Diversity in Decision-making of the Global Business Environment - Assignment Example

Decision-making in a Global, Diverse Scenario Abstract In a global business environment, a central challenge is to conduct affairs in a manner acceptable to a variety of cultures and societies. The ethics and business morality of cultures across the world tend to differ in many respects, and the global businessperson must acknowledge and respect these particular ways of thinking if he/she is to be successful. This paper examines two scenarios: both are possible in light of the global environment, and both present challenges on an ethical level. Certainly the differing approaches to conducting business in the Western world, and the Middle-eastern world are highlighted by the situations. A personal response to the resolution of each issue is presented, but informed by some research of the cultural norms of the societies presented. The overriding approach is to meld personal ethics with Western business ethics, and the ethics of the visited culture, so as to arrive at a solution which would satisfy the needs of all stakeholders. Introduction In a global economy, where the requirements of a successful transaction, or business relationship no longer rely only on the quality of products or services, but instead also on the ethics and ethos of the business, it is essential that globally-based managers understand the nature of this “new world” (writer’s quotation marks) in order to be successful and make good decisions. Local issues must be considered by a manager; local customs and ways of doing business must be considered; the ethics of the manager’s own business and his/her own norms must be clearly defined. “ ‘What happens when national and organizational cultures This article or section is written like an . Please help [ rewrite this article] from a neutral point of view. Mark blatant advertising for , using .  come into contact and there is a gulf between standards ... sexual orientation n. The direction of one's sexual interest toward members of the same, opposite, or both sexes, especially a direction seen to be dictated by physiologic rather than sociologic forces. ? This is where an organization must illustrate its sensitivity to local issues," observes (Robin) Schneider (of Schneider-Ross, a United Kingdom-based global diversity consultancy), “by balancing its core culture with enough flexibility to be in tune with other cultural sensitivities. However, a decision may ultimately hinge on Verb 1. hinge on - be contingent on; "The outcomes rides on the results of the election"; "Your grade will depends on your homework" depend on, depend upon, devolve on, hinge upon, turn on, ride  choosing to be an advocate for changing social policy or simply refusing to do business in certain markets.’ ” (Vallario, 2006) Maintaining the sensitivity referred to by Schneider, above, is not always simple and clear cut, however. The following scenarios, and this writer’s responses to these, serve to illustrate the complicated and challenging nature of managing a business in a global environment. Scenario One: Outline In order for a company to win a government contract in the Middle East, a relative of the government minister involved in granting the contract, has implied that a bribe of $200,000 will secure the contract for the company. The relative will suitably influence the minister, and his “costs” will not be part of the official deal. A rival company has been awarded three previous contracts – and should this money not be paid, this contract will go to the rival company, too. A Code of Ethics does exist for the bidding company – a paragraph relating to the practice of “buying influence” is not clear and defined, though, and the marketing manager is required to make the call to go ahead, and take full responsibility for the decision. Scenario One: Discussion Almost universally, corruption is increasing in business across the globe. The need to prevent such corruption is obvious. At the same time, however, business cultures in different places may define corruption in different ways. If the stereotype is applied to the culture of the Middle East, it may seem that the use of a bribe is expected. It may also be argued that there is notable difference between the individualist cultures of the Western (largely European and North American) world and the collectivist cultures dominant in the Asian, South American, and Middle Eastern world. In collectivist cultures, the good of the community, the society, or even the country take precedence over the good of the individual person. The collectivist culture of the Middle East also stereotypically suggests that a family member could be advantaged by the business conducted by his/her relative. In such collectivist cultures, the use of intermediaries may be essential – trust is not given easily to the outsider, and agents or intermediaries may be used to build a trust relationship. In the scenario outlined, however, the family member is acting in addition to the agents the company is already using to bid for this contract. This family member has no discernible official role in these negotiations. A major caution in this line of reasoning is, however, that the individual can never be seen to fit the stereotype of a particular group. The government minister’s relative may be just a crooked individual, looking to make some quick money, without the knowledge of the minister. It may also be that the decision to be made will be influenced by what could be called culture blindness. People tend to believe that the moral understanding of “good” or “bad” which they have is exact and universal. It may be that the individual making the decision to pay or not pay the bribe has a morality based on personal religion or traditions. Indeed, in the Middle East, it may be absolutely acceptable to try to make some money for the influence that the individual has over those in power. It is, in short, essential to consider every critical factor regarding the norms and values of the culture being entered here, and the company itself, as well as personal ethics before making a decision regarding action to win the contract. This writer’s personal response and strategy to the scenario presented follows. The company, according to the scenario description, has a standard of ethics to which it subscribes – a national system of laws describing ethical business practice. The spirit of that ethical practice must reflect a fairly universally accepted system of values, in which bribery is not acceptable. Even though the paragraphs referring to this kind of situation specifically are described as “vague” in the scenario description, the intention of the law is surely to discourage bribery, as a form of corruption. The fact that both your line manager and the people to whom he/she reports are avoiding the responsibility for this decision implies that the pitfalls inherent in any course of action here are plentiful. Hence the decision I would make, as the Marketing Manager, would have to be