Home organizations must assess the cultures and values of other nations where they do business. It is naïve to think that a set of business practices that work for a specific nation will also work or be transferable for a different nation (Newstrom & Davis, 2002). Newstrom and Davis also suggest that:
“The idea of cultural contingency means that the most productive practices for a particular nation will depend heavily on its culture. The ideas that work in one nation’s culture must be blended with the social system, level of economic development, and employees’ values in a host country. The difficult lesson for both expatriate and local managers to accept is that neither the home nation’s productivity approaches nor the host nation’s traditional practices are used exclusively”
A multicultural leader must have cultural and strategic understanding to successfully operate a global business. Jones (2004) asserts that “The creation of value from related diversification requires a large amount of coordination and integration, norms and values that emphasize cooperation between divisions are important”. To expedite the acceptance and indoctrination of a home organization’s globalize expansion, the expatriate manager must overcome his or her ethnocentric mindset that centers on the premise that one’s own cultural norms and values are best suited for different cultural situations and conditions (Newstrom & Davis, 2002). Moreover, according to Newstrom and Davis, “This predisposition is known as the self-preference criterion, or ethnocentrism. Though the way of perceiving conditions is very natural, it interferes with understanding human behavior in other cultures…”
The realm of ethics has two fundamental components; the right behavior and the wrong behavior (Kidwell & Kochanowski, 2005). Relative to organizations ethics; rightness or wrongness centers on environmental, legal, or social guardrails to determine if behaviors are moral. Much of the sentiment around deviant behavior relates to wrong doing; as such, the word deviant is applicable. However, there are many circumstances where deviant behavior is actually positive and natural (Kidwell & Kochanowski). The question becomes, who decides what behavior, in a given situation is deviant (Kidwell and Kochanowski)? Additionally, an activity or behavior that is perceived deviant in one culture may not be so in another culture; the same applies with the passing of time – when and where human perceptions change.
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Chowdhury (2003) postulated that in organizational culture, “Network organizations exhibit high levels of sociability but relatively low levels of solidarity…Patterns of sociability within the workplace often extend beyond [the organizational confines]”. Chowdhury expressed his views on Fragmented Cultures; as such, “fragmented cultures can derive substantial benefits from the autonomy and freedom granted to its members”. Finally, Chowdhury shared insight on Communal cultures; as such, “members are often passionate about the ’cause’… [Therefore] communal cultures can often sustain complex teams apparently divided by geography, nationally, and function”.
For an organization to first decide to expand internationally is a major business decision. The decision to grow globally may be easy to conceptualize and strategize, but extremely difficult to implement. Thus, high risk may potentially lead to high return on investment. Chowdhury (2003) postulated that “to prosper and survive in the new globally competitive environment, companies are embracing regional and global integration and coordination”. However, for some companies to maintain a competitive edge and to merely survive, the only alternative is to go global. Former CEO, Percy Barnevik of ABB, articulated: ‘we want to be global and local, big and small, radically decentralized with central reporting and control; If we can resolve those contradictions we can create real organizational advantage’.
Major ethical risks in global organizations reside in: competitive forces; economic, political, and global forces; and demographic and social forces. Competitive forces causes the organization to change in order to meet, minimize, or eliminate competitors’ products and services efficiencies, quality, and capabilities (Jones, 2004). Economic, political, and global forces have a profound influence on the manner, method, and strategy in which an organization produce products and services in foreign countries (also in the United States). To further complicate manners, Jones (2004) asserted that “[organizations]…need to adapt to a variety of national cultures, and the need to help expatriate managers adapt to the economic, political, and cultural values of the countries in which they are located”. The third threat comes from demographic and social forces. Multinational organizations are challenged to train their leaders to change their leadership styles and behaviors to blend with a diverse workforce.
Leaders with an anthropological mental model are suggested to have a propensity towards understanding cultural uniqueness (Hesselbein & Goldsmith, 2006). Understanding various cultural norms and expectations and demonstrating ethical accommodating behaviors will alleviate the obstacles and realities associated with mistrust. For hundreds of years, foreign countries resist interacting with companies from developed nations because of lackluster trust and related anxiety (Grosse, 2000). However, savvy and astute global leaders leverage their cultural expertise to extract the diverse richness of universal workers. The socio-cultural expectations of global workers and their communities increasingly prefer to do business without the threat of corruption and environmental destruction. Environmentally, socio-cultural expectations centers on preventing global disasters due to air pollutions and established wind prototypes; ocean currents carrying man-made toxins traveling through international waterways; and a deliberate or unintentional redeployment of various genus of plant life and living things (Kubasek, Brennan, & Browne, 2003).
Chowdhury, S. (2003). Organization 21C. Upper Saddle River, NJ: Financial Times Prentice Hall.
Grosse, R. E. (2000). Thunderbird of global business strategy. New York, NY: John Wiley & Sons, Inc.
Hesselbein, F. & Goldsmith, M. (2006). The leader of the future: Vision, strategies, and practices for the new era. San Francisco, CA: Jossey-Bass A Wiley Imprint.
Jones, G. R. (2004). Organizational theory, design, and change. (4th ed.). Upper Saddle River, NJ: Prentice Hall.
Kidwell, R. E. & Kochanowski, S. M. (2005). The morality of employee theft: Teaching about ethics and deviant behavior in the workplace. [Electronic version]. Journal of Management Education, 29(1), 135-153. Retrieved August 14, 2006, from the University of Phoenix ProQuest Research Database. (Document ID: 923585551)
Kubasek, N. K., Brennan, B. A., & Browne, M. N. (2003). The legal environment of business: A critical thinking approach. (3rd ed.). Upper Saddle River, NJ: Prentice Hall.
Newstrom, J. W. & Davis, K. (2002). Organizational behavior: Human behavior at work. (11th ed.). New York, NY: McGraw-Hill Irwin.