AN EMPIRICAL INVESTIGATION ON CONSIDERATION OF MULTICULTURAL PERSPECTIVES FOR GLOBAL BRAND MANAGEMENT IN MULTINATIONAL

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1 AN EMPIRICAL INVESTIGATION ON CONSIDERATION OF MULTICULTURAL PERSPECTIVES FOR GLOBAL BRAND MANAGEMENT IN MULTINATIONAL CONSUMER BANKS OPERATING IN THE UNITED STATES Shanmuganathan, Gehan (T.Reuters Researcher ID: C ) Metropolitan College of New York Abstract This mixed study design made an academic effort to understand the consideration of multicultural perspectives for global brand management in multinational consumer banks operating in the United States. One hundred and sixty (160) sample units were drawn from all the levels in organizations in collecting data for the final analysis. Results suggest that multinational consumer banks significantly consider multicultural perspectives of immigrant employees when designing global brand strategy. However, certain critical perspectives at the time of application revealed from the study are discussed in the paper. The findings have important implications for effective leadership and global brand strategy development. Introduction The importance of using multicultural perspectives of immigrant employees in multinational consumer banks has become a paramount importance for many leaders in building their corporate brands in consumer banking industry. Customization of brand offer of aforementioned banks based on the respective market dynamics, should be the corporate effort in today s business context for success (Amba-Rao, Petrick et al. 2000). Leadership to manage employees in multifunctional teams and the appropriate guidance to utilize organizational resources such as people, funds, materials, and machines, including the brand equity achieved, in

2 2 achieving global brand success have been key considerations in this exercise (Bennis 2007). In addition, leadership is another variable in achieving global brand success, especially, leaders capacity to understand the market dynamics that influence effective branding is critical when dealing with international business (Ulrich and Smallwood 2007). Leaders in many multinational consumer banks are resourced with their existing immigrant employees from different countries to customize their brand offer. These organizations are equipped with the appropriate strategy, systems, procedures, and governance for leaders to utilize the immigrant employees cultural aspects to design and develop their brand offerings in international terrains (O'Neill Jr, Hershauer et al. 2009). Therefore, the focal concern of this study is to investigate whether leaders consider multicultural perspectives such as values, beliefs, religion, taste, rituals, and symbols of immigrant employees in multinational consumer banks operating in the United States that could significantly influence global brand management in order to reap above-average profits. According to findings, it was also pursued to explore what multicultural factors and their degree of the implication that influence the effective global branding success. Research Questions The main research question that the author interested in pursuing is What multicultural perspectives (values, beliefs, attitudes, education, religion, myths, colors, taste, and rituals) are considered when designing global brand strategy by multinational consumer banks operating in the United States where there immigrant employees are employed? Further, author investigated the magnitude of the consideration of each of the multicultural factors in comparison with indigenous consumer banks, and their implications to the industry.

3 3 Research Hypothesis Hypothesis 01 effective leaders consider cultural factors such as values, beliefs, education, religious values, symbols, and myths of immigrant employees of multinational consumer banks operating in the United States in their global brand strategy development. Hypothesis 02- Multinational consumer banks operating in the United States utilize multicultural perspectives such as values, beliefs, education, religious values, symbols, and myths of immigrant employees in their global brand management compared to indigenous consumer banks operating in the United States. Hypothesis 03- Charismatic leadership style is the most effective management style when considering cultural factors such as values, beliefs, education, religious values, symbols, and myths of immigrant employees in their global brand management. Methodology This study using a mixed, non-experimental, correlation (explanatory) and causalcomparative (exploratory) cross-sectional survey research design examined the explanatory variables (global brand management, cultural perspectives such as values, beliefs, attitude, colors, taste, myths, rituals, and symbols of immigrant employees, and effective leadership) to determine, if leaders consider immigrant employees cultural perspectives in designing global brands? Finally, grounded theories such as brand management, leadership, international management, and cultural perspectives were pursued.

4 4 The designed sample size is 60 consumer banks branches (30 local banks and 30 multinational banks) operating in the United States. Data collected through a questionnaire were used to study the prevailing dynamics and to extrapolate the behavior of the dynamics in the future. Sample units are drawn from three strata and they are senior managers in multinational consumer banks operating in the United States, immigrant employees employed at multinational consumer banks operating in the United States, and brand managers employed in multinational consumer banks operating in the United States. Finally, regression analysis and correlation were applied in quantifying the findings. Results Total number of participants was 175of which 160 were valid responses. The valid responses, those who completed survey in its entirety, were used to analyze. The response rate was 91.43% which a satisfactory level according to the survey designed. The responses were evaluated to assess the number of responses in favor of consideration of cultural factors between multinational and indigenous consumer banks, when developing global brand strategy. It is reported that, while indigenous banks responded 12 Yes (13.8% from total responded yes) and 23 No (36.5% from total responded no) to the question, multinational banks responded 75 Yes (86.2% from total responded yes) and 45 No (63.4% from total responded no) for the same question. The data suggest that indigenous consumer banks and multinational consumer banks both consider immigrant employees cultural factors when designing their branding strategy either locally or globally. However, multinational consumer banks significantly consider immigrant employees cultural factors over indigenous consumer

