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The modern business environment is characterized by high competition, integration of markets, and changing economic trends. As a result, businesses have embarked on joining international markets to improve their sales and profits.
Companies that have adopted global strategies are increasingly finding it difficult to manage organizational behavior due to the social, cultural, and economic differences in the markets that they serve.
This paper sheds light on the importance of understanding the international dimensions of organizational behavior in the process of making global decisions. It will also discuss how managers can be more effective by understanding the international dimensions of organizational behavior.
International Dimensions of Organizational Behavior
The main international dimensions or aspects of organizational behavior include people, structure, technology, and environment. A clear understanding of these aspects of organizational behavior can help a global manager to make ethical decisions in the following ways.
First, understanding people enables managers to make ethical human resource and stakeholder management decisions. People refer to the individuals or groups of individuals who establish an organization and work to achieve its objectives. Thus, it includes stakeholders such as employees and owners of an organization.
Multinational companies hire employees from different cultural backgrounds. Culture determines the way employees communicate, solve problems, work, and interact with their colleagues.
This means that employees will always interpret the decisions made by their managers according to their cultural values, beliefs, and traditions. A decision that affects employees or any other stakeholder of the organization is considered to be ethical if it respects the culture of the affected parties.
Thus, a decision that is considered to be ethical in the US might be perceived to be unethical in Japan. For instance, staff promotions in the US are mainly based on performance. By contrast, seniority is a key determinant of staff promotion decisions in Japan.
Thus, directing an old Japanese employee to report to his younger colleague is likely to be considered as an unethical decision. By contrast, this decision will be considered to be ethical in the US.
In a nutshell, managers must understand and appreciate the norms, beliefs, attitudes, and traditions of the employees and stakeholders that they deal with in each market or country in order to make ethical decisions.
Second, global managers need to understand the organizational structures that are used in various overseas markets in order to make ethical management decisions. Structure provides a formal framework that delineates the relationships among members of the organization.
It also determines the flow of work and communication among employees. Organizational structures vary from region to region. Most western companies such as IBM and Barclays Bank have dynamic organizational structures that facilitate seamless interactions among employees.
Thus, most western companies have few management levels and encourage direct communication between managers and employees. By contrast, Chinese companies use a hierarchical organizational structure in which the company is directed by the top management.
The managers, on the other hand, lead the employees. A clear understanding of the influence of organizational structure on the relationships among employees enables manages to make ethical decisions concerning accountability, communication, and staff involvement.
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In western countries where companies use flat organizational structures, managers are considered to be ethical if they consult employees before making important decisions. Managers must recognize that employees have a right to express their views and to hold different opinions.
In countries where companies use hierarchical structures, ethical management decisions ensure that each functional unit is accountable for its performance to promote fairness and high performance.
Third, managers who have a clear understanding of the level of application of technology in various parts of the world are likely to make ethical decisions concerning their operations.
Technology is an important element of organizational behavior since it determines the level of cost-efficiency, product quality, and production capacity. Technology has positive and negative implications for the environment and employees.
Thus, people have different perceptions and attitudes towards technology in various parts of the world. For instance, in African countries where unemployment rate is very high, workers and trade unions resist technologies that replace human labor.
However, companies must still adopt technologies that promote automation in order to reduce costs and to increase their productivity.
Thus, a manager who understands the impact of technology on the society will be able to make decisions that promote the use of production techniques that minimize harm to various stakeholders and maximize benefits to the company.
This perspective is based on the fact that an ethical decision must promote responsibility and fairness. Understanding the effects of technology enables managers to make ethical decisions that encourage the spirit of altruism.
Finally, global managers must understand the business environment in which they operate in order to make ethical decisions. The external environment of an organization consists of six major factors. These include political, economic, social, technological, environmental, and legal factors.
Undoubtedly, these variables vary from country to country. The effects of the external environmental factors on businesses can only be addressed in an ethical manner if they are clearly understood.
