Business task

Business task

Project Instructions:

Step 8: Review the International Expansion Case

URGENT MESSAGE (Special Assignment)

From: Janet Yoon, CEO, Colossal Corporation

To: International Task Force

Team,

I know it’s been a while since I checked in, but I’ve appreciated all of your dedication and progress in these cases. Since you’ve successfully addressed so many complex issues, I’d now like you to weigh in on the International Expansion case file. This final case involves issues arising from NBD’s recent international expansion into Asia.

To answer these questions, you may need to review cross-cultural ethical business decision making (specifically focus on the “Cultural Theory in Global Business” resources), and country cultural differences, and will need to do some additional research on the internet and in the library to fully answer my questions.

I am confident you will produce great work here. Great teams do great things.

Janet

Email signature with logo of Collossal Corporation and Janet Yoon, Chief Executive Officer

In the next step, you will write your International Expansion re

Step 9: Prepare Your International Expansion Report

Using your outline and research notes write a report for the CEO. Be sure to meet the following requirements:

· Include APA-formatted in-text citations and an APA-formatted reference list (do not format the body of the report using APA style, just the reference list). See references and citations for details.

· Include a specific recommendation on what action, if any, the CEO should take based on your analysis and conclusions.

· Support your conclusion with references to cultural norms, strategy, and ethical theory and principles.

· The report should be no more than five pages (double spaced, 12-point font; the reference list does not count towards page limit).

Course Resource

International Expansion Case File

Colossal Corporation maintains a subsidiary in Serafini, a small country in Eastern Europe. This subsidiary is incorporated in the state of Delaware as New Brand Design, Inc. (NBD), a company that designs, brands, and manufactures innovative electronic products and markets and distributes them for resale across the globe. NBD has been admitted to conduct business in Serafini.

NBD recently expanded its operations beyond Serafini and into Western Asia. It has attained all government permits and successfully opened a new facility in Asia. The CEO of Colossal Corporation, Janet Yoon, is worried about certain reports concerning NBD’s expansion into Asia. The CEO has submitted the following issues to the international task force and requires solutions immediately:

1. The local employees in Asia seem to spend considerable time chatting with each other instead of getting right to work in the morning. Not only that, but when meetings are scheduled it seems that everyone is late, sometimes significantly late.
2. In filling a recent vacancy in the new Asian facility, the local who headed the hiring committee insisted on hiring his uncle. The uncle appears to be qualified, but the CEO is worried about nepotism and whether that creates ethical issues for the company.
3. The various suppliers in Asia with whom NBD has supply contracts for the components that NBD uses in its manufacturing do not always honor the specific terms of the contracts that NBD has entered into with them. Particularly where market prices have shifted significantly, they insist that the contracts represent a partnership and that each partner should help protect the other from losing money on the deal. They say that the relationship is more important than the contract terms.
4. Four weeks ago, NBD’s Asian facility introduced an employee incentive plan with annual awards for outstanding individual performance by employees. Employees were encouraged to nominate a deserving colleague, or they could nominate themselves. So far there have been no nominations. The CEO, Janet Yoon, wants to know what’s wrong and whether the incentive plan should be scrapped.

Yoon would like the international task force to research and provide an analysis of the issues and recommendations on how to approach them.

Additional Information Needed to Complete Assignment:

Cross-Cultural Ethical Business Decision Making

Management in the global arena involves addressing unique and difficult issues of culture and morality. Although general ethical frameworks may help you to assess management decisions in a cross-cultural context, there are unique questions that arise in global settings. The resources below provide guidance for situations involving conflicting ethical norms and customs of different cultures within the business context.

How an organization addresses unique situations involving ethics and customs will impact its success in the global arena. The first subtopic examines the role of ethical theory in global business. The second subtopic examines the role of cultural theory in global business.

