Importance Of National And Organisational Culture Management Essay

greatness Of field And Organisational finis solicitude EssayWith the recent acquisition of Nexen Inc. by CNOOC Limited, the problem of managing pass through ethnic challenges arises. This is because of the heathen differences between chinaware and Canada which twain companies act. This focal point wrap up addresses the envisaged challenges of subject area and fundamental lawal refining arising from CNOOC acquisition of Nexen, by applying Hofstede ethnic models. The shroud commences with introduction, followed by background of CNOOC acquisition of Nexen. It besides discusses import and importance NC and OC refinement it thenly discusses the challenges and focussing strategies. It would conclude and nock recommendations on how to relieve the challenges.WORD work out 2,498PRESENTED TO MS. Gillian PallisCONTRACT CONCERNING PLAGIARISMI have read the code of employ regarding plagiarisation contained in the students introductory Handbook. I realize that this co de governs the musical mode in which the Centre for Energy, and Mineral Law and Policy regards and treats the issue of plagiarism. I have understood the code and in adjournicular I am aware of the consequences, which may follow if, I breach the code. I a manage authorize the centre to s evoke the e-copy of my research paper through the plagiarism detection software to detect plagiarism.SIGNED ___________________________________DateTERMS OF quoteThis is a say by 110024120 an MSC student in transnational Oil and Gas Management, University of Dundee, Centre for Energy, Petroleum Law and Policy (CEPMLP). The state has been prepared exclusively for and at the request of the Senior Strategy team of CNOOC Limited to address potential management challenges to the continued effective enclose of line of credit arising from the acquisition of Nexen Inc. This report is focused on the perspective of delivering equal management practices in meeting the envisaged challenges.The aim of th e report is to present a critical and informed analysis of appropriate managerial strategies and practices for the challenges of national and agreemental close differences in charge-acquisition performance. It concludes with some recommendations for consideration by the Senior Strategy group of CNOOC and Nexen.TABLE OF limitTERMS OF REFERENCE 2TABLE OF CONTENTS 2 number OF ABBREVIATIONS 4KIFs association intensifier Firms 4KIWs noesis Intensive Workers 4CHAPTER ONE 51. INTRODUCTION 5CHAPTER both 62. BACKGROUND OF CNOOC ACQUISITION OF NEXEN 6CHAPTER THREE 73. center AND IMPORTANCE OF matter AND ORGANISATIONAL tillage 7CHAPTER FOUR 84. THE CHALLENGES OF internal AND ORGANISATIONAL CULTURE 84.1. HOFSTEDE FOUR placeS MODELS FOR NATIONAL CULTURE 84.2. HOFSTEDE hexad DIMENSION MODEL FOR ORGANISATIONAL CULTURE 94.3. ANALYSIS OF THE MODELS AND CHALLENGES OF NC AND OC DIFFERENCES 104.4. STRATEGIES FOR MANAGING pagan CHALLENGES 111313131313CHAPTER fivesome 135. CONCLUSION 13 CHAPTER six 146. RECOMMENDATION 14BIBLOGRAPHY 15APPENDIX 18HOFSTEDS CULTURAL INDEX, SCORES FOR SELECTED COUNTRIES 18LIST OF ABBREVIATIONSNC National civilizationOC Organisational CultureNXY New York Stock put backKIFs Knowledge Intensive FirmsKIWs Knowledge Intensive WorkersCHAPTER ONE1. INTRODUCTIONCNOOC Limited make global headlines on July 23, 2012 when it announced the acquisition of NEXEN, a Canadian establish inunct and Gas Company at the cost of $15.1 Billion. The acquisition is seen as chinas largest Oil and Gas Company overseas acquisition Lauren (2012). NEXEN was founded in 1971 and is headquartered in Calgary, Canada. Nexen is a global energy company and is listed on the Toronto and New Yorks gillyflower exchange under the symbol of NXY (www.nexeninc.com). Nexen is strategically located in varied regions of the universe of discourse it has over 3,067 employees that add appraise for shareowners through successful oil and pull up stakesicle accelerator exploratio n and development. Consequent to the acquisition of Nexen, CNOOC Limited is now among whizz of the largest independent oil and gas exploration and production companies in the world (www.cnooc.com).According to Barney (1988) many global acquisitions creates value for the assumer through cooperation and integration to enhance sustainable growth. The objective of acquisition is to take a mood companies together and extend their competitive advantage through fellowship carry, innovations and management skills. This is overly a justification for an acquisition Fitzgibbon Seeger (2002). However, most international acquisitions come with involved management challenges Hitt, Harrison and Ireland (2001). Many factors are accountable for these challenges. Thus, this management report is aimed to address the envisaged challenges of national and organisational grow to the effective rail line performance in CNOOC acquisition of Nexen.This report leave apply Hofstede (1980) four ho ldings models and Hofstede (1990) six belongingss models as belles-lettres to lay out that the challenges of NC and OC will affect post acquisition performance. The application of the two models is in line with a separate model developed by Hofstede for comparability OC differences. This is also consistent with