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Project 5: Managing a Global Business

Management issues can become quite complex, especially when they arise from global operations. As part of an international task force, you will investigate several nuanced cases that touch on the finer points of global management.

Step 8: Review the International Expansion Case

URGENT MESSAGE (Special Assignment)

From: Janet Yoon, CEO, Colossal Corporation

To: International Task Force

Team,

I know it’s been a while since I checked in, but I’ve appreciated all of your dedication and progress in these cases. Since you’ve successfully addressed so many complex issues, I’d now like you to weigh in on the  International Expansion case file . This final case involves issues arising from NBD’s recent international expansion into Asia.

International Expansion Case

Colossal Corporation maintains a subsidiary in Serafini, a small country in Eastern Europe. This subsidiary is incorporated in the state of Delaware as New Brand Design, Inc. (NBD), a company that designs, brands, and manufactures innovative electronic products and markets and distributes them for resale across the globe. NBD has been admitted to conduct business in Serafini.

NBD recently expanded its operations beyond Serafini and into Western Asia. It has attained all government permits and successfully opened a new facility in Asia. The CEO of Colossal Corporation, Janet Yoon, is worried about certain reports concerning NBD’s expansion into Asia. The CEO has submitted the following issues to the international task force and requires solutions immediately:

1. The local employees in Asia seem to spend considerable time chatting with each other instead of getting right to work in the morning. Not only that, but when meetings are scheduled it seems that everyone is late, sometimes significantly late.

2. In filling a recent vacancy in the new Asian facility, the local who headed the hiring committee insisted on hiring his uncle. The uncle appears to be qualified, but the CEO is worried about nepotism and whether that creates ethical issues for the company.

3. The various suppliers in Asia with whom NBD has supply contracts for the components that NBD uses in its manufacturing do not always honor the specific terms of the contracts that NBD has entered into with them. Particularly where market prices have shifted significantly, they insist that the contracts represent a partnership and that each partner should help protect the other from losing money on the deal. They say that the relationship is more important than the contract terms.

4. Four weeks ago, NBD’s Asian facility introduced an employee incentive plan with annual awards for outstanding individual performance by employees. Employees were encouraged to nominate a deserving colleague, or they could nominate themselves. So far there have been no nominations. The CEO, Janet Yoon, wants to know what’s wrong and whether the incentive plan should be scrapped.

Yoon would like the international task force to research and provide an analysis of the issues and recommendations on how to approach them.

To answer these questions, you may need to review  cross-cultural ethical business decision making  (specifically focus on the "Cultural Theory in Global Business" resources), and  country cultural differences , and will need to do some additional research on the internet and in the library to fully answer my questions.

Cross-Cultural Ethical Business Decision Making

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Management in the global arena involves addressing unique and difficult issues of culture and morality. Although general ethical frameworks may help you to assess management decisions in a cross-cultural context, there are unique questions that arise in global settings. The resources below provide guidance for situations involving conflicting ethical norms and customs of different cultures within the business context.

How an organization addresses unique situations involving ethics and customs will impact its success in the global arena. The first subtopic examines the role of ethical theory in global business. The second subtopic examines the role of cultural theory in global business.

Resources

Ethical Theory in Global Business

· Global Business Ethics

· Corruption in International Business

· Major Ethical Perspectives

Cultural Theory in Global Business

· Introduction to Culture and Business

· What is Culture, Anyhow? Values, Customs, and Language

· Understanding How Culture Impacts Local Business Practice

· Ethical and Cross-Cultural Negotiations

· Cultural Diversity

Country Cultural Differences

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In workplaces, as in communities and nations, people spending time together are likely to share certain values, attitudes, and beliefs. Because of this established culture, people at work may have developed certain preferences or orientations in the following situations:

· interacting and communicating with others

· working in teams

· making decisions

· responding to and evaluating risks and opportunities

· managing or attempting to resolve disagreements and conflicts

· interacting with those at different levels in the organization

· engaging in numerous other workplace activities

Those who have studied and compared societal cultures and their possible implications for the workplace have identified some differences that can be important for success.

