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The New Age of Doing Business

A business organization these days is no longer simply synonymous to profit-generation. Slowly, the age wherein profit is the name of the game is coming to its end, replaced by the increasing consciousness of the more abstract factors that affect the performance of the whole organization. In contrast to its usually-taken shortcut ‘capital and labor input straight to output’—and thus revenue—production path, the business organizations of today are compelled to focus on the then-taken-aside factors in the middle for their endeavors to become more successful, or in some cases, assure their survival.

The people making up the organization are now being examined more carefully: their behaviors, their personality, their values; all with the object of utilizing these people, with their individual uniqueness, to bring out their best collective performance for the betterment of the organization they work for. And in the age of globalization, where countries are interconnected more than ever, where business transactions are also held between countries, understanding people’s different values has never been so crucial. These days, the volume of trade across countries reaches unparalleled heights.

Seeing the benefits of specialization, businesses in one country take advantage of the lower prices of inputs afforded by other countries. A computer’s

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internal parts can have multiple origins: its microchips’ parts can be made in Japan, assembled in China, and then shipped to the US for the assembling of the computer itself. In the same degree, employees of the business organization may also come from different countries due to the migration of either the people to the base country of the business, or the business itself, relocating to a country with a more attractive business environment.

With these arrangements, with the business organization transacting with different people with different values, from countries of different cultures, it is clear that understanding the people involved directly or indirectly in the business is a very important matter. According to the MARS Model, a person’s values, personality, perceptions, emotions, attitudes, and stress influences their motivations and ability (coupled by role perceptions and situational factors) which all together translate into their individual behavior and results (McShane and Von Glinow, 2006).

In the interest of compelling individuals within the organization to show their best behaviors and results, it is logical to analyze their characteristics, and to predict their tendencies. McShayne and Von Glinow (2006) stated five cross-cultural values that may be of help in this endeavor: (1) individualism and collectivism, (2) power distance, (3) uncertainty avoidance, (4) achievement vs. nurturing orientation, and (5) long-term vs. short-term orientation.

The importance of these five concepts lies in the fact that people from different countries have varying degrees of possession of those values, which affects their behaviors and results. The values of individualism and collectivism, which can co-exist in high proportions among the citizens of a country, are important in determining whether the people involved in the organization work better when left to themselves, or clumped in groups, or if they fit both sizes of the shoe.

For example, an organization involved in doing business with people of a more individualistic nature, say Europeans, might do well in assigning them the tasks that will not require group effort. Power distance, the people’s degree of tolerance to unequal distribution of power, can tip off whether more or less power should be concentrated to a relatively few people or not. Misunderstanding the people’s power distance can prove to be disastrous for the organization’s environment as it can induce power struggles or significantly lessen the authority of the executives.

Helping to assess just how tolerant a person is to risk is the purpose of understanding the value of uncertainty avoidance (UA). An organization with people of high UA may tend to undertake risky transactions that can be the make-or-break factor of the business. The proportion of nurturing and achievement needed by a person should also be considered since it affects the environment of the organization: those with people who value achievement may have quite stressing environment due to competition while those with nurturing people may have it lighter with them valuing others’ well-being.

The value of long-term vs. short-term orientation gives the organizations hints on whether the people put more value on present or future issues. Thus, in interacting with people with different values and cultures, utmost care must be taken in understanding where the people of that country stands in terms of these five cross-culture values. These values serve as a signal to the business on what steps to take to further their interests while not stepping on that country’s toes, anyway, trade among countries is supposed to be for the mutual benefit of the countries.

And this is proving to be true: these days the only way to get ahead is by requesting a boost from others to get to the top and then helping them once you’re there. Business is no longer a vicious clawing to the top like it was once. Stepping on others toes is now proving to be an unethical and unsustainable way to do business. It turns out that what this saying says is actually true: “be careful of the toes you step on today, they might be connected to the feet that would kick you tomorrow”.

Reference

McShane, S. L. , Von Glinow, M. A. (2006). Organizational behavior, 4th ed. McGraw-Hill.

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