Ethical Behavior and International Business Workshop

1. What does the statement "all capitalism is crony capitalism" is referring to? Do you agree with this statement or not? Give an example.

This statement is refering to the idea of the "friendship" that these two big business have: Enterprises and Media. Capitalism main actors are now corporations, and the way they establish public relations (lobbying I prefer to call it) shapes their incomes in the global arena. So, in order to lobby, their main goal is to have good relations with Media, getting to manipulation of information to benefit 100%. That is why capitalism  can be considered as crony capitalism.

I agree with this statement, as well as with P. Sainath said in the article. For example in Colombia, this happens the same way: You cannot watch news without realizing that journalists and channels take some sort of position when trying to "inform" events to people. Same with kind of information: normally, you will get info depending on the position, they can leave out information that can affect their interests, and show other info to foster good concepts favoring their interests. Media are not neutral at all. Media have not ethical behavior.

2. What is a Banana Republic? Why the author is comparing India with a Banana Republic?

A Banana Republic is a concept that was developed to describe one nation that is not so powerful, unstable and poor (maybe some countries in Third World can be named Banana Republics, being rude with this name... Are Latin American countries like this?) Banana Republics also are characterized by corruption, they survive only with certain products not so significant, and they have put some of the power in the hands of BIG corporations (Again Latin America, Asia or Africa?) 

India has been compared to a Banana Republic since this country has been victim of high levels of corruption, and with the problem of the Radia Tapes it can be proved that big business hold power in their hands: Media and Enterprises. This is a essential characteristic of Banana Republics. That is why India can be compared to a Banana Republic.

3. Why is it problematic that in the business world "The Media" becomes a corporation?

It is problematic due to the fact that Corporations lead their strategies and actions towards interests, and to be more accurate, economic interests. So, if  Media is a corporation probably will not: 

• Worry about what information is the right one, but the most convenient one.
• Care about damages done to others if they can profit from situations.
• Follow rules if doing so requires losing opportunities.

4. In this situation, what behaviors are considered unethical for corporations, journalist and the state?

• Missing honesty from journalists
• Lack of neutrality in information
• Inability to show what is actually happening, but
• Ability to hide what is not convenient
• Corporations making "alliances" to get profit in exchange of not ventilating scandals or problems (corruption)
• State giving "carte blanche" to others to act anyway, holding eyes closed to events
• State supporting certain ways of corruption

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.

Really difficult to think about, Corporations as well as Media are moved by economic interests that cannot be erased from one day to another, and just start to think about people's welfare. Same with States. But from one point of view, it can be done:

• Implement strategies to control what actions take States when Corporations enter and try to influence certain aspects.
• Make Corporations follow some ethical steps when entering or playing in some scenarios.
• Strengthen punishment for those who do not follow rules of ethical behavior (Some States are characterized by high degrees of corruption in legal areas)
• Media could be done by people from different spheres so we can see high participation of normal people, that can tell what they see and say what they think.
• Strengthen levels of education, to build in future more people acting towards ethics.

Discussion: The Corporation (film)

How can we ensure corporations are held accountable for their actions "legally" and "ethically"?

It is really difficult to ensure because sometimes corporations have support of governmental institutions to do "what they want", and with that support they get profit so they would stay silent if there are violations in terms of law and ethics. If not, probably corporations would change place of operations to move to other places where restrictions are not so strong. That is why we can consider corporations not able to accomplish rules of social behavior according to the movie.

Should individuals (directors, employees, shareholders) bear any responsibility for the actions of a corporation? If so, on what degree?

There is a matter of attitudes and behavior since one person working for a company can have a set of values that can make him or her behave in a certain way but believe in another totally different, and it happens because as people are part of the system, they have to get what they "need" to survive, and if it implicates to go over and do not care about others, they will probably do so. I think it would be good to have employees that can work ethically and in a responsible way so they can admit what actions take in corporations in a certain degree.

What are the benefits of the corporate form? Could an alternative model offer them as well?

-Possibility of having property

-Having power for domination

-Be taken as "person" for the laws, so they are treated same way (more benefits for corporations)

An alternative model would maybe  implicate more restrictions and less benefits for them, that is why corporations have been so successful in recent years, and there is a controversial point: corporation as person, person as target; people are not being treated as it should be, they are only the mean for corporations to get profit through manipulation of "consumer's perceptions". So corporations can be successful only if this model continues, overlapping interests to people (consumers).