Perhaps the leading expert on cultural differences and their potential implications for business is Geert Hofstede, a Dutch scholar who worked for IBM in the late 1960s. Hofstede's early research (1980) examined, compared, and categorized the culturally derived preferences of IBM employees in many countries. He, and other scholars who have followed in his path, created a classification scheme that differentiates country cultures across what were originally four dimensions, though they have since been expanded to include six.

In what is probably his best-known book, Cultures and Organizations: Software of the Mind (published first in 1991 and revised and republished in 2010 with his son Gert Jan and Michael Minkov), Hofstede presents a careful explanation of his work and its implications. Hofstede reminds his readers that "culture is learned, not innate" (p.6), and introduces the analogy of culture as "software of the mind."

Hofstede uses the layers of an onion to help convey the way culture manifests itself. Values are deep at the core or center of the onion and are very slow to change compared with the other manifestations of culture. Examples of common core values in US businesses include integrity, accountability, fairness, and excellence. Other layers of culture include our rituals (e.g., greeting with a firm handshake and direct eye contact), the heroes we honor (examples include Warren Buffett and Steve Jobs), and on the outside of the onion, the symbols that have special meaning for societal members.

Examples of U.S. Business Cultural Manifestations

Created by Christina Hannah

Using an analogy of culture as mental programming, Hofstede explains that we are each conditioned (or programmed) by multiple societal levels: national, regional, ethnic, religious, linguistic, gender-oriented, generational, socioeconomic, and professional. Values associated with these levels may or may not be in harmony. One consequence of these multiple sources of programming is that it can be difficult to predict what will influence a person's response or behavior in particular situations.

Our present interest is not in delving deeply into the causes and consequences of individual differences in values, attitudes, and beliefs, but rather to learn about those shared at a societal level. Hofstede explains that his extensive research, and that of others who have studied culture, make it possible to differentiate between and among national cultures using a set of dimensions. He originally proposed the first four dimensions in the list below, then added a fifth—long-term orientation (Moskowitz, 2009)—and later added indulgence as a result of further research by and insights from collaborators.

Here is a simple explanation of Hofstede's current six dimensions:

· Power distance (PDI)—In countries with a high power distance dimension score, we can expect those in lower level positions to respect or defer to those who outrank them. In other words, power is thought to come with position. In such cultures, employees may expect managers and leaders to make decisions and might be surprised or uncomfortable when asked for input. In countries with a low power distance score, we are likely to find that employees treat those they report to more as colleagues and hold the view that respect must be earned. There may, of course, be exceptions to this model (for example in military and paramilitary organizations). Not surprisingly, the United States's score on this dimension is relatively low at 40. The score for France is is 69. In comparison, the scores for Malaysia, Slovakia, Guatemala, Panama, the Philippines, and Russia are all above 93 (Hofstede, Hofstede, & Minkov, 2010, pp. 57-58). This means that, in general, we can expect employees in the United States to expect a more egalitarian workplace than may be true in other societies.

· Individualism or collectivism (IDV)—In countries with high scores for individualism (like the United States), you are likely to find a shared belief in developing strong individuals who are comfortable working and making decisions on their own. In such workplaces, you will probably find an emphasis on the importance of developing, recognizing, and rewarding individual contributions. In countries that score low on the individualism dimension, you are likely to find an emphasis on the community, team, group, or department (i.e., the collective). People may be embarrassed if they are singled out publicly for praise or recognition, because they strongly believe their success depends upon the support and work of others. For this dimension, the US score is the highest, at 91. The score for France is 71. The country with the lowest score is Guatemala, with a score of 6 (Hofstede, Hofstede, & Minkov, 2010, pp. 95-97).

