Primer on International Business
One of the first important points brought up by the introductory chapter of “International Management: Strategy and Culture in the Emerging World“ by Ahlstrom and Bruton were the 5 values that influence organizational behavior. Such aspects are particularly important given that it enables firms to understand the various nuances that come with establishing and appropriate off-shore location in the various problems that may come about as a direct result of having to interact with entirely new business culture.
In line with this particular reasoning was the point brought up regarding minimum wage differences in various countries. As indicated by the chapter each country has its own unique minimum wage law that sets the limit that people are legally obligated to work. While knowing this is an important factor for any company’s off-shore location it is particularly interesting to point out that just because a company has a set minimum wage doesn’t mean that a company can’t give its workers more than minimum wage especially when it is in the company’s ability to do so.
The last point within the chapter that piqued my interest was the section of anti-discrimination laws. This is particularly important for a company’s recruiting practices since it sets a standard wherein all candidates, those that are qualified at least should be considered rather than hold onto misplaced preferences over gender and race. For example, within the U.S. it is illegal to discriminate in regards to gender, race and age and as such creates a certain degree of equality for all qualified candidates.
Leadership
One of the more interesting points brought up by this chapter is the concept of power and its use depending on a given situation. As the chapter states leaders need to apply power in order to both control and motivate employees in order to accomplish a particular task. Without this, there is an increased likelihood that employees will not do a task as required or fail in being able to become sufficiently self-directed in accomplishing a particular goal. As such leaders need to be able to both know what type of power to apply and when in order to ensure proper employee performance.
For example, when there is a lack of employee discipline a certain degree of masculine high power is needed in order to put employees back into line so to speak. On the other hand another interesting point brought up is the concept of interpersonal power. This form of power is based on a more coercive form of power wherein a leader may attempt to influence a person in a positive or negative way in order to get a particular task done. This is particularly important since different types of people can only be properly influenced by certain types of strategies.
For example, a hard-headed employee is usually influenced by a coercive/punishment interpersonal leadership style while a rewards oriented individual would be more likely to cooperate if some form of reward is entailed. The last point that interested me in this chapter was related to the concept of choosing who gets to be a leader. This is an important aspect that all organizations need to take into consideration since if they choose incorrectly and the choice doesn’t correspond properly with the local business culture there will be conflicts within the office. For example, within Japanese offices it is often the case that seniority rather than employee performance dictates promotions and as such to promote someone over another that has been there longer often results in internal conflict due to a perceived violation of the business culture within the company.
Negotiation
One of the first points of interest in this chapter is the concept of language problems in negotiation. All corporations need to take into consideration the inherent problem that may arise when it comes to negotiating a contract or agreement in the context of a foreign language since the meaning of a particular phrase could have an entirely different context when translated. For example, when Pepsi launched its marketing campaign its slogan “Come alive” was hilariously misinterpreted as bringing dead people back to life. Another interesting point that was brought up within the chapter was the concept of trust. What must be understood is that mutual trust and understanding is needed for any agreement to succeed.
If one party distrusts the actions and motivations of the other is more likely than not that negotiations will fail to push through. As such when it comes to proper negotiations it is important to first establish mutual trust and respect before any terms or agreements are even brought to the table. The last point that was of interest to me within the chapter was the concept of goals and approaches and how each party to the agreement has their own inherent goal in mind with a varied method of achieving it. This is particularly important to consider given that depending upon the goal in question both parties to an agreement may be able to see the benefit of a mutual agreement or the opportunity of using the other company for their own personal advancement.
Conflict
When it comes to the topic of conflict there are 3 particular points of interest within this chapter, namely: the sources of conflict within an organization, cultural influence on conflict, and the positive influences conflict may at times have on a firm. Conflict within an organization isn’t necessarily a bad thing, having varying ideas regarding a particular action plan or operational structure actually enables differing views to present themselves which often leads to the creation of a variety of possible resolutions to particular issues which is a far more effective means of solving a problem as compared to merely following one single overriding idea.
For example, an international firm that has a little internal conflict and doesn’t have different ideas regarding particular aspects of a firm’s current level of operations runs the risk of stagnating as a company. Another factor that should be taken into consideration in regard to this topic is the culture influences the affected conflict within an organization. What must be understood is that an organization’s business culture often affects the way in which conflict is created and resolved and as such before means of conflict resolution can be enabled by a multi-national company it must first take into account aspects related to the methods of traditional conflict resolution within that particular organization.
