martes, 8 de marzo de 2011

Leadership styles and Convergence

¿How does organizational leaders should behave in cross cultural environments?
Leaders working in cross cultural environments, need to have a clear and deep understanding of the concept of culture, with its multiple, fluid and dynamic elements, in order to develop cross-cultural skills and create an ability to work with diversity.
They also should construct a leadership based in cooperation, instead in competition, in this way it would create an environment in which everyone can accept their cultural differences as an advantage, in which diversity favors creativity for the consecution of the common goal of the organization.
They should create a level of cultural sensitiveness that help the to develop understanding and intercultural communication.
Leaders are also required to become transformative agents, inspiring and motivating others to higher levels of performance.  
They have a duty to mediate between groups, to help them discern their differences and be proactive in the creation of new cultural solutions that engage diversity and readdress  motivation.  


Diversity. Retrieved on March 2011 from:
http://www.hrvoice.org/


One model that gather the previous characteristics in a simple and effective way is the XLQ model. The XLQ model present an effective model to understand the main dimensions which, leaders working in cross cultural environments, should develop in order to be successful.The theory is based in seven attributes, a weakness in some of them will result in a reduction of the leader’s effectiveness: Trust, transformation, communication, power, empathy, culture and conflict management.



XLQ Model. Retrieved on March 2011 from:
http://www.emeraldinsight.com/journals.htm?articleid=1769232&show=html
"The hub of the steering wheel is trust, without it, leadership cannot function. The spokes of the wheel are transformation, communication, power, and empathy. The wheel itself is culture for without the effective use and coordination with the other aspects, the wheel would in fact not be a wheel, and would be ineffective. The lubricant for the wheel is conflict management. Conflict can be used to stimulate creativity, but if not managed can cause enough friction so that the wheel cannot turn. The wheel also assumes that the leader has knowledge of each component of the wheel, and of the destination or goal of the drive"1.


REFERENCES
1.Grisham, T. & Walker, D. (2008) Cross-cultural leadership. International Journal of Managing Projects in Business, Vol. 1 Iss: 3, pp.439 – 445. Online publication March 4. DOI : 10.1108/17538370810883873


Collard, J. (2007) Constructing theory for leadership in intercultural contexts. Journal of Educational Administration, Vol. 45 Iss: 6, pp.740 – 755. Online publication March 4. DOI : 10.1108/09578230710829919

lunes, 7 de marzo de 2011

Decision making + Ethical behavior in international business

1. What does the statement “all capitalism is crony capitalism” is referring to? Do you agree with this statement or not? Give an example.
The statement “all capitalism is crony capitalism” is referring to the condition in which every economy based in capitalism, is an economy in which success in business depends on the relationships between business people and government entities. The relationships are not base on quality or merit, but on the posture that their result be mutual advantageous for the interest of both parties, influencing the economy and the society.
In the worst of the cases, this deformation of capitalism can create a situation in which the taxes are used to pay overpriced good and services of favored suppliers.
Nowadays, in an era in which the corporations are increasing more and more their social and economical power, the maximization of value for their shareholders and the pursuit of money at any cost is becoming the rule for business, this statement provides a suitable description of what capitalism has become. A very popular example is the case of Enron. Let see the next articles:
"Enron used revenues –not profits- as its primary financial objective, performance drivers and measure of success. Enron’s use of distorted, “hyper-inflated” revenues was more important to it in creating the impression of innovation, high growth and spectacular business performance that the masking of debt in special purpose entities"1
'Cronyism' made in USA
Enron used creative accounting practices to dress up profits and conceal losses. When the managers saw disaster looming, they sold off their shares at a profit. Those footing the bill were the employees, their pension fund and all investors without insider connections.
Before the bankruptcy, the firm had been politically 'connected' on all sides. Enron made huge contributions to Bush Jr's election campaign. Eighty-five per cent of Congress members received Enron funds. The corporation favoured the Republicans, but also backed the laissez-faire wing of the Democratic Party. Last year Enron contributed decisively to writing the Bush Government's national energy plan and placed its own people in key positions in the administration.2

