Decision making + Ethical behavior in international business

It is known that people in different cultures differ in their decision-making in mixed-motive situations, due to individual interests face collective interests.

Mixed-motive game is a situation in which an individual faces a conflict between maximizing personal interest called defection and maximizing collective interest called cooperation. This game works properly to compare cross-cultural cooperation. This idea of individualism-collectivism put pressure in people decision-making, showing how an individual concerns about those decisions’ consequences for himself as for all.

Talking about individualism-collectivism; individualism can be defined as a social pattern that consists of being more related or closed to the individual interests rather than collective ones. While collectivism is pretty much the opposite, in which collective interests are more important due to seeing him/herself as a part of a group.

Individualists tend to disagree on value attitudes with others, and collectivists are characterized by similarities.

According to Markus and kitayama there are 4 kinds of self: independent or interdependent, and same or different. The combination of this four types can be categorized as horizontal individualism (independent/same) and horizontal collectivism (interdependent/same), vertical individualism (independent/different) and vertical collectivism (interdependent/different).

The horizontal context is focused on maximizing self interest or self goal without a big comparison with others, horizontal people are not too much interested in distinguishing themselves from others or be aware on how others’ action can affect them. It is the opposite thing with the vertical dimension, which emphasizes a “different self” and winning over others. To establish differentiation and better self, vertical individuals pay more attention to environment and others’ actions to accomplish the target.

Ethics is the "discipline dealing with what is good and bad and with moral duty and obligation," "a set of moral principles or value" or "a theory or system of moral values." Ethics assists individuals in deciding when an act is moral or immoral, right or wrong. Ethics can be grounded in natural law, religious tenets, parental and family influence, educational experiences, life experiences, and cultural and societal expectations. 

Ethics in business, or business ethics as it is often called, is the application of the discipline, principles, and theories of ethics to the organizational context. Business ethics have been defined as "principles and standards that guide behavior in the world of business." Business ethics is also a descriptive term for the field of academic study in which many scholars conduct research and in which undergraduate and graduate students are exposed to ethics theory and practice, usually through the case method of analysis.

 What are the impacts of culture in terms of mixed-motive decision making?

Inside a culture there are values, which are assumptions of how people should behave. And there are also beliefs, which are if the people really apply or not their cultural values.

Owing to these concepts, one might say Islamic people would be really influenced on decision-making by their religion values, however some of them might argue that they do not share or agree on certain values preached by their religion, and that they will act based on what they believe is right or wrong, which is an illustration of cultural belief.

Therefore people of a specific culture could lead their decisions, according to beliefs and focus on self- interest, but others could be leaded by national values and make decisions in order to favor collective purposes or vice versa. This is just an example but shows how a random culture aspect affect decision making.

1) Image took from: http://www.forbes.com

2) video source: http://www.youtube.com/watch?v=vSNwcBLwqxM

3) Image took from: http://socrates-greatconversation.blogspot.com

4) Ethics. Retrieved from: http://www.referenceforbusiness.com/management/Em-Exp/Ethics.html

5) Difference between values and beliefs. Retrieved from: http://www.differencebetween.net/language/difference-between-values-and-beliefs/

 

The rise of multinational corporations

During the latter years the governmental prerogatives and the nation-state sovereignty seemed to be threatening by the rise of multinational corporations (MNCs). 

MNCs are significant parties in the international system, despite of they do not count with certain characteristics, that governments absolutely have like independent, territorial definition and sovereignty, but their international influences really concern. However government and social groups have put MNCs in a place where they can do community services, basically when they assumed basic governance functions and responsibilities in response to external pressures.

The foreign direct investment may foreign companies far more deeply into host economies; giving MNC’s a greater and better impact on domestic production, employment and other socioeconomic indicators. Because of the use of subsidiaries, they also a relationship with this entities and their impact on national interests, increasing the relation with countries’ sovereignty

Traditional multinational corporations have evolved into transnational corps (TNC’s), with some moving toward a global corporation concept. These include substantial changes in business interests, strategies and operations. As MNC’s become more diverse and diffuse, are less restricted by the political limitations of state boundaries. Changes in relationships between nation-states and MNC’s rely in a broader system described by concepts such as interdependence and globalization.

