Assignment Sample Cross-Cultural Management Portfolio
Introduction
Organizational culture is all about organizational values, beliefs, and attitude that helps to influence the behaviour of the working employees within the organization and the creation of an organizational image in front of the associated stakeholders. Therefore, this particular report is going to analyse the organizational culture and its effect on employee motivation, leadership, and management approaches for the Louis Vuitton organization with the help of appropriate theories and models. Louis Viton, a luxury goods and fashion brand faced challenges in maintaining the brand’s heritage, embracing innovation, employee engagement and more that significantly reduced its overall revenue share in some countries such as France (6%), Japan (6%), and more. Therefore, this study tries to understand the reasons for cultural differences in different regions and other reasons for reducing revenue share in different countries.
1.2 Main body
1.2.1 Company management approaches
It is essential for Louis Vuitton to understand and appreciate cultural variations in different regions in the global market to effectively navigate the international market, reduce issues in cultural management and keep its position as the world’s top luxury fashion brand. As per the statement of Thorisdottir & Johannsdottir (2020), organisational culture influences the overall management approaches of an organization and it is responsible to perform top management activities such as decision-making, risk management, employee management and more.
In above figure 1, it can be seen that Louis Vuitton has different revenue shares in different countries. For example, in France it has around 6% revenue share, in the US it has a 37% revenue share, in Japan the revenue share was around 6% (Statista.com, 2023). Moreover, in the rest of Asia Louis Vuitton has around 20% of the revenue share as compared to other markets (13%). Therefore, it can clearly be analysed that Louis Vuitton has different revenue share according to different regions or places. Maybe, it became difficult for the organisation to understand the cultural difference in different areas that significantly affect its management performance and reduce revenue generation.
Therefore, effective use of Hofstede cultural dimension model can help Louis Vuitton to understand the cultural difference in different countries and regions in the global market. As per the statement of Khan et al. (2020), Hofstede cultural dimension model can help to understand individualism, collectivism, power distance, risk, safety, informal-formal procedures and more that improve the business management process [Referred to Lecture Material Unit 2]. For example, Louis Vuitton can implement hierarchical and centralized management styles in countries where power distance is high. As per the opinion of Bhaduri (2019), this model is also preferred for taking effective decisions in management work in different regions. For example, Louis Vuitton may implement top-down management approaches in the headquarters in France to manage the cultural difference and establish strong manhunt approaches to handle employees by taking strict diction for improving employee engagement and cooperative attitudes.
In addition, in terms of maintaining high organizational loyalty within the target marketplace, there needs to implement strong relationships with the employees and other stakeholders (Thorisdottir & Johannsdottir, 2020). Therefore, Louis Vuitton can develop high loyalty by investing in employee development and promoting humble and supportive organizational culture (Olan et al. 2019). It will attract the stakeholders and the working employees to the organization and increase the revenue generation rate in different areas such as Japan, Asia, France and more.
1.2.2 Leadership Style
Leadership and management both are necessary to maintain organisational performance in the global market. As stated by Wang (2019), leadership helps to influence the working employees to motivate and boost the productivity of the employees to achieve organizational objectives, along with leaders taking effective decisions, making innovative planning, managing organizational activities, and more (Robbins & Judge, 2013). According to Trait’s theory leaders comes with effective skills and qualities such as communication skills, decision-making skill, talent management skill, effective knowledge, ambition, and more that makes a leader perfect to manage any kind of complex organizational situation in different times. As stated by Hou et al. (2019), in the case of Louis Vuitton, a luxurious fashion bartends, need to adopt different leadership styles in different countries based on the culture, and other factors of the country. For example, Louis Vuitton may implement a transformational leadership style in some business areas to motivate the employees by selling a compelling vision, fostering a sense of shared purpose and encouraging innovation.
Figure 2: Theories associated with leadership
(Source: Self-created)
On the other hand, in some areas such as Japan, leaders need to need to focus on team cohesion, and relationship building as Japan is a more collective cultural place. As per the opinion of Ahluwalia (2020), servant leadership can be a suitable leadership style to implement in such collective culture. It helps to prioritise the well-being and needs of the employees within the organisation. In such cases contingency theory can help Louis Vuitton’s leaders to understand the importance of the leader-employee relationship, proper management of leadership power and to achieve organizational growth [Referred to lecture material Unit 3]. Moreover, the working regions such as some parts of Europe and Asian countries with high power distance Louis Vuitton can adopt a transactional leadership style. As stated by Robbins and Judge (2013), transactional leaders always try to clearly define the organizational roles, divide the responsibilities among the employees and provide effective rewards to the high-efficiency workers. It motivates other employees to work hard and explore new creative ideas to stray competitive in the international market.
In some regions such as Sweden, Netherlands and other places that prioritise risk-taking and innovation Louis Vuitton needs to establish a laissez-faire leadership style. As stated by French (2015), Laissez-faire leaders encourage their employees to experiment with new concepts and methods by giving them freedom and trust and by utilising behavioural theories. Therefore, by encouraging innovation and inventiveness, this look may help Louis Vuitton maintain its leadership position in the fast-moving fashion market. Therefore, a flexible and adaptive strategy that takes cultural differences and regional preferences into account is necessary for Louis Vuitton’s effective leadership implementation across international borders (Bagwell, 2020). It may be possible for Louis Vuitton to successfully manage its different teams and succeed in a variety of international marketplaces by combining transformational, servant, transactional, and laissez-faire leadership styles, customised to each unique situation.
