?entral bank and Treasury officials
In the simple two country model outlined above, A and B are assumed to have well developed domestic monetary systems, borrowers and lenders in this countries can transact domestically or in each other’s markets by going through the foreign exchange markets or by dealing in the ‘offshore’ international markets. Thus the markets are linked in some way and economic events in one country or region may well affect market prices in all markets. Governments and other international institutions also play a part in influencing and directly controlling parts of the system.
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...Individual governments may through their Central bank and Treasury officials, control their domestic capital markets and intervene in dealings in their currency. Government may also act together in this way through some ad hoc agreements. Other international institutions such as the IMF and World Bank play a part in influencing monetary arrangements in countries and therefore influence the way in which the foreign exchange markets can transact. As more organizations go international individuals will always aspire to expand their veins on rivalry and more important on other national behaviors.
If the business world has to advance and flourish, there is need to know/be updated about the differences instead of concentrating on the similarities. Culture and sub culture are probably the most key aspects in this change to global behaviors (see Tung 2000). Cultural differences We have hundreds of cultures and subcultures of consequence which are so important to the topic of cross-cultural management and international business. The task of Inco-operating all of these with an integrated whole is almost impossible.
Not only may the domain vary from the small group, to a departmental level or an organizations a whole, but one should also have to consider the nation, region and possible the global settings. (Set Ohmne 1990; Warner 2000). The cultural focus may have also. To vary from the factors that are above the water in ice berg’ metaphor, which may include behaviors and abilities, more oven to those factors which may be hidden, like attitudes, values, identity and belief (see Hofstede 1980).
There have been two main approaches towards the application of culture and the consequences associated with it in a managerial and organizational setting. The first approach is divergence theory which suggest that culture showed be showed be studied since it is different in Africa than it is in Europe, the U K, the china, and so on. The second approach is contingency theory . For detergency theory, it assumes that elements for instance differing values and behaviors, differing stages of economic development and unevenly distributed global resources will guarantee global diversity (see joint and Warner 1985).
Convergence theory on the other hand suggests that because of changes in technology, structure and a global orientation by many firms, it is necessary to practice cross-cultural management. The theory involves pragmatic issues which can push one in the direction of adopting a ‘one best way’ approach to the management of org. worldwide. In international enterprises, managers need to know how far the working of organizations in one seems too different from those in another. How could knowledge of them home country style of organizing and its functioning help them in dealing with organizations in other places in the world?
Are the structures and functioning of organizations in different cultures coming sufficiently close together to permit? Development of globally applicable approaches with the expectation of obtaining consistent outcomes? Clearly, there are international cultural differences, however the key issue is how important are they, what is their impact on international business and are diminishing? (Hickson and Pugh 2001) For instance, are the cultural differences in organizational functioning between the Chinese and U S A and UK, on between the developing and the developed world likely to remain the same or change?
If that is so them managers can rely on a substantial basis of universally established knowledge and skills which they can transfer from one culture to another. Or must they do things differently in each society (Hick son and pugh2001). Organization convergence Organizational convergence is concerned with how far organizations in different countries have travelled and many travels in the future along a path to global convergence in operations and management, and how far the influence in this specific cultural factor must be understand and planned for if the manager is to be effective in cross-cultural situations (Warner 2002)
The key elements of convergence a) Social system It has been suggested that whole societies are steadily moving together so that in social characteristics the similarities between all cultures will become much greater than their differences. The most obvious way in which this is shown is in the enormous global communications explosion. People are beginning to see immediately via satellite and cable television what is happening all over the world, and this is forming their aspirations.
For instance so many people, especially the young want similar clothes, pop stars, and sports, opportunities for participating in elections and everything else which may be shown on television or networked electronically. The power of modern communications is upsetting controlled political system is profound. For example, china needs fax and electronic mail communication for business purposes (Warner 2002). b) Economic systems The most developed countries in the world. Especially those with the highest standards of living are market economies.
The market approach has been so successful relative to and other cultural system that is being adopted worldwide for the economic benefits that it brings, for example Marxist state control. The collapse of the Eastern European communist regimes was primarily economic. They simply could not deliver the western and Japanese standards of living that were known and expected. They were replaced by free market economies. c) Management Organizations all over the would need to be managed.
If organizations managers subscribe to aims which may include efficiency, effectiveness, growth and increased technological advancement to produce on higher standard of living them, it is argued, they will be driven to carry out their functions in ways which have been found to be the most effective in comparable situations elsewhere across the world. Add to this the transfer of technology and proselytizing activities of the multinational corporations and there will be a steady global cultural convergence of management. The spread of technology
Industrialization is a mayor influence of the three elements of convergence- economic, managerial and social. This is based on technology which speaks a universal language attractive to all, independent of the form of government on the culture of people. Technology spreads out so that the world is divided into countries which are industrialized and those which are in the in the process of becoming so contributing to effectiveness may also be passed from the less developed countries to the more developed before being incorporated into the worldwide way of doing things.
