COURSE CODE : HBO III
TITLE : Human Behaviour in Organizations
TARGET POPULATION : 3rd year Public Administration Students
COURSE FACILITTOR : MS. Joanne G. Saab
WEEK 9
Chapter 9: GLOBALIZATION
CHAPTER OBJECTIVES
When you have completed this chapter, you should be able to:
1. Explain Globalization
2. Discuss cross-cultural management
Although government policies have set the stage for the expansion of world trade, the
real action has occurred because thousands of companies and individuals acting
independently have realized that opening on global basis is both necessary and
beneficial.
Today, economic and business activity includes global strategic alliances, worldwide
production and distribution, and integration among nations such as the European Union,
the North American Free Trade Agreement and the ASEAN.
Globalization is defines as this interdependency of transportation, distribution,
communication, and economic networks across international borders.
Marketing scholar and researcher Theodore Levitt observed that the existence of truly
global market demands a new type of corporation. He believes the global corporation has
replaced the multinational corporation which conducts its business in various countries,
adapting its products and practices to local conditions by customizing products for
specific markets. In contrast, the global corporation avoids the high relative costs of the
multinational corporation by offering universal standardized products for homogenous
world market. It means that there is no specific product for a particular country.
Global strategies and approaches to managing diverse workers have become a new
requirement for managers. Before, the management practices in an organization relate to
the nationality of its ownership rather than to the particular locations of its facilities. The
evolution of business from being primarily domestic based and oriented to more globally
oriented will require new thinking and new managerial skills. The fourth phase of
evolution, the global stage, emphasizes that firms need to understand their customers or
clients’ needs, and quickly translate them into products and services on a least cost basis,
and market them effectively.
Cross-cultural management involves the study of the behavior of individuals in
organizations around the world. The study describes organizational behavior within
countries and cultures while it compares organizational behavior across countries and
cultures at the same time, it attempts to understand and improve the interaction and
behavior of co-workers, clients, suppliers, and alliance partners from different countries
and cultures. Cross-cultural management attempts to extend the study of domestic
management to encompass global and multicultural considerations.
The global manager is a person who views markets, production, service, and
opportunities globally and who seeks higher profits for the firm on a global basis. The truly
global manager is at home anywhere in the world. He or she is considered open to
national ideas and free of prejudices or attachments to one community, country, or culture.
The global manager is aware of and understands the major cultural differences from
country to country. This awareness and understanding is acquired by observation,
learning, participation, and involvement with people from many different countries and
cultures.
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Global Strategic skills
Managers operating in a globally shifting work environment will need a working
knowledge of international relationships and foreign affairs, including global financial
markets, international law, and exchange rate movements. Understanding global
economies of scale, work ethics of employees, and host government policies and
procedures will be required to formulate feasible, fair, legal, and effective strategies.
Global managers need to be trained well to attain all the skills needed to manage globally.
Team-building skills
The increased complexity of global operations will require more use of work teams,
including culturally diverse groups. The need for global teamwork is important when one
see how accounting and auditing are conducted in various parts of the world. In one
country financial statements are used to reflect the economic conditions of a firm, and the
audit is an accuracy check of the condition. In another country, the audit is conducted to
make sure that legal requirements are met. Managers need to know how the audit could
be interpreted in different countries and why teamwork is needed to assure a clear
understanding of its use.
Organization skills
Managers must consider individual differences when organizing firms, units, and jobs.
Minimum requirements for managers operating in a globally shifting world would include.
The following characteristics:
a. Creativity and inventiveness in designing organizations and jobs
Global managers are hired because of their creativity and inventiveness not only
for specific tasks but for all tasks in any situation that may arise. Because of fast
changing events and technology, decision making needs to be prompts if possible
on the spot. Therefore, global managers should possess the highest educational
qualification available, had many trainings, seminars, and experiences to meet
shifting demands of the environment.
b. High tolerance for ambiguity
Uncertain situations and events are characteristics of a global environment.
Global managers have to anticipate shifting events and be ready when crisis
happens.
c. Ability to coordinate finance, marketing, operations management, and
human resource interdependencies
All factors of production are necessary for the successful operation of a firm. One
trait of a global manager is coordination of all these factors to produce the goals of
the organization.
Communication skills
In the global environment, managers will need to be able to communicate with diverse
groups of people. The communication task would be easier if managers possessed multi
lingual skills and high levels of cross-cultural awareness and sensitivity. Within the global
business environment, strategy formulation, decision making, motivating, team building
or organization and job design, leading, and negotiating are all based on the managers’
ability to communicate with each other and with subordinates.
