The Company’s Information System as a Factor for Cultural Differences in Multinational Companies (Part 3 of 3)

Edited by: Yara Mohamed, Mona Timor Shehata

Published by: Amira Haytham 

A key factor with definitely internal origin for the organisation is the information system in the company. Essentially, this system is a set of interconnected elements (components) for gathering, processing, and presenting data and information to help achieve the company’s goals. The main functions of a given company’s information systems are the following: securing the transactions, process control, and activities automation; ensuring routine and strategic managerial solutions; providing the necessary information to the non-managerial staff, opportunities for communication between the employees, and the units and coordination of the activities.

As for the human factor, it is both the subject of this system—since its work is related to gathering, processing, and using the data—and its object—since the information gathered with this system is related to the mentioned human factor.

The things listed above give a good reason to claim that the successful managing of the human factor requires the managerial team of a given organisation to pay serious attention to not only the physical health of the organisation’s employees, but also to their mental state and health. This is achieved by taking into consideration the interconnection between the physical and mental states of the human resources employed by the organisation.

Existing cultural differences within a transnational company place specific requirements to the company’s managerial activities as a whole. These requirements are at the heart of the existing and currently in use various management practises and styles, and the background of the managerial staff. Serious attention needs to be paid to the attitude of the human factor concerning their conception of fate.

Different nationalities (or cultures) have different views on fate, which requires of the managerial staff to take

The existing cultural differences caused by the external and internal factors lead to the four distinct management styles: exploitative authoritative; benevolent authoritative; consultative; and participative group.

  • Exploitative authoritative: typical feature of this management style is autocratic leadership, where employees are motivated by punishments and only occasionally by rewards. In this management style, communication goes downhill; i.e., there is a lack of horizontal communication. Teamwork is limited and the control over decision-making is in the hands of the senior management.
  • Benevolent authoritative: characteristics of this management style is very similar to those of the exploitative style; however, the benevolent style is more of a patronage-based type. When applied, the employees are given more freedom compared to the previous style. Despite that, the scope (the limit) of interaction, communication, and decision-making are determined by the management team.
  • Consultative: the case of this management style, employees have more opportunities for interaction, communication, and decision-making. They (the employees) are given the role of consultants, but despite that the final decision is made by the management team of the transnational company.
  • Participative group: The typical feature of this management style is active encouragement of the employees to participate in teamwork. They are given the opportunities to set on their own the goals, as well as to make decisions, improve their work methods, and assess the results of their work. In the case of this management style, communication is vertical and horizontal.

The classic management styles are now unsuitable for the current conditions of development of the world and the business organisations in particular, although they brought good results in the past. The problem of leadership and management style in the transnational companies is becoming more multidimensional in the context of the dynamic social and historical changes which occurred in the last decade of the 20th century. The transition from the industrial to the information age forces us to forget the bureaucratic type of organisations and increases the necessity of coping with the crisis in the adaptation to the changing external environment. The new trends in effective organisational culture management set a requirement for discussing and solving key problems, such as:

  • Emphasizing human potential management instead of on the strict resource structuring system.
  • Using the advantages of horizontal organization, rather than the hierarchical one.
  • Strategic management and new organisational philosophy, instead of short-term planning of profits


These problems are also the main challenges to human capital management in the information age. The ongoing changes in human capital management caused by the existing cultural differences inevitably lead to changes in the value, meaning, and importance of the management process in the organisations.




Martin, R., The 3 Simple Rules of Managing Top Talent, published on: 24 February 2017., accessible at:

A mental state is a state of mind that an agent is in. Most simplistically, a mental state is a mentalcondition. It is a relation that connects the agent with a proposition. Several of these states are a combination of mental representations and propositional attitudes.

Mental health: a state of well-being. Mental health is defined as a state of well-being in which every individual realizes his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to her or his community.