Essay: Impact of Culture Diversity on Supply chain

The Impact of Culture Diversity on The Relationship Between The Dimensions of National Cultures and the Effectiveness and Success of Supply chain

Introduction

International supply chain is one of organisations methods to get the benefits of globalisation and open market, where using the international suppliers and manufacturers have several advantages, such as decreasing the cost, increasing the products qualities and maximising production size as well as opening new markets to the organisations. However, Globalization forces organisations to utilize manufacturing abilities from various countries that have many national cultures differ than their own, which creates new challenges for those organizations operating in several countries. National culture is an undeniable challenge that faces organisations, as it found that it has an impact on the operation practises in general and supply chain in particular. Thus , this research aims to examine the impacts that culture diminutions have on supply chain and how it will be effected by the culture diversity that firms within the supply chain might have.

Cultural diversity is growing significant phenomenon that influence not only political and social harmony but it effects the efficiency and cohesion of organisations. Several research have indicate how diversity of culture has certainly influenced organisational performance and competitiveness (Das Neves and Mele ́ 2013). Cultural diversity predicted to greatly affect the business world in the 21st century, as it is extensively impacting organisations management styles,  communication styles and, behaviour forms, generally, works relations. Despite this growing interest in cultural diversity, it is surprising that so little known in the literature about how the culture diversity affect  international supply chain.

Put succinctly, this research views cultural diversity as mostly influencing how national cultures dimensions are effecting the effectiveness and success of supply chain. The proposal is  organized as follows: First: the research questions, and method will be presented based on a literature review of Supply chain and National culture, National culture dimensions and measures, and Cultural Diversity. Second, there will be a discussion of the research methodology and design. And finally, the research conclusion and expectation

Literature review

Supply chain and National culture

Globalization increase the competition around the world and with new technologies, which made extending supply chain to international markets possible, international supply chain  became a beneficial method for organisations to survive highly competitive open market. Collaboration in Supply chain proven to increase benefits for all involved actors  (Fawcett et al., 2008). The benefits range from reducing the costs of logistics (Cooke 1997) and increasing the turnover of inventory  (Agrawal and Pak 2001) to increase responsiveness (Jayaram, Kannan, and Tan 2004), decrease time to market (Mentzer et al. 2001), and the total economic value (Daugherty et al. 2005). However, A primary concern of international supply chain is that it increases the chance of exposing the organisation to failures by depending organisation process on outside resources and makes firms affected by actions of its supply chain partners (Craighead et al. 2007). Failures caused by the uncertainties in market conditions, supply availability, and transportation which can interrupt operations adding additional pressure on the companies in the chain (Hendricks and Singhal 2003).

There are three kind of failures in supply chain as explained by (Chopra and Sodhi (2004): disruption, delays, and distortion. Craighead et al., (2007) defined Disruptions as incident that disturb the flow of material through the supply chain phases (i.e. starting from raw material to the final customer), which create a real threat to business operations (Bode and Wagner, 2015). While Delay is related to each particular order that delivered later than when it was scheduled for (Chopra and Sodhi, 2004), and distortions are related to unexpected changes in the size of orders (Lee et al.,1997). Delays, Disruptions, and distortions are failures caused by internal (e.g. production capacities) or external (e.g. inspections, environment) factors that eventually lead to inflexible response from supplier to demand changes.

Several research in the literature indicates that internal factors causing the failure to the supply chain occurs from three diverse sources : manufacturer, supplier, and customer (Chopra and Sodhi, 2004). On the other hand,  A number of researchers have reported several external factors that might have impact on effectiveness of supply chain and operations such as national culture. The effectiveness of supply chain articulate how firms achieve within the supply chain its operational and financial goals (Gunasekaran et al., 2004). Research demonstrate the significant role played by national culture on the  efficiency of operations (Flynn and Saladin, 2006; Nakata and Sivakumar, 1996; Pagell et al., 2005), as National culture defined as beliefs, traits, and preferences that shape the behaviour of society members (Hofstede, 1984; Wiengarten et al., 2015b). Previous studies have considered extensively the role of national culture in the success of supply chain and multiple operations practices (Kull and Wacker, 2010).

There are several evidences suggesting that a number of culture characteristics have impact on operations and supply chain practices effectiveness (Wiengarten et al., 2015b). national culture that are characterized by collaboration and interdependence and encourage the interests of the group over the interests of individual enhanced the value creation process of e-business (Davis et al. (2014) A considerable amount of literature has been published have confirmed the impact of national culture on the level of success and implementation of several supply chain practices and programs such as TQM, ISO 9001(Kull and Wacker, 2010; Power et al., 2010; Wiengarten et al., 2011). For example, Kull and Wacker, 2010 confirm, with the use of GLOBE’s country cultural value dimensions, how the dimensions of country cultural impact QM effectiveness. Additionally, Durach & Wiengarten (2017) studied the national culture role, in terms of Hofstede et al.’s (1990) uncertainty avoidance index (UAI), in the occurrence of on-time deliveries or late deliveries risk. Thus,This research aims to participate in the on-going debate on culture, operations and supply chain management in global production networks.