Transfer of knowledge skills
The increased competitiveness throughout the world has placed a special emphasis on
technological advances for product and process innovations. This emphasis has
increased the need to transfer knowledge. Learning about a practice, technique, or
approach in one country that can be transferred elsewhere is a skill that managers can
apply on a regular basis.
Benchmarking or analyzing how a firm is doing against competitors is now a widespread
practice around the world.
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National culture
A national culture is a set of values, attitudes, beliefs and norms shared by a majority of
the inhabitants of a country. These become embodied in the laws and regulations of the
society, as well as in generally accepted norms of the country’s social system.
National culture, subcultures, organizational culture, and history all influence behavior
patterns of employees and the structures and processes found in organizations. The
complexity of these patterns, structures, and processes requires careful analysis for
many different variables. Despite such complexity, it is more important than ever for a
manager to attempt to unravel the dimensions of different cultures.
Time orientation
How is time viewed in a society? In many countries, employees are not accustomed to
specific scheduling of work on an hourly basis. Time might be considered in terms of
seasons rather than in hours or workdays. Americans are meticulous about time-arriving
at work, starting a meeting, beginning a sporting event. Being late for a meeting in
northern Europe might be considered disrespectful as to serve a business relationship.
Activity orientation
In cultures such as the United States, emphasis is placed on taking action. Accomplishing
results and being recognized for achievements are considered important.
Language
Languages present barriers to conducting global transactions. Culture reflects what the
society values in its language. When communication in organizations involves translation
from one language to another, the problems of meaning that arise become significant. It
is difficult to translate from one language to another.
Hofstede's research
Geert Hofstede, a Dutch researcher, decided to study how cultures in countries are similar
and different. He developed a survey instrument and administered it to IBM offices in 40
countries. A total of 116,000 survey instruments were returned and analyzed. The initial
Hofstede survey data resulted in four dimensions being identified as explaining
differences and similarities in cultures: uncertainty avoidance, masculinity-femininity,
individualism-collectivism, and power distance.
1. Uncertainty Avoidance. This dimension concerns the degree to which people are
comfort able with ambiguous situations and with the inability to predict future
events with accuracy. People with weak uncertainty avoidance feel comfortable
even though they are unsure about future events.
2. Masculinity-Femininity. Hofstede used the term masculinity to designate the
degree to which culture emphasizes assertiveness, dominance, and
independence. People in a culture that has a high masculinity orientation believe
that sex roles in society should be clearly differentiated; men are intended to lead
and women to follow, while ambition and assertiveness provide the motivation
behind behavior.
Femininity describes a culture's tendency to favor such values as interdependence,
compassion, and emotional openness. People in a culture oriented toward femininity hold
the following kinds of beliefs that sex roles in society should be fluid and flexible; sexual
equality is desirable, and the quality of life is more important than personal performance
and visible accomplishments.
Work in cultures can be divided on the basis of a masculine-feminine dimension. In
masculine cultures, men possess jobs that contain power, authority, and responsibility. In
feminine oriented cultures, the roles of teaching, caring for patients, and helping the less
fortunate are valued. There would also be a more equality-based norm between the
sexes. Neither men nor women would be expected to be better managers or leaders.
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Individual talents and skills, and not gender, are the focus for acceptance and recognition
in the feminine-oriented national culture country.
INDIVIDUALISM-COLLECTIVISM this dimension refers to the tendency of a cultures
norms and values to emphasize satisfying individual needs or group’s needs.
Individualism emphasizes pursuit of individual goals, needs, and success. It is assumed
that if each person takes care of her or his personal needs, then the entire society will
benefit. The individualism philosophy proposes that; I is more important than we, while
Success is a personal achievement. People function most productively when working
alone. Scientists and those in technology oriented jobs are examples of individualism
philosophy.
In contrast, the collectivist perspective emphasizes group welfare and satisfaction. The
individual is willing in a collectivist culture to make personal sacrifices to better the stature,
performance, and satisfaction of the group. The collectivism philosophy follows the idea
that; we is more important than I and every member of society should belong to a group
that will secure members wellbeing in exchange for loyalty and occasional self-sacrifice.
POWER DISTANCE .This refers to the degree to which members of a society accept
differences in power and status among themselves. In national cultures that tolerate only a
small degree of power distance, norms and values suggest that power differences should
be minimal Such cultures prefer participative management and worker involvement in
decision making Individuals in such cultures believe that Superiors should be readily
accessible to subordinates using power is neither inherently good not inherently evil;
whether power is good or depends on the purposes for and consequences of its use.
