International Management and Ethics: Windmill Apps - Case Study Example

WINDMILL APPS; CROSS-CULTURAL REPORT AND TRAINING Location; SECTION A 0 Introduction; The Current of Globalization Globalization is not entirely a new concept. It presumes that the World is single market whose span surpasses international borders (Pinder, 2011, 140). Studies carried out in the last decade of the 20th Century established that globalization is a facilitator of national and international economic growth. However, the global economic crisis of 2008 exposed the vulnerability of the capitalized system (Straw & Glennie, 2012, 33). The dynamics of global economic power has shifted in the recent past with China outpacing United States in her contribution to global trade. The top 8 emerging market countries are at par with the G7 group of rich countries in terms of their combined GDP (Straw & Glennie, 2012, 38). Globalization has gone beyond economics to encompass social, cultural and political aspects. Socio-political interdependence has increased and so has awareness with the result that we co-exist as global rather than national citizens (Moghri, 2012, 3). 2.0 Overview of the Macro-Level Realities of The Netherlands Netherlands was formerly part of the United Dutch Provinces that declared independence from Spain in 1579. It borders Germany to the East, Belgium to the South and the North Sea to the West (cia.gov). Amsterdam is the capital city while The Hague is the administrative capital. Constitutionally, it is a Monarchy and has a parliamentary system of governance with a French based civil system of justice (cia.gov). It is endowed with natural resources such as natural gas, petroleum, peat, limestone, salt, sand and gravel as well as arable land comprising 25.08% of its total land mass (cia.gov). The Netherlands is the 6th largest economy in the European Union with a GDP-per capita of $43,300 in 2012 and a purchasing power parity of $699.7 billion in 2013. It is a service based economy contributing 72.1% of the GDP while industry and agriculture sectors follow with 25.4% and 2.6% of the GDP respectively by 2013 estimates. The economy had a negative growth of 0.8% in the 2012-2013 financial years (cia.gov) The Netherlands has a total population of 16, 877,351 with a population growth rate of 0.42% going by July 2014 estimates. 80.7% of the population is Dutch, 5% come from other EU countries while Indonesian immigrants make 2.4% of the population going by 2008 government estimates. The official language is Dutch however; there are regional languages that are spoken in this country including Frisian, Low Saxon and Limburgish (cia.gov). In terms of population distribution, 83.2% of the total population is urban. In terms of age structure, 15-24 year olds comprise 12.2% of the population and 25-54 years comprise 40.4% of the total population (cia.gov). 2.0 Value Comparison Between Indonesia and The Netherlands Cultural values and preferences affect management and apply differently in different cultures and traditional settings. To be successful in The Netherlands she must adapt to the cultural differences and their impact on organization behavior (Wursten, 2007, 11). The management fundamentals remain similar but how to implement them has to change. This will affect her leadership style, how she communicates her ideas, how she motivates her new staff, her recruitment policies and the design of her reward system (Wursten, 2007, 2). The first issue to address is the Indonesian management value systems where organizations are modeled along the family (Wursten & Lanzer, 2012, 8). They have a high power-distant dimension in that hierarchy is highly regarded and accepted. Decisions making is occurs at the top and then communicated to the bottom for implementation (Wursten, 2007, 3). There is a high level of collectivism (Wursten & Lanzer, 2012, 8). In this regard, the management looks after the interest of those under them in return for their unwavering loyalty. In addition, they define their self-image as “we” rather than “I” (Wursten, 2007, 3). There is also low uncertainty avoidance in this society (Wursten & Lanzer, 2012, 8). The new organizational environment in Europe is however different because it is based on network model. To begin with there is a low power-distant dimension (Wursten & Lanzer, 2012, 5). Here power is equalized and any inequality in power is justified (Wursten, 2007, 3). Decisions are jointly made and implemented here as none regards himself better than others. The new culture lays emphasis on cooperation and consensus in decision-making (Wursten & Lanzer, 2012, 5). There is also individualism where everyone is responsible for themselves and those immediately under them (Wursten, 2007, 3). SECTION B; 1.0 A critique of Hofstede Approach to Globalization In the era of globalization and internationalization of business, Hofstadter’s work has enabled us to appreciate the cultural dimension of international management. His models have influenced the study of entrepreneurial behavior, training of human resource, conflict resolution and leadership styles (Shaiq, 2011, 102). There are criticisms that have been leveled against his cross-cultural research work. To begin with, his survey is based on data from one company which he applies to all other organizations (Shaiq, 2011, 103). It also too old (1981) and fails to take into account the evolving nature of international management. The five dimensions are also too few to enable one to get a complete information on the numerous global national cultures (Shaiq, 2011, 103). This research is not action based hence there was no fact-finding, no planning of action steps, evaluation, amendment of plans and further action till change is achieved. Further, his later discovery of a fifth dimension (shot term vs long term orientation) lacks empirical basis because the original research survey did not include any items related to it (Javidan et al, 2006, 897). This research has been criticized for representing a biased, inaccurate and mis-interpretable timeframe due to its ethnocentric grounding. Lastly, it has problems of definition of particularly the word culture and other terminology used in it which may be interpreted differently (Jones, 2007, 3). 2.0 An Analysis of the Challenges in international Business Management 2.1 Globalization To begin with, the emerging markets have stringent requirements for visas and work permits, which hinder the deployment of international managers. In addition, there exists a great shortage of women in international management despite research indicating that they have been effective whenever assigned duties (Fitzgerald & Walsh, 2008, 157). Multinationals recognize the importance of the global competence of would-be job candidates. Despite this, they have done very little or nothing at all in developing this competencies (Fitgerald & Walsh, 2008, 158). Organizations have also failed to carry out sufficient cross-cultural training to facilitate effective and timely cross cultural-adjustment (Fitgerald & Walsh, 2008, 159). Lack of proper cultural orientation, it affects a manger’s ability to motivate their employees and to appreciate the difference in cultural values (Snowden, 2006, 62). It also hampers their ability to apply the global principles of performance management in the local settings (Aguinis et al, 2012, 392). 