Global Decision Making - Assignment Example

Index Introduction 2 Making Ethical Decisions by Understanding International Dimensions of Organizational Behavior 2 Ethics Across Cultures and Strategic Marketing Decision Making 3 Application of Hostetede’s Five Dimension Theory and Its Limitations 4 Making Way for Effective Managers 5 Cross Cultural Communication Issues Faced by Managers 6 Applications of Halls Theory of Culture Context and Its Limitations 7 Implications for Insights for Cross Cultural Communication 8 Conclusion 8 References 10 Global Decision Making: Writing Assignment Introduction In the world of today on one hand business are expanding their reach crossing political and cultural boundaries, however with the presence of significant integration in the market shrinkage is also taking place with assistance of technology making way for complex decision making issues. The paper seeks to elaborate on the complex issues that are faced while making decisions in a global environment and theoretical framework available that can help resolve these issues. The role of cross cultural communication is discussed, along with how knowledge about cultures and different markets can help make global decision makers be more effective and make more ethical decisions. Making Ethical Decisions by Understanding International Dimensions of Organizational Behavior Cultures significantly effect business communication, and decision making for managers in the organization and this can be applied to ethics as well, in terms of how culture can influence ethics of an individual and similarly how organizational culture can affect the ethical decision making in the organization. Ethical decision making for domestic firms and businesses is a confusing task as it involves dealing with perceptions of the market and the concept of ethics can be different for different people across cultures. However when concerned with making ethical decisions in the international and global business context, it is a daunting task as it involves not just the parent country’s perception of ethics but those of the other regions where the organization is operating in. The strategic as well as routine business decisions employing ethical consideration are therefore effected by the international cultures which have to be accounted for by manager striving to resolve the dilemma of ethical decision making. Anita Roddick the former CEO and founder of Body Shop UK, expands on ethical decision making across cultures by elaborating her views that moral leadership is essential for good business leaders, specially when working in a multicultural environment (Adler and Gundersen, 2008). The Body Shop as a result works for free trade with its suppliers across the world, promoting rights of small farmers to grow with the growth in the market. Ethics Across Cultures and Strategic Marketing Decision Making Management of cross cultural communication is particularly useful in the marketing field, as it involves having knowledge about the market, its culture and attitudes and how to best market the product and services to them for sustained business profitability. The advertising messages, development of brand perceptions, use of color (Ergos, 2011) as well as brand name all use cross cultural communication theories. This is the reason why ‘Nova’ is not a suitable name for a car being marketed and sold in countries that have a primarily Spanish speaking population as it means ‘no go’ in the local language. Similarly Lexus a luxury car by Toyota was unsuccessfully received by the European market as they were particularly brand conscious and being the home of luxury brands the likes of Mercedes, Austin Martin, Lamborghini etc, they did not perceive Toyota or Lexus as a luxury brand. When entering new markets, the theories of cross cultural communication come into play and the marketing strategies employed by businesses are greatly affected. The case of Nestle shows this, in regards to their introduction of baby formula in Africa. The Swiss FMCG Corporation that operates around the world, sought to market baby formula in the African region as a substitute for breast milk. However due to lack in communication between what was being marketed and what was being perceived by the consumers, the company faced one of its most difficult challenges for sustainability and had to retract out of the region for temporary basis (Gerber & Short, 1986). The market perceived the baby formula as an absolute alternate for breast milk, and as most of the consumers were very price concisions, instead using the dosage required and purchasing new baby formula packs when finished, made to make their baby formula packs last longer by decreasing the dosage (Zelman, 1990). This created a massive problem of infant malnutrition as the infants were being made to forgo breast milk. This drew not just bad publicity but lawsuits against the company raising whether the company employed ethical decision making when developing a marketing strategy for the region. Application of Hostetede’s Five Dimension Theory and Its Limitations Decisions pertaining to operations, marketing, human resource planning as well as both strategic level and routine decision reflect the ethical orientation as depicted by the culture. Multinational and Global organizations can have different ethical considerations and decisions made on these considerations in different areas of its operations. Vitell et all, (1993), have elaborated this aspect and have explored the ethics and culture as per the application of Hofstede’s dimension theory. Hofstede’s provides five different aspects in which the cultural difference can be categorized between the cultures. These five dimensions relate to the power distance, individualism versus collectivism, masculinity versus femininity, uncertainty avoidance and long term versus short term orientation (Hofstede, 1980). When dealing with people from different countries and cultural backgrounds, this theory has provided significant insight into the