Schein (1985) argument that organisational culture differences are not the alike with national culture. The report will discuss the background of CNOOC acquisition of Nexen. It also discusses the meaning and importance of NC and OC culture it then discusses the challenges and management strategies. It would conclude and make recommendations on how to mitigate the challenges.CHAPTER TWO2. BACKGROUND OF CNOOC ACQUISITION OF NEXENCNOOC Limited was realised in 1999 and listed on the Hong Kong Stock Exchange and New York Stock Exchange in 2001 and is 70 percent owned by China National Offshore Oil Corporation (www.cnoocltd.com). CNOOC is wholeness of Chinas largest producers of oil and natural gas and is also among the largest independent oil and gas exploration and production Companies in the world (www.cnoocltd.com). According to the chairman Mr Wang Yilin, based on the strategic business objective to expand CNOOC overseas business and deliver sustainable growth, thus complementing the large offshore production footprint in China. Extending its global comportment to oil rich region like Western Canada, and other separate of the world are mandates for management to achieve.Consequently, the opportunity for the acquisition of NEXEN is an important part in CNOOC international business growth platform as mentioned by Chief Executive Officer of CNOOC Mr Li Fanrong, CNOOC Press release (2012). The acquisition of NEXEN by CNOOC Limited was announced on July 23, 2012 and approved by NEXEN shareholders on September 20, 2012 at the cost of $15.1 Billion (www.nexeninc.com). The acquisition will bring in benefits for both firms. CNOOC brings in a reassurance of stable company and unafraid financial base for investment, tour Nexen Inc. will play an important part in international business growth platform.However, securing approval and making leveraging does not end acquisition challenges. The challenges of acquisition may be in advance of what happens afterwards, the issues after takeover Lauren (2012). For NEXEN a Canadian company with western value and culture, the management and staff are accustomed to working independently. But with the acquisition, they will align with CNOOC as their new Chinese owner with a diametric culture and orientation Lauren (2012). As both companies are knowledge intensifier firms (KIFs) with knowledge intensive workers (KIW) there will be challenging issues on NC and OC differences Alvesson (2004). Thus, this report addresses the challenges of NC and OC in CNOOC acquisition of NEXEN. We will proceed by feel at the meaning and importance of NC and OC.CHAPTER THREE3. MEANING AND IMPORTANCE OF NATIONAL A ND ORGANISATIONAL CULTURENATIONAL CULTUREThis was defined as the collective program of the mind acquired by growing up in a detail country Hofstede (1991). National culture is reflected in basic values, such as feelings of right and wrong, good and evil, beautiful and ugly, rational and irrational Olie (1990). NC jars many forms of organisational behaviour, ranging from decision-making styles and human resources management to behaviour in groups Kirkman, Love Gibson (2006). NC is treated as a relatively stable feature that changes very(prenominal) slowly Erez Earley, 1993 Hofstede (2001).ORGANSATIONAL CULTUREHofstede (1980) defined organisational culture as the collective programming of the mind that incompatibleiates the members of one organisation from others. Trice and Beyer (1984) views it is a system of publicly accepted meanings which operate for a group at a particular time it is a digit of shared basic assumptions developed by a group or organisation on how to cope with its environment, that are stable and arduous to change, and difficult to observe because many important parts of culture are unseeyn Schein (1985) and much so it can simply imply the way we do things around here Deal and Kennedy (1982).IMPORTANCEThe importance of national and organisational culture in international acquisition cannot be disregarded Hatch, 1993 Schein, 1985 and Hofstede (1980). Managing international business or acquisition means handling and pinch both cultural differences at the same time. Knowledge of cultural practices across borders is significant for multinationals in order to hold the company together. National cultures are embedded in values, whereas organisational cultures are embedded in practices, when both cultures are curved there could create challenges that affects post-acquisition performance.CHAPTER FOUR4. THE CHALLENGES OF NATIONAL AND ORGANISATIONAL CULTUREFor the purpose of analysing the challenges of national and organisational culture , this report applies Hofstede cultural models to illustrate the major cultural differences which CNOOC of China and Nexen of Canada represent. Canada reflects the western cultural values wheras China reflects the Oriental Confucian group. The models are identified as follows4.1. HOFSTEDE FOUR DIMENSIONS MODELS FOR NATIONAL CULTUREINDIVIDUALISM/COLLECTIVISMThis implies disharmony of interests on personal and collective goals Parsons and Shils (1951). Hofstede (1980) culture index (from the appendix) scored Canada 80 maculation China scored 20. This shows that the Canadians are highly independent of their organizations, preferring personal