CH-4-5 International Management and Cross-Cultural Competence – Management : Book Guide

This Document Contains Chapters 4 to 5 Chapter 4 International Management and Cross-Cultural Competence END OF CHAPTER FEATURES • Terms to Understand – encourage students to make use of the flashcards available on the student website. Also, suggest they visit the Manager’s Toolkit section on the website for tips and suggestions for aspiring managers. • Action Learning Exercise – Look Into The Cultural Mirror. Encourage students to complete the survey keeping in mind that there are no right or wrong answers. The point of this exercise is to raise awareness and open a dialogue about cultural variables. You may want to consider giving this as an assignment where students must have five people representing a diverse sampling complete the survey as well. Have them answer the questions at the end, and discuss the results in class. • Ethics Exercise – Do The Right Thing, Google’s Fight Against Chinese Censorship. After reading the background and negotiated compromise have students respond to the questions that follow. A few possible responses they are likely to offer are included. What are the ethical implications of the following interpretations? 1. Despite its admirable business philosophy, Google is a profit-making corporation that is cheating its stockholders by fighting censorship in China, the world’s most populous country with huge market potential. On one side – how are they cheating their stockholders, by reaching a compromise they are still in the game and at least capturing some of the market share. On the other side – they have no business violating Chinese law for their stockholders’ benefit. Answer: The statement presents two conflicting perspectives on Google's actions regarding censorship in China: 1. Cheating Stockholders Perspective: This viewpoint argues that Google is cheating its stockholders by potentially compromising its values and principles in order to gain access to the Chinese market. The argument is that by fighting censorship, Google could potentially miss out on a significant market opportunity in China, which could benefit its stockholders financially. 2. Legal Compliance Perspective: This perspective suggests that Google has a responsibility to adhere to the laws of the countries in which it operates, including China. From this viewpoint, violating Chinese law to benefit stockholders would be unethical and could lead to legal repercussions for the company. Ultimately, the resolution of this conflict depends on one's values and priorities. Some might prioritize financial gains for stockholders, while others might prioritize ethical principles and legal compliance. Google's decision-making process in this regard would likely involve a careful consideration of both perspectives and a weighing of the potential risks and benefits associated with each course of action. 2. Foreign-owned companies are guests in host countries and have no right to impose their cultural values. They are obligated to “play by the rules” by following local laws and customs. Any exceptions? Imagine if the roles were reversed and a Chinese company starting doing business in the U.S. without complete disregard for our laws? Answer: The statement raises an important point about the need for foreign-owned companies to respect the laws and customs of the countries in which they operate. However, there are some nuances to consider: 1. Respect for Local Laws and Customs: Foreign-owned companies should indeed respect the laws and customs of the host country. This includes obeying local regulations and cultural norms. 2. Balancing Cultural Values: While foreign-owned companies should respect local cultures, there may be instances where a company's cultural values conflict with those of the host country. In such cases, finding a balance that respects both sets of values can be challenging but necessary for successful operations. 3. Exceptions and Adaptations: There may be instances where certain cultural practices or laws are in direct conflict with fundamental human rights or ethical principles. In such cases, foreign-owned companies may need to carefully consider their actions and possibly seek ways to address these conflicts while still respecting local laws and customs. 4. Reciprocity: Considering the hypothetical scenario of a Chinese company operating in the U.S., it is reasonable to expect that the same principles of respect for local laws and customs should apply. Just as U.S. companies should respect Chinese laws and customs when operating in China, Chinese companies should do the same when operating in the U.S. In summary, while foreign-owned companies should generally respect the laws and customs of the countries in which they operate, there may be exceptions where ethical considerations or fundamental human rights come into play. Balancing these factors requires careful consideration and a commitment to responsible business practices. 3. Google, as an Internet mainstay, has a moral obligation to promote free speech worldwide. Did the negotiated solution betray that moral obligation? No, it may have added an additional step which may limit the number of users and advertisers but they found a way to make it work. Answer: The statement presents two contrasting views regarding Google's moral obligation to promote free speech worldwide and whether the negotiated solution in China betrayed that obligation: 1. Moral Obligation to Promote Free Speech: Some argue that as a major player in the internet space, Google has a moral obligation to promote free speech worldwide, even in countries like China where censorship is prevalent. From this perspective, any compromise on free speech principles, even if it allows Google to enter the Chinese market, would be seen as a betrayal of this obligation. 2. Pragmatic Approach: Others argue that while promoting free speech is important, Google also needs to consider practicalities and limitations in certain markets. They might see the negotiated solution as a pragmatic approach that allows Google to operate in China while still adhering to local laws. This approach may involve compromises that limit the number of users and advertisers but still allow Google to make some impact in the market. In this view, the negotiated solution may not be seen as a betrayal of Google's moral obligation but rather as a practical way to navigate a complex situation. The effectiveness of this approach would likely be judged based on its ability to balance Google's business interests with its commitment to promoting free speech. 4. Your own ethical interpretations? Answer: When framing my own ethical interpretations regarding management's social and ethical responsibilities, I believe that ethical management involves a commitment to transparency, fairness, and accountability. Managers must prioritize the well-being of employees, customers, and the community while making decisions that balance profit with social good. Ethical responsibilities also include respecting environmental sustainability, promoting diversity and inclusion, and upholding integrity in all business practices. Ultimately, ethical management requires a proactive approach to identifying and addressing ethical dilemmas, fostering a culture of ethical behavior, and ensuring that the organization contributes positively to society. • Managers-In-Action Video Case Study – Numi Organic Tea CHAPTER 4: NUMI ORGANIC TEA – SUSTAINABLE SUPPLY CHAIN The cultural imperative and a sustainable supply chain Length: 7 minutes and 22 seconds Topics: Culture, Import, Export, Outsourcing, International Business, Partnerships, Profit, Sustainability, Manufacturing, Packaging, Transporting, Forecasting, Quality Improvement, Resource Management, Fair Trade, China, Asia, ERP Software, Systems, Supply Chain Company Background From the Numi website January 10, 2011 http://www.numitea.com/ Numi Facts At-a-Glance What is Numi? Numi Organic Tea is a leading purveyor of premium-quality, full-leaf organic and Fair Trade Certified teas. Numi lets Nature speak for itself, blending organic teas and herbs with only real fruits, flowers and spices. Since Numi never uses bitter-tasting tea dust or fannings, it is not necessary to mask the tea with “natural” flavors, oils or fragrances. Numi’s authentic practices mean you can pronounce the ingredients, know exactly what you’re sipping and savor the true gifts of nature. The Numi team shares the commitment to bring the best tasting organic tea, sourcing directly from fair trade gardens that guarantee livable wages and better opportunities for farmers and their families. Numi History After spending many years apart traveling the world and pursuing interests in art, brother and sister Ahmed and Reem Rahim met up during a family vacation to the Grand Canyon and discussed starting a tea business. Ahmed had been living abroad and had owned and operated teahouses in Europe while Reem had been studying art in Northern California. They wanted to create an entity that would encompass both of their passions. In 1999, after observing that competing brands in the U.S. tea market differed little from one another in quality, consistency, and selection, Numi was created in a tiny 750 sq/ft apt in Oakland, CA. Inspired by art and exotic teas, Reem and Ahmed created a company whose hallmark is super-premium, organic and Fair Trade Certified, full leaf teas and herbal teasans. Numi pioneered the introduction of exotic herbs such as Rooibos, Lemon Myrtle, Honeybush and Dry Desert Lime that were popular in Europe but were completely unknown in the United States. Numi also is known for their innovative line of Flowering Tea, handsewn tea leaves that blossom open when steeped. Most recently, Numi was the first U.S. company to bring a revolutionary new tea category, including four USDA certified organic Puerh tea blends, six ready-to-drink Puerh Iced Tea bottles and Puerh Brick to market. Numi Mission Numi’s mission is to be the most innovative tea company in the world dedicated to quality, sustainable values and a commitment to community. Numi Vision Numi’s vision is to inspire well-being of mind, body and spirit through the simple art of tea. Numi elevates the tea experience through innovation and quality, as well as a commitment to the environment and our global community. Numi hopes to educate and influence others to make a difference in their contribution to society. Numi is an organization that celebrates difference and creativity; the company occupies a vibrant office space and tea garden that invites all