In its evolution the multinational corporation faced serious contradictions. Evolving from its national context, the multinational corporation employs large numbers of employees of diverse nationalities and ethnicities. Westney (1993) notes that managers are, thus, caught between the institutional pressures to conform to the company norms and values, as well as to the cultural and social influences of its local national environment.
Foreign assignments require adjustment to new culture, new job, new language. The need to interact with host nationals at work and in general life makes the expatriate feel the culture shock. Culture shock can be best defined as a natural response to stress on immersing oneself in a new environment. The new environment makes new demands for which the people are not ready for. They neither have ready answers nor do they know what the appropriate response should be. This massive change creates stress. Stress related culture shock may take many forms: anger, anxiety, disappointment, embarrassment, frustration, impatience, confusion etc... Often times the adaptation process will not be smooth. Culture shock & work related stress often cause then blaming the host culture, nationals etc...
From a managerial perspective, the ethical problems manifested in the arena of international business represent real ethical dilemmas for the contemporary managers as they generate, at least on a short term, a conflict between the organizational economic performance (evaluated by measuring the turnover, the costs and the profits) and its social performance (evaluated by measuring the ethical responsibilities to the people outside or inside the organization) (Hosmer, 1987, p.3).
Major sources of ethical dil...
... middle of paper ...
...mpetitiveness.
Therefore managers working abroad face a range of experiences related to culture and organizational goals. Hence they need to be well equipped mentally and emotionally for the novel experiences along with the preparation in the technological arena which is the back bone of international trade.
Works Cited
Westney D E (1993). Organization Theory and the Multinational Corporation. St. Martin's Press, New York.
Global careers and cultural shock. Retrieved February 3, 2014 from http://www.geocities.ws/akottolli/global_careers_and_culture_shock.html
Hollenbeck, G. P., & McCall, M. W. (2003). Competence, not competencies: Making global executive development work. In W. Mobley & P. Dorfman (Eds.), Advances in Global Leadership (Vol. 3). Oxford: JAI Press.
Hosmer L. T. (1987). The ethics of management, Homewood, Illinois, United States of America.
When travelling for business between different countries it’s very important to understand the different ethical practices. When looking into the different ethical business practices in organizations we will look at the four largest and fastest developing countries which are commonly known as BRIC; Brazil, Russia, India, and China. There are many similarities between these countries; however India and Brazil seem to have a more favorable ethics rating than China and Russia. While there are similar perceptions on ethical business practices, these ideas are not shared globally. As these four countries grow economically, it’s becoming more important for business leaders to understand their ethical differences.
A mutual accord in the international business literature is that business has increasingly become more globalized. Nonetheless, it is not only businesses that have become more globalized but also people who have become more global, (Friedman & Liu, 2008). As a result of increased globalization, cultural diversity is a common phenomenon in organizations. The implication of such a phenomenon is that managers are increasingly supervising employees from different cultural backgrounds, beliefs and attitudes than themselves, (Steers, Nardon & Sanchez-Runde, 2013). Such is the case for Molson Coors. Molson Coors found itself in a challenging situation where its cultural values markedly differed with those of Starbev, a Czech Republic
Incorporating ethics into everyday decisions in the business world can greatly reduce the scandalous behavior that has as of late has run ramped. Obviously, we have seen the results and consequences of business conducted absent any moral or ethical boundaries. When decisions are made without the consultation of ethics there is no direction from the moral compass and surely consequences will follow. Choices contemplated by managers may often seem difficult, but assessing the options against ethics can assist the manager in making the best decision.
A Multinational Corporation (MNC) can be defined as “a single entity that controls and manages group of goal-disparate and geographically dispersed productive subsidiaries” (Triandis and Wasti, 2008, p. 2). Multinational corporations are entities that make Foreign Direct Investment (FDI) and produce added value in countries other than the country in which they are headquartered. One of the key objectives of the MNC is to obtain capital where is it cheapest and to invest FDI and undertake production in areas that yield the highest rates of return (De Beule and Van Den Bulcke, 2009). However, many theories have been advanced to account for the decision-making process that MNCs undertake in relation to FDI. The purpose of this paper is to explain the two main theories – internalization theory and OLI eclectic paradigm theory – and to critique these in relation to some of the other conceptual models that have been advocated.
This paper will compare and contrast the various interpretations of four separate authors in respect to ethics and social responsibility as they apply to business. The four articles to be reviewed are; “The Social Responsibilities of Business is to Increase its Profits” by Milton Friedman, “The Relevance of Responsibility to Ethical Business Decisions” by Patrick E. Murphy, “What is ‘business ethics’” by Peter F. Drucker and “To Be Ethical Not To Be: An International Code of Ethics for Leadership” by Ala’ Alahmad. Each of these articles represents the author’s interpretations on the interplay between “business ethics” and “social responsibility” supported by both external and personal research. Although none of the authors represent themselves as being opposed to ethics or responsibility in general, there appears to be opposition in the attempt to silo these two topics into a separate, distinct business application rather than maintain them as applicable to individuals’ separate of any corporate (or business) relationships.
