The Impacts Of Host Country Culture On Multinational Companies Financial Performance

Host country national culture plays important role for business success in international business.Work values and the way people understand and interpret things inside the organization or society it according to culture.This study examined the Impact of Host Country Culture on Multinational Companies Financial Performance – Case study LG Electronics Company – Sudan.In this study,the national culture was measured using Hofstede’s framework the Values Survey Module 2013(VSM 2013)that comprises of six culture dimensions namely,power distance(PD),individualism/collectivism,(ID),masculinity vs femininity(MAS),uncertainty avoidance(UA),short-term/long-term(LTO),indulgence versus restraint(IVR).The firm performance was measured using financial performance represented by return on assets(ROA)and earnings before interest and taxes(EBIT).Data were collected from 50 employees’ in LG Electronics company-Sudan.A correlation test was conducted,three independent variables was excluded after test one.In the second test it included three independent variables power distance(PD),uncertainty avoidance(UA),long-term orientation(LTO),correlation and regression analysis to these three variables the results showed that national culture has a negative correlation with firm financial performance.Uncertainty Avoidance(UAI)and long-term orientation(LTO)have a positive correlation with firm financial performance.This research it helps the decision makers to understand the impact of host country culture on MNCs firm financial performance.Further empirical studies are required to investigate and evaluate the Sudanese national culture which are of great importance on multinational companies’ financial performance,the future research should consider size of sample and the direct consequence of such a big number of ethnic groups,religions.