1. Dharan, B. & Bufkins, W. Red Flags in Enron’s Reporting Of Revenues and Key Financial Measures. Retrieved form: http://www.ruf.rice.edu/~bala/files/dharan-bufkins_enron_red_flags.pdf
2. Daily News (2002). Lessons from the Enron scandal : Crony capitalism everywhere. P. Niggli. Features. July 16, 2002. Retrieved from: http://www.dailynews.lk/2002/07/16/fea03.html


2. What is a Banana Republic? Why the author is comparing India with a Banana Republic?
Banana Republic is a republic ruled by the crony capitalism, in which the power is concentrated and ruled by a small, self-elected and wealthy group of people. "The purpose of a banana republic is commercial profit by collusion between the State and favoured monopolies, whereby the profits derived from private exploitation of public lands is private property, and the debts incurred are public responsibility".


America The Banana Republic. Retrieved on march 2011 from: 

The author is comparing India with a Banana Republic, because the power is concentrated in a small group of people, the corporates (even the media is a corporation). They manage and manipulate things around India to their convenience and for their benefit, also with the cooperation and participation of some government officials. As is show in the article: “Large contracts being awarded, conditions of contracts becoming a little vague, eligibility of capability being abused”.

3. Why is it problematic that in the business world “The Media” becomes a corporation?
The media has the objective to inform and educate through the information they give and the interpretation they place over this information, influencing the perception that people have from diverse topics.
As a corporation it main objective will be to earn profit for its owners, managing they power to favor certain group of people in their convenience. As a consequence the information and it interpretation they give to the public will be biased according to their interests, without considering the real issues that must be taken into account in a country.



Corporate Corruption. Retrieved on march 2011 from: http://www.cartoonstock.com/directory/c/corporate_corruption.asp


4. In this situation, what behaviors are considered unethical for corporations, journalist and the state?
They all work based in their crony relationships managing the interests of a whole society, according to their own convenience. They put their economic and personal interests over the pubic interest and welfare of the society.
In the case of the journalists they distort the information to favor their own interests and relationships, not being loyal to their profession and to the people that follow their publications. As the author says: “The media are mostly stenographers to power, especially corporate power”.
In the case of the government they fail to provide its function as a protector of the public interest, instead they allow the existence of these crony relationship and in fact they are part of them. They “play” with the public resources of the State to favor a little group of powerful and wealthy people.
In the case of the corporations they manage the whole country at their convenience, manipulating the media (choosing for example the publication of an article regarding and issue or not, or a interpretation that must be done according to a specific issue) and the government (influencing some decision over the concession of certain contracts or the people that must be in certain politic positions) to gain as much profit as they can regardless of the cost for the “people of lesser power”. As the author says: “From pitching for licences, mines and spectrum using money and media power to pitching for ministerial candidates and portfolios by the same methods is not a huge leap”.

Do Corporations Have A Responsibility To Society? 
Retrieved on march 2011 from: http://rosemarysalum.blogspot.com/
  
5. What can The Media, Corporations and the States do in order to behave ethically and in the benefit of the people and not their own interest. Give at least 5 good ideas.  
I think more than the media, the corporations and the state are “the people of lesser power”, the ones that see all the consequences of the unethical behaviors, the ones who must do something to pressure the behavior of these entities to the common benefit. We must be critical with the information we receive everyday by the media, creating our own opinions, not believing everything they said and demanding them qualified and objective information. We also must be very selective with the products or services we chose, supporting those corporations that take seriously the social responsibility and contribute with the welfare of the society. And finally, be very strict with the government, demanding them the accomplishment of its functions and also participating actively in their decisions.  
·         The Media should be objective in the way they give and select the information they transmit, it should be information according to reality and useful for their spectators. For this, the media should not have participation or investment of other corporations, in order to avoid conflict of interests.
·         The Corporations should adopt mandatory Corporate Social Responsibility programs, investing a certain percentage of their revenues in the benefit of society.
·         The State should create more strict rules in which they regulate the media and corporations, for example demanding to the last one that a percentage of their revenues must be invest in SCR programs . Also they should not allow the participation of their members in Media or in the ownership of the corporations.