management of communication as it explains how the cultures can differ in terms of equality between people, group orientation or individual concerns, whether cultures value profitability or better way of life, how people in different cultures deal with uncertainty and how the horizon of time is prioritized differently by different cultures. This is particularly useful for international business as it provides for a comprehensive framework on which the employees can be trained through workshops on cultural diversity and how to manage communication across culture when armed with information derived through Hofstede’s framework. Moreover the theory (Moonij and Hofstede, 2010), can be adapted to provide for development of marketing strategy across different cultures. However there are some limitations to the theory as well. One of the limitations is that pertaining to the individualism, versus collectivism aspect; Hofstede generalized the culture of a nation generally, taking a stereotypical approach, while in reality it is possible for large groups of people in the nation to have significantly different collective personalities. Moreover on an individual level as well, in some cases the national attributes might not fit. Similarly, it is possible for the orientation of the national culture to be significantly different from that of the organizational culture. People belonging to the same field of occupation also share the same cultural values in reality, while their individualistic, cultural and national culture might be different. On the level of gender as well, it is possible for culture to be significantly different across the world. This is because the way members of the two genders operate can be significantly different which is based on their ‘gender collective’ level of values. These highlight some of the many factors according to which culture for an organization be categorized, whoever Hosftede’s model takes a simplistic approach disregarding these. Making Way for Effective Managers Managers are responsible for many stakeholders, as with authority comes responsibility, and where managers seek to become leaders, their responsibility increases significantly. In global and multinational organization, for effective management, mangers should seek to be culturally knowledgeable and develop skills in communication that can help them communicate successfully across cultures. This will enable them to not only effectively manage but also develop oneself on a personal level. Some of the main issues pertaining to management that they face when working across cultures pertain to understanding the local market and dealing with the local employee base. The differences in the culture of the management and the local market and employees can make way for discrepancies. Therefore human resource management plans have to be customized and developed incorporating cross cultural concerns. Through research undertaken, Lieshout and Steurenthaler (2006) provide a profile of a cross cultural manager depicting that such a manager should be fully knowledgeable about conflict management, with significant emotional intelligence. Moreover such a manager should also be competent in terms of cultural awareness and knowledge. Cross Cultural Communication Issues Faced by Managers When operating in a multicultural environment, managers face numerous issues that impede on successful and effective business management. Most of such issues originate due to the differences in cultures involved, whether it is the organizational culture and that of the employees or a host and parent country culture. When communicating for negotiations and mergers and acquisitions, often meetings between the host and the parent country management are required. The communication in such interactions are highly influenced by culture a dimensions of time, emotions, management style, use and style of words, as well as non verbal communications are influenced by the different cultures and can create barriers for effective communication (Salacuse, 2004). Especially when it comes to language, what means as one thing in one culture can mean the total opposite in another. What time means to an Arab does not mean to Japanese, and similarly the value and importance of time is not shared between the Arab, Japanese or an American. Same goes for use of language, in terms of words and phrases and the body language employed. Cohen (1991) elaborates on this using Lorand Szalay's theory on message content and how different cultures code and decode message differently. Similarly, the monochromic and polychromic concepts pertaining to time can also create issues against effect communication across cultures. Taking the case of China, when considering communication, they seek relationship building, while on the other hand European countries like UK seek information flow through communication. Similarly management for UK and the west involves managing and delegating people to achieve an organizational goal, while for China; it signifies authority and leadership through a mentor approach. In such diverse perceptions, a manager has to be culturally aware as well as competent with significant skills in cross cultural communication to avoid such discrepancies and work towards a more integrated, profitable and harmonious solution for decision making. The solution for such problems is to gain knowledge about the culture as a development and enhancement measure. The management should seek to study the other party’s culture, and develop a common ground for communication. The communication strategy employed as well as the specific words and mannerisms used during interactions should be well planned for. In addition it would, where knowledge about the other culture is not easily available, consultants can be hired who can help the management learn the culture and effective practices for communication across cultures. These can then be filtered down the organization through self development workshops when operations of the firm change in their