There was a chance to acquire a big box retailing organization that sources and sells world-wide. But the organization is a mess. Relations between people from different lands are not productive and smooth, the company has poor relations with suppliers, and the parts of the organization do not seem to be coordinated. Thus, there is a need of fixing the problem.
Today, the working world is changing and becoming more demanding, especially where the environmental factors have contributed to globalisation, intense competition, and speed. People need to change with it and so does organisations, to be flexible, keep learning, and committed. In today’s global economy, firms are facing 2 major issues: Internationalisation and the effective usage of International Human Resource Management (IHRM). As firms expand globally, professionals who operate internationally should understand how cultural differences affect management style. The understanding of the impact of cultural and personal/demographic factors related to management efficiency is craved.
Let us take the example of cultural diversity in the context of West and East Asia. It can be always mentioned that the East has very intricate value systems which even today pose questions to the West. Particularly countries like Japan and China who base their belief in Confucian and Zen wisdom tend to react very differently than their Western counterparts. A thorough understanding is needed of their culture, perceptions and style of thinking in order to accurately predict their behaviour on Western understanding scales.
Globalisation forces the West to interact with East on a very large scale and success of this interaction will be based on these crucial key points which determine the psyche of the Chinese modern manager. Ethical values and corporate social responsibility are fast gaining global priority. The corporate sector has, since long, behaved as an isolated entity, powerful enough to influence and dictate directions in the life of the common man, as well as governments.
The emergence of environmental concern and sustainability issues has highlighted the role of ethics and social responsibility in the functioning of the corporate sector. Modernisation has brought in materialism and consumerism which by itself is not detrimental. However, from an organisational point of view this trend is somewhat fruitful.
US’s sway on business culture across the world is instantly recognizable. Conducting business in the US may possibly be fairly dissimilar from the method it is done in any other country. The greetings, dress codes, and agendas may differ from what any foreigner is habituated to. Here are a few appropriate approaches to demeanour commerce in an apposite manner in the US.
Each and every corporation in US provides a line of definition regarding certain standards for business attires. More often than not, as a common rule, most of the big organizations and associations necessitate more formal clothing. The majority of the companies contain an official dress code designed for their meticulous business. Some companies may well make available uniforms for a number of, or each and every one of their employees. If the employees prefer to have on costume jewellery, it is supposed to be the minimum and at a time should compliment the outfit. Large, ostentatious jewellery is more often than not apposite for a commerce environment.
Punctuality is an incredibly imperative rule of business decorum. The usual business hours are from Monday to Friday, 8.30 or 9.00 a.m. to 5 or 6 pm, with a 30 to 60 minute lunch break. Every endeavour must be made to reach the destination on the dot to any scheduled convention or appointments. If any individual would be behind schedule for a rendezvous, in that case a call should be made declaring the predictable impediment. On the other hand on a regular basis arriving belatedly or missing schedules would cast a negative impact on the business.
It is traditional for business conference with individuals from outside the company to initiate and finish with a firm handshake. Eye contact is desirable to be maintained during the handshake and on every occasion when somebody is communicating. During introductions, attention should be paid vigilantly to the articulation of the person’s name so that he or she could be addressed properly. While introducing oneself, the full name should be given instead of the first name.
Matters like when it would be apposite to address an important person by their first name only, or whether they should be addressed in an extra formal style. Using nicknames should be avoided until the person gives consent to do so. The apposite method of addressing somebody may perhaps depend partially on his or her status in the company. For case in point, it may possibly be good enough if co-workers are addressed by their first name other than the higher-ranking officers of the company.
Where as in US Ethnic Culture is centred around individuals, messianic in nature, saving the world as aphorism, people are outspoken, expressive and efficient communicators, more individual influence and disseminated decision making prevails in negotiation style, dealing with business counterparts are straight, more understated, gratitude and grudge for both favours and humiliations respectively are superseded by business purpose, strong Ability to Make Immediate Response. Westerners usually put up dealings and, if they are successful, an association will follow. However, the Chinese consider that potential business partners should build a relationship and, if successful, commercial dealings will follow. Commercial law is embedded in our accepted wisdom.
Hofstede identified five dimensions (individualism, power distance, uncertainty avoidance, masculinity, and Confucian dynamism) to distinguish differences in culture, in international business context. Hofstede’s (1980) measures of national culture dimensions could provide a framework to identify potential ethical problem-areas in specific countries.
Moreover, Hofstede (1980, 1991, 1993, and 2001) described the cultural context as involving shared norms and value systems, and how the cultural context may shape notions and perceptions of subject service and service quality. This is the fundamental of relational norm. In this context it would be relevant to mention the view of Mesquita, & Lazzarini. They indicated “Relational norms therefore promote greater support for cospecialization efforts” (Mesquita & Lazzarini, 363).
Organisations are cultural phenomena, they would stress the ways in which cultural assumptions can suppress opposition and reproduce management propaganda and ideology. Moreover, it is reasonable to propose that complex organisations might have many cultures and that such sub-cultures might have common characteristics and contradict each other. The key point is that the culture of an organisation (its values, norms and artefacts that are created) is not to be viewed as easily open to management planning.