Managers who understand political factors such as industry regulations will be able to make ethical decisions by complying with all reporting and operational requirements.
Similarly, global managers will be able to make ethical decisions concerning their production and marketing strategies if they understand social factors such as citizens’ attitudes and beliefs in various countries.
For instance, an advert that has a picture of a woman is highly accepted in the US and most European countries. However, using a picture of a woman in an advert in Saudi Arabia is considered to be unethical since it contravenes Islamic teachings and the country’s traditions.
In a nutshell, a clear understanding of the business environment enables global managers to make ethical decisions by avoiding to break rules or to engage in activities that undermine established social norms in various countries.
Effective Global Managers
An understanding of the international dimensions of organizational behavior can help someone to become a better global manager in the following ways. First, it enables global managers to motivate a multicultural workforce. Motivation is achieved by understanding and fulfilling the needs of employees.
Needs are deficiencies that influence employees to behave in a particular manner to achieve a predetermined outcome. Understanding the organizational and the national culture in a given country, as well as, the external business environment enables global managers to identify employees’ needs.
For example, intrinsic rewards such as staff promotions and recognition are highly regarded in masculine cultures. However, employees from low income countries are likely to be more interested in extrinsic rewards such as bonus pay to improve their purchasing power.
Thus, a global manager will be able to influence employees to behave in a particular way if he is able to understand their needs and to provide appropriate rewards to fulfill them.
Second, understanding the international dimensions of organizational behavior improves global managers’ leadership abilities. The contingency theory of leadership postulates that a good leader links his behavior to the situation at hand.
Specifically, the leadership style that a good leader adopts depends on the situation that he is dealing with in terms of business objectives, as well as, employees’ values and skills. For instance, a country where employees value freedom of expression and autonomy, a global manager can be a good leader if he is democratic.
Similarly, a production-oriented leadership style will be appropriate in an organization where employees are high motivated. Thus, a global manager will be effective if he can understand the situation associated with the various elements of organizational behavior and to utilize the appropriate leadership style.
Third, global managers can enhance their communication skills by understanding organizational behavior. Different cultures often use different communication styles. Most western cultures use direct communication styles where people say exactly what they mean.
By contrast, most Asian cultures use indirect communication styles. This means that a global manager who is in charge of a diverse workforce can create confusion and misunderstandings if he uses the wrong communication style.
Global managers can overcome this challenge by taking time to study and understand the interactions among employees, the communication styles used in their organizations, and the role of technology in communication.
Fourth, understanding the international dimensions of organizational behavior improves global managers’ ability to manage power and conflict in their organizations. Power refers to “the ability to influence the behavior of others”. The organizational structure is the main source of legitimate power in most companies.
The structure defines the power that is associated with various positions in the company. There are also several forms of power that do not emanate from the organizational structure. Nonetheless, they have immense effects on organizational performance.
These forms of power include expert power, coercive power, and referent power. Misuse of power often results into interpersonal and intergroup conflicts. Conflicts often arise when the organizational structure fails to define the officers who have the right to make decisions in every situation.
For instance, engineers who have expert power often disagree with CEOs who approve projects without their consent. Global managers can prevent conflicts if they understand the sources of power straggles within their organizations. This enables them to distribute power fairly, thereby avoiding conflicts.
Given the dynamics of the modern business environment, global managers have to understand the international dimensions of organizational behavior in order to make ethical decisions.
Specifically, understanding organizational behavior enables global managers to make ethical decisions concerning personnel management, stakeholder management, and application of technology.
Moreover, it enables global managers to respond to external factors such as industry regulations in an ethical manner. Global managers can be more effective in leadership, communication, and conflict management if they understand the international dimensions of organizational behavior.
Bredeson, Dean. Applied Business Ethics. New York: John Wiley and Sons, 2011. Print.
Hellriegel, Don and John Slocum. Organizational Behavior. New York: McGraw-Hill, 2010. Print.
Luthans, Fred. Organizational Behavior. London: Oxford University Press, 2005. Print.