For example, Japan was a late developer in the area of industrialization but the values and culture of the country enabled it to change relatively quickly. Japan put a greater priority on training workers. Such investment paid off, giving Japan a considerable competitive edge in the market together with how rates of scarp and lower costs of reworking during manufacturing. Once the methods was demonstrated to give a competitive advantage the same ideas were taken seriously by U S A and the total quality management movement they became part of the global management convergence.
Thus, particular management innovations will be inaugurated in cultures in which they are adopted in some degree worldwide, even in less receptive cultures. In this way they aid the advancement of managerial convergence. Thus, particular management innovations will be inaugurated in cultures in which they are more likely to flourish. Then, if successful, they are more likely to flourish. Then, if successful, they are adopted in some degree worldwide, even in less receptive cultures. In this way they aid the advancement of managerial convergences. Factors influencing enterprises function across all cultures.
1) The size of the unit of operation. Larger organizations will require more impersonal forms of management than smaller ones. This will also include greater standardization of procedures and greater formalization of control mechanisms. 2) The dependence of the organization . On others is its environment organization . Which depend the most on others in their environment take decisions centrally and lose autonomy to, say, a controlling board or ministry. This happens because ties of ownership on contract are so important that the relevant resource decisions must be taken at the top. 3) The institutional environment of the enterprise.
Joint stock companies will require different styles of operation from government enterprises which, in turn, will differ from family owned businesses. This includes greater centralization in joint stock companies. 4) The different managerial rules. The functional jobs managers do their hierarchy and the training and education they have received will all produce characteristic differences in outlook everywhere. 5) The organizational culture, Organizations develop their own cultures and in international enterprises this will have some impact across subsidiaries in all national cultures, as is seen in the cases of lCl, Mitsubishi and Siemens.
The above influence will be approved across all cultures. Thus there will be important similarities as well as differences in the way organizations operate in different countries. Sizes of the unit of operation dependence on the other factors listed above become key elements in the explanation of the broad features of organizations worldwide. It appears to be at least as important to know how large an organization is, who set it up and what its dependence on others in its environment is as to know the country in which it is located.
Certainty the difference between organizations within one country is greater than the average differences between countries (Pugh 1993). Conclusion Culture can have a powerful impact on management and organizational behavior. The challenge for management scholars is to determine what practices will work where and how much cultural adaptation is necessary, if any. Frank Hellen (1985) suggests, for examples, that culture should be approached in the same way one would approach an aggressive patient without prejudice but will a resolute intention not be bowled over a broad winked into prescribing either a placebo on the patient’s own medicine.
In the final analysis, awareness of culture helps us understand each other better and understanding is often the essence of successful management (Warner 1996, 2000) This discussion has been inclined on impact of culture in a business environment which disposes managements and organizations towards greater and greater similarity. Yet deeply cultural institutions in different societies, especially education, can be resistant. By inculcating different out looks and training for employment in difference ways, they sustain differences in the ways that otherwise similar organizations are run.
While Specialties in dress and everyday ways of speaking, on even in following technical instructions, change relatively easily the emphasis is always on the word relatively, when discussing culture the fundamental attributes of culture are relatively resistant to change. For example, a subordinate in south America/Africa who is told to do something about which he or she is dubious is likely to carry is out in and indifferent manner rather they argue with the boss. A similar subordinate in Scandinavia or in an English speaking country is far more likely to question the sense of it.
This is done to a difference in how authority is viewed. The very influential research by Hofstede (1991) showed how employees in differing nations with differing cultures continued to hold distinctive attitudes to work even though all were employed by the same multinational corperation. IBM. References 1) Hofstede, G. (1980) Cultural Consequences: International Differences in Work related Values, London: Sage.
2) Warner, M. (2000) IEBM Regional Encyclopedia of Business and Management, 4 volumes, London: Thomson Learning. 3) Ohmae, K. (1990) The Borderless World, New York: Mckinsey and Co Inc. 4) Hickson, D. J. and Pugh, D. S. (2001) Management World-Wide: Distinctive Styles amid Globalization, London: Penguin. 5) Kenen, P. B. ,(1990) The International Economy, 3rd ed. New York: Cambridge University Press. 6) Pugh, D. S. (1993) The Convergence of International Organizational Behavior, Berlin: De Gruyter. 7) Galbraith, J. K. (1978) The New Industrial State, revised edition, London: Penguin 8) Yeager, L. B. , (1976) International Economics Relations, 2nd ed. New York: Harper and Row.