On the other hand, in national cultures characterized by a large degree of power distance,
norms and values based on hierarchical distribution predominate. People in these cultures
use authority and power to coordinate individual work and behavior. Individuals in large
power distance cultures believe that the Power holders are entitled to special rights and
privileges, and superiors and subordinates should consider each other to be different
kinds of people.
Authoritarian manager styles are more likely to exist in a large power distance culture than
in a small power distance culture. Decentralization, participation, and worker involvement
are more likely to exist in a small power distance culture than in a large power distance
culture.
Hofstede and other researchers have continued to examine cultural differences and
similarities. Bond studied students in 22 countries using a value survey. He discovered a
fifth cultural dimension labeled Confucian dynamism. It designated the extent to which
people perceive the importance of the value of persistence, status, thrift, and feeling
shame plus the unimportance of the values of personal stability, face saying, respect for
tradition, and reciprocation of favors and gifts. Confucian dynamism indicates how
strongly a person believes in ethical principles
The Global Manager
International business and the global economy need a new breed of manager, one which
is called the global manager. The global manager is someone who knows how to conduct
business across international borders. (Tully, Moran and Reisenberger, 1993)
The global manager is difficult to find, because this manager is multi guard and thinks with
a world view and is able to map strategy that is appropriate to it. Many corporate recruiters
are trying to find people with these types of skills and interests, Universities now offer
business and management curriculums with subjects in liberal arts, language study and
foreign travel. Some managers who want to advance in their careers, attend training and
seminars and attempt to acquire personal growth in language study and travel because
more international assignments are opening of attributes of the "Global Manager (Wood,
et. al. 2001),
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The global manager can apply high technical expertise to a job, adapt skillfully to different
business environments and negotiate quickly under different circumstances, motivate and
communicate well with people from different cultures and speak many languages.
They are knowledgeable about political systems and different governments understand
business partner's backgrounds and their mentality convey a positive attitude and
enthusiasm when dealing with others and able to manager across boundaries. Add to
these characteristics the ability to view different economies as belonging to a single global
market and be culturally sensitive and adaptable.
Cross-Cultural Transitions
Although the terms are often treated as the same, pointed out important distinctions
between a multinational corporation and a global corporation. A multinational corporation
(MNC) might have operations in different nations but each operation is viewed as a
separate enterprise. Key human resources are usually sent out from the company's home
offices, and most decision making remains at corporate headquarters. Thus, although the
MNC is largely staffed by people from the nation in which a particular facility is found,
manager from the corporation's home country retain most authority. The multinational
corporation does not yet see its potential market as the world. Rather, it views each of its
foreign operations as a specialized market for a particular product. In other words, each
foreign subsidiary concentrates its efforts on the nation in which it is located. In contrast to
an MNC, the global corporation (GC) is structured so that national boundaries disappear
and it hires the best persons for jobs irrespective of their national origin. The global
corporation sees the world as its labor source as well as its marketplace. Thus, the global
corporation will locate an operation wherever it can accomplish its goals in the most cost
effective way. The true global corporation also believes in a world market for essentially
similar products. Moreover, the national affiliation of an employee becomes rather
unimportant.
Multinational Corporation
A firm with operations in different nations with each viewed as a relatively separate
enterprise. An American firm operating in Metro Manila is a multinational corporation.
Global Corporation
An enterprise structured so that national boundaries are not considered. The best people
are hired irrespective of national origin.
Human resources for international assignment
Three sources provide employees for an international assignment. For key managerial
and technical positions, all three sources of workers are frequently used in global
organizations. Which source is used the most depends, however, on the perspective of
the company, the organization might choose to hire.
Host country nationals, who are workers from the local population. A worker
from Ireland employed by a U.S. firm operating in Dublin would be considered a
host country national. Sometimes they are referred to as local nationals. Filipino
employees working for a Japanese firm operating in Metro Manila is host country
nationals.
Parent country nationals, who are sent from the country in which the
organization is head quartered. These persons are usually referred to as
expatriates. AUS manager on assignment in Ireland is an expatriate or parent
country national. An American on assignment in the Philippines is an expatriate. A
Filipino manager working in Hongkong is an expatriate.
Third country nationals, who are from a country other than where the parent
organization's headquarters or operations are located, If the U.S. firm employed a
manager from Canada at facilities in Ireland, she would be considered a third
country national. A Japanese firm employed a manager from the Philippines at
facilities in Macau would be considered a third country national.
HBO 111 Human Behaviour in Organization Page 5 of 6
Reference:
Mosura, C [Link], (2012), Human Behaviour in Organizations, ASCENT Communication
Solutions and Publishing Enterprises 2012,ISBN 978-971-94993-5-0
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