UNIT I STUDY GUIDE The Global Leader’s Environment Course Learning Outcomes for Unit I Upon completion of this unit, students should be able to: 1. Explain how the political and economic environment affects decision making. 1.1 Examine the political and economic risks of investing in a BRIC country (Brazil, Russia, India, and China). 1.2 Discuss the strategic role that corporate social responsibility (CSR) and codes of ethics play in global management, in particular the responsibilities toward human rights. Reading Assignment Chapter 1: Assessing the Environment: Political, Economic, Legal, Technological Chapter 2: Managing Interdependence: Social Responsibility, Ethics, Sustainability Unit Lesson Whether communicating locally, nationally, or internationally, managers must know how to implement strategies that will have positive outcomes. Managers must also know how to communicate effectively with people at work. While there are several cultural factors that must be understood when working in your own country, this course is mostly about understanding the cultural factors that managers face when working abroad. Managers who work in various parts of the world can be very successful if they have a full understanding of intercultural communication. Intercultural communication refers to exchanges, both verbal and nonverbal, between people from different cultures. You may have heard of men and women who have taken jobs in another country, found the culture there to be uncomfortable, and requested reassignment to their home country. Deresky (2014) provides information that will help leaders to meet some of the challenges of intercultural management, nationally and internationally. First, one must have an understanding of the business climate and the cultural factors that affect decision making. Deresky (2014) considers globalization to be the competition that is organized in a system of networks through which people communicate with each other around the world. Successful management in global environments occurs when people understand: 1. that cultural factors when doing business locally or globally impact all decisions made in their organizations; 2. that the economies in countries such as China, India, Brazil and Russia, countries which are referred to as BRICs, have changed over the past decade. In the United States, “traditional industries… continue to decline” (Deresky, 2014, p. 5). As change occurs globally, those changes will impact his or her decisions over time; BBA 2551, Intercultural Management 1 3. that organizations doing business globally must have a “global orientation theGUIDE UNITtox meet STUDY challenges of world markets and rapid, fundamental changes” (Deresky, 2014, p. 33). Legal Title systems may differ around the world and managers must understand how those systems operate and what drives them; and 4. those who manage on a global level have to use various strategies to handle operations “whether directly or through some form of alliance” (Deresky, 2014, p. 3). Successful managers must also understand their responsibilities in a corporate world. Corporate social responsibility (CSR) is about the social and economic impact of decisions, especially when working in other countries. Managers must be ethical at all times when making business decisions. For example, making decisions about which systems to put in place in a particular country involves one’s beliefs about and attitudes toward that country. The systems that are used will be seen from differing cultural value systems, and organizations will be judged by mores that govern local ways of doing business. Large companies, such as Best Buy and Walmart, did not do well in the Asian markets where shoppers prefer smaller stores. Walmart’s well-known problems in Germany occurred because they did not fully understand the culture. According to Landler and Barbaro (2006), Walmart’s stores were unsuccessful because management did not heed the local cultural outlook on large stores. Consideration must also be given to the differences in culture when making decisions about human rights issues. To be successful, managers have to be aware of how people in other cultures regard human rights before assuming that the term human rights can only be viewed from one perspective. Reves (2014) is critical about how the United States has responded to human rights issues. Brazil has also been challenged with human rights violations. In an article about Brazil’s struggles, Muriel Asseraf (2015), an institutional development coordinator at one of Brazil’s human rights watch organizations, noted that to be successful in business, one had to pay attention to how the country is viewed by its trading partners. Another country with human rights challenges is Russia, which is being charged on human rights issues against gay and lesbian people and because of its incarceration of protestors, as reported in a Human Rights Watch World Report (Human Rights Watch, n.d.). As pointed out above, multinational corporations (MNCs) have to consider their stakeholders as they implement systems in various countries. Managers must also take into account their consumers and their employees and suppliers. It may be easy to reach employees outside business hours, but managers must ensure they do not encroach on employees’ private lives. Additionally, technology must be used ethically to sustain a good relationship between these stakeholders and to retain their trust. Now that information is easily accessible, managers have to ensure that their files are secure. The ability of managers to manage effectively when they operate in different cultural systems ultimately leads to success and greater productivity. It is essential that managers understand the importance of cultural competence wherever they work. As you will read throughout this course, effective communication is not easily achieved. One has to think carefully about the words that are chosen and the impact those words will have on the people receiving your messages as well as the situation in which the message is delivered. For example, scheduling a mandatory meeting in a foreign country at a time of day when the people in that country are attending religious events can have negative outcomes. References Asseraf, M. (2015, January 22). Home and abroad: balancing Brazil’s human rights commitments [Website]. Retrieved from https://www.opendemocracy.net/openglobalrights/muriel-asseraf/home-and-abroadbalancing-brazil%E2%80%99s-human-rights-commitments Deresky, H. (2014). International management: Managing across borders and cultures (8th ed.). Boston, MA: Pearson. BBA 2551, Intercultural Management 2 Human Rights Watch. (n.d.). World report 2014: Russia [Fact Sheet]. Retrieved fromx STUDY GUIDE UNIT http://www.hrw.org/world-report/2014/country-chapters/russia Title Landler, M. & Barbaro, M. (2006, August 2). Wal-Mart finds that Its formula doesn’t fit every culture. The New York Times. Retrieved from http://www.nytimes.com/2006/08/02/business/worldbusiness/02walmart.html?pagewanted=all&_r=0 Reves, A. (2014, March 28). U.N. holds U.S. accountable for human rights violations at home and abroad. ACLU Human Rights Program. Retrieved from https://www.aclu.org/blog/human-rights/un-holds-usaccountable-human-rights-violations-home-and-abroad. Suggested Reading The articles below are suggested readings or resources that can provide further information on intercultural management. The first two articles can be accessed through the links. Hummel, D. P. (2012). Understanding the importance of culture in global business. Retrieved from http://www.oracle.com/us/corporate/profit/archives/opinion/050312-dhummel-1614961.html Okoro, E. (2013). International organizations and operations: An analysis of cross-cultural communication effectiveness and management orientation. Journal of Business Management, 1(1), pp. 1-13. Retrieved from http://www.centreofexcellence.net/J/JBM/Vol1/No1/1.htm The article below is a suggested reading that can be located through the linked DOI. Janáková, H., & Magdolen, Ľ. (2014). Creative impact measure of cross–cultural managerial aspects. Creative and Knowledge Society, 3(2), pp. 16-27. DOI: 10.2478/v10212-011-0035-z BBA 2551, Intercultural Management 3
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