The last of the topics of interest within this chapter are the sources of conflict within an organization. This is particularly important to consider since in order to prevent conflict from starting in the first place any firm needs to take into consideration where possible problems may arise. For example, if it evident that there is a dispute between a manager and his/her employees within a particular department it is important to immediately address the issue rather than let the resolution stagnate resulting in the problem getting worse.
Corruption, Culture, and Foreign Direct Investment
The three points of interest within this chapter are the correlation between power and corruption, how corporations themselves often enable such practices to continue and how despite the general abhorrence of most individuals towards the concept of corruption many politicians still continue to practice it. When it comes to power and corruption it is often the case that power in itself breeds the possibility for corruption and as such corporations should be wary when it comes to dealing with individuals who pride themselves on power.
For example, there have been numerous instances where a politician has been willing to accept a bribe in order to look the other way when it comes to practices of questionable legality (i.e. the case of Mexico and Wal-Mart). The second aspect of this chapter that I found particularly interesting was how corporations actually promote corruption by willingly providing bribes to politicians in order for their business interests to push through. The inherent problem with this particular situation is that it creates a precedent for unethical behavior which may in turn negatively affect a firm’s business culture (i.e. the case of Goldman Sachs).
The last interesting point in this chapter is the concept of most people abhorring corruption yet many still continue the practice. What must be understood is that it is important for any corporation to understand that the concept of opportunity creates the potential for corruption. Thus, any firm should never place itself or any employee in a position where the potential for corruption exceeds the checks and balances system that should be put in place in order to prevent it from manifesting.
Motivation
The first interesting point from the chapter on motivation is the various tools utilized to encourage employees to steadfastly work towards a goal or feel more compelled to work harder. This can come in the form of reward programs, company policies or varying degrees of empowerment that makes a job a little more “valuable” to an employee so to speak. This is an important factor to take into consideration for companies since such programs increase employee performance levels which of course is a good thing. One example of this seen in modern-day firms is the employee bonus program which rewards hard workers and those who fulfill certain standards of attendance.
Another interesting point brought up by the study is the assumptions on what drives an employee to perform better. This comes in the form of varying models that emphasize that most individuals are goal direct, are driven towards intrinsic rewards and need such rewards in order to work better. Such models of behavior are important facilitators in understanding employee behaviors and as such are important in the creation of new policies and strategies in boosting employee performance. For example, when using such models of behavior a company may employ a rewards program for efficiency and productivity in order to encourage all employees to work harder as a result.
The last point of interest within the study is the concept related to how motivation initiates, directs and sustains an employee’s performance to the job they are accomplishing. When examining this particular aspect it becomes obvious that all employees need some form of motivating factor in order to work harder, without this there is no incentive to improve one’s performance. For example, if a company doesn’t have any means of motivating its employees to work harder it is unlikely that their performance will improve.
Management Practices
The first point of interest in this particular chapter are aspects related to the “hidden costs” of doing business. The reason behind this is the fact that businesses don’t operate within a vacuum and have to deal with intense competitive environment forces on an almost daily basis. As such in order to meet these challenges company often has to retain employees by offering certain benefits while at the same time institute costly training practices in order to improve performance, these factors result in added costs for the company.
For example, if a company wishes to expand into a new field of business to stay competitive it would need to train some of its current employees. The second point of interest within this chapter is the use of power and resources in order to encourage unfair labor practices. The fact is that some management styles unfairly use the situations of employees in order to derive every single ounce of performance out of them while at the same time paying them a mere pittance. Such practices are beneficial for the bottom-line of the company but are considered unethical since it is a form of abuse.
One example of this can be seen in Foxconn (one of Apple’s major suppliers) and how they supposedly abuse their employees in China in order to get them to work more. The final point of interest is instances where serious problems are overlooked in favor of having work continue as usual. This can come in the form of environmentally damaging practices or employee abuse. The reason this is important is due to the fact overlooking such factors is highly unethical and would reflect badly on the company if discovered. For example, the recent scandal of bribery in Mexico involving Wal-Mart definitely reflects badly on the company.