National culture: dimensions and measures

National cultures have been an object of research since the late 1970s, these research intended to expand the set of the cultural dimensions. One of the most utilized dimensions are based on the study of Hofstede (1980), Geert Hofstede’s (1980a, b, 1983, 1993, 1994, 2001) wide studies on classification of culture and cross-cultural research are probably one of the most influential views on the practices of management through different culture. after studying 50 countries, Hofstede suggest that several management behaviours that are suitable in a particular cultural environment may not actually be right for another. Based on commonly identified issues in different cultures, four dimensions of culture were presented: power distance, individualism, uncertainty avoidance, and masculinity.

Furthermore, additional cultural dimensions depending on Hofstede’s cultural classification were presented by the GLOBE study. The GLOBE aims to explore the values and practices of culture in a large variety of countries, identifying their effect on the practices of organizations and leadership characteristic (House et al., 2002).The GLOBE's measures accomplished in 1997 as a result of a 10- year study for 62 societies all over the world (House et al., 2004). Where it was used in several researches in managerial studi
es (Euwema et al., 2007; Luo, 2008). Nine cultural dimensions including the four dimensions of Hofstede’s and they are: Uncertainty Avoidance, Power Distance, Societal Collectivism, In-Group Collectivism, Gender Egalitarianism, Assertiveness, Future Orientation, Performance Orientation, Humane Orientation (House et al., 2002).

Diversity

For decades researchers worked to understand diversity and its role on the performance of organisations and governments around the world. Cultural diversity is an important component, has undeniably influenced competitiveness and performance of organisations (Das Neves and Mele ́ 2013). The profitability of cultural diversity and ethnic minorities employment for companies has been investigated by many researchers (Cox 1991; Thomas and Ely 1996; European Commission 2013; Ortlieb et al. 2014). Recently, diversity of culture and its related challenges have become even more important than before, due to  the population increased movement and migration processes, which led most of the world to be exposed increasingly to diversity and contact with people from different cultures (Lozano, & Escrich, 2017).

The topic of diversity in management considered very controversial (Krell and Sieben 2011, p. 159), as it discusses the companies approaches to deal with diversity and how to integrate minority groups into organisations structures and networks (Lozano, & Escrich, 2017). Whereas a considerable amount of literature proven that diversity of cultural offers many advantages, such as improving the global reputation of companies, strengthening the organisation’s culture, rising  innovation and creativity, besides, encouraging loyalty among different origins customers (Cox and Blake 1991; Thomas and Ely 1996; Shen et al. 2015; Escuela de Organizacio ́n Industrial, EOI 2009; Fundacio ́n Bertelsmann 2012; Franken 2015). There are several economic reasons motivating organisations to adopt cultural diversity approaches as suggested by Krell and Sieben (2011) : having minority workers in an organisation in fact attracts many workers from those minorities and even brings the firm closer to those groups, also diverse groups offered better performance at resolving problems and creativity, also studies showed that diverse groups are more innovative and flexible which led to conclude that having diversity in the organisation facilitates internationalisation.

With this increase in attention to the topic of culture diversity in the business studies, to date there has been little studies that covers culture diversity in the area of supply chain and operation context . Knowing that there is still a lack of cultural aspects recognition in different operational processes in operation research studies(Lee Park, & Paiva, 2018). Therefore, this study will continue investigating one of the significant current discussions on how companies can influence and mitigate the potentially negative impact of national culture through their own practices and culture ? and how could cultural diversity of firms within the supply chain impact the influence of national culture on the international supply chain? when research suggest that national culture plays the dominant role and has the upper hand (Durach, & Wiengarten, 2017).

This study will focus on the national cultural dimensions provided by the GLOBE study, through investigating the impact of culture diversity on the relationship between national culture represented by the GLOBE nine elements and the supply chain success and effectiveness. Moreover, understanding how the culture diversity within the firms can affect or moderate the impact of national culture on supply chain in general. This perception will possibly show different options and decisions, enabling the chain to get the maximum advantages of competing and functioning in a global competitive open market. this potentially will help to gain better performance and competitive advantage through clear comprehension of partners in supply chain particularly in global supply chains , as getting better understanding of the social elements of all supply chain partners’  might lead to efficient operation process(Lee Park, & Paiva, 2018).

This study is designed to understand and fill out the void in the previous literature through investigating the following research questions: