2 organizations 2001 and managerial challenges chapter Scan

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Chapter Scan

This chapter focuses on the changes and accompanying challenges those changes will bring about in the coming decade. Specifically highlighted are global competition, workforce diversity, technological change, and ethical behavior. Global challenges necessitate that future employers and employees consider cultural differences and appreciation of the culture as vital for company survival. One of the ways this can be measured is by Hofstede's dimensions of cultural differences. Cultural diversity within the United States encompasses all forms of differences among individuals, including age, gender, race, and ability. Technological changes reshape jobs and the workforce, as seen through the advances in five technologies: information storage and processing, communications, advanced materials, biotechnologies, and superconductivity. Ethical issues compound the complex challenges of management, and frequently involve white-collar crime, computer use, employee rights, sexual harassment, romantic involvement at work, organizational justice, whistle-blowing, and social responsibility.


After reading this chapter, you should be able to do the following:

  1. Describe the dimensions of cultural differences in societies that affect work-related


  1. Explain the social and demographic changes that are producing diversity in organizations.

3. Describe actions managers can take to help their employees value diversity.

4. Understand the alternative work arrangements produced by technological advances.

5. Explain the ways managers can help employees adjust to technological change.

6. Discuss the assumptions of consequential, rule-based, and character ethical theories.

7. Explain six issues that pose ethical dilemmas for managers.


Chapter 2 introduces the following key terms:

transnational organization guanxi

individualism collectivism

power distance uncertainty avoidance

masculinity femininity

time orientation expatriate manager

diversity glass ceiling

technology expert system

robotics telecommuting

reinvention consequential theory

rule-based theory character theory

distributive justice procedural justice

whistle-blower social responsibility


I. THINKING AHEAD: The Lexus, The Olive Tree, and HP

Recent surveys verify that U.S. firms are encountering unprecedented global competition. Chief executives indicate that their primary challenges are globalizing the firm's operations, making sure they consider the human side of the organization, keeping up with technology, and managing ethical behavior. Successful management of these challenges is essential for survival, and the United States faces tough competition from countries such as Canada, Germany, Japan, and the United Kingdom.
The concepts of globalization have helped to define the terms organizations use to determine the level of activity in the global marketplace.
Globalization implies that the world is free from national boundaries, whereas international carries with it a connotation of nationality. Transnational organizations must assume global viewpoints over national issues.

A. Changes in the Global Marketplace

Numerous global, social, and political changes have led organizations to change the way they conduct business and encourage members to think globally. A few of these changes are the unification of East and West Germany, the European Union, the political changes in Russia and opening of business ventures in Russia and China, and NAFTA.
B. Understanding Cultural Differences

In order to compete globally, and because cultural differences affect work-related attitudes, organizations must understand culturally diverse individuals. Hofstede’s research focused on the differences among cultures in work-related settings and found five dimensions of cultural differences that formed the basis for work-related attitudes.
1. Individualism vs. Collectivism
Individualist cultures have primary concern for themselves and their families. Collectivist cultures belong to tightly knit social frameworks and depend on extended families.
2. Power Distance
Power distance is the degree to which a culture accepts unequal distribution of power. High power distance cultures are more accepting of unequal power distributions; low power distance cultures are less accepting.
3. Uncertainty Avoidance
Uncertainty avoidance is the degree to which a culture tolerates ambiguity and uncertainty. Cultures with high uncertainty avoidance place importance on security and tend to avoid conflict.
4. Masculinity vs. Femininity
In cultures that are characterized by masculinity, assertiveness and materialism are valued. Cultures that are characterized by femininity emphasize relationships and concern for others.
5. Time Orientation

The time orientation value determines the long-term or short-term orientation of a culture. Long-term orientation is toward the future, whereas short-term orientation is toward the past and present.

6. U.S. Culture

The United States scored the most individualistically of all the countries measured. The U.S. ranked weak on power distance, and is a masculine culture with a short-term orientation.

C. Developing Cross-Cultural Sensitivity

There is an increase in organizational cooperation for training employees for cultural sensitivity. Cross-cultural task forces or teams are increasing. Employees are more often being trained to be expatriates. Integrity, insightfulness, risk taking, the courage to take a stand, and the ability to bring out the best in people are key competencies for expatriate managers.
Diversity encompasses all forms of differences among individuals, including culture, gender, age, ability, religious affiliation, economic class, social status, military attachment, and sexual orientation.
A. Cultural Diversity
Cultural diversity indicates the diversity apparent in the workplace. The change in the population will increase the diversity and distribution of participants from Hispanic and African-American origins. The challenge for managers is to capitalize on the wealth of differences provided by cultural diversity.
B. Gender Diversity
Women make up almost 46 percent of the labor force, and by the year 2020, a balance of genders is expected in the workforce. Women continue to receive less compensation for work, and the transparent barrier referred to as the glass ceiling continues to keep women from rising above a certain level in organizations.
C. Age Diversity
The number of middle-aged Americans will continue to rise, resulting in an older work- force. This will place emphasis on intergenerational work situations. This will also have an impact on benefits and policies relating to a more diverse workforce.
D. Ability Diversity
The number of disabled individuals in the workforce is expected to increase dramatically because of the passing of the Americans with Disabilities Act in 1992. This law stipulates that employers should make reasonable accommodations to assist disabled individuals to become contributing employees.

E. Differences are Assets

Managing diversity is one way in which organizations can become more competitive. As the workforce becomes more diverse in the next decade, it will be imperative that companies appreciate diversity.

F. Diversity’s Benefits and Problems

Diversity management can help organizations attract and retain human resources, enhance marketing efforts, promote creativity and innovation, improve problem solving, and enhance organizational flexibility.
There are five problems associated with diversity: resistance to change, lack of cohesiveness, communication problems, conflicts and decision making.
Technology consists of the intellectual and mechanical processes used by an organization to transform inputs into products or services that meet organizational goals. The difficulty of successfully integrating technology into the workplace at an ever-increasing pace has been considered a major factor that has limited economic growth in the United States. The Internet is an example of a technology advance that has dramatically impacted the way organizations do business.
The development of expert systems in the workplace has benefited inexperienced workers with a training tool for gaining knowledge and checking their assumptions against the knowledge based system.
Robotics represents another advance in technology that has changed the way companies operate. However, robots require a large investment that does not pay off in the short term.
It is important to note that half of all new technologies sometimes fail to meet expectations, and as a result, some firms have chosen to de-engineer.

A. Alternative Work Arrangements

Advances in technology have made possible a variety of alternative work arrangements. One of these alternative work arrangements involves transmitting work from a home computer to the office using a modem, and is known as telecommuting. Telecommuting helps employees gain flexibility and avoid traffic while working from the comfort of home. Disadvantages of this approach include distractions, isolation, and reduced identification with the organization. Satellite offices and virtual offices offer two additional alternative work arrangements.

B. The Changing Nature of Managerial Work

Managers will need to adapt and make effective use of new technologies. The need to help workers manage stress, and motivate, coach, and counsel workers will add complexity to managers’ roles.
C. Helping Employees Adjust to Technological Change
Reinvention is the term for creatively applying new technology. Managers have the responsibility of helping employees learn about and utilize new technologies through effective training.
There is plenty of evidence that ethical problems are still a major concern in corporations. Managers have the responsibility of initiating programs to improve the ethical climate.
Consequential theories of ethics emphasize the consequences or results of behavior. In contrast, rule-based theories of ethics emphasize the character of the act itself rather than its

effects. The third type of ethical theory, character theory, emphasizes the character of the individual and the intent of the actor.

A. Employee Rights
Employee rights encompass many current issues, such as drug testing, free speech, due process, smoking policies, AIDS/HIV disclosure, and even questions regarding activities away from the organization.

B. Sexual Harassment

Sexual harassment includes verbal or physical unwelcome sexual attention that affects job conditions or creates a hostile work environment.
C. Romantic Involvements
As the number of women in the workplace increases, the resulting interaction between men and women means that organizations must address a number of issues related to the occurrence of romantic relationships at work.
D. Organizational Justice

Organizational justice includes both distributive justice, which deals with the fairness of outcomes received, and procedural justice, which involves the fairness of the allocation


E. Whistle-Blowing

Employees who inform authorities of wrongdoing by their companies or co-workers are referred to as whistle-blowers.
F. Social Responsibility
The obligation that an organization feels to behave in ethical ways within its social environment is referred to as social responsibility.
G. Codes of Ethics
Increasing numbers of organizations are implementing codes of ethics. One of the more concise tests of ethical and moral questions is the simple four-way test created by Rotary International in 1904 (see Figure 2.2).
VII. LOOKING BACK: The HP IT Resource Center


  • To ensure that their organizations meet the competition, managers must tackle four important challenges: globalization, workforce diversity, technological change, and ethical behavior at work.

  • The five cultural differences that affect work-related attitudes are individualism versus collectivism, power distance, uncertainty avoidance, masculinity versus femininity, and time orientation.

  • Diversity encompasses gender, culture, personality, sexual orientation, religion, ability, social status, and a host of other differences.

  • Managers must take a proactive approach to managing diversity so that differences are valued and capitalized upon.

  • Alternative work arrangements, facilitated by technology, are changing the way work is performed.

  • Through supportive relationships and training, managers can help employees adjust to technological change.

  • Three types of ethical theories include consequential theories, rule-based theories, and character theories.

  • Ethical dilemmas emerge for people at work in the areas of employee rights, sexual harassment, romantic involvements, organizational justice, whistle-blowing, and social responsibility.


1. What are Hofstede's five dimensions of cultural differences that affect work attitudes? Using these dimensions, describe the United States.
The dimensions are polarized concepts of the following: (1) individualism/collectivism, (2) high power distance/low power distance, (3) high uncertainty avoidance/low uncertainty avoidance, (4) masculinity/femininity, and (5) long-term orientation/short-term orientation.
The United States is extremely individualistic, tolerant of uncertainty, weak on power distance, masculine, and short term in regard to time orientation.
2. What are the primary sources of diversity in the U.S. workforce?
The U.S. workforce is characterized by diversity of all types: culture, gender, age, personality, sexual orientation, religion, ability, and social status.

  1. What are the potential benefits and problems of diversity?

Diversity management may serve as a vehicle for attracting and retaining human resources, enhancing marketing efforts, promoting creativity and innovation, improving problem solving, and enhancing flexibility. Potential problems of diversity include resistance to change on the part of current employees, group cohesiveness may take longer to develop, and diversity may lead to communication problems, conflict, and a slower decision-making process.

  1. What is the reality of the glass ceiling? What would it take to change this reality?

The reality of the glass ceiling is that women are not promoted to top management positions at the same rates as men and often are not paid equitably. Efforts to change this reality should include training managers to be aware of biases and stereotypes, and other proactive stances toward the management of diversity.

  1. Why do employees fear technological innovations, and how can managers help employees adjust?

Employees may view technological innovations as decreasing their quality of work life and increasing pressure. They may fear that technological innovations will displace them from their jobs. Managers can help employees adjust by providing information on how technological innovations will affect employees and by allowing employees to have input into decision making regarding workplace technology.

  1. What are some of the ethical challenges encountered in organizations?

Employee theft, environmental issues, issues of comparable worth of employees across job categories, conflicts of interest at work, and sexual harassment are just some of the ethical challenges encountered in organizations.

  1. Describe the difference between distributive and procedural justice.

Distributive justice addresses the perceived fairness of outcomes, while procedural justice addresses the perceived fairness of procedures used to determine outcomes.


1. How can managers be encouraged to develop global thinking? How can managers dispel stereotypes about other cultures?
All managers can enhance their perspectives by participating in cross-cultural sensitivity workshops offered by organizations. Another way is to volunteer for cross-cultural task forces. Students have opportunities to meet and learn about other cultures on campus by attending the festivals and celebrations that are typically held each academic year for student groups.
2. Some people have argued that in designing expert systems, human judgment is made obsolete. What do you think?
Expert systems are built on the judgment of experts in a field, to help train and sharpen the decision making of less experienced problem solvers. The best expert system is only as good as the human expert who provided the decision rules for the program.
3. Why do some companies encourage alternative work arrangements?
Alternative work arrangements may allow companies to reduce overhead costs by reducing the amount of office space needed. Alternative work arrangements may also serve as a tool to attract a diverse group of employees and to better allow employees to meet personal needs while maintaining a job.
4. What effects will the globalization of business have on a company's culture? How can an organization with a strong "made in America" identity compete in the global marketplace?
Globalization will help in understanding needs of current constituents, as well as future clients. By learning about various cultures, organizational members are able to understand

that other companies' missions and objectives are not vastly different from their own, and that they need not surrender their company loyalty to interact and negotiate with others.

5. Why is diversity such an important issue? Is the workforce more diverse today than in the past?
The population is much more diverse than it has ever been. Whether the business is service- or product-oriented, the constituents and clients of the company must be understood in order to satisfy their needs. New ideas come from analyzing old problems differently. Diverse work- forces assist in seeing traditional problems in a new frame of reference. Today’s workforce is definitely more diverse than past workforces.
6. How does a manager strike a balance between encouraging employees to celebrate their own cultures and forming a single unified culture within the organization?
This is a difficult balance. Any organization that is referenced for a strong culture can be countered with an example of rigidity in their practices and views. The key seems to be separating the personalities from the missions and objectives of the organization.
7. Do you agree with Hofstede's findings about U.S. culture? Other cultures? On what do you base your agreement or disagreement?
This answer will vary by work experience and by cultural identity of the students. Often students will perpetuate stereotypes in their answers of other countries, yet rationalize the weaknesses of their own society. It is interesting to ask students from other cultures what their stereotypes were about the U.S. before arriving, and if those perceptions have been reinforced since being here.
One item worth mentioning to students is that Hofstede's study, although monumental, was completed almost 25 years ago. The study is currently being updated with cooperation from participating countries.
8. Select one of the four challenges (globalization, diversity, technology, ethics) and write a brief position paper arguing for its importance to managers.
Encourage students to use specific answers in support of their position. This exercise can generate interesting discussion in class as students present potentially different perspectives on why an issue is important to managers.
9. Find someone whose home country is different from your own. This might be a classmate, an international student, or a Native American at your university. Interview the person about his or her culture, using Hofstede’s dimensions. Also ask what you might need to know about doing business in the person’s country (e.g., customs, etiquette). Be prepared to share this information in class.
This provides an excellent opportunity for students to learn about another culture. During class discussion, have students share anything that surprised them in the information that they gathered. Discuss why they were surprised by this information.


1. Suppose your company has the opportunity to install a marvelous new technology, but it will mean that 20 percent of the jobs in the company will be lost. As a manager, would you adopt the new technology? How would you make the decision?
This dilemma has happened in many instances in the workplace. Most of the research literature emphasizes that keeping the employees well informed of the actions is a key difference between lawsuit filings and displeased employees. Examples are evident of companies and countries that have not employed technology because of the potential for lost positions. Ironically, the hesitancy to employ technology often results in the same outcome – lost positions. Great Britain had the labor union refute the printing advancements, and the Swiss were too slow to compete with the changes in watch technology from Japan.
2. What is the most difficult ethical dilemma you have ever faced at work or school? Why? How was it resolved?
This question usually takes a while to get rolling, because students are often reluctant to talk about their own dilemmas. A good way to get this discussion moving is to share one or two dilemmas you have faced as an instructor, related to grading, students, research, or publishing. This helps students understand that ethical problems are evident in all organizations. Another opportunity for discussion may emerge by asking about ethical problems they have heard of from their friends, or the most complex ethical dilemma they have ever heard about.
3. Some companies have a policy that employees should not become romantically involved with each other. Is this ethical? Is it ethical to have a policy about sexual orientation for an organization and its employees?
This has been answered many ways, but the key is to stay away from individuals discussing their particular policies, or specific instances of romantic involvement they have observed. After discussion has progressed, you may want to ask the students how this policy is different than a policy stating that divorced couples could not work together, or family members were not allowed to work in the same company.
4. What are some of the concerns that a person with AIDS would have about his or her job? What are some of the fears that coworkers would have? How can a manager balance these two sets of concerns?
The foremost concerns a person with AIDS would have are job security and insurance coverage. There also may be other concerns about time off from work jeopardizing job security. The coworkers’ greatest fears would center on fear of contagion or preferential treatment.
5. Suppose you are visiting Taiwan and attempting to do business there. You are given a gift by your Taiwanese host, who is your prospective client. Your interpreter explains that it is customary to exchange gifts before transacting business. You have no gift to offer. How would you handle the situation?
The situation can be avoided altogether by doing research before leaving home. There are a number of books available that specifically address differences in culture and etiquette when conducting business abroad. Nonetheless, it is hard to prepare for everything. This would make a great group exercise where students discuss how they would handle the situation.