Resources

Ethical Theory in Global Business

· Global Business Ethics

· Corruption in International Business

· Major Ethical Perspectives

Cultural Theory in Global Business

· Introduction to Culture and Business

· What is Culture, Anyhow? Values, Customs, and Language

· Understanding How Culture Impacts Local Business Practice

· Ethical and Cross-Cultural Negotiations

· Cultural Diversity

Country Cultural Differences

In workplaces, as in communities and nations, people spending time together are likely to share certain values, attitudes, and beliefs. Because of this established culture, people at work may have developed certain preferences or orientations in the following situations:

· interacting and communicating with others

· working in teams

· making decisions

· responding to and evaluating risks and opportunities

· managing or attempting to resolve disagreements and conflicts

· interacting with those at different levels in the organization

· engaging in numerous other workplace activities

Those who have studied and compared societal cultures and their possible implications for the workplace have identified some differences that can be important for success.

Perhaps the leading expert on cultural differences and their potential implications for business is Geert Hofstede, a Dutch scholar who worked for IBM in the late 1960s. Hofstede’s early research (1980) examined, compared, and categorized the culturally derived preferences of IBM employees in many countries. He, and other scholars who have followed in his path, created a classification scheme that differentiates country cultures across what were originally four dimensions, though they have since been expanded to include six.

In what is probably his best-known book, Cultures and Organizations: Software of the Mind (published first in 1991 and revised and republished in 2010 with his son Gert Jan and Michael Minkov), Hofstede presents a careful explanation of his work and its implications. Hofstede reminds his readers that “culture is learned, not innate” (p.6), and introduces the analogy of culture as “software of the mind.”

Hofstede uses the layers of an onion to help convey the way culture manifests itself. Values are deep at the core or center of the onion and are very slow to change compared with the other manifestations of culture. Examples of common core values in US businesses include integrity, accountability, fairness, and excellence. Other layers of culture include our rituals (e.g., greeting with a firm handshake and direct eye contact), the heroes we honor (examples include Warren Buffett and Steve Jobs), and on the outside of the onion, the symbols that have special meaning for societal members.

Symbols: corner office. Heroes: Warren Buffett, Steve Jobs. Rituals: firm handshake with direct eye contact. Values: integrity, accountability, fairness, excellence.

Examples of U.S. Business Cultural Manifestations

Created by Christina Hannah

Using an analogy of culture as mental programming, Hofstede explains that we are each conditioned (or programmed) by multiple societal levels: national, regional, ethnic, religious, linguistic, gender-oriented, generational, socioeconomic, and professional. Values associated with these levels may or may not be in harmony. One consequence of these multiple sources of programming is that it can be difficult to predict what will influence a person’s response or behavior in particular situations.

Our present interest is not in delving deeply into the causes and consequences of individual differences in values, attitudes, and beliefs, but rather to learn about those shared at a societal level. Hofstede explains that his extensive research, and that of others who have studied culture, make it possible to differentiate between and among national cultures using a set of dimensions. He originally proposed the first four dimensions in the list below, then added a fifth—long-term orientation (Moskowitz, 2009)—and later added indulgence as a result of further research by and insights from collaborators.

Here is a simple explanation of Hofstede’s current six dimensions:

· Power distance (PDI)—In countries with a high power distance dimension score, we can expect those in lower level positions to respect or defer to those who outrank them. In other words, power is thought to come with position. In such cultures, employees may expect managers and leaders to make decisions and might be surprised or uncomfortable when asked for input. In countries with a low power distance score, we are likely to find that employees treat those they report to more as colleagues and hold the view that respect must be earned. There may, of course, be exceptions to this model (for example in military and paramilitary organizations). Not surprisingly, the United States’s score on this dimension is relatively low at 40. The score for France is is 69. In comparison, the scores for Malaysia, Slovakia, Guatemala, Panama, the Philippines, and Russia are all above 93 (Hofstede, Hofstede, & Minkov, 2010, pp. 57-58). This means that, in general, we can expect employees in the United States to expect a more egalitarian workplace than may be true in other societies.

· Individualism or collectivism (IDV)—In countries with high scores for individualism (like the United States), you are likely to find a shared belief in developing strong individuals who are comfortable working and making decisions on their own. In such workplaces, you will probably find an emphasis on the importance of developing, recognizing, and rewarding individual contributions. In countries that score low on the individualism dimension, you are likely to find an emphasis on the community, team, group, or department (i.e., the collective). People may be embarrassed if they are singled out publicly for praise or recognition, because they strongly believe their success depends upon the support and work of others. For this dimension, the US score is the highest, at 91. The score for France is 71. The country with the lowest score is Guatemala, with a score of 6 (Hofstede, Hofstede, & Minkov, 2010, pp. 95-97).

