The Impact of Organizational Culture on Employee Job Satisfaction

in Transnational Corporations: Challenges and Strategic Responses

Runyi Chen

School of Social and Public Administration, East China University of Science and Technology, Shanghai, China

Keywords: Transnational Corporation, Organizational Culture, Job Satisfaction.

Abstract: Transnational corporation plays an important role in multiple aspects under globalization circumstances by

not only promote the integration and development of global economy, but also increase the communication

between different cultures Organizational culture represents a company’s opinion of value, and it’s

meaningful in increasing the employees’ job satisfaction and promote company development, and a good

organizational culture can improve employees’ job satisfaction in the balance between institutional norms and

humanistic care and individual development and collective goals. It has been found that organizational culture

can influence many factors that have a close relationship with the employees’ sense of belonging and

expectation, which can form the employees’ job satisfaction. A balanced organizational culture based on the

typical environment should be built in those corporations.

1 INTRODUCTION

Transnational corporations are those companies

which are based in their own country, establishing

branches or subsidiaries around the world through

investing in foreign countries and engaging in

international production and business activities. They

promote the flow of capital, technology, and

productivity internationally, and influencing

international economic relations. Those companies

play an important role in multiple aspects under

globalization circumstances by not only promoting

the integration and development of the global

economy but also increasing the communication

between different cultures. However, while

globalization brings more market and resources, more

competition and issues of culture differences occur.

Transnational corporations should be familiar with

the different environments and potential risk in their

scope to develop stably and provide attractive

products. On the other hand, a harmonious multi-

culture working place encourages the employees to

work efficiently and create more income. This poses

a requirement for the company to adapt and be

tolerant of different cultures.

Organizational culture represents a company’s

opinion of value, and it’s meaningful in increasing the

employees’ job satisfaction and promoting company

development. A successful organizational culture can

motivate the employees’ enthusiasm and creativity. It

can also enhance a sense of belonging to bring

satisfaction. From the early 20th century to the 1950s,

employees are considered as production tools. With

the emergence of research such as the Hawthorne

experiment during 1930s to 1960s however,

researchers found that productivity can be affected by

social psychological factors, and the employee sense

of belonging and informal organizations are

beginning to be valued. In the 1980s, researchers

found that as a shared value, belief and behavioral

norm, organizational culture decides how the

members think, act and solve problems in the group

(Denison, 1996). Since the digital age, diversity and

inclusiveness become increasingly valued, people

pay more attention to cultural factors in corporations.

46% of Generation Z and 47% of Millennials globally

refuse job opportunities due to culture and value

mismatches. The number was only 30% in 2019, and

there’s also 49% young employees consider

organizational culture to be one of the top three

factors in their career choices (Deloitte, 2023). The

purpose of this study is to find out the relationship

between transnational corporations’ organizational

culture and job satisfaction, and how the relationship

affects a company’s growth. By understanding how it

works, advice on efficient management and cultural

construction policy could be put forward.

Chen, R.

The Impact of Organizational Culture on Employee Job Satisfaction in Transnational Corporations: Challenges and Strategic Responses.

DOI: 10.5220/0013995500004916

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on Public Relations and Media Communication (PRMC 2025), pages 523-528

ISBN: 978-989-758-778-8

523

2 LITERATURE REVIEW

Organizational culture was defined as an information

system shared inside an organization, which includes

its opinion of value, belief and code of conduct

(Mansaray and Mansaray, 2020). Unlike an

organizational climate, which focuses on member’s

subjective experience and feelings of an

organization’s policy and program, organizational

culture pays more attention to the overall spiritual

outlook and value system. Therefore, qualitative

methods such as interview and case study were used

more often to reveal the essential characteristics.

According to research of organizational culture’s

measurement however, the differences reflect in

practice, including organizational rituals, heroes, or

symbols (Robert and Rousseau, 1988). These

common practices can be observed directly and

reflects the point of view of the organization’s

founder or leader, not the other individuals’. By

evaluating quantitative methods such as paying

attention to individuals’ reaction and the role of

norms and expectations, existing research has shown

how organizational culture plays its role (Kiefer et al.,

2021). Expectations and code of conduct not only

shape the employees’ behavior but also has an

influence on their sense of identification and

belonging. Multiple role employees play in family

and at work can cause work overload and role

conflicts. So, when the employees’ individual

behavior matches with the organization’s

expectations and norms, they may experience less

pressure and higher job satisfaction. It shows that

organizational culture is not only a steady state of

norms, but also an interactive process that can

influence the employees’ behavior and attitude

through ways like excitation mechanism and values.

