship between localization model and motivation model is higher for entire sample rather than partial case identified by emphasis on system thinking. From the finding, researcher concluded that H4a is partially tenable. Go further of the research, finding illustrated that multicultural coexistence dimension under the five dimensions of organizational performance (motivation models, leadership, organizational culture and emvironment, work design and human resource management policy) for the entire sample were correspondingly lower than those for the partial case identified by emphasis on team learning.

In addition, multicultural coexistence dimension under the dimension of organizational performance correspondingly lower for entire sample compared to partial case by looking on system thinking. Therefore, researcher conclude that H4b is partially tenable. Resercher also found that, cultural conflict dimension under five dimensions of organizational performance for entire semple were higher correspondingly than those of the partial case identified by emphasis on personal mastery.

In contrast, the four other partial cases identified by emphasis on improving mental models, building shared vision, team learning or system thinking also showed similar results. Means that, H4c is untenable. Researcher also concluded that H4d was also untenable. It is because, cultural mergence dimension under the five dimension of organizational performance for entire sample higher correspondingly rather than those of the five partial cases identified by looking on personal mastery, improving mental models, building shared vision, team learning or system thinking.

As we can see here, learning organization cannot enhance the relationship between the two dimensions which are cultural conflict and cultural mergence towards corporate cross cultural management nad the five dimensions of organizational performance. It is because, culture is something inherent of the person and cannot be change. Because of this culture differences, it may lead to conflict in an organization. We unable to avoid conflict, however we can manage to reduce it However, there are few weakness in this research.

In our opinion, researcher had failed to further discuss how most of the variables influence each other. Basically in the Literature Review (LR) it discussing what is the dimension of each variable, little history and how it is important towards the MNE’s. For example, for dimension localization construction in variable Cross-Cultural Management, researcher explains the definition of localization construction which focuses on human resource of the MNE and the benefit of using local worker.

But, researcher fail to show what are the relationship between localization construction with other dimension in Cross-Cultural Management or it significant influence to other variable. We believe that if researcher manages to dig up more research and provide us with this factor, perhaps it will increase our confidence on the researcher findings. Perhaps it also can make us understand why there is certain hypothesis only partially tenable. It also hard to identify which is the main Dependent Variable (DV) is the primary interest to the researcher.

The variable that will be affected or influence by other variable ( Sekaran, 2008). In our opinion, the variable is difficult to be indentified. Based on the purpose of the researcher, they only want to know what is the relationship between the Cross-Cultural Management, Learning Organization and Organizational Performance in MNE. However, we were confused on how this variable will be identified. Which one is the Independent variable and which is dependent variable. When we look at the hypothesis, the variables influence each other.

We suggest to researcher to at least provide way to understand this research. Perhaps researcher can do executive summary to make it more clear on the purpose of this researcher and how it suppose to help manager of MNE companies and other reader as well. We were also wondering why researcher takes two group of sample for this researcher. Based on Table 1: Multiple Regression Analysis, the sample are test again the same dimension in Cross-Cultural Management and Organizational Performance.

The larger sample (743 respondents) was used as analysis for hypothesis H1 until H3, while the smaller sample (213 respondents) was use to analysis hypothesis H4a until H4d. hence come the question, what are the different between this two group of sample. Does they answer similar question or another set of question that specifically on how Learning Organization element influence each dimension of Cross-Cultural Management and Organizational Performance as whole. Certain aspect in this research does confusing and causing further question

Even though this paper had few weaknesses, it is interested to be read. In manage to analysis the entire element in MNE. This element does help manager to highlight which elements that can help companies to improve their management and smooth out their management and production process. Perhaps, more research can be done regarding Cross-Cultural Management, Learning Organization and Organizational Performance in MNE. This paper can help to enhance future research in finding more connection between all this elements and help MNE manager when dealing with conflict in their companies.