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?

Nestlé. They get to countries through "Corporative principles" and CSR (Corporate Social Responsibility). According to Iván Cepeda Castro, journalist for El Espectador, multinationals are implanted violently in Colombia, and they try to accumulate desperately capitals, but those two facts are not possible without the state power that allows them to do so, to auspiciate directly "every kind of abuses and massive acts of criminality". For Cepeda, that is the real law that can lead the pleasure of politicians in Colombia. And for me, it can be in some extent the truth, because sometimes the government/state overlook some actions of multinationals that affect colombian society, just because they are getting huge profits. What I can consider also truth is that, when there is absence of state in certain countries (target for MNCs), Multinationals become the force of the state, and they get the power and support to do what they want.  

Should economic efficiency (main argument for privatization) be primary concern for common and public services? Are there other criteria to determine who should own or operate them?

Not only economic efficiency but also common welfare should be primary concerns. What is contradictory is that, as the video showa, public institutions (supposed to care about common welfare) are less efficient since they can operate with no profit, so probably we can see privatization as the solution and the correct path to get profit. I think that is the reason why corporations are so strong. There should be of course some other criteria so private companies be aware of what actions can generate. For me, criteria would be:

- Common welfare.

- Damages done to the environment, people, development, sustainability, cultures, etc.

- Shared profit: Possibility of sharing success between corporations and places they work (normally poor or less -  developed countries).

- Level of commitment, loyalty and responsibility.

References:

- Cepeda Castro, Iván. La ley de las multinacionales (2007). El Espectador. Retrieved on: February 14th, 2011 from:http://www.elespectador.com/opinion/columnistasdelimpreso/ivan-cepeda-castro/columna-ley-multinacionales

-The Corporation - Film (Documentary) (Achbar, M - Abbott, J. 2003).

Multinational Corporations (MNCs)

"Continued MNC proliferation paradoxically diminishes the relative power of individual enterprises and reduces their effective autonomy" (Kline, 2006) 

Starting with this phrase is a good way to understand how powerful MNCs have become during last years. One MNC becomes powerful by its specific characteristics: can operate in several countries but it is centralized or managed fro headquarters in only one. The question is: Are MNCs menacing "making decision's processes" in countries where they arrive?

MNCs. Retrieved on february 17th from: http://library.thinkquest.org/05aug/01053/module/worldtoday.html

When we talk about the menace MNCs have on "making decision's processes", we talk about the political and economic power they have when arriving to a new country, so they can decide or at least push for decisions in order to obtain more profit, and that is one of the main criticisms that have been made to MNCs. Some people tend to see them as the savers (in less developed countries): it happens because normally, an arriving MNC starts to push for development in the region to operate in a proper way, so the MNC asumes the absence of state: Education, Human Rights, opportunities for people, Health (which are part of the state's job) became part of the MNCs obligations, so they act as the "new form of state".

In this place is when "no loyalty" arrives. MNCs start to get profits after giving development to the region. But then, when they have run out all resources, they relocate in other places that can give them more and more profits. They do not keep any stable relation with the regions they have been before. Mostly of the times, the isolated population goes back to poverty.

What is the pure truth is that MNCs will continue growing and increasing presence in almost all countries. Now, what they have to do is to adjuste some operation politics, because this system can not be sustainable for much time. MNCs should try to adapt the way how they relate to society, environment, economics, otherwise crisis would be the rule, not the exception.

References:

Kline, John M. 2006. "MNCs and Surrogate Sovereignty". Brown Journal of World Affairs 13, Iss: 1, pp. 123-133. 

Discussion:

Is economic retribution enough to motivate employees?

Economic retribution is important but is not the most. It has to be taken into account that one employee gets motivated too when he or she has the opportunity to go up in the labor ladder, when it is also a good work environment so there is no tension "in the air", when he or she can work with conscience and without the pressure of being treated in a wrong way, and when there are opportunities of social and personal improvement.

Also, it is important to say that economic retribution can be a motivator, but it can not work in a proper way, because people would do whatever it takes to get the money, no matter upper consequences and integral performance. 