As previous study has pointed out, culture is a set of

shared basic assumptions learned by a group when

solving external adaptation and internal integration

problems (Fridan and Maamari, 2024). It’s

established by the founder or early leader, forming

shared experiences by solving problems, and can be

reflected by an organization’s artifacts, espoused

values and basic underlying assumptions.

Organizational culture can provide identity

recognition and stability to the employees and reduce

anxiety by providing predictability of behavior. But

some organizational cultures like those have great

pressure and bureaucratism in management will help

create an inactive working atmosphere and have a

negative impact on performance (Judge et al., 2020).

A rigid organizational culture cannot provide

employees with a sense of security; therefore,

employees’ satisfaction will go done and pursuing

risk avoidance instead of effectiveness and new ideas.

Job satisfaction usually refers to employees’

emotional response or subjective attitude towards the

work environment, role content interpersonal

relationships and organizational policies (Sang et al.,

2019). In academic research, job satisfaction is

considered as an important variable that measures

employees’ attitude, since it originates from their

comments on the job and working experience. When

the job fits the employees’ individual needs and

interest and satisfies them in various fields like

working conditions and interpersonal cooperation,

the employees will show a high level of job

satisfaction. Otherwise, its level will go down.

Basically, the impact mechanism of job satisfaction

has shifted from single factor analysis to multiple

interaction research, and it influences employee

behavior through the mediating effect of

psychological capital, which includes factors like

self-efficacy, hope and optimism (Taylor, 2024).

Organizational culture influences employees’

feelings of the meaning of work through shaping

values and forms a cooperative effect with other

factors such as leadership, excitation and so on. On

the other hand, employees with high satisfaction are

more likely to maintain those cultural values, while

low satisfaction employees may passively resist and

spread negative subcultures. When the satisfaction of

most employees remains at a low level, the culture

itself will gradually change, and high turnover rates

can force companies to change the strategy. The

relationship between employee’s job satisfaction and

organizational culture is partly a process of mutual

influence, but cultural factors usually have stronger

structural influence and play a decisive role.

Currently, serval of the research has confirmed the

impact of organizational culture on job satisfaction.

This study focusses on how organizational culture

plays a role in influencing job satisfaction and further

impacts the unity and efficiency of the organization.

Research shows that psychological capital like

hope, effectiveness, resilience and optimism works

on relieving stress and reducing turnover rate

(Maharani et al., 2022). The employees who believe

in a sense of control over their career and have high

efficiency will have lower intention to quit. What’s

more, psychological capital also shows a positive

effect on employees’ job satisfaction and

performance. Overall organizational performance can

be improved by developing employees’

psychological capital to dealing with stress and

resignation issues. However, most research currently

default culture has a unidirectional impact on

satisfaction, and led by European and American

samples for research, which has a lack of cross-

cultural comparison.

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3 CORPORATIONS

The organizational culture of transportational

corporations supports their globalization strategy. It

is supposed to be able to coordinate and adapt

different parts of the company, whose cultural

characteristics not only need to carry its motherland’s

traditional culture but also integrate the local

characteristics of the host country.

3.1 Cultural Diversity

A multicultural team can bring many advantages to

the international corporation, such as being familiar

with different markets, providing service with

cultural sensitivity and having longer business hours.

However, these advantages can be offset by issues

that come from cultural diversity. Culture conflict is

a process where different organizational cultures

compete or oppose each other when they meet. It

includes not only the conflict of culture differences

between the company and its host country, but also

the one that happens in employees who have different

culture background. Most of the culture conflicts

originate from the culture differences of countries,

corporations and individuals. Due to the differences

in power distance, individualism or collectivism and

long-term orientation among different countries,

there are conflicts in management styles. At the

corporation level, different companies have different

values, behavioral norms and management styles. In

the process of cooperation and integration that often

occurs in multinational corporations, these

differences may come out and lead to conflict. What’s

more, due to the differences of system and legal

environment, some controversy may be caused, such

as some countries accepting relational commerce,

while western countries rely more on formal contracts.