MNC’s made strategic transformations that reduced their potential challenges to national governments, and through decentralized and dispersed operations, it would limit a total control of a central MNC headquarters, this could help to narrow territorial ties and commitments to states.

MNCs as levers: corporations are bounded to human rights and labor relations, due to that civil society use MNC’s as levers for change in their country.

MNCs as surrogates: when MNC’s provide a range of public services in local communities primarily in poorer developing countries, taking some governmental work.

Question

As a legal organizational model, how does the rise of corporations influence the aspects of culture in pursuing profit?

The rise of MNCs produced a big impact in national cultures, because those corporations that crossed borders, it is supposed that they are not related territorially, politically or culturally to a specific type of country or land, so that their coming into a place, the way the handle their business, they way manage people maybe it does not agree on the customs, manners, and citizens profiles, due to this it could affect the welfare of a certain group of people in country.

On the other hand, those MNCs that are really aware and with cultural knowledge of countries’ situations and issues could indeed improve many cultural and economic aspects. This has been demonstrated for several companies that have taken many basic government responsibilities, most of them related to favor the community. That’s why MNCs are one of the most important actors in the international system, and good, profitable, and constant relations between those and government would lead a development for the world citizens.

1) Image took from: http://trashi.lacoctelera.net

2) image took from: http://www.brookhavencollege.edu

3) Corporation definition. Retrieved from: http://www.investorwords.com/1140/corporation.html

4) La empresa como psicópata. Retrieved from: http://trashi.lacoctelera.net/post/2005/05/14/la-empresa-como-psicopata

 

Motivation

Motivation is one of the main factors that determine the work performance of employees. A person is motivated when he or she wants to do something, however the reason is not equally to stimulus, the reason could be fear of failure or desire to distinguish from others, that why motivation of a person covers all the reasons for which he chooses to act in a certain manner.

There some motivation theories

The most influent theory is Maslow’s Hierarchy of needs, which classifies people need in 5 categories

1. Physiological needs

2. Needs of security and safety

3. Social needs (sense of belonging)

4. Needs of self esteem

5. Needs of self actualization

It basically explains when an inferior rank need is satisfied the next level need becomes dominant. The need of self actualization can never be satisfied because man is a perpetually wanting animal and only an unsatisfied need can motivate the behavior.

This theory was criticized especially for its rigidity because people are different and have different priorities.

Frederick Herzberg - two factors theory: He performed an investigation to identify satisfaction and dissatisfaction factors and found out that satisfaction factors were related to elements of professional activity (achievements, promotions, responsibility) and dissatisfaction factors are of their work: company policy, management, salary, work conditions.

It was criticized due to any evaluation of the relation between satisfaction and performance

Another one is theory X and theory Y by McGregor, in which he separated employees in two categories.

- Theory X: employees avoid work and responsibilities, lack ambition, and resist to change. In the workplace they must be forced and controlled

 - Theory Y: Workers make efforts at work, volunteers to different assignments and responsibilities and is motivated by the associate rewards. No being pushing because obtains motivation by the content of his work.

It was criticized because did not refer to external and internal factors.

Adair’s theory of motivation called the fifty- fifty rule: The theory says that a substantial part of motivation lies within a person while a substantial part lies outside and beyond its control, and this theory covered internal and external perspectives.

Question 

In multicultural organizational contexts what could be a good strategy to keep people motivated towards a common task?

As It was mentioned on the readings, create a constant motivation strategy is quite complicated, owing to the dualities, capacities, attitudes, desires and expectations of people, but maybe by identifying and perceiving those ones that you noticed that are really committed and those who see their activities as a priority, a manager could find a way to lead all the individuals values and put them together a consistent group which develop and achieve better results and ideas for companies in short and large terms.

1) Video source: http://www.youtube.com/watch?v=je9H3d-egH4

2) image took from: http://multinivelemprendedores.com

3) Motivation and motivation theory. Retrieved from: http://www.referenceforbusiness.com/management/Mar-No/Motivation-and-Motivation-Theory.html