Economic retribution. Retrieved on february 15th, 2011 from: http://creadinero.com/como-lograr-ganar-dinero-internet-con-banners.html

Motivation

Motivation, can be considered one very influencing factor for the performance of employees within an organization. It is the motor that makes people work and feel a sense of reward in their job.

To describe motivation, there have been many scholars that have tried to show different ideas of motivation theories:

1. Maslow's Hierarchy of needs:

Maslow's Hierarchy of Needs. Retrieved on february 15th, 2011 from: http://psychology.wikia.com/wiki/Maslow's_hierarchy_of_needs

 2. Frederick Herzberg's Two Factors Theory:

Frederick Herzberg's Two Factors Theory. Retrieved on february 15th, 2011 from: http://american-business.org/827-herzbergs-two-factor-theory-of-motivation.html



3. Douglas McGregor: Theory X and Theory Y:

Theory X and Theory Y. Retrieved on february 15th, 2011 from: http://courseware.finntrack.eu/leadership/competence/motiv_7.html

Theory X: Workers tend to need coercion to work "properly", and they prefer to be directed.

Theory Y: Workers like to seek for responsibilities, work is natural and the worker try to achieve objectives.

4. The Expectancy Theory:

The Expectancy Theory. Retrieved on february 15th, 2011 from: http://www.flatworldknowledge.com/node/28089#web-28089

5. The Equity Theory:

The Equity Formula. Retrieved on february 15th, 2011 from: http://www.flatworldknowledge.com/node/29142#web-29142

This theory is about one's perceptions according to a comparation made with another one treated in different or equal conditions.

6. The Fifty - Fifty Rule: 

The Fifty/Fifty Rule. Retrieved on february 15th, 2011 from: http://marketplace.veer.com/images/1610473_Even-fifty-fifty-chance-written-on-a-blackboard

"A substantial part of motivation lies within a person while a substantial part lies outside and beyond its control" (Adair, 2006).

Discussion:

How can organizational capital become a source of advantage in International Business?

According to Steward (1991), organizational capital can be defined as culture, implicit and explicit knowledge, formal and informal, organization learning, etc. In this sense, it can become a source of advantage in International Business if those facts are practiced for the organization's well-being. For example, if an organization has culture of service, responsibility, punctuality and respect for costumers and workers, it would probably get an advantage over the other organizations that do not have those cultural characteristics. It can be seen as a good place for working, or having relationships with. If it also has knowledge and organization learning, it can mean to people outside the organization that it has experience doing what the organization does, leading people to think confindently on it, and contributing to the advantages of having organizational capital.

Organizations. Retrieved on february 8th from: http://www.projectappleseed.org/organizations.jpg

Attitudes and Values

Attitude formation:

1. Social Learning (Easier to change)
2. Direct experience (More difficult to change)

 Types of Attitudes:

1. Affective
2. Cognitive
3. Conative
4. Evaluative

Cognitive disonance: Tension when experiencing conflict between attitude and behavior.

Intellectual capital assets:

• Human
• Tecnhological
• Organizational
• Business
• Social

Intellectual capital. Retrieved on february 8th, 2011 from: http://www.youtube.com/watch?v=uFwFfGx-NMk

Discussion:

Why is it important for managers and employees to be able to understand different types of personalities?

It gets to be really important since it is a way in which both managers and employees asume their rôles in the organization according to what is needed and the organization's main goals. 

Also, it has to be taken into account that different personalities enrich the organization's environment, giving creativity and different points of view, complementing in such a way other's job. Finally, by understanding different types of personalities, threats or conflicts can be solved in a proper maner, giving more fluency to relations in the organization.

Four basic personality types. Retrieved on february 8th, 2011 from: http://www.youtube.com/watch?v=k7mEh53rTc0

Personality, Perception and Attribution

 Personality theories:

1. trait theory: behavior patterns divided into detailed characteristics.
2. Psychodynamic theory: unconscious determinants of behavior.
3. Humanistic theory: Individual growth and development
4. Integrative approach: Personal + situational variables.

Personality affected by:

• Perceiver
• Target
• Situation

Discussion:

Do you think corporate culture is a way to manipulate employees?