Those conflicts and issues may lead to personality

differences and language barriers among employees,

which can cause communication barriers (Gerhart,

2008). Language and nonverbal differences lead to

misunderstandings and reduce collaboration

efficiency. Moreover, managers from different

cultural backgrounds will find it difficult to reach a

consensus, which delays the execution of strategies.

3.2 Managing Complexity

Transnational corporations often have complexity in

personnel management. Culture differences which

influence cross cultural teamwork is one of the most

important factors that affect management. Non-native

speakers may have limited expression and

understanding even when using a common working

language. Effective cross-cultural communication is

the key to intercultural management. Apart from

communication issues, employees of different culture

backgrounds can also differ in the method of decision

making, leadership style, employee motivation and so

on (Bourguignon et al., 2019). That requires the

transnational company to have a global human

resource management ability, which holds an

inclusive attitude for employees to adapt to different

cultural environments.

On the other hand, transnational corporations also

face complexity in the whole management process.

Apart from power struggles within multinational

corporations (Mayer, 2010), different places will

have different rules of politics and laws, and customer

preference differences also need to be taken into

consideration for overall balance. Companies must be

familiar with those rules, such as the host country’s

admission of foreign investment, the structural

differences between the market and developed

country, or how the informal institution like family

business network in the target market restrict or

empower the company’s strategy. There is a mutually

circle between the challenges of personnel

management and overall management. Politic risks

will increase the company’s hesitation of expanding,

such as the decision on expatriation, and the

hesitation will cause the company to miss out on

market opportunities and resources. Cultural conflicts

may finally lead to team division and block the

execution of strategics. Companies need to keep

balance in management, ensuring unification while

also having flexibility to adapt to local markets.

4 EMPLOYEE JOB

SATISFACTION

As an important variable that affects job satisfaction,

organizational culture can shape the employees’

feelings and behavior during work. A positive

organizational culture can enhance their employees’

sense of belonging and meaning by creating an open

and collaborative atmosphere and clarifying its value

orientation. Giving support to employees’ career

development can also meet the needs in the growth of

both individual and the organization.

4.1 Enhancing Team Identity

To reduce cultural conflicts, companies can consider

providing a better working atmosphere and sense of

value. Organizational culture can create a typical

working environment by both explicit institutions and

implicit norms. Things like configuration of facility,

space layout and management system in the working

place can build the objective working conditions.

The Impact of Organizational Culture on Employee Job Satisfaction in Transnational Corporations: Challenges and Strategic Responses

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Planning a workstation and a flexible attendance

system can reduce the employee’s physical fatigue

and pressure. On the mental side, the communication

mode and decision-making mechanism advocated by

culture can affect the emotion of employees directly.

Some management design is used to eliminate

oppression and enhance an individual’s sense of

control over the working environment, such as a

flatter management structure without too much layer

or an open feedback channel. The flat management

structure can shorten the time for information to pass

on, and the feedback channel ensures employees’

demand can be fully expressed. It’s easier for

employees to build a sense of security when the

organizational culture pays attention to respect and

tolerance, and they will be better adapting to the

working environment.

Organizational culture reaches the balance

between individual and collective goals though the

infiltration of its core concepts, and the advertising

and guidance not only stays in the text, but also in the

practical part, like decision making behavior,

resource allocation and the reply of crisis. Employees

who highly agree with the sense of value in the team

will have a significant positive correlation between

their sense of work and organizational identity.

4.2 Internal Construction

The employees’ expectation of individual growth can

be affected by the organizational culture through

resource allocation and the mechanism of opportunity

supply. A comprehensive training system should

cover skill enhancement, learning new knowledge

and mind expansion. Whether the organization

willing to invest in providing such systematic

learning resources shows its will on investing in

human capital. When the employee feels, the

promotion is related to the enhancement of personal

ability, the consistency between career goals and the

development of the organization enhanced, and the

job satisfaction increased. Companies can make

efforts in building a clear promotion channel or

diversified development way to support their

employees’ needs in development of both individual

and the organization.

By deciding role position and interaction rules in

the organization, organizational culture influences the

behavior patterns of a group. Having clear boundaries

of responsibilities and designing standardized

cooperation processes can reduce the problems in

communication and overlapping tasks and make

working more effective. What’s more, the

establishment of cultural consensus can resolve

cognitive conflicts caused by differences in values.