to find their own thoughts and visions and take the tea transformation. Numi Flavors Numi offers 26 teas and herbal teasans, a variety of Flowering Tea, Organic Puerh Iced Teas, loose leaf tea, gifts and tea chests. See www.numitea.com for full catalogue. Where is Numi sold? Numi is sold nationally in Whole Foods Markets, Safeway’s Organic Marketplace, other premium independent natural food stores and natural sets within conventional grocery stores. Numi is sold internationally in more than 20 countries. Visit www.numitea.com for a store locator. Synopsis of Video Numi Organic Tea The cultural imperative and a sustainable supply chain Numi Organic Tea was started in 1999 in Oakland, California. They import tea from Asia and export to more than twenty countries around the World. Brian Durkee, Director of Operations and Ahmed Rahim, Co-founder and CEO, discuss in this video how and why they source tea from growers in China. They share their approach in creating mutually beneficial partnerships that are respectful of cultural differences. They also describe how they have implemented a sustainable supply chain and leveraged technology to grow. This video provides a sample of Numi Organic Tea’s secrets to success, as they achieve their commitment to People, Planet, and Profit. Previewing Questions 1. How would you describe culture and cultural differences? Answer: Cultural lessons are taught from birth to death through family, role models, educators, religious leaders, and peer pressure. Culture includes norms, values, attitudes, beliefs, customs, traditions, taboos, rituals and many other variables that shape a group or society. Differences among cultures stem from all of these areas and if not respected can lead to conflict. 2. Why is it important for managers to compare and study how organizational behavior and management practices differ across cultures? Answer: One of the biggest reasons is because there are differing attitudes around the world towards international operations. See Table 4.3 for the overview of ethnocentric, polycentric and geocentric. In addition, when working across context cultures such as a manager from a low-context culture working with people in a high-context culture – they will need to spend more time cultivating the relationship and managing their nonverbal communication along with the primary message. What competencies and skills does a manager need to have to work effectively across cultures? In addition to skills previously discussed, encourage students to conduct an open brainstorm on this topic. They are likely to suggestion skills and abilities such as: a. Building relationships b. Valuing people of different cultures c. Listening and observation d. Coping with ambiguity e. Translating complex information f. Taking action and initiative g. Managing others h. Adaptability and flexibility i. Managing stress Postviewing Questions 3. In The Changing Workplace chapter opener, we describe myths and realities about China. Choose one of these and discuss how you think it is relevant to the management team at Numi Tea. Answer: Both the reality of individualism and risk tolerance are apparent when the Numi team representative discusses one of the business partners in China and shares how entrepreneurial this tea grower is and how willing he is to learn from the Americans. It sounds like he understands what’s in it for him and his workers. 4. What steps has Numi Tea taken to fulfill their commitment to the Planet? Answer: Numi has implemented sustainable manufacturing, packaging and transport reducing waste. For example, boxes are made of 85% recycled fiber. 5. How does Numi Tea maintain their commitment to profit and people while respecting cultural differences? Answer: When sourcing to growers in China they focus on three primary values: how they want things done related to quality and level of sustainability, and how are they treating their workers. They are not trying to change the culture but instead want to improve the standard of living for the workers. Balancing quality, fair trade, and sustainability while also achieving a profit is challenge achieved through effective use of partnerships and technology. 6. How has technology had a positive impact on Numi Tea’s management practices? Answer: The ERP software has had a significant impact as it connects and manages the company in multiple countries, multiple locations, with multiple partners. It has improved Numi’s entire business systems from finances to production & supply chain management leading to improved efficiency, effectiveness and profitability. CLOSING CASE: SOLUTION TELL THE KIDS WE’RE MOVING TO KENYA 1. Ethnocentric. He cannot see any advantages to exploring another country and culture and is more concerned with what he will miss in the United States. 2. Polychronic. The example with someone interrupting paperwork shows that people would rather start the process and pause than follow a linear pattern of finishing the task at hand. Failing to arrive promptly on time for social gatherings is also a polychronic tendency. 3. According to Figure 4.1, in Sub-Saharan Africa the most acceptable styles are charismatic/value-based, team-oriented, and participative. Humane-oriented would be all right, but not as successful as the other three. Self-protective wouldn’t work well there. 4. This calls for a personal opinion. The positives were that they had exposure to both personal and business-related issues, as well as a smattering of language. Also, their instructor had first-hand experience with the country. The negative was that many of their fears and concerns weren’t acknowledged, let alone overcome. It might have been useful to help the family deal with their personal issues, rather than just explaining where to shop and how to entertain. 5. This calls for a personal opinion. It’s hard to tell. The only member of the group that seems really responsive to the process is Dale Pilger. Their exposure to other cultures before this has probably been nonexistent. A lot will depend on the attitudes of the children. It won’t be easy. INSTRUCTIONAL TIPS 1. A discussion of the many ways in which the products of global and transnational corporations touch our lives (e.g., foreign cars, imported oil, imported beverages, and imported video, audio, and other electronic equipment) helps dramatize the immense impact of the global economy today. 2. By encouraging your foreign students and students who have traveled abroad to share the experiences they have had with ethnocentric, polycentric, and geocentric individuals, you can help your class fully grasp the significance of these contrasting attitudes. 3. To help students understand the impact of cultural differences on business activities, you could divide your students into small groups and have each group consider one of the cultural differences listed in the chapter (e.g., high-context versus low-context, individualism versus collectivism, and differing time standards). Issues the students should review include the potential problems caused by the differences and how managers can adapt their style and assumptions to fit the alternative cultural context. You may also want them to consider the perceptual impact of the cultural differences on someone who is not familiar with them. 4. Have students determine and demonstrate a business meeting between two people of different cultures, using the cultural differences outlined in the chapter. Students could also do additional research on cultural mores and expectations to enrich this activity. Participants in the demonstration can do things right and wrong, and the students in the class can point out what worked and what didn’t, and why. 5. Given some of the recent concerns about products coming out of China, a discussion of the advantages and risks of global trade can be interesting. Are students nervous about imported produce after the Chinese toxic drywall import of a few years ago? What should the United States do to address some of these consumer concerns? 6. Because so many students have the opportunity to travel today, a general class discussion of personal experiences in other cultures is a relevant and interesting way to highlight the need to adapt American management theory and practice to local cultures. A great resource for this is the “World Citizen’s Guide,” a brochure with insights into avoiding the “Ugly American” stigma. More information and a free PDF download are available at www.worldcitizensguide.org. 7. Cross-cultural training is being recognized as important because of the recent focus on cultural diversity in the United States. If you have students discuss any diversity or cross-cultural training experiences they have had or explore some of the cultural diversity programs offered at various local organizations, they may begin to understand the complexity of cross-cultural training. 8. Another alternative to help students understand cross-cultural training is for small groups of students to research cultural mores and business practices in various countries and report on their findings in the style of a briefing for managers who are going overseas. ADDITIONAL DISCUSSION/ESSAY QUESTIONS 1. What is a transnational corporation, and how does it evolve? Answer: A transnational corporation (TNC) is a large company that operates in multiple countries, with a centralized management system that coordinates global activities. TNCs evolve through stages of internationalization. Initially, they may begin as domestic companies, focusing on their home market. As they grow, they may start exporting their products to other countries. This is followed by setting up overseas offices or production facilities, often through licensing agreements or joint ventures. As the TNC expands further, it establishes wholly-owned subsidiaries in different countries, creating a network of operations. This allows the company to adapt its products and strategies to local markets while maintaining a global identity and control over key decisions. TNCs often evolve into complex organizations with a strong global presence, leveraging their international operations to achieve economies of scale, access new markets, and manage risks through diversification. 2. What are the nature and significance of Perlmutter’s distinction among ethnocentric, polycentric, and geocentric attitudes toward international operations? Answer: Perlmutter's distinction among ethnocentric, polycentric, and geocentric attitudes toward international operations provides valuable insights into how multinational corporations (MNCs) approach their global strategies. These attitudes reflect different orientations toward managing subsidiaries and addressing the challenges of cultural diversity. 