2.1 planning for a global career

If you have time in class, give students the opportunity to share what they have learned about the various countries they have investigated. This is a great opportunity to broaden students’ perspectives. This challenge could also be assigned to groups rather than individuals.

2.2 How much do you know about SEXUAL HARASSMENT?

This challenge provides an opportunity to discuss many of the misconceptions that exist about sexual harassment in the workplace. As this challenge is discussed, the instructor might also provide students with information about any educational and counseling resources available on campus with regard to sexual harassment.



The exercise immediately following the case is a difficult one. The students are asked to rate a potential expatriate and his spouse with very little information about the couple. The key to this exercise is to assess the reasons why they made the choices they did. Are they justified, given the information provided? What follow-up questions could the student ask to make more confident ratings? There are many behavioral details the students may attend to in order to make their ratings. The details, however, do not provide the full picture about the couple. Here are some points the students may list:

Jonathan: He has never lived outside his hometown. He speaks a second language (i.e., German). He is familiar with some German ethnic traditions. OSI does not have a location in Germany. Jonathan is active and likes people. His activities are softball and volleyball - both of which are American sports.
Sue: She has studied English literature. She is a teacher by profession and a trainer at a city mission. At the mission, she interacts with people who are of a lower socioeconomic status. Given that she volunteers her time, she is probably a person who likes to help others. Her interests include ethnic cooking, which indicates that she likes to try new foods.
Discussion Questions:
1. This is an opportunity for the students to write questions that could map the international orientation of the couple. What types of questions are they asking? Some critical information they may include is a realistic preview of what the assignment may entail – allowing the couple to self-select out if they so choose. They could discuss the educational opportunities for the couple’s daughter and career opportunities for Sue.
2 and 3. Do the students expect that the Australian culture would be an easier transition than would the French or Japanese transfers? The “country difficulty,” that is, the extent to which the foreign country differs from one’s own, should be considered in all expatriate cases. The Australian transfer would have less of a language barrier than would the French or Japanese transfers.
4. There are many possible types of training. For example, the couple could listen to lectures, see films, read books, etc., about the host country. Likewise, the couple could take language and culture training, go visit the country for a short stay to “test the waters,” or talk to people who have been on expatriate assignments in the same country.
5. This gives the students an opportunity for some personal reflection on their own international orientations.
6. Dual-career couples will need to find placement for both members or make other arrangements for the spouse (e.g., the spouse could take a sabbatical from work, be transferred to the same country as well, take a break in his or her career). In an age when both men and women have careers, multinational companies must think of more creative ways to satisfy both the expatriate and his or her spouse.
7. In general, younger children have an easier time adapting to living abroad. Older children, especially teenagers, have a more difficult time adjusting. For example, they resent being moved so far from their friends. For this reason, multinational companies should allow the entire family (not just the expatriate) ample opportunity to self-select in or out of the foreign position. This needs to be decided as a family because any member may impact the success of the expatriate when he or she is abroad.

International Orientation Scale

The International Orientation Scale is an index of behaviors that are related to one’s acceptance of, and interest in, other cultures. From the criterion-related validity study conducted, it was found that International Orientation is related to how well individuals adjust to living abroad, and how much they will interact with host nationals. The International Orientation Scale has also been found to be related to tolerance of ambiguity, interpersonal orientation, optimism, personal need for structure, and openness to challenges. The IOS was not related to self-monitoring or time urgency.