time, freedom, and challenge, whereas the Chinese employees have a stronger sense of belonging to their organization.POWER DISTANCEThis refers to how different societies find different solutions on social inequality Mauk (1977). China scored 80 while Canada scored 39, indicating that Chinese employees are more comfortable with structured hierarchi cal levels and supervisors who make decisions. Canadians, on the other hand, prefer a more participatory style.UNCERTAINTY escapeThis implies the degree to which cultural members are willing to accept and deal with dotty situations or unknown future Hofstede (1980). China scored 30 while Canada scored 48, meaning that the Chinese try to forefend risk and anxiety, while the Canadians neither anticipate nor avoid ambiguous situations.MASCULINITY/FEMININITYThis refers to stereotyping gender expectations in organisations Hofstede (1984). China scored 66 while Canada scored 52, meaning that China has medium/high masculinity culture whereas Canada has a medium/low masculinity culture.4.2. HOFSTEDE SIX DIMENSION MODEL FOR ORGANISATIONAL CULTUREPROCESS orientated VERSUS RESULT ORIENTED surgical procedure oriented cultures are dominated by technical and bureaucratic routines, while progenys oriented by a common concern for outcomes. In results-oriented units, everybody sensed their practices in nigh the same way in process-oriented units, vast differences subsist in perception among different levels and parts of the unit Hofstede (2011).JOB ORIENTED VERSUS EMPLOYEE ORIENTEDJob oriented scoop ups province for the employees melodic phrase performance, while employee-oriented cultures assume a broad responsibility for their members wellbeing. At the level of individual managers, the feature between job orientation and employee orientation has been popularized Blake and Moutons Managerial Grid (1964). pro VERSUS PAROCHIALProfessionals usually imply the highly educated members identified in the main with their profession while in Parochial, the members derive their identity from the organization for which they work. This is wide known as local versus cosmopolitan.OPEN SYSTEM VERSUS CLOSED SYSTEMSThis dimension refers to the common style of internal and external conference, and to the ease with which outsiders and newcomers are admitted. It shows that organi sational openness is a societal characteristic which means organization cultures also contain elements from national culture differences.TIGHT VERSUS LOOSE CONTROLThis dimension deals with the degree of formality and punctuality within the organization it is partly a function of the units technology as most companies tend to show buckram control, while others like advertising agencies show loose control.PRAGMATIC VERSUS prescriptiveThis inhabit dimension describes the prevailing way of being flexible or rigid in dealing with the environment, particularly with guests. This dimension measures the degree of customer orientation, which is a highly popular topic in the marketing literature Hofstede et al. (1990).4.3. ANALYSIS OF THE MODELS AND CHALLENGES OF NC AND OC DIFFERENCESBy analysing the above cultural models as postulated by Hofstede, in the four dimension models we can get wind differences in designer distance, scruple avoidance, individualism/collectivism and femininity/m asculinity between Canada and China which both companies represent. For the six dimensions models, CNOOC has process oriented culture with beurocratic routines while Nexen is more result oriented having concern for outcomes (www.nexeninc.com). Also Nexen culture are more job oriented while CNOOC have employee oriented culture with broad responsibility for their members wellbeing (www.cnoocltd.com). These cultural differences as illustrated creates challenges of conflicts, costs, and difficulties Hosted (1980 2001).The cultural differences are also responsible for challenges and obstacles to achieving integration benefits Bjorkman, Stahl, Vaara (2007). It leads to decrease in shareholders value Datta and Puia (1995). It can complicate post acquisition integration and resource sharing Brock (2005). It causes human resource challenges like feeling of uncertainty and insecurity, causing culture clash and negatively charged delirious reactions of employees towards acquisition Elsass a nd Veiga (1994) and culture collision Cartwright and Cooper (1993).They also lead to communication problems, ego clashes, inter-group conflicts, low employee morale, poor performance and ultimately retention Adkins and Caldwell (2004). However, these challenges can be mitigated by applying management practices and strategies.4.4. STRATEGIES FOR MANAGING CULTURAL CHALLENGESManaging the challenges of national and organisational culture involves applying management practices or strategies by managers to reduce the challenges. The strategies are as followsCULTURE INTEGRATIONIt involves the varying extent to which we can integrate more than one cultural perspective, mind-set, and behaviour into ones identity and worldview. It implies being able to move considerably among cultures. It highlights the central importance of developing leaders and managers to the point where they have an ethno-relative begin of cultural difference Randy and Jacob (2009).SYNERGY