1. Ethnocentric Attitude: This approach considers the home country's practices and values superior and seeks to replicate them in foreign operations. It tends to centralize decision-making at the headquarters and staff key positions with expatriates from the home country. While this approach may offer control and consistency, it can lead to cultural insensitivity and limit adaptation to local markets. 2. Polycentric Attitude: In contrast, the polycentric attitude emphasizes adapting to local cultures and practices. MNCs adopting this approach decentralize decision-making to subsidiaries, often employing local managers who understand the local market dynamics and can tailor strategies accordingly. While this approach enhances local responsiveness and adaptation, it may lead to a lack of coordination and consistency across global operations. 3. Geocentric Attitude: The geocentric attitude represents an integrated global approach that seeks to balance the benefits of both ethnocentric and polycentric attitudes. It promotes a global mindset where the best individuals, regardless of nationality, are selected for key positions. This approach aims to achieve synergy between global integration and local responsiveness, leveraging global efficiencies while respecting local differences. Significance of Perlmutter's Distinction: Strategic Decision Making: Understanding these attitudes helps MNCs in making strategic decisions regarding staffing, product adaptation, and market positioning. Organizational Culture: It impacts the organizational culture and structure, influencing how decisions are made and how employees from different backgrounds are integrated. Competitive Advantage: The choice of attitude can significantly impact the MNC's competitive advantage by affecting its ability to adapt to local market conditions while maintaining global efficiency. Risk Management: It also affects risk management strategies, as different attitudes may lead to different levels of risk exposure and mitigation approaches. In conclusion, Perlmutter's distinction provides a framework for MNCs to assess their approach to international operations and highlights the importance of balancing global integration with local responsiveness for sustainable success in the global marketplace. 3. What issues should you consider when attempting to apply American management theories and techniques in foreign cultures? Explain. Answer: When applying American management theories and techniques in foreign cultures, several critical issues must be considered to ensure effectiveness and avoid potential pitfalls. These issues revolve around cultural differences, communication styles, leadership approaches, and the overall context of the foreign business environment. 1. Cultural Differences: One of the primary considerations is the vast diversity in cultural norms, values, and practices across countries. What works in one culture may not necessarily work in another. It's crucial to understand and respect the cultural context of the foreign country to avoid misunderstandings and conflicts. 2. Communication Styles: Communication norms vary widely among cultures, affecting how messages are perceived and understood. Direct communication, common in American culture, may be seen as rude or aggressive in some cultures. Adapting communication styles to be more indirect or nuanced can enhance effectiveness in cross-cultural settings. 3. Leadership Approaches: American management often emphasizes individual initiative and assertiveness. However, in some cultures, a more collaborative or consensus-driven leadership style may be more appropriate. Understanding and adapting leadership approaches to fit the cultural context is essential for successful management practices. 4. Work Ethics and Values: Attitudes toward work, punctuality, hierarchy, and authority differ among cultures. For example, American emphasis on efficiency and productivity may clash with cultures that prioritize relationships and harmony. Aligning management practices with local values can foster acceptance and engagement among employees. 5. Legal and Regulatory Environment: Foreign countries have their own legal and regulatory frameworks, which may differ significantly from those in the United States. Adhering to local laws and understanding the regulatory environment is crucial to avoid legal issues and ensure compliance. 6. Adaptation vs. Standardization: Balancing the need for standardization of processes and practices with the need for adaptation to local customs and practices is a key challenge. Finding the right balance can enhance efficiency while respecting local cultures and values. 7. Training and Development: Providing adequate training and development programs for both American managers and local employees is essential. This helps in bridging cultural gaps, enhancing cross-cultural competence, and improving overall performance in the foreign environment. 8. Flexibility and Openness: Finally, maintaining a mindset of flexibility and openness to learning from the local culture is crucial. Being willing to adapt and modify management practices based on feedback and experience can lead to more successful outcomes in cross-cultural management. In conclusion, applying American management theories and techniques in foreign cultures requires a deep understanding of cultural differences, effective communication, adaptive leadership, alignment with local values, compliance with local laws, and a willingness to learn and adapt. By addressing these issues thoughtfully, organizations can navigate the complexities of cross-cultural management and achieve success in international operations. 4. Is there one best style of leadership in international management? Explain. Answer: No, there is no single best style of leadership in international management due to cultural differences across the globe. Effective international leaders must be culturally competent and adaptable, tailoring their leadership style to fit the cultural norms and values of the specific environment. This flexibility is key to navigating diverse cultural expectations and achieving success in a global context. 5. What can be done to reduce the relatively high expatriate failure rate among U.S. managers? Answer: To reduce the high expatriate failure rate among U.S. managers, companies can implement the following strategies: 1. Comprehensive Pre-Departure Training: Provide cultural, language, and practical training to prepare expatriates for living and working in the host country. 2. Support Systems: Establish strong support networks, including mentoring programs, to help expatriates adjust and feel connected. 3. Family Assistance: Offer support for expatriates' families, such as educational resources for children and employment assistance for spouses. 4. Clear Goals and Expectations: Set clear performance objectives and provide regular feedback to ensure expatriates understand their roles and progress. 5. Repatriation Planning: Develop a plan for the expatriate's return to ensure a smooth transition back to the home country and to leverage their international experience. Discussion Starter: Do You Have What It Takes to be an Expatriate? • If you could move anywhere in the world for a management position, what country would you choose? • What skills and abilities do you have that will help you achieve success when you arrive in your new country? • What skills and abilities will you need to develop? • What are the risks? • What are the potential rewards? • Well, do you have what it takes? BONUS VIDEOS BIZFLIX VIDEO CASES FROM THE TEXTBOOK WEBSITE Discussion Questions and Guide Video Case: Lost in Translation VIDEO CASE SYNOPSIS Based on director Sophia Coppola’s Academy Award winning screenplay, this film was shot entirely on location in Japan. It offers extraordinary views of various parts of Japanese culture that are not available to you without a visit. Prior to the beginning of this film clip, jet lag has conspired with culture shock to force the meeting of Charlotte (Scarlett Johansson) and Bob Harris (Bill Murray). Neither can sleep after their Tokyo arrival. They meet in their luxury hotel’s bar, forging an enduring relationship as they experience Tokyo’s wonders, strangeness, and complexity. In this composite of clips taken from different parts of Lost in Translation, Charlotte has her first experience with the complex, busy Tokyo train system. She later takes the train to Kyoto, Japan’s original capital city for more than ten centuries. VIDEO CASE DISCUSSION QUESTIONS AND SUGGESTED ANSWERS 1. While watching this scene, pretend you have arrived in Tokyo and you are experiencing what you are seeing. Do you understand everything you see? Answer: The complexity of the multilevel Tokyo station overwhelms Charlotte. Notice her confused look as she tries to understand the subway map. She cannot read any signs in Japanese and none of the signs are in English, nor does she feel able to engage anyone in conversation because of the language difference. Students, except those from Japan, should have an equally bewildering experience while viewing this scene and may even express frustration with the video clip itself. 