In doing so, however, they may find they experience a significant amount of culture shock. Culture shock is defined as "the feeling of disorientation, loneliness, insecurity or confusion that can occur when someone leaves his or her home country to live in a new culture"(Harzing, para. 1, 2016). Culture shock happens in stages, usually starting with a feeling of euphoria at being chosen to move to the new country, as well as the desire to soak in and learn everything one can about the new country and culture. However, this period is temporary and descends into a low period, characterized a feeling of homesickness. Managers in this stage may become irritable and react to small inconveniences and differences dramatically (Four Common Stages of Cultural Adjustment, 2016) They may feel as though they do not have significant support from the company they work for and contemplate moving back to their home countries. This has a negative effect on the work performance of the manager, and in turn, has a negative impact on the welfare of the company in the foreign market. Because of this, many companies begin implementing a training program to help management prepare for and adjust to life in a foreign country. Such programs may include learning the work culture as well as the social norms and mores of the host country, and also how to balance work life and home life. In this way, managers and their employees would have an easier time adjusting to the culture shock of their host countries (Kottolli, 2006). But in adapting and conforming to the culture of a host country, could a manager find themselves in a difficult
With the proliferation of the internet international Business transactions are more common today than ever. Globalization is now a key factor when creating a business strategy for most companies whether they are small family own businesses or huge corporations. Globalization however does not just involve selling a product in other countries. There are legal and cultural concerns that must be addressed. The legal aspects are fairly simple because in most places the laws are spelled out. It's the local customs, and regional way of doing things that can be tricky. Research on globalization has shown that it is not an omnipotent, unidirectional force leveling everything in its path. Because a global culture does not exist, any search for it would be futile. It is more fruitful to instead focus on particular aspects of life that are indeed affected by the globalizing process. (1). In this new economy, as it has been in the past, it will be the people not the machines who will determine a company's success. Having an effective Human Resource Management team that effectively analyze your company's current and future personnel needs is key in any business organization.
Culture shock is personal incomprehension a person may feel or experience when in an unfamiliar culture or way of life as a result of a visit to a new place or immigration, a movement amid social environments. Culture shock mostly affects individuals who have relocated to foreign environments. It is a process that an individual undergoes in experiencing a new environment; it is categorized into four phases that are honeymoon, crisis, adjustment, and recovery phases. The common problems associated with it arelanguage barrier, generation gap, homesickness, information overload, boredom, technology gap and cultural response ability among many others (Macionis 2010, 26). Cultural differences affect individuals differently. Therefore, there is no definite way of preventing culture shock.
A major challenge of doing business internationally is to adapt effectively to different culture. Such adaptation requires an understanding of cultural diversity, perceptions, stereotypes, and values (Hodgett &Luthans, 2005). Doing business overseas has its challenges as well as it rewards.
Large corporations have been attempting to find a balance between the traditional hierarchical structure and the flexible local entrepreneurial structure for many years. Increasing global competition has made it critical that multinational enterprises be both globally integrated and locally responsive at the same time (Bartlett & Ghoshal, 1988). Sohn & Paik (2004) describe the efforts of Toshiba to achieve a hybrid of centralized control and localized autonomy. Irrespective of the structure chosen, corporations can all be placed somewhere along the continuum between centralized and decentralized management. A centralized structure will be slower to respond to changing market conditions but provides stability and control. A decentralized structure provides autonomy for local businesses to make their own decisions quickly, ; however, the decisions may not align with the parent organizations' strategic objectives and ethics. Many business decisions involve conflict between making money and ethical treatment of employees, customers, and the environment. Centrally managed organizations are more likely to align decisions with a universal corporate code of conduct. Autonomous subsidiaries will make decisions that are reflective of the local cultural values. The risk to the parent organization is that some of these decisions may severely conflict with shareholder values. Treatment of women, children, and respect for the environment are some areas where regional differences exist.
...Harris, Sarah V. Moran (2011). Managing Cultural Differences, Leadership Skills and Strategies for Working in a Global World. 8th ed. UK: Elsevier Inc.. 10-25.
One of the biggest hindrances to people living in a new culture is the initial culture-shock that people experience, as well as the culture-stress that occurs as time progresses. When a person enters a new culture, there are many noticeable differences from his/her own culture. These differences have been labelled culture-shock and culture-stress. It is the initial differences, which is called culture-shock, that often cause worry, fear, and sometimes withdrawl. However, these can be easily overcome through preparation and changes in attitude. As time progresses, there will be other issues that will start to appear that can become even more troublesome; these are called culture-stresses. The problem with culture-stress is that it is a lot more difficult to overcome. Conveniently there are a number of steps that can be taken in order to minimize the effects of both culture-shock and culture-stress. Missionaries often feel the effects of culture-shock and culture-stress the more than at other people as they normally do not have the support structure that other people do. In order for missionaries to adapt to the new cultures, they must prepare ahead of time.
There are a number of issues that affect international business ethics. They include employment practices, human rights, environmental regulations, corruption, and moral obligation of multinational companies. Employment practice refers to the working conditions an employee must work under. This can be very difficult to gauge, because many times the working conditions of a host nation are inferior to those in an organizations home nation. Many organizations have had to fight with these regulations. A good example of this in the trouble Nike found themselves in during the 1990s. There were a number of news reports released about the working conditions of most of its subcontractors were very poor . The Nike Company was not breaking any laws but it did bring into question the ethics of using a sweatshop. After this incident it left a number of questions for the international marketplace. In recent years many companies have cut ties with organizations that use unsafe and unfair labor practice.
Firstly, multinational corporations are not something new in this 21st century. There are more and more international corporation as people try to boost the process of globalization. The development of these multinational corporations depends on the management of the owners. Transnational strategy is needed in order to operate such a big system of companies. Every nation in this system has to be managed thoroughly in order to help running the corporation, as well as to keep the system as one consistent body of business. Managers also find it important to look for opportunitie...
11. Satish P. Deshpande and Chockalingam Viswesvaran, "Is Cross-cultural Training of Expatriate Managers Effective: A Meta Analysis," International Journal of Intercultural Relations 16 (1992): 296.