· Masculinity and femininity (MAS)—The label used for this dimension may not be the best. The basic idea is that some country cultures place a relatively high value on competitiveness, assertiveness, achievement, etc. Such countries are given a high score for masculinity because these preferences and traits were historically associated with men more than women. Other country cultures place greater value on caring for others, cooperation, quality of life, etc. Such countries are given a high score for femininity on this dimension. Despite the problems with these unfortunate gender-based labels, when you step back and compare countries you will probably recognize that there are some where businesses seem to value competition over cooperation, achievement and success over quality of life, and so on. Japan has a masculinity (MAS) score of 95. The US score is moderate at 62. The score for France is 43. Sweden has the lowest score for this dimension, with a 5 (Hofstede, Hofstede, & Minkov, 20110, pp. 141-143).

· Uncertainty avoidance (UAI)—This dimension recognizes that there are differences among countries, which results in differences among the leaders of businesses that operate therein and the extent to which they are willing to take risks. In countries that are low in the uncertainty avoidance dimension, business leaders might be very comfortable exploring new opportunities and see this as the likely path to success. In other countries, this may not be the case. Sometimes those in country cultures that are highly risk averse (with high uncertainty avoidance scores) have a very good reason for their responses. There may be, for example, significant legal penalties for failure, including the possibility of being sent to jail in the event of bankruptcy or reneging on debts. The country with the highest score for uncertainty avoidance (UAI) is Greece at 112. France is relatively high, with a score of 86, and the US score is 46, indicating a tolerance for uncertainty and acceptance of risk-taking to achieve success (Hofstede, Hofstede, & Minkov, 2010, pp. 192-194).

· Long-term versus short-term orientation (LTO)—In countries with a high long-term orientation score, shared work values emphasize learning, accountability, and self-discipline. Patience and waiting to make a profit are acceptable. Creating and nurturing lifelong networks is valued. In contrast, those favoring a shorter-term orientation tend to focus on "the bottom line" and value achievement, freedom, and independent thinking. Quarterly and annual profitability are important. Korea, Japan, and China have high long-term orientation scores (100, 88, and 87, respectively). France has a moderate score of 63. In contrast, the US LTO score is low, at 26 (Hofstede, Hofstede, & Minkov, 2010, pp. 255-257).

· Indulgence versus restraint (IVR)—In countries with high scores on indulgence, you are likely to find people who value having fun and enjoying life. In the United States, for example, it is common to find that employees emphasize the importance of a good work-life balance and quality of life. The IVR score for the United States is relatively high (68) and for France is moderate (48). Pakistan has the lowest score (0) among the countries studied. Territories with the highest indulgence scores are Venezuela (100), Mexico (97), and Puerto Rico (90) (Hofstede, Hofstede, & Minkov, 2010, pp. 282 - 285).

A very important caveat when reading and thinking about Hofstede's work is to remember that the comparisons are at the societal level, rather than the individual level. In other words, in any country you will find individuals who are different from what you see suggested as the norm for the country culture. In fact, for any given dimension you may find yourself thinking "but this isn't what I'm like" or "this doesn't explain what happens in my organization." Those who have studied and compared country cultures ask you to suspend these responses temporarily and to try instead to look at a country as a whole, and then consider how it compares on these dimensions with other countries. When you adjust your imaginary lens to consider cultural differences from a broader perspective, you are able to discover things that may be helpful when explaining what happens when companies do business abroad, when people work together on country teams, and when they work together in multicultural, multinational organizations.

One challenge is that we are often less knowledgeable about our own shared country culture than we are about the cultures of others (Hofstede, 1980). This is because our culturally derived values and preferences are so deeply embedded that we may not be aware of how they influence our decisions and behaviors. Those who have worked or studied in a country other than their own are likely to have developed higher levels of cultural intelligence than those who have not had this experience.

The United States has traditionally tended to place strong emphasis on equality, individualism, risk-taking, assertiveness, achievement, and the opportunity to enjoy life (pursuit of happiness).

This brief introduction to the comparative work on country cultures and their potential consequences for individuals and their organizations, along with the Resources below, should help you understand the possible sources of confusion or conflict that could, if not anticipated and well-managed, result when multinational and multicultural team members work together. These issues may include training, coaching, mentoring, and effective leadership. Remember to consider as well the possible advantages associated with building and using teams with members who bring different country cultural perspectives to their work (Chakrabarti, Gupta-Mukherjee, & Jayaraman, 2009).