2. Is Charlotte bewildered by her experiences? Is she experiencing some culture shock? How would you describe Charlotte’s level of cultural intelligence? Answer: Based on her responses, we can assume that Charlotte has a low level of cultural intelligence regarding Japanese culture. Charlotte has bewildering experiences in Tokyo station and at the temple. However, we can assume that she is learning quickly when we see her participate in a cultural tradition of placing a prayer sheet on the branch of a bush. 3. What aspects of culture discussed in this chapter appear in this movie about Japan? What do you see as important values of Japanese culture? Answer: The language difference plays a key role in Charlotte’s confusion. The role of religion in Japanese culture also comes through clearly in this scene. Charlotte observes monks praying in a Tokyo temple. When she gets to Kyoto, she again sees religious observance at a temple. Students may also comment on the garden and the artistry it represents. BONUS LECTURE Global Gaffes You have a great idea to introduce your new line of children’s footwear in Egypt. Have a line of children sitting on a hilltop, singing a popular local children’s song and waving their feet to the music. You can shoot the scene from the bottom of the hill, and as each child jumps up and runs down the hill, you can focus on his or her shoes. Sounds good, right? Lots of energy and lots of shoes? Except that it is the worst kind of insult to aim the sole of a shoe at someone in the Islamic Middle East. The ad would look like the children were gravely insulting adults. Now, you would hope that anyone marketing products in another country would have done their homework and would know that already, but at least anecdotal evidence shows that people are making horrible, and expensive, gaffes all the time. For example, consider the U.S. sales executive who packaged a multimillion-dollar proposal for a Saudi Arabian client in a pigskin portfolio. But devout Muslims consider pigs unclean. The executive was fired, and his company was blacklisted with all Saudi companies. Or consider Chevrolet’s introduction of the Nova model to Mexico a number of years ago, totally ignoring the fact that in Spanish, nova means “it doesn’t go.” What can you do to help correct these problems before they occur? The key is to go back to the basics of product marketing, the Four P’s of marketing—Product, Price, Place, and Promotion. Product: Chase and Sanborn decided to introduce instant coffee in France, totally unaware that brewing real coffee is a valued culinary pleasure for the French. Instant coffee was an unsatisfactory and somewhat vulgar alternative. Packaging can also be an issue. When Procter & Gamble packaged its diapers designed for distribution in China using pink in the packaging, it displayed a preference for girl babies in a country where the prevailing desire is to have a boy. The rollout was a failure. Price: Simply converting the U.S. price to foreign currency often won’t work in other countries. Differences in the standard of living, the pricing policies of local competitors, and inadequate cost analysis can lead to disastrous pricing decisions. Ford decided to sell its economy model Escort for over $20,000 in India. However, in that market, a car in that price range is a luxury vehicle that only a few can afford. Once again, with just a basic review of prices charged for locally manufactured automobiles, Ford would not have made that mistake. Coming in at the price the market will bear may not work either if it means losing money on the product. Many companies have moved into a new foreign market with a low-cost approach, only to be forced to leave the market in a few years when the product never generated enough volume to break even. Place: Distribution is one of the most critical criteria for success. Often, the right distributor may open doors to a product that would be closed with a direct sales attempt. This is frequently the case with international grocery products that try to get a toehold in the U.S. market. Our grocery stores are so focused on shelf space that international firms benefit greatly by hiring a distributor with some clout to get their products well positioned on store shelves in the United States. Promotion: Taking the time to understand what makes a product sell in another country can mean the difference between success and failure. Gerber put baby pictures on the front of its baby-food jars that went to Africa, and potential buyers thought the jars held ground-up children. Some countries have a nationalistic attitude about buying products manufactured locally. Lincoln Electric found that out to its dismay when it acquired a German arc-welding firm. It immediately changed the product brand name to Lincoln, not realizing the strong “buy German” bias. Germans immediately switched to products manufactured by other German firms, and Lincoln ended up closing the operation. Thinking that what works in the United States will work all over the world betrays tremendous provincialism. American managers need to recognize the dangers of taking these marketing basics for granted when moving a product into the international arena. Otherwise, they can end up like Braniff Airlines, which encouraged potential passengers in a radio commercial to fly en cuero, or “in leather,” referring to its plush leather seats. However, en cueros, a similar-sounding Spanish expression, means “naked.” The rapid pace at which the radio ad was delivered led listeners to believe that Braniff was recommending that its customers travel in the buff. Discussion Questions 1. Have you heard of any other examples of international gaffes that have been made by U.S. or foreign firms? Answer: Yes, there have been several notable international gaffes by U.S. and foreign firms: 1. Chevrolet Nova: General Motors struggled to sell the Chevy Nova in Latin America because "Nova" translates to "doesn't go" in Spanish. 2. Pepsi in China: Pepsi's slogan "Come alive with the Pepsi Generation" was mistranslated in China as "Pepsi brings your ancestors back from the grave." 3. KFC in China: KFC's slogan "Finger-lickin' good" was mistranslated as "Eat your fingers off" in Chinese. 4. Parker Pen in Mexico: Parker Pen's slogan "It won't leak in your pocket and embarrass you" was mistranslated into Spanish as "It won't leak in your pocket and make you pregnant." 2. What advice would you give a manufacturer in another country that was considering moving into the U.S. marketplace? Answer: When advising a manufacturer from another country considering entry into the U.S. marketplace, I would suggest the following: 1. Market Research: Conduct thorough research on U.S. consumer preferences, market trends, and competitive landscape. 2. Regulatory Compliance: Understand and comply with U.S. regulations, including safety standards, labor laws, and environmental regulations. 3. Cultural Sensitivity: Develop a deep understanding of U.S. cultural norms and business practices to tailor marketing strategies and build customer trust. 4. Distribution Network: Establish a reliable distribution network to ensure efficient logistics and supply chain management. 5. Local Partnerships: Consider forming partnerships or alliances with local firms to leverage their market knowledge and established customer base. 6. Adaptation: Be prepared to adapt products and business models to meet the specific needs and preferences of U.S. consumers. This strategic approach can help navigate the complexities of the U.S. market and enhance the likelihood of success. 3. If you wanted to market a product internationally, what steps would you take first to ensure that your firm didn’t make some of the same types of mistakes discussed above? Answer: To market a product internationally and avoid common mistakes, I would take the following steps: 1. Conduct Thorough Market Research: Understand the target market's cultural, economic, and legal environment. 2. Cultural Sensitivity Training: Educate the team on cultural differences to ensure respectful and effective communication. 3. Local Regulations Compliance: Study and adhere to local laws and regulations to avoid legal issues. 4. Consumer Insights: Gather and analyze data on local consumer preferences and behaviors. 5. Adaptation Strategy: Customize products and marketing strategies to fit the local culture and consumer needs. 6. Pilot Testing: Launch a small-scale test market to identify and rectify potential issues before a full-scale launch. 7. Local Partnerships: Collaborate with local businesses to gain insights and establish credibility in the market. BONUS ACTIVITY COOPERATIVE LEARNING TOOL: INSTRUCTOR NOTES Are You a Cultural Survivor? This activity is a fun way to demonstrate one interesting difference between cultures—the standard greeting. This illustrates several key cultural differences: the amount of personal territory individuals from different cultures need to feel comfortable, the fact that the varied greetings probably evolved from these territory needs, and the discomfort people can experience when spending time in another culture, even with something as simple as an initial greeting. This activity is patterned on one of the “survival” television programs. You can set this up in whatever way you like by talking about survival shows to introduce the activity, etc. The activity is scripted, but it would be best to review the information and use your own words. That will make it feel more natural and keep it loose and fun. There are many other cultural differences. If you want to expand this exercise, pick up a book or look on the Internet for sources of information on differences. This game could be expanded to demonstrate a number of differing cultural issues. At the end of the game instructions are some details on these greetings, plus some insights into why each culture has each type of greeting, along with some discussion questions to support the activity. Looking for Cultural Survivors Could you survive in another culture? Let’s take a look at one basic cultural ritual—greetings. Ask for four volunteers to come to the front of the room. Place two on each side of you in front of the room. Explain that the contestants making up teams A and B will be visiting another country and that to survive, they will need to use the appropriate standard business greeting for that country. Tell Team A, “You are going to Japan.” Tell Team B, “You are going to South America.” Let them know that they have one minute to agree together on what the appropriate greeting is. You can use a stop watch to time them if you want. Then tell them that when you say “Go,” they should demonstrate the appropriate business greeting for their assigned countries. Say, “Go.” Answers: In Japan, the traditional greeting involves standing about 3 feet apart and bowing slightly from the waist. The more important the person, the lower the bow, so if you’re bowing to your boss, your bow would be lower than his. In South America, the traditional greeting is to stand about 6 inches apart and hug, kissing both cheeks. If both teams get it right, congratulate them and have the class give them a hand. Then have them demonstrate the traditional U.S. business greeting, a handshake at a distance of about 18 inches to 2 feet. If one team gets it right and the other doesn’t, congratulate the team that gets it right and have the class give them a hand. Give the other team one more chance to be cultural survivors. Have them demonstrate the traditional business greeting in the United States. (The correct answer is a handshake.) If the other team gets this wrong, tell them (nicely) that it looks as if they can’t even survive in their own culture. If both teams get it wrong, tell them that you will give them one more chance to be cultural survivors by demonstrating