There are two major limitations of the scale that should be addressed in class discussion. First, there are no established norms for the scale. For this reason, one can not say, “he or she falls above or below normal” on the scale. As yet, the scale is only intended to guide one’s thinking about international orientation and to generate awareness for self-assessment.
The second major limitation of the scale is that the items were generated with an American population. Likewise the reliability and validity evidence was established on an American population. The behaviors of Dimensions Two, Three, and Four were generated from experiences that Americans may either have or choose to have in their lives. As one can imagine, it would be inappropriate to assess (or even worse, interpret) non-Americans who have had little or no opportunity to have the types of experiences on the IOS.
The items of Dimension One (i.e., International Attitudes) are reverse scored. The rest of the scores can be added and used for personal reflection. As mentioned in the previous paragraph, there are no established norms, such that the scores cannot indicate some specific deficit or talent the student has. The scores can be used as a means to think about one’s own international orientation (e.g., one’s answers to the self-assessment discussion questions.)
*Experiential Exercise 2.1 is by Paula M. Caligiuri, Department of Psychology, Pennsylvania State University. Used with permission. In Dorothy Marcic and Sheila Puffer, Management International, West Publishing, 1994.

2.2 Ethical dilemmas

This is a simple, beginning overview of ethical issues. As students become more familiar with ethical issues, these could be revisited for elaboration. This exercise serves as an initial icebreaker, beginning orientation for group work, and an introduction to ethical issues. After discussing the questions provided, the five themes of the book could be discussed in terms of ethical issues related to these new challenges. Ask students to provide examples of ethical issues related to: technology, quality, workforce diversity, and globalization. You may want to help begin the conversation with the following issues: security and privacy with technology, promotion of a lesser qualified minority to meet requirements, providing entertainment for potential clients from another country, and altering the information for the Malcolm Baldrige Award.


This exercise requires a bag of peanuts-in-the-shell. Students do not need an additional handout to complete this exercise. This exercise may be used as a team-builder, or an icebreaker for the beginning of the semester. The time necessary for the exercise and debriefing is about twenty minutes and is ideal for group sizes of 10-25, although it easily accommodates larger groups as well.

  1. The instructor rummages through a bag of peanuts-in-the-shell, choosing peanuts most

similar in shape and size. Peanuts having clearly evident defining characteristics, such as split shell, an attached stem, discoloration, three nuts rather than two, etc., should be

discarded. The selection process should yield approximately one-fourth more peanuts than number of participants. The qualifying peanuts are place in a large bowl that is then passed to each participant, who is asked to choose a peanut and to wait for additional instructions.

(2) Each person has one minute to get to know his or her peanut. Students cannot mark on their peanut, open it, or alter it in any way. They may sniff it, talk to it, lick it, fondle it, argue with it, confess to it - in short, whatever will aid them in getting to know it better.
(3) The peanuts are returned to the bowl along with those extra peanuts that had not been selected. The peanuts are then emptied onto a table or in the middle of the floor and participants are instructed to "find your peanut."
(4) If anyone cannot locate his or her peanut, he or she is invited to check everyone else's peanut and to negotiate ownership. (A short intervention by the instructor on the vagaries of "peanut napping" may be appropriate here.)
Instructor's Notes
This exercise is an adaptation from the old Gestalt-learning exercise, "know your lemon," to help participants become more aware of nonverbal cues in perception. This exercise illustrates issues of individual differences and diversity in organizational life, as well as stereotypes and prejudice.
The following excerpt is a typical debriefing/application sequence of questions and discussion items. The purpose is to move students in a logical manner to a clearer, gut-level

understanding and appreciation of differences among people and between themselves and others.

(1) Ask students to analyze their peanuts carefully. How are they able to recognize it? What distinguishes it? How confident are you that this peanut is your peanut?
Amazingly, typically 90 + % of participants are absolutely confident.
(2) Next, ask students to compare their peanut with a neighbor's peanut. How are they similar? How are they different? Is one peanut more identifiable than another?

After all, kids have been comparing their peanuts for decades, maybe centuries. This question allows for a short discussion on surface traits versus substantive traits, and observable traits versus implied traits also works well here. Some people possess characteristics that make them more salient as employees, leaders, influencers, etc.