This actually query on how well can a firm prepare its employees for the demand of a multi-cultural organisation. Organizational culture is the culture of an organisation that will, to a large extent, determine how people interpret and act upon information that is provided through the controls process. Corporate culture therefore is the key in determining the success or failure of an organisation and a poor existing corporate culture can nurture poor behaviour leading to poor judgement.
The new class of Human resource managers is required to recognize and know how to determine the financial impact of their dealings, so as to be competent to make obvious the value added contributions of their jobs. Human resource professionals turn out to be strategic partners when they involve themselves in the course of action of defining business approaches, when they put forward questions that set in motion plans to action and when they formulate Human resource practices that bring into line with the business plans.
By satisfying this role, Human resource professionals augment the competence of a business to carry out its strategies. In this context of cross-culture employment, the effect of outsourcing is evident. This element is the necessity of the day. Engardio indicated that “Procter & Gamble products would come out from outside by 2010”. (Engardio, 56) Thus, it is obvious that a cross-culture management system is necessary.
The Human Resources Management (HRM) purpose take account of a several activities, and the most important among them is making a decision what staffing requirements one have and whether to use autonomous contractors or take into service employees to meet these needs, appointing and training the most excellent employees, making sure that they are better performers, handling performance related problems, and ensuring that the human resources and administrational practices do the accepted thing to various set of laws.
Actions also take account of supervising the steps taken towards employee benefits and reimbursements, employee accounts and personnel guiding principle. But everything should be done with compassion and understanding the basic psyche of the employee. However, in accordance to Pressey & Selassie, “influence of national culture in international buyer-seller relationship” (Pressey & Selassie, 353) is negligible but in the context of production procedure this becomes a chief component of development.
Thus it is obvious from the research that for a better working environment and healthy relation with other personnel the managerial levels of the HR management groups must take extra note to ease the conditions for the worker. In this study it has been established that organizational culture and national culture sometimes collide and it becomes difficult to become aligned with the mainstream. Thus HR department must always study these types of problems of the employees and act immediately if help is needed.
This only way that production of a company can be enhanced from the parameters of the HR department. Thus, it is clear that only with the help of these measures the problem of cross culture diversity in organizations can be solved.
In the new organization, it was discovered that some of the suppliers are located in the developing world and worse yet the working conditions for some of the workers in some of these suppliers’ factories are sub-standard given mainstream American values. In particular, managers are physically abusive, ventilation is poor, and wage has the have about 25% of the buying power of American wages. In this case of outsourcing it evident there should be some thought process involved.
It is obvious that goals of any company are simple, such as speed, equality and competitive price. Commodities have become international for this company and the impact of engineering is significant. In this company, the learning curve in engineering has become an unaffordable luxury. Competitive market pressures mandate finding ways to reduce the total time required to introduce new products in the market. Competition along with more complex production and distribution environments requires identifying and reducing necessary costs, such as costs associated with development, manufacturing, distribution and service and it is logical to believe that developing strategies like M&S would not be quoted under the parameters of a successful strategy plan.
On the contrary there are several examples of an unsuccessful strategy plan. In the context of globalization and global economy this becomes more evident when we find that companies are overlooking the global parameters of a business. Outsourcing is another global strategic alliance that fosters a winning international strategy. For, lower prices combined with quality will generally increase the company’s clients.
To achieve lower selling prices, one marketing strategy is to produce these goods or buy imported materials from an outsourcing company in India, China, Taiwan and other countries. This is called value retailing. Outsourcing literally gives a big edge against competitors in the current tough and competitive business world. Phenomenally, outsourcing of raw materials to third world countries has increased because the labor cost in these Asian countries are cheaper than if companies hire local workers in the United States.
Definitely, cost structures, internal processes and ways of working between the outsourced supplier of goods and services and the American purchasers of goods and services are very crucial factors that will make company profits skyrocket way above the competitors.
Examples of outsourcing are calling center jobs, accounting jobs. Also, some companies buy the raw materials needed to make a new product from third world countries in order to lessen manufacturing costs. Thus, management’s successful cost reduction through outsourcing (supply chain management) is another global strategic alliance which fosters a winning international strategy. But companies like Clark- Davis fails to recognize this advantage and can well enumerated as prime example of unsuccessful strategy plan.
Decision making makes the prime difference between the reasons for the group’s very good and very poor performance. The same is applicable in the context of decisions on HRM. It can well be stated in this context that in the parameters of decision making the Human Resources Management (HRM) purpose take account of a several activities, and the most important among them is making a decision what staffing requirements one have and whether to use autonomous contractors or take into service employees to meet these needs, appointing and training the most excellent employees, making sure that they are better performers, handling performance related problems, and ensuring that the human resources and administrational practices do the accepted thing to various set of laws. Actions also take account of supervising the steps taken towards employee benefits and reimbursements, employee accounts and personnel guiding principle.