the traditional business greeting in the United States (the correct answer is a handshake). If the one or both teams get this wrong, tell them (nicely) that it looks as if they can’t even survive in their own culture. Using the same team members, tell them the correct answers and have them demonstrate the correct greeting for each country while you explain. Additional Information on the Greetings In the United States, we operate in a comfort zone if people are about 18 inches apart. Our traditional greeting—shaking hands—works very well given our comfortable range of personal territory. However, in other countries and cultures, other personal territory distances apply. For example, in Japan, their territory is about 3 feet wide. Thus the common business greeting ritual in Japan, the bow, fits perfectly with their territory goals. They interpret our moving close enough to shake hands as very intrusive. On the other hand, in Latin America, the personal territory of comfort is about 6 to 8 inches. Their common business greeting is a hug and/or a kiss on both cheeks. How does this behavior feel for us? What about for a U.S. female meeting a Latin American male. If someone moves closer, we get uncomfortable. We also are uncomfortable interacting with someone too far away—say 3 to 4 feet. Chapter 5 Management’s Social and Ethical Responsibilities END OF CHAPTER FEATURES • Terms to Understand – encourage students to make use of the flashcards available on the student website. Also, suggest they visit the Manager’s Toolkit section on the website for tips and suggestions for aspiring managers. • Action Learning Exercise – The Rokeach Value Survey. Encourage students to complete the survey keeping in mind that there are no right or wrong answers. The point of this exercise is to raise awareness and open a dialogue about personal values and the impact they have on ethical and unethical behavior. You may want to consider giving this as an assignment where students complete the survey prior to your class lecture on Personal Values and Ethical Anchors. • Ethics Exercise – Do The Right Thing, Does Ethics Instruction in College do any Good? After reading the remarks from Nitin Nohria, dean of the Harvard Business School, have students respond to the questions that follow. A few possible responses they are likely to offer are included. What are the ethical implications of the following interpretations? 1. Ethics instruction in college is probably a waste of time because students’ value systems solidify earlier in life. What percent of students do you think are fundamentally honest, trustworthy, and ethical, and what percent are fundamentally dishonest, untrustworthy and unethical. Answer: however at a minimum the discussion can point to the survey of teenagers where 60 percent admitted to cheating on a test. Wow! 2. There should be coverage of ethics because at least some students will be positively influenced. How should ethics instruction be handled for college students? Answer: Ethics instruction for college students should be comprehensive, engaging, and relevant to their lives and future careers. Here are some key strategies for handling ethics instruction: 1. Integration into Curriculum: Ethics should be integrated into various courses across disciplines, rather than being a standalone subject. This helps students see the relevance of ethics in their field of study. 2. Case Studies and Real-World Examples: Use case studies and real-world examples to illustrate ethical dilemmas and decision-making processes. This helps students understand the complexities of ethical issues. 3. Discussion-Based Learning: Encourage discussion and debate on ethical issues to help students develop critical thinking skills and learn from diverse perspectives. 4. Ethical Leadership Development: Provide opportunities for students to develop ethical leadership skills through projects, presentations, and role-playing exercises. 5. Ethics Across Cultures: Explore how ethical principles can vary across cultures and societies, helping students develop a global perspective on ethics. 6. Experiential Learning: Offer internships, service learning opportunities, or simulations that allow students to apply ethical principles in real-world settings. 7. Professional Ethics: Provide guidance on ethical standards and practices in specific professions, preparing students for ethical challenges they may face in their careers. 8. Ethics in Research: Teach students about ethical considerations in research, including issues related to plagiarism, data falsification, and ethical treatment of research subjects. By incorporating these strategies, ethics instruction can effectively engage college students and equip them with the knowledge and skills needed to make ethical decisions in their personal and professional lives. 3. Ethics should be emphasized in virtually every college course to increase the likelihood of better conduct later in life. Will corrupting influences and pressure for results in the workplace tend to cancel out ethics lessons learned in college? Answer: Without question, peer pressure and family pressure can have a major impact on people’s values and actions. However, there is still hope that by learning right from wrong and how to make ethical decisions every student may benefit. Particularly if ethical conduct becomes the norm and cheaters are shamed and embarrassed by their friends. 4. Your own ethical interpretations? Answer: When framing my own ethical interpretations regarding management's social and ethical responsibilities, I believe that ethical management involves a commitment to transparency, fairness, and accountability. Managers must prioritize the well-being of employees, customers, and the community while making decisions that balance profit with social good. Ethical responsibilities also include respecting environmental sustainability, promoting diversity and inclusion, and upholding integrity in all business practices. Ultimately, ethical management requires a proactive approach to identifying and addressing ethical dilemmas, fostering a culture of ethical behavior, and ensuring that the organization contributes positively to society. • Managers-In-Action Video Case Study – Greensburg, Kansas CHAPTER 5: GREENSBURG, KS - SOCIAL RESPONSIBILITY Social Responsibility: a Kansas Town Goes Green Length: 8 minutes and 27 seconds Topics: Resource Conservation, Green Initiative, Sustainability, Corporate Social Responsibility, Leadership Vision, Rural America, John Deere. Company Background From the Greensburg Greentown website January 10, 2011 http://www.greensburggreentown.org Background At 9:45 pm on May 4th, 2007 an EF5 tornado leveled the rural town of Greensburg, Kansas. Just days after the storm, the community came together and decided to rebuild sustainably, striving to become a model green town for the future. Ever since this landmark commitment was made, Greensburg Greentown -- a grassroots community-based organization -- has worked side-by-side with city and county officials, business owners and local residents to incorporate sustainable principles into their rebuilding process. We serve as an educational resource for the community, a conduit through which donations can be distributed, and a representative to those outside the community who are interested in the Green Initiative. Mission To provide inspiration and leadership to Kiowa County in order to be a model of sustainable living for the world. Vision Greensburg Greentown exists to: • Make it easier for residents to ascribe to, and adhere to, green practices and to make green living appealing to residents. • Engage as many residents as possible in the enthusiastic pursuit of making Greensburg a model green community. • Establish incentives in order to maximize the participation of businesses and residents in rebuilding Greensburg as a model green community. • Bring in resources and support from around the country to make the dreams of Greensburg as a model green community a reality. • Make it easier for builders, building supply companies and all local businesses to do business as green as possible. • Work to spur economic development with a green emphasis. • Serve the residents in an unbiased consumer advocate capacity, striving to get them the best value for their money as they rebuild their homes and businesses. Program Plan Programs undertaken by Greensburg Greentown are in service to the mission of providing the residents of Greensburg, Kansas and the surrounding area with the resources, information and support they need to rebuild Greensburg as a model green community. Greensburg Greentown is a grassroots community owned organization that represents the townspeople as Greensburg rebuilds in a sustainable fashion. Consulting by Staff and Volunteers - Greentown provides technical assistance and support for individuals, businesses, nonprofits and government offices seeking to build and operate programs guided by green principles. This is done through a volunteer matching program as well as through staff consulting. Energy Rater - We work with Certified Energy Rater Brian Wendland to assist homeowners to maximize energy savings in their homes. This professional is available to both new and existing homeowners. Library - We stock and maintain a library of materials so that people can educate themselves in the green building/living process. Educational Materials - We write and distribute information that assists people in making their decisions easier. There is a great quantity of information already available which we sift through, making the best available to Greensburg residents. Educational Series - We provide a series of classes and speakers addressing issues related to sustainable building and green living. These classes are taught at locales in and around Greensburg as well as through online and telephone courses for those residents with telephone and computer access. Website - This is a place where people find information about happenings related to the green initiative, extensive resources for those seeking education and links to other helpful websites. There is also a forum where questions about all aspects of green building and living is posted and responded to. Outreach - We interview residents as a means of gathering information about what is most important to them in the green rebuilding of their community. During the interview process we share information about how a model green town might look. Chain of Eco-Homes - The Chain of Eco-Homes project plans to build up to twelve model homes in Greensburg. Each home