The presently analyzed article examines business practices and managerial values in the context of globalization: through a detailed literature review, he tries to understand whether cross-cultural interference is positively influenced by managerial values, how managerial values interrelate with the organizational culture as well as how the profile of business practices has changed in the course of globalization and overall integration.
From the very beginning the author substantiates the choice of the topic and explains the importance of the issue being discussed: he intends to prove that the overall process of globalization observed nowadays in the world leads to the major change in managerial behavior, managerial values, and the way business is conducted. One more distinguishing feature he mentions is the overall obsession with environmental issues that also influenced the formation of the companies’ mission, vision, and corporate ethics codes (Kanungo, 2006: 23).
This opinion surely makes sense as nobody will deny the fact that globalization is unstoppable, intensifying with every coming year and requiring an adequate response from the managerial staff and business administration in order to bring the actions of the global community to coherence and persistence. The environmental crisis is one of the major side effects of the industrial revolution; its dramatic influence has been recently realized hence making environmental protection one of the most aching issues of contemporary reality. Every business should include these considerations in its agenda while planning the business strategy to choose in order to succeed as companies that neglect the global environment are not favored nowadays and receive a negative reputation at once, are doomed to failure in the business arena.
Extension of interrelations across cultural and geographic borders is also one of the issues brought about by globalization – it is possible to agree with the author on this point. However, the question is in the reason and consequence ties between these two notions – whether it is globalization that is the push towards multifaceted cooperation of managers and business owners, reformation of managerial values and corporate ethics to suit the changing demands. It is useful to look back to the period when FDI and MNCs were still unknown and not understood by the society, thought to be bearing a threat to the independence and autonomy of separate countries’ economies, but despite this fact they developed and extended their influence in target countries. Summing these considerations up, the question about what caused what comes to the fore – whether globalization is the consequence of international cooperation that was developed by the society in order to increase profits and grasp as much territory for its influence as possible or globalization emerged as a phenomenon further causing the major change within economies, businesses, values, and perception of people.
Rama Prasad Kanungo (2006) gives out a set of theories concerning interrelations between managerial values, business practices, and cross-cultural interaction. He includes assumptions of Perlmutter on the necessity of the agreement of shared values and the existence of two managerial capabilities that should be developed in the present context (global cross-cultural competencies and understanding of derivatives of varied factors influencing implications of managerial values), Joynt and Warner’s considerations of divergence and convergence, and Cox and Blake’s theory of advantage managerial values may bring in the form of utilizing expenditures, gaining resources and creativity. He also considers Fatehi’s opinion on the business cooperation representing nothing more but the interrelations between managerial values on the subject of their compatibility, which, in the case of being positive, ensure the success of the business (Kanungo, 2006: 23-24).
Agreement of shared values with the purpose of conducting joint business affairs really makes sense, however, it seems that the cross-cultural communication and interrelations in all aspects, including business, would not be such a deep concern of the majority of managers and other specialists of cross-cultural communication; they would not be a subject of such intense and long-lasting research – all answers, policies, and strategies would have been found long ago if the sole aim of every manager were to ensure the compatibility and coincidence, productive interconnection of corporate values on all levels.
The value system is much deeper and much more unplanned, rooted in the mentality of the staff and the history of the company, the profile of its activity, and the initial mission statement of its founders. They heavily depend on the location of the company, its specific traits of organization structure, etc. Even the most successful manager cannot tailor the corporate values, ethics, and morality of the company he/she works for to fit the specific values of another company they plan a partnership with. It is more probable that one of the main aims of the manager is to look for parallels, common traits, and similarities that would aid in building up a delicate scheme of mutually acceptable communication. If every company changed its system of values to establish one business contact, no matter how important and long-lasting it would be, then in a couple of years all global business space would turn into an army of standardized, formalized institutions that would be even unable to compete because of their homogeneity.
In the course of discussing business practices, the author attributes much attention to the change of perspective concerning cross-cultural studies that took place in the 1990s. He includes findings of such researchers as Hofstede (who created cultural models and investigated their global influence) and Trompenaar (who analyzed cultural implications in corporations on the basis of varied cultural factors) who, together with Czinkota and Ronkainen identified culture as a result of complex influences of economic, political, social, moral and other factors and made conclusions on its influence on managerial values deriving from this information. The author concludes that managerial values shaping the corporate culture may sometimes be designed to make the company’s profile fit the needs of its business strategy. However, in the opinion of Leigh L.Thompson (2007) organizational culture is a more complex notion that is flexible and corresponds not to the needs of the company but to the needs of individuals constituting the working staff:
Most people think that culture shapes organizational behavior; however, people (particularly, organizational leaders) attempt to change the culture of their organizations to fit their own personality (Thompson 2007: 34).