"Culture is nothing but a control system" (Spengler, 1980)

Corporate Culture. Retrieved on february 8th from: http://t2.gstatic.com/images?q=tbn:ANd9GcRVmoRMfhNyNt0gxKjLYVS1Gf7lwZCTqEDZ0M13sKeNE0rsHfECfg&t=1

Making reference to this particular phrase, Corporate Culture can be taken as the way managers and organizations have in order to preserve the uniformity and keep the control they have in employees. For example, one person working in a company having high degrees of corporate culture, can feel so tied to the system, not meaning that the employee loves working for that company, because corporate culture can "manage" at a certain point attitudes, but not behavior. Corporate culture in that way, can manipulate employees in the name of the company, because it tries to create a sense of belonging, and sometimes can quash specific culture manifestations that could be enriching to the organization.

National and Organizational Culture

Culture. Retrieved on february 8th from: http://redeartes.org/wp-content/uploads/2010/05/cultura1.jpg

Studying culture is a very important activity because it can be a tool that helps to understand the mechanics and the way people act  or behave within a company, but it also has to be taken into account that other aspects are essential when analyzing the organization's environment. In this sense, the importance of culture depends on:

• Particular circumstances
• Interests of the analyst

Now talking about international management (the way of planning international business' activities, according to O' Conell, 1998), we cay say that there are some factors influencing internally or externally the decision making process, leading to a constant reinterpretation of the environment, allowing culture to re-shape some aspects in organizations.

Corporate Culture. Retrieved on february 8th from: https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgupKvNSSrNqK5b53p_2eYL3yMNM8IcBMmMhFCLCgvPS8A_0AYuzc3adI-N2ZLZPE3UMPMUxDXMvxeZNJrPU3y9OzzgWTr36zExGLj-AKL0kVw4K495LZB6DdPv0N6s2PA2gM28Rr7Ksyhd/s400/20080527172159-direccion.jpg

If we continue describing in some way culture, another aspect that has to be mentioned is the concept of "National Culture", defining it as "something" that distinguishes people from one group to another, and includes values transmitted from one generation to the next coming through time.

In this sense, if cultures and values go from one generation to another one, we can affirm too that culture is learned, and it is influenced by beliefs (religion, for instance), or even ideologies. Having on the table all these facts, we should learn how to deal with cultural diversity within organizations, since it could bring opportunities as well as problems (diversification or misunderstandings). Finally, what is important to say is if culture is managd in a proper way, cultural diversity brings more creativity and a sense of variety that can improve the organization's performance.

Video: "Cultura organizacional y orientación al cliente". Retrieved on february 8th, from: 

http://www.youtube.com/watch?v=IAVRfe3f-Vg

Organizational Behavior

In an organizational environment, it is necessary to try to understand , predict, controle and describe human behavior. The study in charge of that is Organizational Behavior, and it is really important because it can analyse the impact behavior has in some organizational structures (Robbins & Langton, 2003), and also it helps on improving organizations' efectiveness. Finally, Organizational Behavior is also related to other disciplines, like Organizational Theory, Human Resources Management and Organizational Development.

But, if we talk about Organizational Behavior, it is essential to define first what is an Organization. According to the System Approach, it is a complex system created by individuals, creating relationships as a social system and has "life" on its own. In the organization, some objectives are built up:

- Human

- Organizational

- Social

While Human and Organizational objectives are looking for profit (considerating them "selfish" or "egocentric" objectives), Social objectives aim to share responsibility (i.e. CSR programs in Coca - Cola). Last but not least, we have to mention that there are some theoretical frameworks to explain behavior in organizations, like: Behavioristic, Cognitive Approach and Social Learning Approach. For further information, you can check out these links:

Positive Organizational behavior. Image for Positive Psychology News daily. Retrieved from:  http://positivepsychologynews.com/news/timothy-so/200903181667

References:

Ashraf, T. Organizational Behavior. Jawaharlal Nehru University Publication. Pdf file. Retrieved on February 3, 2011 from:http://www.unesco.org/education/aladin/paldin/pdf/course02/unit_14.pdf


Don, c. (2010) Big dog & little's dog performance yuxtaposition. Leadership and Organizational Behavior. Website retrieved on February 3, 2011 from :
http://www.nwlink.com/~donclark/leader/leadob.html