will serve as a “living laboratory” featuring a variety of building techniques, prices, sizes, energy efficiency features, and green living products and services. Each will be unique, and will be available both as an informational center and as eco-lodging where people can experience green living first-hand in homes that interest them. Planning - Greensburg Greentown works in concert with the other parties interested in moving forward with the Green Initiative in Greensburg and the surrounding area. Greentown serves as eyes and ears of the city and county leadership in carrying out the vision of Greensburg as a model green community. Fundraising - Greentown brings in funds from outside the community to support innovative programs and infuse the efforts with energy and resources. Show and Tell Registry - In order to provide the best examples to residents of what "green" means, a registry has been established to list those in the area that already have in place the latest in sustainable or green technologies. Synopsis of Video Greensburg Kansas Social Responsibility: a Kansas town goes green The town of Greensburg, Kansas was wiped out by a Tornado. Rather than let this tragedy devastate the community, it bonded residents and business leaders as they launched a green rebuilding initiative. In this video, city leaders, business owners, and students share how the rebuilding of Greensburg has impacted them, their city and local businesses. Social responsibility is evident throughout the town. A John Deere dealership owner is paving the way for the next generation of green dealers. The newly formed Greensburg Greentown non-profit organization is providing resources and information for residents, business owners and others who are interested in resource conservation and the green initiative. This is an inspiring story about how one town of approximately five hundred residents turned a disaster into something great through social responsibility and a commitment to sustainability. Previewing Questions 1. How would you describe corporate social responsibility (CSR)? Answer: Nancy Lockwood, from the Society for Human Resource Management said, “Environmental, financial, and social actions that allow a company to gain a competitive edge, make a profit, and enhance its reputation, all while serving others.” 2. Do you think a company can be socially responsible and still profitable? Explain why or why not. Answer: Yes, a company can be socially responsible and still profitable. Being socially responsible can enhance a company's reputation, attract loyal customers, and improve employee satisfaction, leading to increased sales and productivity. Moreover, sustainable practices can reduce costs in the long run and open up new market opportunities. Thus, integrating social responsibility with business strategy can drive profitability while contributing positively to society. 3. Choose a company that you are familiar with that demonstrates social responsibility. Describe their corporate policies and practices that illustrate their commitment to CSR. Answer: One company that demonstrates social responsibility is Patagonia. Patagonia's corporate policies and practices illustrate their commitment to CSR in several ways: 1. Environmental Initiatives: Patagonia uses recycled materials in their products and strives to minimize their environmental footprint through initiatives like the Worn Wear program, which promotes repairing and reusing products. 2. Sustainable Supply Chain: The company ensures fair labor practices and safe working conditions across its supply chain, adhering to rigorous standards for worker rights and environmental stewardship. 3. Philanthropy: Patagonia donates 1% of its sales to environmental causes through the 1% for the Planet initiative and supports grassroots environmental organizations. These practices reflect Patagonia's dedication to sustainability and ethical responsibility while maintaining profitability. Postviewing Questions 4. How have the town of Greensburg and the formation of the Greensburg Greentown organization demonstrated social responsibility? Answer: This video illustrates how the town of Greensburg and the Greensburg Greentown organization involve all aspects of social responsibility including economic, environmental and social action. They have involved all stakeholders including residents, businesses, and students. They took a tragedy and turned it into something beautiful by rebuilding green. 5. Who was the champion for change and the green initiative? How were they successful in getting buy-in and support from residents, business owners, and government officials? Answer: Although there were many supporters, Steve Hewitt, the city administrator was one of the leaders of the green initiative. He gained buy-in by listening to the concerns of the stakeholders and by incorporating plans for all aspects of the community from education to business. In addition, he leveraged the existing culture – the Midwestern mentality that you take of what you’re given. He persuaded people to embrace the green building initiative as part of the commitment to taking care of the land and resources they had. He also fostered support from the business community with companies like the local John Deere dealership committing to rebuild green. In fact, they view themselves as the green dealership model for others to follow. 6. What legacy programs have been created, as a result of this initial green movement in Greensburg, that will provide sustainability for the future? Answer: One of their goals was to begin a new trend in how rural America accepts green. By rebuilding every structure as green as possible they were demonstrating social responsibility to the current and future residents of Greensburg. The goal was not simply a short term solution to the problem of putting roofs over people’s heads. They thought about the long-term implications and put together a plan to maximize resources and knowledge to build a sustainable community. The creation of the non-profit Greentown organization provides a central source for information that is available to residents and others interested in the Greentown initiative. One of the many examples of how Greensburg is trying to pay it forward and benefit the greater good by sharing what they have learned from this experience. 7. As a manager, how can you incorporate the lessons learned from the town of Greensburg to implement more corporate social responsibility at your work? Answer: The lessons presented in this video can help managers solve both large and small problems. One of the first things the leaders did was involve the stakeholders. As they demonstrated, getting people’s buy-in early on made implementing change much easier. In addition, they discovered benefits that would impact various stakeholders such as the infusion of green collar jobs and building homes that were more energy efficient. Finally, managers can actually go to the Greentown website to access their resources and benefit from the hundreds of hours of research and expertise that is shared on the site. Good managers know what they don’t know and they know how to obtain the information efficiently. To implement corporate social responsibility at your work, research other successful organizations to see how they did it. CLOSING CASE: SOLUTION A PERSONAL CRUSADE 1. Personal opinion question. Responses will range from, “this is an abuse of power” to “yes, this is the right thing to do”. 2. DBMC is not compromising profit, simply employee bonuses so he meets the criteria for the first level. How about the second level? As far as we know his proposal is legal. Moving up the pyramid to the third level, “Ethical Responsibility” now, here is where it gets interesting. Is Duncan’s proposal ethical or is he overstepping his boundaries? 3. If anything, Duncan is displaying #2, personal virtues as he probably feels he is being honest, open and truthful and that he is proud to be a champion for this disease. Distribute justice would be one of the many principles that should drive any decision about corporate profit sharing. 4. The board should not let him proceed with his plan to direct any of the bonus money to the Batten disease organization. Rather than imposing his personal values on the company, Duncan could set up a program where people could choose to donate all or a portion of their bonus to a fund of their choice, including the Batten disease fund. There are probably other employees who are personally connected to a cause, to be truly fair he could invite anyone to recommend their non-profit organization. At bonus time, each cause could have a poster or webpage sharing information about the organization and why the employee thinks it is important. If Duncan makes the decision to direct the funds to “his” cause he runs the risk that employees will lose trust and respect for him. Employee resentment can be toxic to a corporate culture. To be ethical he must find a path that is fair and equitable rather than supporting his own personal cause. Because he is in a position of authority, employees will feel forced or coerced into supporting his cause for fear of retribution. Therefore, any contributions of bonuses need to be private and anonymous. INSTRUCTIONAL TIPS 1. One way to personalize the concept of social responsibility for your students is to have them go out into the community and ask managers to describe what socially responsible actions their organizations have taken in recent years. Back in class, this field evidence can be analyzed in terms of the degree of voluntarism (versus coercion, legal obligation, or contractual agreements with labor). 2. Two organizations that corporations have strongly supported in recent years are the United Way and Habitat for Humanity. Have students interview members of these groups and come back and report on what tactics they use to retain the strong support of the business community. 3. Have your students self-select themselves into two groups, one arguing for corporate social responsibility and the other arguing against it, to see how the evidence stacks up. 4. Your students can gain a better understanding of a stakeholder audit with an in-class analysis of the stakeholders for a particular company or industry. Another approach would be for them to analyze the stakeholders involved in their own education. In this analysis, don’t forget future stakeholders, such as present or future spouses and children, as well as society as a whole. 