Corporations without National Boundaries: Operating in a Culturally Diverse Environment

Globalization blurs the boundaries of national identity and national differences between corporations. It is increasingly necessary for corporations to identify with a plethora of nations and cultures. Countries that had never been considered major participants in world trade have suddenly emerged as major economic powers. In the past two decades, world trade has expanded from $200 billion to over $4 trillion (Czinkota and Ronkainen, 1993). Yet, the USA's participation in world trade measured as a proportion of world market share has declined drastically. In the early 1950s the USA accounted for nearly 25 per cent of world exports (adjusted for World War II); in 1991 this figure had declined to 12 per cent (Czinkota and Ronkainen, 1993). In 1987 the USA had a trade deficit of $166 billion, larger than that of any other nation (McEnery and DesHarnais, 1990, p. 43). This situation demonstrates a need for American corporations to develop products with a global consciousness in a cross‐cultural context. It is essential that managers acquire cross‐cultural understanding and skills. International business competition requires managers to have not only a knowledge of how to be a global player, but also the ability to implement that knowledge. In response to this, cross‐cultural managers must deal with certain fundamental issues. Three of the most essential issues are: communication, adaptable management strategies that transcend cultural differences, and sufficient investment in human resources.