From these two controversial opinions, the questions arise on what serves what – does the company intentionally create the set of values that would best fit its profile, or are the values formed as a natural response to the profile of the company, its everyday activity, and the form of its functioning? Another question logically coming from the point of what variant is more profitable and potentially correct for any company – will there be enough control and surveillance within the company to supervise precise compliance with the imposed rules, and can the moral ethics deliberately imposed on people be integrated into their everyday working process? It is rather hard to answer these questions because they require much empirical research – according to the nature of human character it is at times rather hard to accept some philosophy of life and ethics of everyday conduct if they do not arouse any inner response in the personality. This is why the issue of successful integration of managerial values, corporate ethics, and code of morality should always be thought over well and strategically implemented – in case it is done the wrong way it will remain a code written in the statute of the company forever, it will never build up the staff’ commitment and compliance with it.
Following the literary research he conducted, the author assumes that human resources management is the result of managerial values’ influence (Mendonca) and emphasizes that the culture adopted within an institution becomes a prism through which the company interprets other cultures (Kanungo, 2006: 25). Nevertheless, continuing this topic, it is important to consider such issues as the implementation of the results of this interpretation and looking for the ways to build such a corporate culture that would ensure only constructive further actions concerning interrelations with other companies across the cultural border.
Among other issues investigated by the author are implications of cross-cultural practices revealed in communication, business strategies, values, and value systems of different corporations involved in international cooperation. Next, he argues that despite a huge set of distinctions that may be seen on a political map the global business map is much more homogeneous. Differences gradually disappear, but the ones that still exist are a diffusion of relationship into shared; response of managerial value to change; constructive conflict, and criticism appraisal (Kanungo, 2006: 26).
According to the author’s opinion, the main task of a manager is to base a business on culture – it is even a more basic concept than the language, which can assist even under the conditions of challenging communication. However, the question is on which culture he should rely on establishing cross-cultural communication. Robbins and Judge (2008) argue that the focus should be made on the culture of a partnering company:
To avoid communication problems, many countries require their managers to learn the local language…however, learning a foreign language can be difficult… to compensate, U.S. managers sometimes rely solely on body language and facial expressions to communicate (Robbins and Judge, 2008: 373).
The result of using the body language may be catastrophic, as, despite the meaning of the author about the tendency of cultural boundaries disappearing from the business context these differences are still the basic premise of success or failure. Describing cultural profiles of different countries, the author uses the research of the 1970s-1990s, underlining the fact that nowadays they have lost their importance. But this is not so – Mike Nicks and Barry Tomalin prove this in their 2007 book “World’s Business Cultures: And How to Unlock Them”. They discuss the differences in conducting business affairs in different countries and give clues to success in the business on the basis of cultural differences that should be taken into account.
The question of culture is really complex because basing one’s business surely has to have a strong foundation represented by the cultural values that have been proved to increase commitment and devotion to the company’s mission enormously. But the world is so diverse and culturally rich that at times it is simply impossible to denote with which culture to comply or what synthetic culture to establish in order to fit the maximum number of needs of the company, of the staff, and the future partners. Besides, the decision should be highly strategic as the company should plan its activity in the long run.
Rama Prasad Kanungo concludes that “a new cultural community is emerging in global businesses” and states that the three premises for successful cooperation are restructuring, innovation, and partnership. This really makes sense, but it is necessary to remember that partnership should be based not on erasing cultural differences between the companies but on recognizing and observing them.
References
Kanungo, RP 2006, Cross culture and business practice: are they coterminous or cross-verging? Cross Cultural Management: An International Journal, Vol. 13, No. 1, 2006, pp. 23-31.
Robbins, SP and Judge, TA 2008, Organizational Behavior, Thirteenth Edition. Prentice Hall.
Thompson, LL 2007, Organizational Behavior Today, Prentice Hall.
Tomalin, B and Nicks, M 2007, World’s Business Cultures: and How to Unlock them (1st ed.), Thorogood.