5. Class Discussion Topic: “Is business ethics instruction a waste of time in the college classroom?” ADDITIONAL DISCUSSION/ESSAY QUESTIONS 1. Do you think social responsibility will have to be legislated in the future, or will companies choose to be more socially responsible to meet the expectations of customers and/or other stakeholders? Answer: Social responsibility may increasingly be legislated in the future due to growing public demand for ethical business practices and the need to address global challenges such as climate change and inequality. However, many companies are likely to voluntarily adopt more socially responsible behaviors to align with the expectations of customers and stakeholders, enhance their reputation, and achieve competitive advantages. Balancing regulatory requirements and voluntary actions will be crucial for fostering a sustainable and ethical business environment. 2. What is the iron law of responsibility? Do you think it is true? Answer: The iron law of responsibility states that those who do not use power responsibly will eventually lose it. This principle emphasizes that businesses must act ethically and consider the social impact of their actions to maintain their legitimacy and support from society. I believe the iron law of responsibility is true. Companies that neglect their social and ethical duties risk losing trust and credibility, which can lead to customer attrition, regulatory penalties, and diminished market position. In contrast, businesses that prioritize social responsibility are more likely to build strong, lasting relationships with stakeholders and achieve long-term success. 3. How can a company effectively create an ethical work environment? Answer: A company can effectively create an ethical work environment by implementing the following strategies: 1. Establish a Clear Code of Ethics: Develop and communicate a comprehensive code of ethics that outlines expected behaviors and ethical standards for all employees. 2. Leadership Commitment: Ensure that top management consistently demonstrates ethical behavior and leads by example, reinforcing the importance of ethics within the organization. 3. Ethics Training: Provide regular training programs to educate employees about ethical issues, decision-making processes, and the company’s ethical standards. 4. Open Communication: Foster an open and transparent communication culture where employees feel comfortable reporting unethical behavior without fear of retaliation. 5. Ethical Decision-Making Framework: Implement frameworks and processes that help employees make ethical decisions, including ethics committees and support lines. 6. Reward Ethical Behavior: Recognize and reward employees who demonstrate ethical behavior, reinforcing the value of ethics in the workplace. 7. Regular Audits and Assessments: Conduct regular audits and assessments to identify and address potential ethical risks, ensuring ongoing adherence to ethical standards. By integrating these practices, a company can build a strong ethical foundation that promotes integrity, trust, and accountability throughout the organization. 4. What is the difference between instrumental values and terminal values? What is your number one value from each list? Answer: Instrumental values are the preferred modes of behavior or means of achieving terminal values. They include traits like honesty, responsibility, and hard work, which guide how we behave daily. Terminal values, on the other hand, are the end goals we strive to achieve in life, such as happiness, self-respect, and a sense of accomplishment. From the list of instrumental values, my number one value is honesty, as it builds trust and integrity in relationships and professional settings. From the list of terminal values, my top value is happiness, as it represents the ultimate state of well-being and fulfillment I aim to achieve in life. 5. What are the ten general ethical principles that guide behavior when ethical questions arise? Which has the most impact on your decisions? Answer: The ten general ethical principles that guide behavior when ethical questions arise are: 1. Honesty: Be truthful in all communications and actions. 2. Integrity: Maintain consistency between your values and actions. 3. Fairness: Treat everyone justly, without favoritism or discrimination. 4. Respect: Honor the rights, dignity, and worth of all individuals. 5. Transparency: Be open and clear about your decisions and actions. 6. Responsibility: Accept accountability for your actions and their consequences. 7. Caring: Show concern for the well-being of others. 8. Citizenship: Follow laws and contribute positively to the community and environment. 9. Trustworthiness: Build trust through reliability and dependability. 10. Loyalty: Uphold commitments and protect the interests of those you serve. The principle of integrity has the most impact on my decisions. It ensures that my actions are consistently aligned with my values, fostering trust and credibility in both personal and professional relationships. Discussion Starter: Corporate Social Responsibility and Profitability Social responsibility has become a PR dream for companies around the world. But how many companies are truly socially responsible and still profitable? Can you think of a business that demonstrates positive social action, everybody wins—employees, shareholders, and society at large? Consider Toms, www.toms.com. They have a one for one shoes and eyeglasses program. For every pair of shoes or glasses purchased by a customer a pair is donated to someone in need. And, yes, Toms is still profitable. For Discussion: 1. Why do you think Toms has been successful incorporating social responsibility into their business model? Answer: Toms has been successful in incorporating social responsibility into their business model due to several key factors: 1. Clear Mission and Vision: Toms' commitment to social responsibility is embedded in its mission to improve lives. The company's "One for One" model, where a pair of shoes is donated for every pair sold, resonates strongly with consumers. 2. Authenticity and Transparency: Toms is transparent about its social initiatives, which builds trust and credibility with customers. People appreciate knowing exactly how their purchases are making a positive impact. 3. Consumer Alignment: There is a growing consumer demand for socially responsible brands. Toms meets this demand by addressing social issues, appealing to ethically conscious consumers who prioritize purpose-driven purchases. 4. Emotional Connection: Toms creates an emotional connection with customers by involving them in its mission to give back. This fosters brand loyalty and encourages repeat purchases. 5. Marketing and Storytelling: Toms effectively uses storytelling to share the impact of their social initiatives, creating compelling narratives that attract and retain customers. 6. Adaptability: Toms has expanded its product lines and social initiatives over time, adapting to market trends and broadening its impact while staying true to its core values. By integrating social responsibility into its core business model, Toms has differentiated itself in the marketplace, driven customer loyalty, and achieved sustainable growth. 2. Should more companies follow Toms lead? Why or why not? Answer: Whether more companies should follow Toms' lead in incorporating social responsibility into their business model depends on various factors. Following Toms' lead could be beneficial for companies that: 1. Align with Consumer Values: If a company's target market values social responsibility, adopting a similar approach to Toms could enhance brand perception and loyalty. 2. Seek Differentiation: In competitive markets, integrating social responsibility can differentiate a company's brand and products, attracting socially conscious consumers. 3. Desire Long-Term Sustainability: Incorporating social responsibility can contribute to long-term sustainability by fostering positive relationships with communities and reducing environmental impact. However, not all companies may benefit from replicating Toms' model. Factors such as industry, target market, and organizational values should be considered. Additionally, companies must ensure that their social responsibility efforts are genuine and aligned with their core values to avoid accusations of greenwashing or ethical inconsistency. Discussion Starter: Business Ethics Lies, lies and more lies. It seems that every day in the media we hear about someone who has told a lie. At work, at school, maybe even at home we hear people telling lies. Perhaps you have lied recently…..were you really sick or did you just not feel like going to work? For Discussion: 1. Is lying a matter of degree (e.g., an acceptable little white lie versus a big bad lie)? Or is it always wrong to lie? Explain. Answer: The question of whether lying is a matter of degree or always wrong is complex and often depends on the context and ethical framework being applied. In some ethical systems, lying is considered inherently wrong because it involves intentionally deceiving others, which undermines trust and respect in relationships. From this perspective, even small lies can be seen as ethically problematic because they erode the foundation of honesty and integrity. However, in certain situations, lying might be considered acceptable or even necessary to prevent harm or protect important values. For example, telling a "white lie" to spare someone's feelings or lying to protect someone from harm could be justified in some ethical systems based on the principle of minimizing harm. Ultimately, whether lying is considered acceptable or always wrong depends on the ethical principles and values of the individual or society. It is important for individuals and organizations to carefully consider the consequences and ethical implications of lying in different situations. 2. When, if ever, is it okay for a manager to tell a lie? Explain the circumstances, if any. Answer: It is generally not considered acceptable for a manager to tell a lie, as honesty and integrity are core principles of ethical behavior in business. However, there may be rare circumstances where some argue that lying could be justified, such as: 1. To Prevent Harm: If telling the truth would result in immediate and serious harm to an individual or the organization, some argue that a manager may lie to prevent such harm. For example, if disclosing certain information would endanger someone's safety. 2. To Protect Confidentiality: There are situations where maintaining confidentiality is crucial, and revealing the truth could breach that confidentiality. In such cases, some argue that it may be acceptable for a manager to lie to protect confidentiality. 