REFERENCES:






The rise of multinational corporations (The Corporation)

1. How can we ensure corporations are held accountable for their actions “ethically” and “legally”?
In the latest years, due to the globalization forces, an unprecedented surge in the growth of multinational corporations is taking place, increasing their economic and social power to unimaginable levels. But the bigger the power the bigger the controversy around the price of this power, mainly on the ethic and legal schemes.

As a consequence, a contemporaneous trend is surging as a way to ensure corporations held accountable for their actions “ethically”, Corporate Social Responsibility (CSR). This tendency is about making companies responsible for their corporate behavior with better business practices and using their resources in a way that benefit the community. However, this practice has not been completely effective, because:
Corporate Social Responsibility. 
Retrieved on march 2011 from: blog.acton.org
SR programs can bring many benefits in the states in which there are present, sometimes providing some things that the local government has fail to offer, but these can also be used as a way to hide their real situation.
CSR programs are still internal mechanisms, in which the corporation has the authority, making really complicated the evaluation of their effectiveness.   
In the other hand, the legal responsibility of the corporations is still a challenge, because due to the lack of an international legal framework that rule their behavior, there is always going to be an issue of jurisdiction in the decision of being legally responsible to the regulation of their home country or their host country.
The discrepancies in the resulting literature conclude the only real conclusion is that there is no transparent path to standardize to corporate citizenship.

2. Should individuals (directors, employees, shareholders) bear any responsibility for the actions of a corporation? If so, to what degree?
A corporation is defined as an artificial person, who´s existence is considered separate and distinct from its members. As a person it has rights and responsibilities, but these are artificial responsibilities, because we cannot say that something that is virtual or fictitious can make decisions and assume them. In the last term, the decisions are taken by the people that conform the corporation and in this sense are them the ones who must be responsible for their actions. Not only the ones who work for it, like their directors and employees, but also and in the same degree their shareholders. Because how it’s mentioned in the movie “The Corporation”, the final objective of the corporation is to maximize the value of their shareholders no matter the price, they don’t care by which means this is achieved, because the important is the money. 


3. What are the benefits of the corporate form? Could an alternative model offer these as well?
Under the law the corporation is consider as a legal entity, who´s existence is considered separate and distinct from its members, bringing:
·         Limited liability over the corporation’s debts or liabilities protecting the member’s personal assets.  
·         Corporate tax treatment, in which their members pay taxes separately and apart from the corporation.  
The stock structure under the corporation is constituted, make it:
·         Attractive opportunity to invest in.
·         Attractive for talented employees offering them ownership of the corporation through stocks. 
·         Flexible, because as shares can be transfer, it existence not depend on who the owners or investors are at any one time.
·         Its operational structure allow the establishment of a set of distinct and separately roles (shareholders, board of directors and officers), in which the shareholders don’t participate in the operations of the corporation.  
·         The existence of the corporation is determined only by its shareholders. They can decide when to dissolve it or merge with another business.



How a clerical error made corporations “people”. 
Retrieved on march 2011 from: hightowerlowdown.org
  
4. Search for a foreign multinational corporation that has operations in Colombia. Research if they are run under Colombian rules or regulations or if they have special regulations?
In the following news article we can see how some multinational corporations operating in Colombia have a special treatment in matters of regulations. In this case some oil consumer companies, under the Upme (Unidad de Planeación Minero-energética) resolution, received a “huge gift” by the government not charging them a global oil tax. Let see the article:  

5. Should economic efficiency (Main argument for privatization) be the primary concern for commons and public services? Are there other criteria to determine who should own or operate them?

