Business Ethics and cross-cultural management
National culture affects organizational culture since people in a particular company will behave the same. Multinational companies have a great challenge of learning the cultural aspects of all its employees and to identify national cultures which relate to their activities. The management of multinational companies should study the behavior patterns of people in a particular region to estsablish appropriate strategies which incorporate the cultures of such people.
Culture has been defined as the values, beliefs, attitudes, behaviors, norms and symbols which are shared by a group of people. Cultural can be understood from national level to corporate and organizational levels. Managerial and organizational strategies are affected by cultural aspects and there is need to study patterns and changes in cultures of different people (Warner & Joynt, 2002).
Managing multinational companies has become a big challenge to managers since it involves cross-cultural activities. Globalization of economies has led to immigration of people from different regions and this has caused interaction between people of different cultures. Work places have become diversified since organizations are employing people from different cultural backgrounds. Joint ventures are being established between companies from different cultures.
Innovation in all industries requires acquiring skills from different people. Global competition has increased and
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Traditional theories of management assumed that people and cultures are homogenous. Managers should understand that cultural diversity affects the activities of an organization and that they should integrate cultural aspects in their management strategies to avoid conflicts. Productivity in an organization requires developing ideas which create understanding in cross-cultural environments. Leadership and team management skills should be encouraged by managers to encourage employees to adopt systems which allow interaction between people working in an organization.
Organizations which have failed to understand the cultural diversity of their people have failed. Mergers between companies from different cultural backgrounds have been affected by cultural differences. An example is provided by the merger between Daimler and Chrysler automobile companies. The employees from the two companies misunderstood each bother and the cultural differences were not amicably resolved leading to failure of the merger.
Daimler is an automobile company based in Germany while Chrysler is located in the United States. Germans conduct their business informally while Americans are formal. This created conflicts between the two parties. Other conflicts related to the issue of transferring employees from one region to another. The Americans were not willing to move out of their country whereas Germans were willing to relocate (Johann, 2008).
Decision making in an organization should consider cultural diversity. Managers should consult with all stakeholders to ensure they get the appropriate strategies to incorporate in the organizational decisions. The process of making decisions should make use of ideas from all stakeholders in order to have a general overview of the organizational culture. Top management team should not impose decisions to the junior employees but they should collaborate in the decision making process to ensure that all people affected own the final decisions (Mead, 2005).
Global human resource management involves dealing with people from different cultures and different backgrounds. There are several advantages and disadvantages of operating global human resource management. Some companies have failed while others have acquired great success after extending their operations across the borders. Proper strategies are required in the management of employees with diversified cultures. There are several barriers in managing global human resources factors (Sparrow, Brewster & Harris, 2004).
The political, legal and social environments in the global labor markets are different and the management should be very accurate in establishing the appropriate strategies which match the particular needs of the different employees. With the increase in globalization many people are seeking employment across the borders of their domestic markets. However, organizations dealing in the international scene face some challenges when relocating employees from one country to another. There are several barriers which hinder managers of multinational companies from relocating their employees from one country to another. These barriers relate to the physical conditions, legal aspects, economics, and cultural barriers (Tichy, 1991).
Operating in the global markets is beneficial and increases the market space to the companies which take this approach. Sourcing employees from different countries creates a pool of qualified staff with diversified skills. The organization improves its image in the global markets and is able to generate more profits. Companies source skilled employees from the international markets. The semiskilled and unskilled employees can be obtained from the local markets.
The World labor Organizations has issued laws governing employment of people across the borders and this gives the employees a security when they are working with multinational companies. Managers should understand the differences between the backgrounds of each employee to ensure there are no conflicts. Proper leadership is required in managing employees in the international scene. The management team should integrate management and leadership skills in managing employees from different backgrounds. They need to understand the specific beds of the employees to ensure there is no conflict of ideas (Tichy, 1991).