The effectiveness of conflict management

mechanisms depends on inclusiveness. Identity and

values should be fully considered during conciliation,

and by enhancing mutual understanding and respect,

solution accepted by each side could be found (Lok

and Crawford, 2004). Companies can set up formal

and informal communication platforms, such as

meetings over multiple divisions and communities

related to interests. Whether the appeal channel is

smooth enough and the neutrality of mediation

processes decides the construction of guarantee of

good interpersonal relationships. Team cohesiveness

can be fully turned into an important part of job

satisfaction when the members feel the sense of

effectiveness and belonging.

5 CHALLENGE AND COPING

STRATEGIES

Based on the content above, the challenges

transnational corporations faced in culture can turn

into some issues in management. Individuals of

different culture background have differences in

language and expression, nonverbal symbols and

logic. Some people try to give their opinions clear and

directly, while others prefer to imply and express

indirectly. This difference can meet regularly in an

international corporation, and it can cause the loss or

incorrect transmission of information, increase the

cost of communication and reduce efficiency. On the

other hand, traditional culture can shape people’s

behavior in work, then affect team cooperation mode.

For example, people come from individualistic

culture values making decisions and having goals on

one’s own, while those who come from collectivist

culture emphasize making decisions together and

shared responsibility. When these people cooperate in

the same organization, there may be conflicts because

of the differences of the division. The communication

breakdown and differences in cooperation provide

significant resistance to the operation of the

organization.

Deeper cultural differences may be reflected on

things like the attitude to authority and risk, or ethical

judgments. Some cultures may emphasize hierarchy

order and rules while others advocate for innovation

and an equal environment of communication. If

members of the company don’t have enough

sensitivity and attention to those differences and they

are not properly addressed, conflicts within the

organization will occur.

However, corresponding strategies can be made

for international corporations to face those challenges.

The management architecture can be designed to fit

in the adaptation of organizational culture and

leadership strategy. According to existing research,

when bureaucratic culture is combined with

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transformational leadership, or innovative culture

meets a service-oriented leadership, employee

organizational commitment and job satisfaction will

be increased. The style of leadership needs to be

adapted to the characteristics of organizational

culture to maximize the company’s effectiveness

(Kazan, 1997). When conflict occurs, the different

types of management models are also adapted to the

certain culture. In the adversarial model, conflict is

treated as a process that needs to be solved by

competition, which reflects the characteristic of

individualism. Some organizations will solve the

conflict in a more harmonious way by avoidance and

tolerance, which may be based on a collectivism

culture background. The regulatory may be more

common in cultures that emphasize rules and order,

using bureaucratic methods to ensure the conflict

resolution conforms to established norms (Schein,

2010). Leaders of those transnational organizations

are demanded to have a sensitivity of culture to adjust

the atmosphere and establish a localized strategy. The

construction of organizational culture in transnational

corporations can start from two aspects: establishing

an adaptive organizational structure and developing

personal cultural accomplishment. Managers can

identify key contradictions in the corporation by

measuring cultural characteristics and satisfaction

through surveys to adjust the strategies.

6 CONCLUSION

Job satisfaction is the result of multiple factors, which

require organizations to meet the employees’ needs

through institutional design, as well as the flexible

leadership and cultural shaping abilities of the

manager. As an important factor that affects job

satisfaction, organizational culture can influence the

work atmosphere, career development opportunities,

interpersonal relationships and the sense of value

inside the company directly. Since those factors have

a close relationship with the employees’ sense of

belonging and expectation, they play a significant

role in influencing job satisfaction. In the working

environment of transnational corporations, where

they have the characteristic of multiple culture

background and complex management,

organizational culture also plays a coordinating role

by deciding the style of leadership and ways to

resolve conflicts. To increase job satisfaction and

develop cultural strategies that are more conducive to

management and working efficiency, managers of

transnational corporations should build an inclusive

working atmosphere and shape the value based on

analyzing both local and the host country’s culture.

Good organizational culture can improve employees’

job satisfaction in the balance between institutional

norms and humanistic care and individual

development and collective goals. The diversity on

culture and complexity in management make

transnational corporations a special place to integrate

management factors. Thus, the organizational culture

of those transnational corporations should be

designed to balance the differences and conflicts and

root on the company’s typical working environment.

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