5 5 banks. Further, out of total multinational consumer bank respondents, 34.78% said they do not consider cultural factors when developing global branding strategy. The analysis of data on responses to assess what factors the indigenous and multinational consumer banks use when designing their brand strategy and in what degree they are used were assessed. The responses were reported on a scale of 1 to 4. Data suggested mostly used cultural factors by the multinational consumer banks in a higher degree are beliefs, colors, symbols, and myths with a descending weight compared to other factors such as values, attitudes, taste, and rituals that constitute relatively lower magnitude of the cultural importance for global branding. Further, values of immigrant employees of multinational consumer banks are not considered as significant as other cultural factors. Comparatively, indigenous consumer banks use values as the most critical cultural factor in a higher degree compared to multinational consumer banks. In summary, the results of the statistically treated data suggest that there is a significant consideration of cultural perspectives of immigrant employees in multinational consumer banks compared to indigenous banks. Table 01 Correlation between Charismatic Leadership and Cultural Factor Consideration CLS CFC Charismatic Leadership (CLS) Pearson Correlation Sig. (2-tailed) Sum of Squares and Crossproducts Covariance N 20 4 Cultural Factor Consideration (CFC) Pearson Correlation Sig. (2-tailed) Sum of Squares and Cross E+08

6 6 products Covariance E+07 N 4 4 According to the statistical treatment using Pearson two tailed correlation (see Table 01), it is reported that there is a positive correlation between charismatic leadership and consideration of cultural factors with a positive value of.60. This establishes that charismatic leadership style is the most effective style when considering cultural factors of immigrant employees in multinational consumer banks global brand management. The correlation between multinational and indigenous consumer banks utilization of cultural perspectives for branding is tested on Pearson correlation two tailed test. Accordingly, statistics indicate that there is a positive correlation between the two variables with positive value. (r=.73, p two tailed >.05). Hence, this concludes that multinational and indigenous consumer banks both utilize cultural perspectives of their immigrant employees significantly in their branding purposes. Table 02 Multi Regression Analysis on influence of Charismatic Leadership, Management Cultural Factor Consideration, and Type of Commonly Used Leadership Style on Effective Global Brand Effective Global Brand Management (V4) Charismatic Leadership (V1) Cultural Factor Consideration (V3) Types of Commonly Used Leadership (V2) Pearson Correlation VAR VAR

7 7 Sig. (1- tailed) N VAR VAR VAR VAR VAR VAR VAR VAR VAR VAR As a result of a multi regression analysis performed (see Table 02), it suggests that there is a correlation between charismatic leadership, effective global brand management, and cultural factor consideration. However, there is a negative correlation between the effectiveness of the global brand management and commonly used leadership styles. Discussion The data suggest that compared to indigenous consumer banks, multinational consumer banks reported a higher cultural diversity. The consideration of the cultural perspectives such as values, beliefs, attitudes, education, religion, myths, colors, taste, and rituals when developing global brands is significant in multinational consumer banks compared to indigenous consumer banks. However, out of total multinational consumer bank's respondents, 34.78% said they do not consider cultural factors when developing global branding strategy. Hence, the conclusion is that despite the degree of consideration of cultural perspectives of immigrant employees in multinational consumer banks, it is not considered with a significant magnitude when developing global branding strategy. This phenomenon validates the previous seminal investigations

8 8 conducted by Zheng (2009), Tyler (2009), Snow (2005), and Sebenius (2002). These authors argued that despite the high importance of using multicultural perspectives in global brand management in multinational organizations, these cultural factors were given minimum significance in using them for global brand management. Mostly used cultural perspectives in a higher degree by the multinational consumer banks are beliefs, colors, symbols, and myths compared to other cultural factors such as values, attitudes, taste, and rituals that constituted a higher degree of the cultural importance for global branding. However, according to the findings, it is revealed that values of immigrant employees of multinational consumer banks are not considered as a significant cultural factor compared to other factors. Indigenous consumer banks use values as the most critical cultural factor in a higher degree compared to multinational consumer banks. Indigenous and multinational consumer banks both consider employees cultural factors when designing their branding strategy either locally or globally. Therefore, it is apparent that multinational consumer banks do not consider the most critical cultural factors such as values and attitudes that play a critical role in global brand strategy development, compared to indigenous consumer banks. However, this phenomenon contradicts with some of the early seminal work in the similar area done by many academics (Vadivelu, M. 2008; Whiteaker, 2006; and Small, 2008). They argue that multinational organizations use values and attitudes as most critical cultural factors used in global brand management compared to indigenous organizations. The key focuses of the indigenous banks are; market penetration, new-product development, and diversifications as opposed to multinational consumer banks operating in the

