A Study On Cross-Culture Management Of Multinational Corporation

With the acceleration of economic globalization,transnational operations have become a common phenomenon of nowadays.Subsidiaries,mergers,acquisitions and joint ventures arise in every corner of the world since organizations believe the only way to survive is to expand.Survey shows that about 70% of multinational companies fail because of the failure in cross-cultural management.And 90% of the senior-high managers take “cross-cultural management” as the biggest management challenge of this century.And what are the main obstacles during this process?The main factors to cause the failure are lack of cross-cultural management experience and effective management method.Hence,cross-cultural communication becomes an important issue in the management of multinational corporation.In this paper,the author collects relevant literature on theoretical basis of cross-cultural communication & management.By using Hofstede's 5 cultural dimension model to analyze the reasons for culture difference.Generally speaking,there are 4 methods in cross-culture management: Separation,Integration,Innovation and Assimilation.There is no best strategy among these methods.It depends on the corporation strategy and the nature of business.Since 2016,China becomes Germany's largest trading partner.There are more and more enterprises plan to “come in” or “go out”.According to the study of Hofstede,culture difference between China and German is huge.Culture conflicts would lower the efficiency and raise in management cost.The author applied the typical case of German AH company in China subsidy as an example through literature review,observation & interview with the colleagues and documents analysis.Thanks to its global strategy,it leads to the success of global expansion,which is customize to the need of local market and integrate with local resource.However,there are existing problems between Chinese and German employees regarding trust crisis and conflicts in communication and management,which cause high turnover rate and increase in management costs.Based on the Hofstede 5-dimensional model and the cultural cube,this paper tried to proposes the best strategy for cross-cultural management which is the second method: Integration.By cultivating cultural awareness,conduct cross-culture capability training and establishing an effective cross-cultural integration mechanism.Hoping the study would give some implications in management practice for other similar multinational corporation.