2.2 Decision making Decision making in international business may disregard cultural sensitivities. This affects situations where such decisions are reached at the headquarters and the implementing manager has to push them through locally (Coldwell et al, 2007, 615). The low power distance cultures encourage subordinate participation in decision-making. This may be a long and tiresome process and consensus in a large pool of people with divergent views may necessarily not be achieved (Aguinis & Gottfredson, 2012, 389; Bret et al, 2006, 89). The other challenge in a multicultural setting is that decisions are likely to be misunderstood and this hinders the achievement of desired outcomes (Charles, 2006, 272). 2.3 Negotiation and Communication Managing individuals within a multi-cultural setting requires one to understand different communication styles. For instance, western cultures communicate directly while in other cultures communication inundated (Brett et al, 2006, 90). There is also the question of varying accents and fluency, which may hamper communications and ultimately negotiations as a result of misunderstandings (Brett et al, 91). 2.4 Leadership and Cultural intelligence Cultural intelligence is requires a person who is has a good personal adjustment which assists in the development and maintaining cross cultural relationships (Thomas, et al, 2008, 125). This takes time, which may slow decision making and implementation (Thomas, et al, 128). SECTION C: CONCLUSION AND SUMMARY 1.0 Conclusion Globalization has opened up new markets including the labor market. National borders have also been redrawn and continue to be readjusted not physically but by global demand and supply patterns. This has increased interactions among diverse social, political, economic, and cultural entities unlike never before (Moghri, 2012, 1). There has been an increase in the pool of available competent human resource to select from (Straw & Glennie, 2012, 88). This means that more and more people are working in countries that are not their own. Their adjustment in new settings is a key factor of career development (Halseberger & Brewster, 2009, 380). Organizations are normally compelled to hire the services of expatriates where the host market is deficient in the supply of job’s a desirable skills and qualities (Shen & Lang, 2009, 372). International appointments for an individual are recognition of one’s high potential (Halseberger & Brewster, 2009, 380). On the other hand, international organizations benefit from the experience and skill of an international appointee (Al Ariss and Sy(ed, 2011, 287). The challenge for the realization of this benefit depends on one’s ability to adjust to the new cultural settings (Halseberger & Brewster, 2009, 385). Therefore, their adjustment in new settings is also a key factor of career development (Halseberger & Brewster, 2009, 380). International assignments are usually accompanied by a high level of uncertainty and in which requires as staff to psychologically adjust to the new cultural settings (Halseberger & Brewster, 2009, 381). For an international staff to be said to have adjusted cross-culturally, they must be able to absorb cross-cultural shocks and overcome fatigue. Adjustment enables an international staff to be able to increase their productivity (Shen & Lang, 2009, 377). Cross-cultural training and adjustment is important in solving arising conflicts, managing negotiations and fostering teamwork (Gelfand et al, 2007, 489). Cultural adjustment by an international manager is also important for the management and recruitment of human resource (Snowden, 2006, 64). 3.0 Summary The Netherlands has a unique and dominant service market that has a constant demand for innovative human capital. The age structure also supports the uptake of software applications, as a majority of the population is likely to be users of smart phones and personal computers. It is important to note that the macro-level realities in The Netherlands are different from the ones in Indonesia. This calls for an understanding and wholesome appreciation of the contrasts. Whatever works in the Indonesia may not succeed in the Dutch market. The dimensions of success however have a common denominator-growth. The mechanisms employed to achieve them must however be sensitive to this facts. The market therefore exists but what is required to capture it is to build a competitive edge where windmill Apps will provide solutions to their everyday technological challenges (Caldwell et al, 2007, 612). However it is important to acknowledge that there are challenges associated with expatriate postings have been discussed in SECTION B; 2.0. The ability of the international staff to overcome all this challenges is hinged on their ability to learn and adjust to the new cultural realities (Shen & Lang, 2009, 372). Windmill Apps is therefore behooved to provide cross-cultural training to the new staff so as to remove any chances of expatriate failure (Shen & Lang, 2009, 373). The adoption to the national culture of her destination will also influence the effectiveness of her leadership, motivation of employees and teamwork (Gelfand et al, 2007, 492). 3.1 Advice to the Windmill Apps Co is as Follows: It is important to note that skills, knowledge and expertise do not change. The Cross Cultural Training (CCT) is necessary to prepare the staff on how she will apply them in the new station. The training should include the cultural component and how it affects leadership. The success of the new posting will be premised on effective and dynamic leadership that respects cultural sensitivities. Cross cultural Training will also help the manager to understand the cultural factors influencing market trends as well as customer needs. The manager’s success will be determined by how well she is able to co-ordinate the team work and motivate her staff at The Netherlands office. List of References Aguinis, H., Joo, H, & Gottfredson, R. K., 2012. Performance management universals: Think globally and act locally. Business Horizons, 55, pp 385-392. Al Ariss, A., & Syed, J., 2011. Capital mobilization of skilled migrants: a relational perspective. British Journal of Management, 22(2), pp 286-304. Brett, J., Behfar, K., & Kern, M.C., 2006. Managing Multicultural Teams. Harvard Business Review, pp 87-97. Central Intelligence Agency, 2014. The World Fact Book. [online] Available at: [Accessed 3 December 2014]. Charles, M., 2006. Language Matters in Global Communication. Journal of Business Communication, 44(3), pp 260-282. 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