Complexity in the diverse cultures makes is difficult to operate in many countries. Several companies have failed in their strategies to operate in the global scene due to due to poor integration of the ingredients required in multinational human resources management (Sparrow, Brewster, & Harris, 2004). The merger between the automobile companies, Daimler of Germany and Chrysler of United States, failed due to cultural differences. The employees from the two companies had different cultures which were incompatible leading to the collapse of the merger.
Wal-Mart Company has failed in its strategy to open up subsidiaries in some countries such as Germany due to legal and cultural differences. Apple Inc is an example of a company that has been very successful in global human resource management. The management of the company has laid down proper strategies to ensure all needs of the employees are fulfilled. Global human resource management is a strategic that is gaining a lot of importance especially after the spirit of globalization started.
Several companies have improved their performance after establishing proper strategies to manage their employees while others have failed due to poor integration of the required aspects of global human resources management. The need to understand the cultural differences, the diversity in economic, legal and political environments is very important when dealing with global human resources management (Sparrow, Brewster, & Harris, 2004).
According to Sims (1994, pg. 273) ethics refers to the acceptable behavior or conduct within the organization. Ethics are derived from the constitution of the organization or from the professional requirements. All organizations have ethics which guide all the stakeholders. Business ethics are the requirements that are established for the proper operation of the activities in a successful manner. Various professions have ethics which regulate the conduct of all the individuals in a particular profession. Ethics are accompanied by punishments so that those who do not abide by the rules are deemed to have broken the rules and they should be punished according to the established mode of punishment (Sims 1994).
Johann, Ralph (2008). Cross-Cultural Management: The Case of the DaimlerChrysler Merger. ISBN 3640159756, GRIN Verlag.
The book explains how Daimler and Chrysler failed after establishing a merger. The author provides that the two companies had good ideas of improving productivity and market for their products but this was not achieved due to cultural conflicts between employees from the companies.
Mead, Richard (2005). International management: cross-cultural dimensions. ISBN 0631231773, Wiley-Blackwell.
Cultural analysis has been done especially when making decisions at the corporate level. The managers should make decisions by using ideas from all stakeholders. The author provides that the process of making decisions should not be centralized on the top management but should be supported by all stakeholders.
Sims, Ronald R. (1994). Ethics and Organizational Decision Making: A Call for Renewal. Quorum Books.
This book is an explanation of ethics in an organization. The author defines different ethical aspects which affect managers. He explains ethics in decisions making [process and the best strategies to adopt to ensure the management team abides by the ethics required by all professional bodies.
Sparrow, Paul., Brewster, Chris & Harris, Hilary. (2004). Globalizing human resource management. Routledge, 224pp, ISBN 0-415-30553-5.
The author explains different aspects of management in the global level. Human resource management has changed after globalization of economies. Managers need to understand the cultural needs of their employees in order to succeed in the global markets.
Tichy, Noel M. (1991). Global human resource management: global development. Division of Research, Graduate School of Business Administration, University of Michigan.
The article explains global human resources management and its effects in the management strategies. Different aspects of human resources management have been provided. Managers operating multinational organization need to study the behavior and culture of their employees so as to avoid conflicts which may be created by diversified ideas.
Tjosvold, Dean & Leung, Kwok (2003). Cross-cultural management: foundations and future. ISBN 0754618811, Ashgate Publishing, Ltd.
This book explains changes being experienced in the global economies after the introduction of globalization. The author explains various instances where cultural diversity has influenced managerial decisions. Team work in organization requires understanding cultural needs of the different people working in an organization. The book provides strategies of identifying cultural differences in an organization as well as creating unity in a cultural diverse work environment.
Warner, Malcolm & Joynt, Pat. (2002). Managing across cultures: issues and perspectives. ISBN 1861529732, Cengage Learning EMEA.
The author of this book defines culture and provides all aspects of culture at national, corporate and organizational level. Culture is said to affect the managerial and organizational aspects of many multinational companies and there is need to study the behavior patterns of people from different cultures.