APPROACHThe approach involves adopting the dodge of managing the differences in culture. This implies recognising the challenges and using them to their advantage, rather than ignoring or allowing the challenges to cause problems Adler (1997). Managers therefore should be taught how to admiration culture differences at work and how to work with them to maximise the parcel of each employee Cascio (1998).RESPECT FOR HOST COUNTRY CULTUREThis means accept the cultural difference without any judgment. No particular culture should seize perfection over the other culture. Cultures are different and for people they represent the ability to manage life situations and conditions the way they are familiar with for a long time Anisha (2011).IGNORING THE CULTURAL DIFFERENCESThe strategy implies a stage where the managers ignore the differences. It later becomes irrelevant as the managers and employees would be having good understanding about each others cultures and practices and they would have to respect the cultures. The employees and managers in this strategy feel that our way is the only way Adler (1997).CULTURAL ADAPTATIONThis strategy involves mutual understanding and simplification of complicated demanding processes of behaving in a different cultural condition. This tonicity does not mean that the participating partner should give up their cultural background, but rather they should use their knowledge of their own culture to set ahead knowledge about the partners culture Anisha (2011).CHAPTER FIVE5. CONCLUSIONThe challenges of national and organisational culture remain crucial in post-acquisition performance. Although CNOOC may experience many complex problems during the integration process, however the challenges of national and organisational culture differences can be very devastating. This is because most successes and failures of international acquisitions have been attributed to the challenges of cultural differences (From the analysis of Hofstede cultural models we identify cultu ral differences between China and Canada which CNOOC and Nexen represent. For individualism/collectivism, it implies that Canadian employees are more independent of their organization, preferring freedom, whereas Chineese employees have a stronger sense of belonging to their organization. In power distance, China employees are more comfortable with structured hierarchical levels while Canada, on the other hand, prefer a more participatory style. With respect to uncertainty avoidance, Chineese tries to avoid risk and anxiety, while Canadians neither seek nor avoid ambiguous situations. In masculinity/femininity, China has medium/high masculinity culture whereas Canada has a medium/low masculinity culture. In term of the organisational culture six dimensions models there are cultural disparities between CNOOC and Nexen in the OC.Consequently, we can surmise that national and organisational culture differences are the biggest challenges that could affect international acquisition perf ormance Hofstede (2001) such as that of CNOOC and Nexen. Thus, in order to mitigate these challenges, the recommendations below are made for the senior strategic team to adopt.CHAPTER SIX6. RECOMMENDATIONFor CNOOC to enjoy sustained business performance in the acquisition of Nexen, the following recommendations are made to mitigate the challenges of NC and OCFirstly, CNOOC should adopt culture management approach. This implies the process of developing or reinforcing an appropriate culture in the organisation Pretorius (2004). Culture management is also concerned with culture change, culture reinforcement, carrying out and change management. The approach will achieve effective control of cultural difference challenges between CNOOC and Nexen.Secondly, culture training for employees is vital. It will sensitize them to the discriminations, biases and negative feelings of the diverse employees in the organisation Farren and Nelson (1999). Through training, employees can understand cul tural diversity that exists between CNOOC and Nexen. cultural training will also supercharge cooperation and coordination among employees to enable them live harmoniously and work comfortably.Thirdly, CNOOC should create awareness on cross cultural communication. This is because all levels of communication are affected by cultural dimensions like words, language, body language, gestures, etiquette dos and donts, clothing, gift giving, dining, customs and protocols William (2005). The knowledge of cross cultural communication is necessary because what may be considered utterly acceptable and natural in China, can be uncultured or offensive in Canada.BIBLOGRAPHYBOOKS SOURCEAlvessson, M. (2004). Knowledge Work and Knowledge Intensive Firms. Oxford University Press, May 20th , 2004. pg102.Deal, T. E. and Kennedy, A. A. (1982). Corporate cultures The rites and rituals of corporate life. Reading MA Addison-Wesley. Cited in Management An Introduction, by David Boddy with Steve Paton. Pe arson Education Limited, 2011, Fifth Ed. Pg. 79.Hitt, M., Harrison, J. and Ireland, R. (2001). Mergers and acquisitions A guide to creating value for stakeholders. Newyork Oxford University Press. Copyright 2001, Pg5-6.Hofstede, G. 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