· Masculinity and femininity (MAS)—The label used for this dimension may not be the best. The basic idea is that some country cultures place a relatively high value on competitiveness, assertiveness, achievement, etc. Such countries are given a high score for masculinity because these preferences and traits were historically associated with men more than women. Other country cultures place greater value on caring for others, cooperation, quality of life, etc. Such countries are given a high score for femininity on this dimension. Despite the problems with these unfortunate gender-based labels, when you step back and compare countries you will probably recognize that there are some where businesses seem to value competition over cooperation, achievement and success over quality of life, and so on. Japan has a masculinity (MAS) score of 95. The US score is moderate at 62. The score for France is 43. Sweden has the lowest score for this dimension, with a 5 (Hofstede, Hofstede, & Minkov, 20110, pp. 141-143).

· Uncertainty avoidance (UAI)—This dimension recognizes that there are differences among countries, which results in differences among the leaders of businesses that operate therein and the extent to which they are willing to take risks. In countries that are low in the uncertainty avoidance dimension, business leaders might be very comfortable exploring new opportunities and see this as the likely path to success. In other countries, this may not be the case. Sometimes those in country cultures that are highly risk averse (with high uncertainty avoidance scores) have a very good reason for their responses. There may be, for example, significant legal penalties for failure, including the possibility of being sent to jail in the event of bankruptcy or reneging on debts. The country with the highest score for uncertainty avoidance (UAI) is Greece at 112. France is relatively high, with a score of 86, and the US score is 46, indicating a tolerance for uncertainty and acceptance of risk-taking to achieve success (Hofstede, Hofstede, & Minkov, 2010, pp. 192-194).

· Long-term versus short-term orientation (LTO)—In countries with a high long-term orientation score, shared work values emphasize learning, accountability, and self-discipline. Patience and waiting to make a profit are acceptable. Creating and nurturing lifelong networks is valued. In contrast, those favoring a shorter-term orientation tend to focus on “the bottom line” and value achievement, freedom, and independent thinking. Quarterly and annual profitability are important. Korea, Japan, and China have high long-term orientation scores (100, 88, and 87, respectively). France has a moderate score of 63. In contrast, the US LTO score is low, at 26 (Hofstede, Hofstede, & Minkov, 2010, pp. 255-257).

· Indulgence versus restraint (IVR)—In countries with high scores on indulgence, you are likely to find people who value having fun and enjoying life. In the United States, for example, it is common to find that employees emphasize the importance of a good work-life balance and quality of life. The IVR score for the United States is relatively high (68) and for France is moderate (48). Pakistan has the lowest score (0) among the countries studied. Territories with the highest indulgence scores are Venezuela (100), Mexico (97), and Puerto Rico (90) (Hofstede, Hofstede, & Minkov, 2010, pp. 282 – 285).

A very important caveat when reading and thinking about Hofstede’s work is to remember that the comparisons are at the societal level, rather than the individual level. In other words, in any country you will find individuals who are different from what you see suggested as the norm for the country culture. In fact, for any given dimension you may find yourself thinking “but this isn’t what I’m like” or “this doesn’t explain what happens in my organization.” Those who have studied and compared country cultures ask you to suspend these responses temporarily and to try instead to look at a country as a whole, and then consider how it compares on these dimensions with other countries. When you adjust your imaginary lens to consider cultural differences from a broader perspective, you are able to discover things that may be helpful when explaining what happens when companies do business abroad, when people work together on country teams, and when they work together in multicultural, multinational organizations.

One challenge is that we are often less knowledgeable about our own shared country culture than we are about the cultures of others (Hofstede, 1980). This is because our culturally derived values and preferences are so deeply embedded that we may not be aware of how they influence our decisions and behaviors. Those who have worked or studied in a country other than their own are likely to have developed higher levels of cultural intelligence than those w