International Business - Term Paper Example

International Business International Business What is the culture shock and how does it affect the international business?Culture shock refers to the state of anxiety, stress, boredom frustration and loneliness that individuals tend to experience when they travel to a new country or region for the first time. These feelings of solitude are caused by lack of psychological touch with family and friends, unfamiliar environment, language barrier, and the different culture experienced in a new country. The individuals are unable to adapt to the environment immediately, therefore, experiencing an atmosphere of helplessness, anxiety, confusion, security and homesick (Munan, 2005). In international business, some people are required to change location and work in different countries from time to time. These expatriates may experience culture shock as they settle in new countries, interact with new workmates and experience new cultures. Culture shock may lower the individual’s motivation, job satisfaction, performance and the ability to work competently (Rajasekar and Renand, 2013). Firstly, the expatriate may experience time change due to country’s location on the globe. This may affect the manner in which an individual works rests, eats and other ability to complete duties. Changing various routines may prove difficult, therefore, affecting how the individual works. The expatriate may become sluggish or find it hard to think clearly especially when the routine has been changed. One may find it hard to sleep at night because the body has not adjusted the change yet. This may decrease the quality of work done by the individual, therefore, rendering him or her incompetent (Munan, 2005). Secondly, the expatriates may experience depression resulting from missing their families, colleagues, friends and other individuals at home. This may affect their work as they may find it hard to make new friends in the new country, therefore, declining productivity. They may also experience demotivation, stemming from the new physical environment. Depression may have other adverse effects on the expatriate, such as sleep deprivation, which may lead to a decline in performance at work (Munan, 2005). The individuals may require some time to fit in with the new colleagues, thus affecting the productivity. Thirdly, the expatriates may find it hard to adjust to the new organizational culture. The new protocols or rules may be unfamiliar, therefore, bringing confusion. The expatriates may require some time to learn and adapt to the new organizational culture, therefore, leading to declined performance (Rajasekar and Renand, 2013). Fourthly, the expatriates can have a change in goals and priorities, as they experience a new country with a new culture. New environs must bring changes in the individuals’ lives, therefore, prompting them to alter priorities. In the case where expatriates moves from a developed country to a developing country, they may tend to change their goals from a materialistic perspective. They may also find that the business has different objectives in a different country. This means that the expatriates may tend to focus on new priorities that may affect their motivation, which could lower performance. The opposite can also happen where the individuals may become motivated to work harder and make certain improvements in their lives. Changing countries may also bring a negative attitude towards the new culture that one experiences. The expatriate may experience a different values or beliefs that may be contrary to his or her own beliefs. This may lead to a negative perception of the country, which may affect the individual’s performance especially when adjusting to his or her colleagues. This could lower job satisfaction and decrease motivation, which may lead to incompetence (Rajasekar and Renand, 2013). 2. Why does the argument that “anything that is legal is ethical” is insufficient? The conception that “anything that is legal is ethical” is in some situations flawed. The words ‘legal’ and ‘ethical’ are entirely different although they are used together in some cases. Some people may have the notion that everything that is legal is ethical; however, the concept is contradictory in certain situations. The opposite is also true. Not everything that is ethical is legal (MacDonald, 2011). Therefore, it is insufficient to claim, “Anything that is legal is ethical”. Sometimes the conception may be true work together, but many times, they collide. Firstly, the term ‘legal’ is used to refer to concepts that involve the law and how it works. On the other hand, the construct ‘ethical’ is used to refer to the state of being right or wrong and it mainly involves the moral convictions. A large number of laws in the society are based on ethics, which emanates from morals and the ability to do right or wrong. However, there are certain laws that deviate from morals, therefore, making them unethical. When individuals adopt these laws, they become unethical. Then again, when individuals follow ethics, they fall short of the law (Weinstein, 2007). Take the example of a successful businessperson who has accumulated many assets and built many companies. The businessperson chooses to pay his employees differently based on the location of each business. In his native country, the businessperson gives the employees a higher salary while paying meagre salaries to those employees working in foreign countries. He has the ability to pay them