Ford: Impact of Culture on International Business

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Abstract

Success in doing international business highly depends on how a company incorporates various cultural diversities in its management. In this essay, a case study of Ford Motor Company has been taken to illustrate the various types of cultural conflicts in the company and the major causes of the conflicts. In addition, the causes of cultural conflicts in its subsidiary plants in other parts of the world are also examined. This essay focuses on the source of cultural conflict in Ford Motors Company.

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Introduction

Culture can be described as a pattern of learned behavior in a particular society whose elements are embraced and shared by members of that particular society. Culture affects how business is carried out especially among different countries that practice international trade. In a given Company such as Ford whose plants are spread outwards to many countries, the top management deployed into those countries ought to be very cautious in handling the local population whose culture might be different. Failure to observe the cultural trends of a given country would result in low productivity as a result of the incorporative nature of the natives (Wederspahn, 2000, p. 33).

Cultural issues in Ford Motor Company

Ford, in the past few years of its operation, have encountered a series of allegation concerning cultural issues. This is in addition to the financial crisis that the company is facing. One serious cultural issue is the company’s leadership structure. It is claimed that forty percent of the top management position and ownership belongs to the Ford family. Because Ford is an equal employer, it has employed a wide variety of cultural groups ranging from African-America, Hispanic, and Asians to Arabs. Therefore, structuring the company’s leadership into a specific group of the family is a great disservice to the rest of the employees whose interests might not be expressed by the leaders. The allegation has also been put forward to the promotional criteria with Africa Americans and other cultural groups except the Ford family being sidelined. This has led to various conflicts in the company that resulted in the formation of various interest groups and cultural groups to accommodate every employee’s interest in the company. Some of the cultural groups include Ford Asian Indian Association (FAIA), Ford-Employee African-Ancestry Network (FAAN), Ford Chinese Association (FCA), Ford Hispanic Network Group (F-HNG), Professional Women’s Network (PWN), and Ford Gay, Lesbian or Bisexual Employees (GLOBE). All these groups have helped resolve cultural conflict in Ford (Ford Motor Company, www.ford.com).

Relationship Patterns; this refers to how different societies associate with each other for example kinship patterns and how relationships are framed for example Individualism or collectivism. How Ford handles these relationships normally brings in cultural conflicts in the company between top management and its employees.

Value system; various societies upload different values and the extent to which they are respected. These values are very important because they determine the extent to which some societies can take the risk and accept a leadership position in the company. The values also might define the superior-subordinate relationship. Therefore, Ford has been experiencing this problem, especially in a leadership position in that some countries would want to manage the plant in their county on their own without much influence from the parent company hence resulting in cultural conflicts.

Language and communication; involves the way people communicate and the extent to which their native language influences their communication. Countries such as China and Japan that do not employ English as a language in their communication would require an interpreter for the top management to carry out its tasks especially during negotiation of the companies. This has always been seen as a source of cultural conflict between Ford and non-English speaking countries.

Institutional and legal system; this involves the legal system in place in a particular country, a contractual system in that country, and how decisions are made about the rules and regulations. This has acted as a source of conflict whereby Ford to some extent fails to comply with these rules (Ghauri, 2003, p. 100)

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Reasons for conflicts

The major reason for the cultural conflict can be attributed to the cultural clash between the top management assigned in different countries with the local population who serves as employees of the company. As a result of the inadequate orientation of the top management before taking up the assigned job, some aspects of the cultural practices of the natives are not observed leading to conflicts. Secondly, the language barrier can be said to be the cause of these conflicts. Most of the top leadership in Ford Company both home and abroad is mainly composed of American native speakers. As a result, communication with the locals in a particular country becomes quite difficult especially in dispensing managerial duties that would always require an interpreter. Consequently, conflict of interest may emerge leading to conflicts.

In conclusion, Ford needs to embrace the cultural diversity in the company more appropriately by employing strategies and measures that would ensure equal representation in the company. In its subsidiary plants, the locals need to be given a chance to manage their affairs. However, close supervision should be done regularly to ensure that the subsidiary plants conform to the objectives of the parent company.

References

Ghauri, P. N., Usunier, J. (2003). International Business Negotiations. Emerald Group Publishing.

Ford Motor Company. On the Team; Valuing Diversity. Web.

Wederspahn G. M. (2000). Intercultural Services: A Worldwide Buyer’s Guide and Sourcebook. Butterworth-Heinemann.

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BusinessEssay. 2022. "Ford: Impact of Culture on International Business." May 12, 2022. https://business-essay.com/ford-impact-of-culture-on-international-business/.

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