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  1. Managing Cultures and Decisions    


    This case focuses on the cultural differences of the U.S. company Coca-Cola and the country of India. In this situation, the people in the area around the Coca-Cola plant accused Coca-Cola of reducing the water levels, and more importantly, contaminating the water supply used for farming and personal consumption in their bottling process.

    After reflecting on this situation involving cultural differences, as a leader, how might MNEs demonstrate their commitment to working with different countries like Saudi Arabia and respecting the cultural and natural environments of the country?

    What types of decisions would you need to make? Would there be bias in the decision-making process? Can you give an example?


Subject Cultural Integration Pages 5 Style APA


Managing Cultures and Decisions


            Many companies have been forced by globalization in recent years to move their operations across geographical boundaries.  Corporations move business operations across geographical boundaries to create global competitiveness by exploiting market opportunities offered by liberalization of trade in host countries and reduce costs of production among others (Deuerlein, 2020).  Despite the attractive opportunities which these expansions offer, managers have realized that managing a local company is much easier than a global business (Jain & Pareek, 2019).  Employees of globalized organizations have ended up working with people from different countries and in unfamiliar environmental terrains.  Cultural differences are some of the factors that make it harder to manage a global business than a local one. Managers of these companies find that in modern multinational business community, cultural differences could interfere with the ability of their organizations to achieve their strategic objectives in the long term (Deuerlein, 2020).

Managing cultural differences by multinational corporations

           There are various ways which multinational corporations could use to demonstrate their commitment to working with countries such as Saudi Arabia. Managers should be culturally sensitive and promote creativity in the work place to succeed in such countries (Jain & Pareek, 2019). Managers should also provide flexible leadership by encouraging employees to be innovative. Managers should understand the basic concepts of cultural diversity to manage multinational corporations effectively (Jain & Pareek, 2019). If a company like Coca-Cola Company is to succeed in an Islamic country like Saudi Arabia, its managers must be culturally sensitive and promote work place creativity.  Saudi Arabia is a desert country where water use is bound to be a very sensitive issue.  Managers must understand the integrated belief systems, value systems, behaviors and communication patterns of people in the target country to succeed in their operations as these are some of the key components that underlie what culture entails (Jain & Pareek, 2019).  The integrated belief systems are the aspects of culture that are socialized in social groups in a country.  Managers must understand the cultural diversity issues that exist in a host country.  Some of the cultural differences could be due to race, ethnicity, language, religion and sexual orientation issues among others (Deuerlein, 2020).

Appointing senior company managers from locals in the host country is yet another of the ways that multinationals can use. Managers recruited from the local population understand the cultural diversity issues better and are better placed to guide the operations of the company than managers from the home country. The company should ensure communication relayed to the public takes into account cultural differences of the target market (Jain & Pareek, 2019). For example, if Coca-Cola Company runs adverts in print and electronic media promoting consumption of alcoholic beverages in Saudi Arabia it could receive undesired responses since drinking alcohol is discouraged.  The company should partner with water conservation organizations to be seen to be playing a leading role in conserving water (Durach, Glasen & Straube, 2017).

Coca-Company was accused in India and in many other countries for using too much water in its franchised bottling companies leading to drop in underground water levels and contaminating the environment by releasing toxic industrial waste indiscriminately (Jain & Pareek, 2019). Being seen to be environmentally sensitive in therefore another way that multinational corporations could use to demonstrate their commitment in working with Islamic countries such as Saudi Arabia. The companies could also finance projects that are aimed at improving the cost of living of the local population (Jain & Pareek, 2019). In addition, they should also finance projects which enhance the general health and wellbeing of the local population to be viewed favorably and hence obtain the social license to operate. Ensuring products sold also meet globally accepted health, quality and safety standards is also another way that multinational corporations can use to demonstrate commitment in working with Islamic countries. Multinational companies must ensure that their production operations and use of their products by consumers does not endanger the wellbeing of the local population or pollute the environment to gain acceptability with the local community (Revti, Lindsay & Everton, 2015). 

Types of decisions which managers should make

            Managers in charge of operations in organizations operating in foreign countries should make decisions which are sensitive to the cultural differences within the company and the target population. Business decisions whether on staff matters, production, finance, promotional activities or expansion plans must be made after careful evaluation of their impact on the cultural differences in the country (Durach, Glasen & Straube, 2017).  For example, if Coca-Cola Company desires to advertise its products in an Islamic country like Saudi Arabia, any advertisement that even in the slightest manner is seen to demean Prophet Mohammed could be met with violent protests and even destruction of the company’s facilities within the country (Jain & Pareek, 2019). 




Deuerlein, S. U. (2020). Pioneers meet vikings: American managers’ perceptions of cultural

differences in scandinavian companies operating in the united states (Order No. 27995897). Available from Publicly Available Content Database. (2417795087). Retrieved from https://www.proquest.com/dissertations-theses/pioneers-meet-vikings-american-managers/docview/2417795087/se-2?accountid=45049

Durach, C. F., Glasen, P. C., & Straube, F. (2017). Disruption causes and disruption management

in supply chains with chinese suppliers: Managing cultural differences. International Journal of Physical Distribution & Logistics Management, 47(9), 843-863. doi:http://dx.doi.org/10.1108/IJPDLM-07-2017-0228


CHALLENGES. Global Management Review, 13(2), 23-32. doi:http://dx.doi.org/10.34155/GMR.19.1302.03

Lozano, J. F., & Escrich, T. (2017). Cultural diversity in business: A critical reflection on the

ideology of tolerance: JBE. Journal of Business Ethics, 142(4), 679-696. doi:http://dx.doi.org/10.1007/s10551-016-3113-y

Revti, R. S., Lindsay, V., & Everton, N. (2015). Managing institutional differences for

international outsourcing success. Journal of Small Business and Enterprise Development, 22(3), 590-607. doi:http://dx.doi.org/10.1108/JSBED-06-2012-0071


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