very carefully considered. It is, in my mind, likely that the relative of the minister is acting without the knowledge of the minister. Just because Westerners may consider bribery, and the “greasing of palms” as standard practice (stereotypically) in the Middle East the situation in reality may be quite different. However, the implied message given by the fact that your company’s competitors were awarded previous contracts after bribing the relative argues that this person does have some influence with the minister. Nonetheless, they are your company’s rivals, and they may certainly be sending you the wrong messages. My initial strategy would have to be to gather intelligence regarding the relationship between the minister and the relative. Could such external influence really be forceful enough to change the mind of a highly placed government official? If the relative is, indeed, so powerful, and the minister so easily swayed, my instinct would be to advise my superiors in the company that this project was not worth pursuing, despite its benefits for the company or the country. If they were then to pursue the arrangement, by bribing the relative, my conscience would be clear. My personal sense of ethical practice, and my own value system, would certainly argue against bribing officials for a contract. If the minister is unaware of the relative’s actions, according to the intelligence I had gathered, I would insist that the company continue along the prescribed paths to win the contract, by presenting the best proposals, with the best interests of the company and the country foremost in this strategy. It may then be required that the relative be exposed to the minister, and I would advise my superiors in the company to do this. Whether this would be facilitated at the level of government, or at the level of the top management of the company, would not be my decision. In either instance, I believe that a relationship of trust will have been established between my company and the government of the country, in which ethical standards will have been set. A continued relationship of mutual trust and ethical business practice would then be possible between my company and the specified government. Scenario Two: Outline A company has been strongly criticized in the press for its conduct in a conservative Muslim community. The company’s plans to run a large steel plant in the Muslim country are financially viable and desirable for both the company and the government of the Muslim country. Criticism of the company includes the proposed location of the plant, which will disrupt family life, traditions and hierarchies in these communities, and even family security and structure, for workers from the local area. Foreign workers will, the press claims, be insensitive to the morality of the locals, and will not show due respect to local women. The company is accused of cultural imperialism and it is claimed that the establishment of the plant will destroy stability in the country. All of these claims are based on reasonable fact, however – other firms established in similar communities in this country have caused problems of this kind. The general public feeling is that foreign firms should no longer be allowed to remain in this Muslim country, due to their influence and disruption. Should the establishment of the plant not go ahead, though, the benefits of the project for the company, and for the local population will never be realized. Again, the company’s ethical business principles act does not specify enough to determine action in this scenario, as it does not deal with the destruction of traditional values and family relationships and hierarchies. Scenario Two: Discussion Conservative Muslim communities have very defined rules and practices regarding how members of those communities should run their lives. These expectations are based firmly in the religious beliefs of the communities, and the cultural and traditional natures of such family and social life. There is no doubt that these practices have to be respected, and their integrity maintained. If a company is to be established within such a community, it is essential that these aspects of local peoples’ lives must be considered, and strategized around, so that no undue changes occur. The community described in the second scenario of this paper is one in which a high likelihood of disruption exists, as evidenced by the events in similar communities where foreign nationals have established projects. Media commentary has also been deeply critical of such projects, and is now focusing on the impending establishment of this company’s steel plant. Many avenues do exist, however, to avert the potential damage of a multinational company on a traditional community. According to the scenario described, the benefits of the establishment of the steel plant are many, and it is accepted that it would not be sensible to scrap the project entirely, either for the company, for the government of the country concerned, or for the community since the plant will provide opportunities for income and advancement to the local people. Once again, this writer’s personal strategy to plan for this scenario, and to provide some solutions for the challenges inherent here, follows. It appears that in the given scenario, not all stakeholders have been effectively incorporated into the process of building this plant. While the company’s management – and presuming myself the Vice President leading this initiative – has agreed with the government of the country that this project is desirable, the local community has had little say. Definitely the Public Relations aspect of the project has not been effectively managed, as a journalist is able to point out the negatives regarding this project without any real contradiction from the company. Good partnerships need to be built with the local community. The plant will employ locals, but it would also be necessary to consult with people who would not be employed, potentially. As the most senior manager in the area, it would be one of my first tasks to show willingness to learn about local customs, and to design a work scheduling plan most appropriate for the local employees. One presumes that in such a traditional Muslim community, time would have to be set aside for the essential prayers during the course of the day. This may necessitate earlier start times, and later leaving times daily, so as to ensure that those who wished to be observant were able to, without being discriminated against by non-Muslim colleagues. Advice regarding such a possibility could be found among local religious leaders. Certainly, the need for the male employees to have times set aside for prayers would be more pressing than for female employees. And the consideration for Fridays, a significant day in the Muslim week, would have to take precedence. A working week structured without the traditional “weekend” of the Western World may be a solution. There would also be local holidays, and days of religious significance – in a Muslim