Check Your Knowledge

Question 1

Using Hofstede’s onion metaphor, what are the ways in which country culture manifests itself?

Question 2

What are the six dimensions of national culture identified by Hofstede? Describe each one briefly.

Question 3

Why is the study of Hofstede’s dimensions of national culture important?

Question 4

What is meant by the term Cultural Intelligence (CQ)?

Question 5

What are the four key capabilities held by people who have high CQ?

Question 6

Why is CQ important?

References

Chakrabarti, R., Gupta-Mukherjee, S., & Jayaraman, N. (2009). Mars-Venus marriages: Culture and cross-border M&A. Journal Of International Business Studies, 40(2), 216-236 http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=36587323&site=eds-live&scope=site

Hofstede, G., Hofstede, G.J., & Minkov, M. (2010). Cultures and Organizations: Software of the Mind (3rd. ed.). New York: McGraw Hill.

Hofstede, G. (1980). Motivation, leadership, and organization: Do American theories apply abroad?. Organizational Dynamics,9(1), 42-63. Retrieved from http://ezproxy.umgc.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=pbh&AN=5143098&site=ehost-live&scope=site

Resources

Hofstede shares some of his insights in  An Interview with Geert Hofstede , while  Hofstede's Five Dimensions of Culture  covers similar points addressed above. You might also want to read  Does Culture Matter? Refresher on Hofstede, Trompenaars, and Gesteland .

Although Hofstede is probably the most frequently cited theorist, there are substantial criticisms of his work such as  Mirror, mirror on the wall: Culture's consequences in a value test of its own design . Hofstede responds to criticism in  Who is the fairest of them all? Galit Ailon's mirror?

There are also alternative models to Hofstede's; the GLOBE project is one such alternative, explained in  GLOBE: A twenty year journey into the intriguing world of culture and leadership .

Cultural Intelligence  explains a model for understanding how well individuals might perform in cross-cultural settings. Examples of effective methods of success for cross-cultural teams are covered in  Teams, Cross-Cultural .

I am confident you will produce great work here. Great teams do great things.

Janet

In the next step, you will write your International Expansion report.

9: Prepare Your International Expansion Report

Using your outline and research notes write a report for the CEO. Be sure to meet the following requirements:

· Include APA-formatted in-text citations and an APA-formatted reference list (do not format the body of the report using APA style, just the reference list). See  references and citations  for details.

· Include a specific recommendation on what action, if any, the CEO should take based on your analysis and conclusions.

· Support your conclusion with references to cultural norms, strategy, and ethical theory and principles.

· The report should be no more than five pages (double spaced, 12-point font; the reference list does not count towards page limit).

· Title your file using this protocol: teamName_InternationalExpansion_date.docx.

References and Citations

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In your papers, you should provide sufficient, correctly cited support that substantiates your ideas.

Even research papers only use sources as support, not in lieu of original thought from you, the essay's author. Use sources that enhance your ideas, but don't let other people's work stand in for your own. If you're writing or presenting a research assignment, don't just assemble other people's ideas. Think of your sources as your big brothers backing you up in a fight, but not going in the melee instead of you. You should connect what you're writing to the source material, and then explain the source material's relevance. Don't let a quote just hang there unexplained, and never end a paragraph on someone else's words. Always, always tie up a quote with your own words.

You need to be fair and accurate: don't take quotes out of context or spin summaries to suit your own purposes. If the material you want to use doesn't really support your point, find other material that does.

The Graduate School standard is APA documentation. Reference your sources appropriately and accurately (not by the source's first name, for instance, and not by only one name if it was a group project). If you don't know APA documentation, check your APA guide, or go to the UMGC library, or search online for the example you need. Many people find the idea of citing or of using a particular format stressful, but it needn't be. It's finicky, and it's nitpicky, but it's really just following a template. If you can follow a recipe, you can follow these guidelines.