9 9 United States (Morhart, Herzog et al. 2009). However, the businesses need to go across the national boundaries to explore substantial market opportunities especially in emerging economic regions in the world. Therefore, it is evident despite the point proven in the study based on the statistical analysis that, the current world business context demands even for indigenous consumer banks to develop their entry strategy to enter international markets that have high business potential for growth and survival. Hence, considering today s business context requirements, it is vital for indigenous banks also to consider immigrant employees cultural factors when conceptualizing their global or local brands for international markets in order to customize the marketing offer. The other most critical consideration of the author is the maintenance of the human resources data base that maintains information on cultural factors of immigrant employees for global brand management. The recorded responses indicated out of total number of respondents who are 160, 40.9% responded saying yes they have a methodology to maintain information on cultural factors, while 59.1% responded saying that they do not have. Therefore, the data suggest that multinational and indigenous consumer banks both must maintain a human resources data base to collect, analyze, and retrieve information for their brand management either locally or globally in order to manage their respective brands effectively. Further, it would be a cost effective methodology for organizations to use these data as secondary data source if the requirement arises to conduct a research on cultural factors for their marketing programs in their respective local or global markets.

10 10 Commonly used leadership style also was assessed in relation to the responses provided and it is reported that commonly used leadership style in the multinational consumer banks is situational leadership style (delegating leadership style with the recorded percentage of 29.13% followed by coaching 25.59%, directing 22.89%, and facilitating 22.38%). Further, based on correlation two-tailed test conducted between charismatic leadership style and commonly used leadership style, statistics suggest that there is a negative correlation between the variables in discussion. This negative correlation value is Hence, it is revealed based on statistics that charismatic leadership could not be the commonly used leadership style used in multinational consumer banks. The outcome of the research based on the data analysis contradicts with previous seminal findings of Bacon (2009) in which he establishes an argument that the most effective leadership style in global brand management is the charismatic leadership style. He further argues that due to the charisma of the leader, the followers willingly contribute to achieve organizational goals, especially the global brand success. On the contrary, this study reveals that delegation of the leader will induce the commitment level of the followers, especially in succeeding global brand management in multinational consumer banks. Finally, based on a correlation analysis, it is reported that there is a positive correlation between charismatic leadership and consideration of cultural factors with a positive value of.607. This establishes that charismatic leadership style is the most effective style when considering cultural factors of immigrant employees in multinational consumer banks global brand management. However, based on the study findings, the researcher is confronted with a contradicting two phenomena. These contradicting two phenomena are according to the survey conducted, the respondents reported that it was the charismatic leadership style they could

11 11 perceive mostly applied in their respective work organizations according to their understanding, but contradicting the same at the later part of the survey the respondents reported that most commonly used leadership style is delegating leadership style. This was captured scientifically used Multifactor Leadership Analysis (MLA). Niranjan, Michael, and Grasse (2008, 2009, and 2009) argue that charismatic leadership style is the most effective leadership style that much congenial to human factors in organizations and these types of leaders get the commitment of their followers using their charisma. Hence, their argument validates the above research question related findings. However, the clarity of the findings in this specific area is challengeable. Limitations and Areas of Further Studies Despite the outcome of the study became interesting, there were certain limitations in conducting the entire investigation. The critical limitation was the lack of literature and previously conducted seminal work on key variable, which are cultural factors that influence the entire phenomenon in this study. Hence, the author was confronted with a limitation to measure this variable in-depth. Finally, author identified certain areas of further research that needs to be conducted in search of real-world knowledge in this specific phenomenon. Therefore, additional research seems needed on leadership for global brand management mismatch between most commonly perceived leadership style and commonly applied leadership style. As noted above in the discussion, it is impossible that this mismatch could be rectified through one study conducted. While there have been a few studies on this issue, there is no consistent evidence. Other two areas of investigation are plausible on factors affecting global brand management and a comprehensive investigation on all the variables that influence this entire phenomenon.

12 12 Therefore, it is recommended that the influence of not only the mediating variables (effective leadership and application of multicultural perspectives of immigrant employees in global brand management) but also of independent variable, which is effective global brand management on above-average returns for corporate growth, and survival need to be explored using a longitudinal study. Implications and Relevance to Business Industry Branding is one of the key areas that leaders have to manage efficiently in delivering stakeholder values through brand success. Efficient management of brands, especially in emerging economies accounts for cultural factor consideration in order to customize the brand offer. Hence the appropriate understanding of the said cultural factors is of high importance in carrying out this exercise. The opportunity that the leaders have in today s business context, especially multinational organizations where there immigrant employees are employed is a great wealth to capture their cultural perspectives for global brand strategy development. Based on the study findings it is apparent that leaders of multinational consumer banks and indigenous consumer banks operating in the United States could make use of a higher mileage in delivering stakeholder value through effective global brand management with a high customization according to the local and international cultural taste. Therefore, this paper crafted could be of high importance to the consumer banks industry to collect, store, and use information related to cultural perspectives of immigrant employees for their local or global brand management. These areas they could consider in order to reap the highest business yields are, leadership, cultural perspectives, and brand management in delivering stakeholder values.

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