country the month of Ramadan comes to mind immediately – on which work would not be possible, or at least a compromise would have to be reached well in advance. In all such preparations, and planning, it would be essential that a relationship of trust be built up between management and the local community. In addition, once the plant had opened, this relationship of trust with local employees would have to be carefully managed. Consistency in applying rules based on religious observance would be the imperative. In the same way as the Islamic rules were being catered for, the religious rules of non-local and non-Muslim employees would have to be seen to be part of the company’s organization, too. It would not be appropriate for the management of the company to appear discriminatory on any level. Vallario (2006) suggests that the success of the multinational, Skandia, was in part due to its policies of managing diversity. The promotion of cultural diversity awareness should be promoted in all organizational communications “... formal and informal ... in executive speeches and communiqués ...” while still ensuring that positive information regarding progress and success of the company is communicated to strengthen company values and ethos. The implication is that, as the Vice President, I would have to provide the personnel who are entering this Muslim country with the company with training and guidelines to increase their awareness of, and respect for, local custom, practice, and sensitivity. The behavior and observances of women, in Muslim cultures, due to religious rules, are very different to what we expect in the Western world. Hence, the employees of the company would have to maintain the standards of the local community with regard to the treatment of women – hence traditional dress code, relationships with men, and other such considerations must be top of mind. The same could be said of the moral codes of the local community. While a company could not enforce behaviours in its employees outside working hours, employees not of the, in this case, Muslim culture, could be encouraged to respect diversity enough to not want to cause offence. This tolerance of others would have to be included into company vision, ethos, and even into performance management systems. Training would be required, and involving local leaders in such training may be the answer. Relationships of trust could be built between the company and the community, and the danger of careless discrimination in the workplace eliminated. Something as seemingly simple as food will also need to be considered. Planning will have to include provision for Hala’al dietary requirements, in a company canteen, so that the Muslim employees are not excluded from this fairly standard daily activity. A further criticism of the company by the New York Times journalist was the effect on family structures and community hierarchies that companies established in similar regions had had. Flexibility in the schedules of employees – for example, time allocated to the harvest, as referred to in the scenario document – may compensate for the potential damage here. Additionally, a relationship of trust between company and community could ensure that some of the local customs become part of the company ethos: respect for family structures and hierarchies. The benefit of this employment on locals – with families being more financially stable, and equal opportunities for advancement of locals – should be communicated in a consistent and ongoing way in the community. The benefit should be seen as not just for the individual employee but as for the benefit of the employee’s family and immediate community, too. The difficulties posed by distance, where local youths are likely to relocate away from their families, can be addressed by transportation schemes, and “family long weekends” on which employees can be encouraged to make contact with their families on a regular basis. All of this interaction with the local community would have to begin immediately. I would implement task groups to begin the recruitment of workers, but also to negotiate and interact with local religious and community leaders, and just informally to learn more about local customs and traditions. It would be essential to have a documented plan regarding the conditions of employment at the plant, which at the outset could be seen by the local community to have taken their priorities into consideration. By the time the plant opens, an understanding would exist between the community and the company, and the possibility of ongoing dialogue will have been stressed. The company’s involvement in the community should extend beyond just being an employer – it should also be a contributor to events, organizations, even individuals within the community. But, the scenario suggests that the resistance to the establishment of foreign firms extends beyond just the New York Times report. Factions within the country’s leadership are also voicing their reluctance to have new multinationals establish operations in the country. Indeed, some are even going as far as to suggest that all established foreign firms be removed. A coordinated Public Relations campaign, to publicize your company’s strategy to deal with the potential disruption of local communities in an open, sensible and flexible manner would be necessary to begin the dialogue with traditional, conservative political power factions in the country. I would attempt to open dialogue with these groups before the opening of the plant, even before recruitment of personnel. Being open to the suggestions of these groups may facilitate a company policy which is truly able to accommodate the diverse workforce of the plant. In a number of the Arab Emirates, the government, and other political groups, do establish rules of conduct for foreign nationals in their regions, and this seems to work. Conclusion In the globalized environment, it is possible to locate business in places where the financial and economic imperatives are most effectively met. Most governments will see the establishment of business in their country as a positive economic benefit to themselves, and their peoples. It is at the level of local customs, local small communities, the individuals directly affected by the entry of multinational companies, that the issue becomes more complicated. The central need, however, for the manager in such a situation, is to strive to understand the challenges and difficulties posed by the mix of cultures in a workplace, and to strategize to manage these cultures effectively so that company profitability is achieved. This is possible when the manager acknowledges, accepts, and engages with the cultures present in the situation to promote a conflict-free incorporation of each culture with the ethos and value system of the company. References Vallario, C. W. (2006) Best Practices for Valuing Cultural Diversity COPYRIGHT 2006 Financial Executives International; The Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company. Read More