Resources

· APA Citations Tutorial

· APA Citation Examples

· Use Credible Sources to Support, Extend, and Inform an Original Thesis or Idea

· Clear Communication: Using Citations

· Summarize, Paraphrase, and Quote Accurately

When you have finished, submit your report to the Assignments folder. You should try to have this report complete by the end of Week 10.

In the next step, you will complete your Skills Gap Analysis and Global Attitude Protocol survey.

tep 10: Complete Skills Gap Analysis

INBOX (1 NEW EMAIL)

From: Kenneth Dodger, Vice President, Colossal Corporation

To: You

CC: Simon Barrel, Human Resources Generalist

I’ve heard nothing but good things about your work on the international task force. I’ve missed your assistance on my case work.

I’m reaching out to let you know that Colossal’s Human Resources department conducts a 10-week post-project self-evaluation of your skills. Using the same skills gap analysis file that was sent to you when you began with us, self-evaluate your project-related knowledge and skills accounting for your growth as you have worked on the other projects within our organization.

The skills gap analysis will help you identify the skill areas you have enhanced by completing the previous five projects and will reflect any changes in way you see the importance of those skills to your career success.

Complete your final skills gap analysis by the end of Week 10. Carefully follow the instructions below:

· Use the same skills gap analysis file you used at the beginning of the course to self-evaluate the knowledge and skills you gained from working with Colossal. To complete this step, use the Project 5 worksheet by clicking the appropriate tab on the bottom of the spreadsheet.

· Use the text box at the bottom of the page to write a reflection of no more than 500 words that identifies two to three skill gaps you worked to reduce over the past 10 weeks and discusses whether and how much you improved. Also reflect on the learning activities you pursued to help you develop your selected competencies.

· Submit your updated skills gap analysis to the submission folder located in the final step of this project.

I’m sure you’ll be pleased with your progress. I’ve CC’d our human resources generalist on this email as well so they are informed that you have the documents to complete.

Best,

Ken

Check Your Evaluation Criteria

Before you submit your assignment, review the competencies below, which your instructor will use to evaluate your work. A good practice would be to use each competency as a self-check to confirm you have incorporated all of them. To view the complete grading rubric, click My Tools, select Assignments from the drop-down menu, and then click the project title.

· 1.1: Organize document or presentation clearly in a manner that promotes understanding and meets the requirements of the assignment.

· 1.3: Provide sufficient, correctly cited support that substantiates the writer's ideas.

· 1.4: Tailor communications to the audience.

· 1.6: Follow conventions of Standard Written English.

· 2.1: Identify and clearly explain the issue, question, or problem under critical consideration.

· 2.3: Evaluate the information in a logical and organized manner to determine its value and relevance to the problem.

· 2.5: Develop well-reasoned ideas, conclusions or decisions, checking them against relevant criteria and benchmarks.

· 4.1: Lead and/or participate in a diverse group to accomplish projects and assignments.

· 4.2: Demonstrate the ability to plan and execute a project, articulating clear objectives and goals for the team.

· 4.3: Contribute to team projects, assignments, or organizational goals as an engaged member of a team.

· 4.4: Demonstrate diversity and inclusiveness in a team setting.

· 5.1: Develop constructive resolutions for ethical dilemmas based on application of ethical theories, principles and models.

· 5.2: Assess the implications of legal, ethical and cultural (national) standards on an organization's operations in global markets and make recommendations for appropriate actions.

· 5.4: Resolve workplace conflicts using the optimal approaches and techniques for the situation and involved parties.

· 6.3: Analyze an organization's internal strengths and weaknesses for strategic value.

· 6.4: Develop and recommend strategies for an organization's sustainable competitive advantage.

· 7.3: Analyze the implications of civil or criminal wrongs and of product or service liability laws, and make recommendations to support business decisions.

· 7.4: Analyze the impact of international and foreign laws on US organizations acting domestically and abroad.

· 9.3: Apply the principles of employment law for ethical practices and risk mitigation.