1.2.3 Organisational Culture
Businesses with an organisational culture always tend to be more successful as compared to less structured corporations and is important to attract top talent, stay competitive, promote employee performance, and foster positive workplaces that promote collaboration. In the area of organisational culture and its impact on management practices, individual behaviour and teamwork are necessary and which is demonstrated in Edgar Schein’s organisational culture model. The concept of organisational culture has three layers attitudes, norms and values and basic assumptions and culture affect the way strategy is determined, goals are set and how the organisation operates [Referred to Lecture Material 4]. The organisational culture of Louis Vuitton also follows the three forms of a circle in which the outermost holds artefacts, the middle one keeps values and beliefs and the innermost is the underlying assumptions. According to Schein et al. (2021), artefacts are tangible and visible parts of any organisation and sharing own values as well as perceptions this layer plays a crucial role.
The company manages practices such as open-door policy, office layout and official dress for the employees and easily observable outside world but they are hard to interpret. Additionally, core values in organisational culture are crucial which include accountability, diversity, passion, collaboration, leadership and integrity and the management understands all these things and adapt core value accordingly to each employee (Louisvuitton.com, 2023). In contrast, Bailey, Benson & Bruner (2019) claimed that assumptions are deeply interconnected with philosophies and ideologies which helps a proper foundation of visible behaviours and core values. The company is effectively utilising the above model to shape consumer perceptions, leveraging consumer engagement and promoting its heritage with the help of digital media space (Global.com, 2023). In this way, it can be stated that this model effectively helps to examine the strengths of the organisation such as a customer-centric approach incorporated with values and beliefs and weaknesses such as challenges in promoting work-life balances.
On the other hand, Deal and Kennedy’s Culture-performance Model is a theory which is completely related to organisational culture suggesting that organisation culture can lead to varying levels of business performance [Referred to Lecture Material 4]. Tough-Guy, Macho culture is one of the important styles of culture which are adopted by this organisation for risk-taking and the emphasis on achieving short-term results. Sakulkijkarn & Khanthong (2022) examined that decentralised decision-making is taken by this organisation in this specific sector for making a cycle where authority is conveyed all through a bigger goal. Process culture is another important culture which is used by the organisation using this theory that helps the firm in placing a high value on customer satisfaction. Their organisational culture completely revolves around delivering exceptional customer experiences and is evident in their personalised service, attention to detail and responsiveness to customer requirements. Using these cultural practices helps to stimulate consumer engagement and increased cultural awareness which ultimately help a company in leading the latest Vogue business index (Voguebusiness.com, 2023). The luxury fashion sector has also been criticized for its lack of diversity and the company has made better efforts to collaborate with diverse artists and have featured models from numerous backgrounds in their campaigns. The company has also adopted the demands of its environment which culture remains constant to thrive success and achieve a competitive advantage.
1.2.4 Employee Motivation
According to Vu (2020), employee motivation in organisational culture is important as it allows a firm to meet the goal of its workplace and without motivating employees they cannot lead to increased productivity and a higher level of input. According to research, corporations such as Louis Vuitton mainly focused on the outcomes and hold their employees and managers accountable for success and mainly consider performance-oriented culture. This culture effectively helps promotive a positive work culture for its employees as it initiates a recognition program for all employees.
The above figure demonstrates how quickly employees within the workplace increased worldwide from 2008 to 2022. In the year 2022, the total number of employees was 196,006 which increased as compared to previous years and the major reason behind it was culture related to employee motivation (Statista.com, 2022). However, market culture and hierarchy culture are not very well adopted by the organisation which creates barriers between the employees and leaders and understanding theories is important (Heinz, 2022). Culture influences the specific content and goals pursued and at the same time motivation differs across cultures in these criteria, content and process theories are two important theories for better employee motivation [Referred to Lecture Material Unit 5].
The theory suggests that individuals have a hierarchy of needs that often motivate their behaviour. In this way, Louis Vuitton likely addresses the lower needs of the organisation by giving competitive salaries, comfortable working conditions and other basic benefits. Kalogiannidis (2021) revealed that using this theory they are also effective in offering opportunities for career growth and development to cater for employees’ higher-level needs such as self-actualisation. However, companies’ focus on higher-level needs is a major weakness and basic needs such as fair wages or a supportive work environment are not adequately met which can lead to employee dissatisfaction and decreased motivation at the same time. Additionally, The Equity Theory would be helpful as well in terms of employee motivation by perceiving whether their input is fairly rewarded or not as compared to their peers (Cheng et al. 2020). One major potential weakness is the challenge of maintaining perceived quality and that can lead to reduced productivity and such theory plays a crucial role.
Conclusion
In conclusion, the study is able to analyse the impact of organisational culture on management approaches, employee motivation, organisational culture and leadership in Louis Vuitton. There are many theories that were incorporated as well such as Hofstede’s Cultural Dimension, Edgar Schein’s organisational culture model, and Culture Performance Model to evaluate its strength and weaknesses. The company should focus on identifying these strengths and weaknesses based on cultural differences and which can help them in improving employee motivation and loyalty.
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