centralism. Applications of Halls Theory of Culture Context and Its Limitations Hall (1976) provided a theory highlighting context of cultures that can be employed by managers to better understand managers from other cultures and work productively with them armed with knowledge about their culture context. Through his research he broadly categorized cultures into two main categories and depicted that the cultures around the world that businesses have to manage for fall into one of the two categories. Either managers are dealing with low context culture or a high context culture where there is great emphasis on language, and the context of the message being communicated. Written and extensive messages characterize such cultures. On the other line of the spectrum are the low context cultures that do not involve formal written documentation, and there is little or no emphasis on the language used or the message context. The theory states that problems arise when cultures of opposing context have to interact. This has been practically seen as well, where certain companies tend to have a highly bureaucratic framework for operations and decision making reflecting a high context cultures. Navigation in such companies is very difficult and strenuous. On the other hand the low context culture oriented companies seem to be more mobile, flexible and navigation friendly in terms of information flow and documentation. This theory has been particularly useful when considering negations or meetings with managers of different cultural origin as it helps in identifying the best way to communicate the message so that it is effectively received and comprehended with a productive and positive response. The main and the biggest limitation of Hall’s theory is that while its objective is to simply understanding of culture, it can gravely make the simplicity reflect stereotypes which might not be applicable in reality. This can result in managers have preconceived inaccurate notions about management from other cultures promoting disparity resulting in improper decision making. Implications for Insights for Cross Cultural Communication In an organization, the inherent culture is largely based upon the pre-existing culture of the region where the organization originates from and operates in. As a result the way a business operates, the decision making methodology employed, human resource management, and the communications in the organization are largely influenced by local culture. Companies that work across national and cultural boundaries develop dynamic organization cultures to support their different markets as well as support diversification in the workforce while striving for management across cultures. Such MNC’s and Global organizations seek to employ one or a combination of management philosophies as suggested by Perlmutter (1969). He proposed that approach taken can be either ethnocentric, polycentric, region centric or geocentric, or a combination. However most of the theories available on the subject make an effort to simplify the understanding of cultural dynamics. This simplification while is appropriate for comprehension, also instigates stereotypical notions and inaccurate perception of culture. This is because culture is complex, composed of multiple elements which can be different at different levels. The implications provided therefore suggest that in order to be effective managers and make way for ethical decision making, managers need to understand culture. Research should be conducted in detail, and stereotypical perceptions have to be avoided. Conclusion Decision making is a complex paradigm for global and multicultural firms. The issues faced by international managers are significant, and in order to best navigate such issues, managers have to personally develop themselves as effective managers by understanding the role that culture plays in management and cross cultural communication. Such managers should seek to understand the international dimensions of organizational behavior in order to make ethical decisions and be effective managers. There are many theories and frame works available to help management develop strategy for effect cross cultural communication. However these theories have their limitations and managers should seek to customize their communication strategy for effective decision making according to their respective attributes, markets and business dynamics. References Adler, N.J., Gundersen, A., (2008), International Dimensions of Organizational Behavior, Cengage Learning Cohen, R., (1991), Negotiating Across Cultures: Communication Obstacles in International Diplomacy, United States Institute of Peace Press Ergos, A., (2011), The Power of Color In Doing Business Across Cultures, accesses from Hall, E.T., (1976), Beyond Culture, Anchor Books Hofstede, G., (1980), Culture’s Consequences: International Differences in Work Related Values, SAGE Publishing Lieshout, S.V., Steurenthaler, J., (2006), Effective Multi-Cultural Project Management: Bridging the gap between national cultures and conflict management styles, University of Gävle Mooji, M., Hofstede, G., (2010), The Hofstede model: Applications to global branding and advertising strategy and research, International Journal of Advertising, 29(1), pp. 85–110 Perlmutter, H.V., (1969), The Tortuous Evolution of Multinational Corporation, Columbia Journal for World Business Salacuse, J.W., (2004), Negotiating: The top ten ways that culture can affect your negotiation, Ivey Business Journal Short Jr., J.F., and Gerber, J., (1986), Publicity and the control of corporate behavior: The case of infant formula, Deviant Behavior, Vol. 7, Issue 3 Vitell, S.J., Nwachukwu, S.L., Barnes, J.H., (1993), The Effects of Culture on Ethical Decision-Making: An Application of Hofstede's Typology, Journal of Business Ethics, 12: 753—760 Zelman, N.E., (1990), Nestle Infant Formula Controversy: Restricting the Marketing Practices of Multinational Corporations in the Third World, Transnational Law, 697 Read More