equally but chooses to favor those from his native country, an act that is legal but unethical. Looking into this illustration, the businessperson exercises his or her legal ability by paying all the employees. It is legal for him to give the employees the amount that they have agreed upon. However, one may consider it unethical for the businessperson to award some employees higher salaries while neglecting others, considering the fact that he can award them equal payments. Regarding the perception of right and wrong, the businessperson is wrong to grant some employees a small salary, therefore, being unethical. However, it is legal for him to act in this manner, as long as all the employees are paid on time and they are given the amount that is agreed upon. This shows that an act can be legal but continue to remain unethical. Whether an act is legal and ethical depends on the people’s perception and the governing laws that are available in the country or a certain region (MacDonald, 2011). There are many instances, where legal matters are considered unethical. Legal acts tend to follow the law of the land, while ethical matters follow universal principles, which are accepted in many societies. It is legal for a partner to cheat on his or her spouse. However, this act is unethical. The law accepts that an individual is a free entity, therefore, can decide to engage in any legal act. However, the act may be against the ethical principles of humanity, therefore, being morally wrong. This explains why anything that is legal is not always considered ethical (Weinstein, 2007). 3. Which stakeholders must companies satisfy? Why is this process more difficult for companies operating abroad? Stakeholders are the individuals who have direct or indirect interest and influence on a company. Stakeholders have the ability to influence the company’s policies, goals and actions. A company has several stakeholders for example the government, shareholders, customers, employees, unions, creditors, suppliers, agencies and the community. Different stakeholders hold different authority, thus proving that some stakeholders are entitled to different considerations (Phillips, 2010). Take for instance, the customers. They have the ability to purchase and make profits for the company. This means that they are entitled to reasonable trading practices. On the other hand, the government provides the policies that the company must adhere. This means that the government has great influence on the company’s practices and taxes, therefore, making it an important stakeholder. The employees are entitled to good salaries and conducive work environment. If the company fails to provide these conditions, there may be low production, which may lead to low profits. The company’s aim is to make profits, which are distributed to its shareholders. The company needs to ensure that the community in its vicinity is comfortable with its operations (Scott, 2007). Failure to comply with the community may lead to the closure of the company. Therefore, for the company to run smoothly, all the stakeholders must be satisfied. If the company focuses on satisfying one stakeholder, conflicts may arise, therefore, leading to scandals and the downfall of the organization (Phillips, 2010). In order to serve all its stakeholders equally, the company should ensure that there is corporate social responsibility, a process that ascertains that all stakeholders are satisfied (Scott, 2007). It is difficult to satisfy all the stakeholders especially when a country is in a foreign country. This is because the government may have different policies that may differ with the company’s goals. Foreign governments may require a company to pay high taxes, a move that may not be well received by the shareholders. This is because the shareholders are interested in the maximization of the company’s profits. The government may alter its policies to ensure that the environment is protected, therefore, meaning that the company may spend a lot of money on changing its production sector, which may result to huge losses (Phillips, 2010). In a foreign country, the community may demand a certain amount of profit to go into the development of infrastructure; therefore, prompting the company to spend extra money on community based projects. This may lead to dissatisfaction among the shareholders. Therefore, a company may find it difficult to satisfy its stakeholders, especially when operating in a foreign country, due to the uncertainty created by the different stakeholders (Scott, 2007). References MacDonald, C. (2011, December 22). What’s Legal Isnt Always Ethical. The Business Ethics. Retrieved May 12, 2014, from http://businessethicsblog.com/2011/12/22/whats-legal-isnt-always-ethical/ Munan, H. (2005). Culture shock! Portland, Oregon. Graphic Arts Books :. Rajasekar, J., & Renand, F. (2013). Culture Shock in a Global World: Factors Affecting Culture Shock Experienced by Expatriates in Oman and Omani Expatriates Abroad. International Journal of Business and Management, 8(13), 54-57. Phillips, R. (2010). Stakeholders. Cheltenham: Edward Elgar. Scott, S. (2007). Corporate Social Responsibility and the Fetter of Profitability. Social Responsibility Journal, 3(4), 31-39. Weinstein, B. (2007, October 15). If Its Legal, Its Ethical? Right? Bloomberg Business Week. Retrieved May 11, 2014, from http://www.businessweek.com/stories/2007-10-15/if-its-legal-its-ethical-right-businessweek-business-news-stock-market-and-financial-advice Read More