3. To Preserve Trust: In cases where revealing the truth would lead to a breach of trust that could have long-term negative consequences, some argue that a manager may lie to preserve trust in the relationship. However, it is important to note that these justifications for lying are highly contentious and often debated in the field of ethics. Many ethical frameworks emphasize the importance of finding alternative solutions that do not involve deception, such as finding a way to communicate honestly while minimizing harm or protecting confidentiality. 3. If lying is more common than in the past, what are the broader implications for business ethics? Answer: If lying is indeed more common in business than in the past, it could have several broader implications for business ethics: 1. Trust and Reputation: Increased lying could erode trust between businesses, customers, and other stakeholders. This could lead to damaged reputations and long-term negative effects on relationships and profitability. 2. Ethical Culture: A culture where lying is prevalent can lead to a normalization of unethical behavior. This can make it more difficult for organizations to maintain high ethical standards and may lead to a decline in overall ethical behavior. 3. Regulatory and Legal Issues: If lying becomes more common, there may be increased scrutiny from regulators and legal authorities. This could result in stricter regulations and harsher penalties for unethical behavior. 4. Employee Morale: A culture of lying can have a negative impact on employee morale and engagement. Employees may feel disillusioned and demotivated if they perceive that dishonesty is rewarded or tolerated in the workplace. 5. Social Responsibility: Businesses have a responsibility to act ethically and contribute positively to society. Increased lying could undermine this responsibility and lead to a perception of businesses as untrustworthy or unethical. In summary, if lying becomes more common in business, it could have far-reaching implications for trust, reputation, regulatory compliance, employee morale, and social responsibility. It is therefore important for businesses to prioritize ethical behavior and foster a culture of honesty and integrity. 4. Generally, what is the connection between telling lies and being trustworthy? Answer: The connection between telling lies and being trustworthy is fundamentally negative. Trustworthiness is built on the foundation of honesty and integrity, which are undermined by lying. When someone tells lies, it erodes trust because it creates doubts about their reliability and truthfulness. Being trustworthy means being honest and dependable, which are qualities that are incompatible with lying. People who consistently tell the truth are more likely to be perceived as trustworthy because their words and actions align with ethical principles. In contrast, those who frequently lie or deceive others are seen as untrustworthy because their behavior indicates a lack of integrity and a willingness to prioritize personal gain over honesty. Ultimately, the connection between telling lies and being trustworthy is that lying undermines trustworthiness, while honesty and integrity are essential for building and maintaining trust in relationships and organizations. BONUS VIDEOS BIZFLIX VIDEO CASES FROM THE TEXTBOOK WEBSITE Discussion Questions and Guide Video Case: The Emperor’s Club VIDEO CASE SYNOPSIS William Hundert (Kevin Kline), a professor at the exclusive Saint Benedict’s Academy for Boys, believes in teaching his students about living a principled life. He also wants them to learn his beloved classical literature. A new student, Sedgewick Bell (Emile Hirsch), challenges Hundert’s principled ways. Bell’s behavior during the seventy-third annual Mr. Julius Caesar Contest causes Hundert to suspect that Bell leads a less than principled life, a suspicion confirmed years later during a reenactment of the competition. Mr. Hundert is the honored guest of his former student Sedgewick Bell (Joel Gretsch) at Bell’s estate. Depaak Mehta (Rahul Khanna), Bell, and Louis Masoudi (Patrick Dempsey) compete in a reenactment of the Julius Caesar competition. Bell wins the competition, but Hundert notices that Bell is wearing an earpiece. Earlier in the film Hundert had suspected that young Bell wore an earpiece during the competition, but Headmaster Woodbridge (Edward Herrmann) urged him to ignore his suspicion. This BizFlix video case appears at the end of the film. The competition reenactment has just ended, and Bell has announced his candidacy for the U.S. Senate just before he speaks with Hundert in the bathroom. In his announcement, he carefully described his commitment to specific values he would pursue if elected. VIDEO CASE DISCUSSION QUESTIONS AND SUGGESTED ANSWERS 1. Does William Hundert describe a specific type of life that one should lead? If so, what are its elements? Answer: Mr. Hundert describes a life philosophy built on virtue and principled values. He describes Sedgewick Bell’s present life as one lived without virtue or principles, Bell reacts to Mr. Hundert’s observations in his typically arrogant manner. He dismisses Mr. Hundert’s observations as those of a person who does not live in the “real world.” Bell notes that one does what one needs to do to reach desired goals, which includes lying and cheating. 2. Does Sedgewick Bell lead that type of life? Is he committed to any specific view or theory of ethics? Answer: Sedgewick Bell continues his fondness for unethical behavior that he displayed earlier as a young student at Saint Benedict’s Academy for Boys. Although Bell faced an ethical dilemma in his decision to cheat, his ethics view or theory lets him quickly dismiss the dilemma. He simply says, “I live in the real world … where people do what they need to do to get what they want. And if it’s lying and it’s cheating, then so be it.” Ask your students, “Do Sedgewick’s ethical standards suggest he is a symbol of a new generation of business people who will replace equally unethical figures like Bernie Madoff?” 3. What consequences or effects do you predict for Sedgewick Bell because of the way he chooses to live his life? Answer: Sedgewick Bell’s political life in the U.S. Senate could backfire politically if he engages in unethical behavior. If he does not get caught, he likely will not experience much harm. If gets caught, his political career could end. Implicit in Mr. Hundert’s observations, however, is the role of values and the effect ethical behavior has on our personal lives, our character, and our well-being. Bell’s response skirts this issue and focuses on external control factors only. BONUS LECTURE, ACTIVITY AND INDIVIDUAL OR GROUP ASSIGNMENT COOPERATIVE LEARNING TOOL: INSTRUCTOR NOTES Ethical Perceptions Ever since Ebenezer Scrooge was haunted by ghosts and Little Nell was tied to a railroad track by the evil landlord, business has been getting unfair treatment when it comes to its image in terms of ethics and fair play. Studies of television programs and movies indicate that the majority of business-related plots perpetuate the image of business people as greedy, dishonest, or uncaring about social issues. Various current events encourage and support this image. Realistically, businesses or managers who are socially responsible and honest simply don’t make as good a news story as the latest scandal. Chances are that your students, even though they are in business classes themselves, have similar negative perceptions of the ethics of business and top-level managers. The following list of questions can be used as an exercise or as a starting point for a discussion on this topic. To emphasize the difference in perceptions in various groups, you may want to have your students administer the test to one of the following groups, in addition to taking it themselves: • Students who are not business majors • Individuals who are in entry-level positions in business • Business managers at various levels It may be interesting to see the differences in the scores among the various groups. Another use for the test is to see if your students have any practical evidence to support their attitude. Chances are they don’t, and they may even have evidence to refute it. Optional Addition to Cooperative Learning Tool As part of this analysis, you may want to have students take a look at how much influence the media have on people’s image of big business. If it is an election year, have students look at what is said about big business in ads and speeches. If not, have them watch films, made-for-TV movies, or reality TV series (such as The Apprentice) where big business plays a major part. For each, have them note two things: • The overall impression given of the big business represented • Any specific adjectives, phrases, or sentences that relate to the big business represented How many of these reflect the attitudes outlined in the Ethical Perceptions test? COOPERATIVE LEARNING TOOL Ethical Perceptions For each of the following statements, indicate your level of agreement, using the scoring system shown below. 1 2 3 4 5 Totally disagree Disagree somewhat Neither agree nor disagree Agree somewhat Totally agree ____ 1. In order to get ahead in business, sometimes managers have to compromise their own beliefs or values for the good of the company. ____ 2. Most top managers will sacrifice the good of the company for their own personal benefit. ____ 3. Company policies and procedures are for the rank-and-file employees. Most managers above a certain level don’t view following the rules as important. ____ 4. Corporations often bend or break laws. They just don’t get caught every time. ____ 5. If there weren’t laws and liability factors to consider, most companies would ignore social responsibility issues such as the environment. ____ 6. Sexual harassment and prejudice in business are a lot more common than the records show, because people are afraid to file formal reports. ____ 7. Most U.S. firms would use bribes to get business in countries where bribes are common, if they knew they wouldn’t get caught. ____ 8. Top-level executives are more ruthless and less scrupulous than the average person. ____ 9. Many business executives would work for a company they didn’t really believe in if they were paid enough. ____ 10. Most companies are really only interested in profits—the rest is just lip service. ________ TOTAL SCORE Solution Manual for Management Robert Kreitner, Charlene Cassidy 9781111221362