(3) Have students introduce their peanut to the other person and the other person's peanut should be introduced to them. Get to know their peanut, get them to know your peanut.
When Peter tells you about Paul, you often learn more about Peter than you do Paul. Sometimes it is easier for people to talk through another person than to be direct themselves. This characteristic has been used successfully in puppet therapy with children and in psychodrama with adults, in order to help clients more honestly express themselves.
(4) Ask students if anyone wants to trade peanuts, because they like someone else's peanut butter, or better.
(This is known in Freudian psychology as peanuts-envy.) Point out how attached we can get to something that is ours in such a short time. What might that tendency say about us as people? Themes of possessiveness, intolerance, and even attribution work well here.
(5) Ask students to relay what their peanut would say about them if it could talk. (It might say that they are tough nuts to crack, but what else might it say?)
Depending on the previous discussion, the facilitator may or may not want to encourage such self-disclosure.
Part of the debriefing hinges upon comments by the students. In fact, the instructor should be prepared to follow-up virtually any comment or side-comment with discussion. Most

participants report that the experience is fun, energizing, light-hearted, and even charming. A brief warning before proceeding with debriefing: this exercise lends itself to words that are highly conducive to short gags and double-entendres. These flights into marginal humor provide part of the fun of this exercise and can be promoted or suppressed according to the composition of the group.

As can be seen from the questions, the discussion can unfold in a variety of directions over a broad range of issues. The richness and learning possible from this exercise often depends on the risk-taking level of the participants and the skill of the instructor. Even so, the exercise is almost goof-proof.

One interesting phenomenon often occurs, especially in extended workshops. Participants often carry their peanut around with them, refer back to it, make jokes including it, and truly personalize it. A few people eat their peanuts, much to the chagrin (and even disgust) of others. For most participants, the peanut becomes a "’Linus' blanket."

*Christopher Taylor, Organizational Behavior Teaching Review, Vol. 13, (4) 1988-89, 123-124. Used with permission.
The following alternative exercises to supplement the material in the textbook can be obtained from:
Marcic, Dorothy, Seltzer, Joseph, & Vaill, Peter. Organizational Behavior: Experiences and Cases, 6th Ed. South Western College Publishing Company, 2001.
Personality Assessment: Jung’s Typology. p. 11-16. Time: 15-20 minutes

Purpose: To determine personality according to Jung’s Personality Typology.
The Owl: Cross-Cultural Sensitivity. p. 253. Time: 50 minutes or more

Purpose: To experience and understand how cultural values influence behavior and


Ethics in International Business. p. 261-263. Time: 50 minutes.

Purpose: To examine ethical foundations of bribery in an international setting.


The Growth of Harley-Davidson

  1. How can Hofstede’s dimensions of cultural differences help Harley-Davidson understand the challenges the company may face in pursuing global growth?

Hofstede’s cultural dimensions and their corresponding definitions are as follows:

  • Individualism versus collectivism: Individualism is a cultural orientation in which people belong to a loose social structure, and people are responsible for taking care of their own interests. Collectivism is a cultural orientation in which individuals belong to tightly knit social structures, and group decisions are valued and accepted.

  • Low versus high power distance: Low power distance refers to the belief that power differentials should be minimized in society. High power distance reflects the belief in and acceptance of unequal distribution of power in society.

  • Low versus high uncertainty avoidance: Low uncertainty avoidance cultures involve a greater tolerance for ambiguity and a greater willingness to take risks. High uncertainty avoidance cultures have less tolerance for ambiguity and are risk averse.

  • Masculinity versus femininity: Masculinity characterizes a cultural orientation in which assertiveness and materialism are valued. Femininity describes a cultural orientation in which relationships and concern for others are valued.

  • Short-term versus long-term time orientation: A culture with a short-term orientation focuses on the past or present. A culture with a long-term time orientation looks to the future.

Students should be encouraged to consider the relative impact of these cultural dimensions on Harley-Davidson’s global expansion, particularly in Latin America, Europe, and the Asia Pacific region. National cultures in these regions are quite different from the United States with respect to Hofstede’s dimensions. An interesting discussion could evolve concerning which dimensions might be the most influential in Harley-Davidson’s decision making. Development and operation of the dealer network, for instance, is likely to be affected by differences in national cultures. While the Harley Owners Group has chapters throughout the world, their operations and activities may also be influenced by differences in national cultures.

  1. Can technology affect Harley-Davidson’s competitive position in the global marketplace? If so, how?

Most likely, Harley-Davidson will continue to use technology to improve both its products

and its manufacturing processes. The use of information technology is likely to have

substantial impacts in at least two ways: facilitating communication with its worldwide

network of dealers and assisting in supply chain management.

