Globalization and Cultural Diversity
Demanding Culture: A Study of Excessive Competition and Innovation and
Managerial Implications for Multinational Enterprises
Abstract: This research aims at examining what level of business competitiveness and innovation will be best
suited for MNEs in the long -run. Author tests the relationship among excessive business competitiveness and
innovation and the dysfunction of MNEs, by using multiple regression analysis as the quantitative metho d.
The results show that both excessive business competitiveness and excessive innovation cannot influence the
ceasing of business operations. For managerial implications, managers in MNEs should always monitor to
what extent it is a ppropriate for organizational culture to create business competitiveness and innovation.
They can add rules in to the internal administration of MNEs, since more rules will block excessive
innovation. Regarding the limitations of the research, firstly, the databases did not categorize which
enterprises in the USA are truly MNEs or local enterprises. Therefore, the precision of predictive analysis
was diminished. Secondly, the data analyzed are not statistically significant, even though a normality test was
performed prior to the analysis. Thirdly, since the nature of business competitiveness itself is hard to measure,
it is difficult to find a good data representative of overall competitiveness. For future research, the author
suggests the future researcher should expend resources identifying statistically valid data for the missing
Keywords: multinational enterprise; organizational culture; innovation; business competitiveness;
JEL Classification: F230; L290; M160
1. Learning from the Past
“Now, young adults expect to be comfortable early; a kid’s first questions about a job are ‘What are
the pay, the hours, and the vacations?’” – Jared Diamond in his Collapse: How Societies Choose to
Fail or Succeed, page 58, line 33
Human beings are social creatures and need to interact with other people (Hofstede et al., 2002).
Economists generally assume that all of us are rational, and we all have reasons for our actions. A
book “Collapse: How Societies Choose to Fail or Succeed” by Jared Diamond profiles civilizations
that collapsed (mostly) due to human greed resulting from potential competition and, surprisingly,
innovation. It is of great interest to researchers to learn the reasons why ancient civilizations at their
paragons faced imminent demise and, more importantly, what were the harbingers portending each
civilization’s impending collapse. Were these civilizations in general overly focused on work and
productivity? It is dubious to assume that all humans were born greedy. Or, is there a common factor
that plausibly shapes us into the way we are today? Diamond (2005) concentrates much attention on
1PhD Student in Management Science, Faculty of Business Administration, Turiba U niversity: Riga, Latvia, +37124804181,
+37167619152. Corresponding author: firstname.lastname@example.org; email@example.com.