However, it should noted that outsourcing is not necessary be an evil from the ethical point of view. Even if the working conditions and wages are lower than US standards it can be certainly mentioned it is still better than the local market value and the purchasing power. Nike example is a prime supporter of this issue. With enhanced production induced by market demands Nike decided to outsource its manufacturing units to South Asian countries like Korea and Taiwan.
This is because there is practically no competitive advantage in terms of pricing with other competitors of the market. Therefore, it would have been impractical and illogical to invest capital in a new manufacturing unit. The option was to outsource the production to comparatively low salary countries. This move was one operational formulation that helped Nike to gain much more profit and market share as production was achieved under lower cost margin.
However, “It is important to note that the ethical and operational responsibility for the value chain as a whole is generally either explicitly denied, or not explicitly accepted by the leading sportswear brands.” (Nijhof, Forterre & Jeurissen, 515)
Nike’s presence in South East Asia is certainly beneficial for Asians and none can enumerate better than this illustration, “eight years ago, when Nike was established in Vietnam, the workers had to walk to the factories, often for many kilometers. After three years, they could afford bicycles. Another three years later, they could afford scooters. Today, the first workers can afford to buy a car.” (Zimmerman, 91) For the South East Asians the presence of Nike is job assurance and not labor camp. As mentioned in Kristof & WuDunn, it can be stated as “First there is bitterness and then there is sweetness”. (Kristof & WuDunn, 71) Nike is providing them exactly this element.
Thus the point made clear by Nike in this context was obviously something to be convinced of. If that is not important or enough for many activists it could be mentioned that if this is an illegal move by Nike then at least the workers are not complaining at any circumstances. Moreover, this move could be regarded as the price of globalization if at all there is a price involved in it. For the South East Asians the presence of Nike is job assurance and not labor camp.
It should mentioned that Nike behaved quite ethically when confronted by human right activists and media by reorganizing and implementing humane approaches to its out sourced factories like creating better working conditions, restricting working age limit to a minimum of 18, allowed independent monitoring, induced research funding, providing education and implementing small business finances. But in terms of working hours and leave schedule there were no changes and the sweatshop continued. This ignited protest all over the western world urging buyers to boycott Nike’s products thus affecting the company in a bigger way.
On the other hand, it could well be mentioned that the amount of work outsourced by Nike is huge and from a perspective of patriotic approach this move by the company is extremely detrimental for the working population of the United States. It has been estimated that without the current mode of operations implemented by the company regarding outsourcing the working population of the US would have gained by a large proportion. With rising curve of unemployment within the US it is true that companies like Nike is making the scenario worse. But seen from a utilitarian perspective outsourcing is the most logical move that the company could have ever made.
It is surely less ethical to deprive the local population in terms of work opportunity but it is more relevant for the overall profit margin of the company and that is what it should always be concerned about in the long term. It should be noted that the outsourced pacts are basically project based thus; on ethical point of view the procedure of the outsourced company should not be counted. It is reported “these alliances are project-based collaborations, often revolving around one or more value–chain activity”. (Emdena, Yaprakb & Cavusgil, 883)
In conclusion, the companies today that are deciding to outsource previous in-house jobs to individuals overseas with equivalent skills and abilities who live where the cost of living is less and, thus, will accept much lower salaries. Therefore, the corporations are getting the same work done, often with the same quality, for substantially less cost. Thus, keeping in mind the need of the company, it is logical to use the benefits of suppliers from overseas.
There are concerns of ethics over the issue but when the benefits of the overseas suppliers and its workers are concerned, it is evident that the suppliers are the real gainers given the purchasing power of the suppliers’ nations.
Works Cited
Emdena, Zeynep. Yaprakb, Attila & Cavusgil, S. Tamer. “Learning from experience in international alliances: antecedents and firm performance implications”. Journal of Business Research 58.2 (2005) 883– 892.
Engardio, Peter. “The future of Outsourcing”. Business Week 2006. A3.
Hofstede, Geert. Culture’s Consequences: International Differences in Work-Related Values. London: SAGE, 1984.
Kristof, Nicholas D. & WuDunn, Sheryl. “Two cheers for sweatshops”. New York Times Magazine. 2000: A2.
Mesquita, Luiz F. & Lazzarini, Sergio G. “Horizontal And Vertical Relationships In Developing Economies: Implications For Smes’ Access To Global Markets.” Academy of Management Journal 51 2 (2008) 359–380.
Nijhof, Andre, Forterre, Dai and Jeurissen, Ronald. “Managing legitimacy issues in global supply chains: the case of the athletic footwear industry”. CORPORATE GOVERNANCE 8.4 (2008) 506-517.
Pressey, Andrew D & Selassie, Habte, G. “Are Cultural Differences Overrated? Examining the Influence of National Culture in International Buyer-seller Relationship”. Journal of Consumer Behaviour 2.4 (2003) 354-65.
Zimmerman, Donald. On the Path of Success: Facts and Fictions. Auckland: IBL & Alliance Ltd, 2006.