Common and public services are the services that should be provided by government to all its citizens, regardless of income. According to these, the primary concern for the privatization of public services must be that they accomplish its function to be available for all, reducing it cost and improving the quality and efficiency. The public’s benefit must be upon the economic efficiency. To achieve this the privatization must occur under a framework in which the government and the corporation work together: They should consider which functions are going to be more effective under the government and under the private sector, it should be an adequate number of companies competing for the development of these functions and it should be regulated by detailed, concise and specific contracts that has rigorous control by the government through performance indicators. 




Fat Cat Water Privatization.
Retrieved on march 2011 from: lalinternadediogenes.wordpress.com



REFERENCES:


jueves, 3 de marzo de 2011

Personality, perception and attribution + Attitudes and values + Motivation

MOTIVATIONAL THEORIES AND CULTURE

Motivation. Retrieved on february 2010 from: 
p2pfoundation.net/Intrinsic_vs._Extrinsic_Motivation
Motivation is the force that directs the behavior. Are all the factors that make people feel interested and committed about doing something. These factors can be two types according to the intrinsic and extrinsic needs.
  • Intrinsic motivation is caused by the decision of doing something, because gives the feeling of satisfaction.
  • Extrinsic motivation is caused when you receive some form of reward as a result of doing something.

Nowadays, there is a number of popular theories that try to explain how human behavior is activated and directed (causes of motivation).
  • Content theories are focused on the internal factors that direct human behavior according to some aspirations and necessities.
  • Process theories are focused on the processes and psychological forces that motivate behavior.

Even though there is a considerable number of motivation theories that has helped manager to understand and improve their methods, none of them is universally applicable. Cultural backgrounds are crucial in the understanding and application of these theories, because they have an impact in the way individuals react to different motivational drivers and in the way their needs are satisfied.
For example the Maslow’s Hierarchy of Needs can give us a general understanding about the main human needs that motivated us, but the way in which these needs are satisfied varies between the cultures and inside them.
For example, American employees are driven by improving themselves and their own positions in life, an individualistic approach, whereas Japanese employees are motivated by the success of the group as a whole, which is a collectivistic approach. Theorists and practitioners continue to look for universal laws or motivational techniques that can be applied among the different cultural groups.


MONEY AND MOTIVATION
One of the most common mistakes referring to motivation is the belief that money is the main or in some cases the only strategy to motivate and keep people motivated towards a common task and this is a mistake managers are still applying in their companies. It is true that economic retribution is important, because no one want to work for free, but it’s not enough and successful in all cases.   
In this order of ideas, money as a motivator must be analyzed carefully, taking into account that:

  • Culture has an important role, because not for everyone money is important. 
  • Money must be a direct retribution of performance.
  • Money must create a sense of satisfaction. Workers must fell that the amount offered is being enough and fair to measure their performance.

When some of these elements is not present, money fail as a motivational factor. This is why managers nowadays (when cost effective approaches are becoming increasingly important) must take into account the non financial motivators (recognition from immediate managers, attention by the leaders and the involvement in the company through the leadership of projects and tasks) as a way to make their employees feel they are part of a company that value, recognize and reward their job and well-being and for the one they want to improve and work every day. 


It's not about the money. Retrieved on february 2010 from: http://www.mckinseyquarterly.com/Motivating_people_Getting_beyond_money_2460 




References:
  • Cesare, J. & Sadri, G. 2003. Do all carrots look the same? examining the impact of culture on employee motivation. Management Research News, Vol. 26, advance online publication February 20. DOI: 10.1108/01409170310783394.
  • Ahmad, K. 2009. Leadership and work motivation from the cross cultural perspective. International Journal of Commerce and Management, Vol. 19, advance online publication February 22. DOI: 10.1108/10569210910939681.
  • Dewhurst, M.; Guthridge M. & Mohr E. 2009. Motivating people: Getting beyond money. McKinsey Quarterly Journal, advance online publication February 22. DOI: www.mckinseyquarterly.com/Motivating_people_Getting_beyond_money_2460.