  1. What ethical challenges do you think Harley-Davidson is likely to encounter as it further develops its presence in the global marketplace?

Most likely, Harley-Davidson will face ethical challenges associated with competing in the international arena. In the 1980s, the company faced threats of unfair competition. It is in a much stronger competitive position now, but this does not mean that those who wish to challenge the market leader will not use unfair competitive practices. H-D may also face ethical challenges as it manages/leads employees from different cultural backgrounds. The company may also face ethical challenges with respect to its global network of dealers


  1. What is Procter & Gamble’s business philosophy and approach? How does its business philosophy and approach help them to compete in the marketplace?

Procter & Gamble’s business philosophy and approach can be best captured through its eight guiding principles and its Statement of Purpose. The eight principles are:

“We show respect for all individuals.

“The interests of the company and the individual are inseparable.

“We are strategically focused in our work.

“Innovation is the cornerstone of our success.

“We are externally focused.

“We value personal mastery.

“We seek to be the best.

“Mutual interdependency is a way of life.”

The Statement of Purpose is:
“We will provide products of superior quality and value that improve the lives of the world’s consumers.

“As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper.”

Following the eight guiding principles and the Statement of Purpose helps Procter & Gamble to compete effectively in the global marketplace because of the emphasis they place on:

  • The value of human resources;

  • The linkage between individual and organizational interests;

  • Personal and organizational competence;

  • A commitment to excellence; and

  • Dedication to the key stakeholders—customers, employees, shareholders, and the communities in which P&G operates.

  1. What lessons about leading and managing organizations does Procter & Gamble provide?

Three key lessons are provided in Procter & Gamble (A). First, innovation—in products, development of technology, addressing environmental issues and animal rights issues, and methods for managing human resources—is a key to long-term success. Second, successful organizations have a clear purpose that is based on clearly articulated core values. Moreover, people in the organization should strive to behave consistently with both the purpose and the core values. Success depends on more than setting clear guidelines; success depends on actually following those guidelines. Third, successful organizations do not rest on their laurels. Instead, they embrace change and continuous improvement.

  1. Which of the organizational challenges––globalization, diversity, technology, and ethics––are likely to have the greatest impact on Procter & Gamble's future operations? Explain your answer.

Clearly, globalization will have a very strong impact as Procter & Gamble continues to expand and enhance its worldwide presence in various types of consumer products. The eight principles, as well as the Statement of Purpose, underscore P&G’s intention to be the premier consumer products company in the markets that it serves throughout the world. Of course, its global success depends upon its capacity to continue developing new products and improving existing products—both of which rely on continuing technological innovation. Thus, global success and technological success are intertwined.

The challenges of globalization and technology are linked to diversity and ethics.

Globalization means diversity—both in terms of customers served and employees managed. To aspire to globalization is to recognize that one of the key elements of success is dealing effectively with diversity. Globalization and diversity also mean ethical challenges, for there are differences among nations and people with respect to ethical attitudes and practices.

Technological challenges can affect the challenges of diversity and ethics. All people throughout the world are not equally capable of absorbing or using the same technology. Products and their supporting technologies need to be adapted to local markets to accommodate differing needs and preferences. Of course, these differing needs and preferences may be rooted in some element of diversity. Technology can also be linked to ethics. For instance, ethical issues arise when product developments—like those in P&G’s pharmaceuticals business––are based on research using human or animal subjects.

Another consideration regarding the interaction among these challenges is that ethics is not (and should not be) something that is considered separately from other systems, procedures, functions, policies, and processes of the organization. Ethics should be an integral part of daily life in any business organization. Ethics should be an important consideration in any company’s strategic, tactical, and operational decisions—especially any company that is interested in being successful over the long term.

While focusing on one of the major challenges might be tempting, the reality of the contemporary business world–—particularly for large companies like Procter & Gamble—is that one challenge cannot be isolated from the other challenges. All four challenges—globalization, diversity, technology, and ethics—must be considered simultaneously. The nature of one challenge may raise issues for one or more of the other challenges. How one challenge is addressed can influence how other challenges are handled. Managers and leaders must be vigilant about all the challenges; they cannot relegate any challenge to the back seat.
Role Plays
Additional role plays relevant to the material in this chapter are located in Appendix A of this instructor's manual.

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