Cultural Difference And Firm Performance

With the continuous development of economic globalization, more and more companies choose to enter the overseas market, the world’s number of multinational companies is increasing. Multinational operations can bring more resources and expand overseas markets to the enterprise. However, companies operating under different cultural backgrounds need to consider the impact of cultural differences on business international operations. Cultural differences bring cultural diversity to multinational corporations, which will enable companies to get different thinking and different ideas. Thus, companies can make more informed and comprehensive decision through brainstorming; On the other hand, cultural differences will also increasing the enterprises’ overseas operations difficulty and increase the risk of business failure. Therefore, the effect of cultural differences on corporate performance may be a positive impact, it could be a negative impact, and this has not been a unified academia conclusion.,Essentially, Cultural differences are different cultural backgrounds values, differences ways of thinking and conduct of the various manifestations. Cultural differences are reflected through human language, thinking and behavior. Thus, the staff from different countries have different values, ways of thinking and behavior guidelines, which will have an impact on internal communication, decision-making and trust. The staff from different cultural backgrounds will have different understanding of management, which will directly affect the effect of management, especially for the human resource management which associated with staff closely. The staff from different cultural backgrounds not only has different understanding of human resource management systems, and the human resource management model that they prefer to is also different. This means that the effect of the same human resource management model is different for staff from different cultural backgrounds, thus cultural differences will affect multinational human resource management performance. Therefore, from the angle of human resource management to investigate the impact of cultural differences on the performance of multinational corporations has great significance.This paper based on the correlation between cultural differences and corporate performance, introduce the human resource management to explore its mediating effect in the multinational cultural differences affect performance path. After studying the literature about the relationship between cultural differences and corporate performance, the relationship between cultural differences and effect of human resource management, the relationship between effect of human resource management and corporate performance, we put forward relevant assumptions. Using880samples overseas subsidiaries of multinational corporations, and using SPSS18.0software analyze the reliability and validity of collected data, ensuring the validity and reliability of the data. In addition, using Hofstede cultural dimension data to calculate the cultural differences between home and host country of multinational corporations, and use the turnover of multinational corporations to measure corporate performance. On this basis, the theoretical model constructed structural equation model, and using AMOS18.0software to estimate and test the model, the final conclusions are:(1)Direct impact of cultural differences on multinational performance is not significant, but cultural difference will produce positive indirect impact for multinational performance through the intermediary role of human resource management.(2)The greater the cultural differences, the better effect of the implementation of human resource management.(3)Human resources management has a positive impact on business performance.