Sample Business Paper on The concept of globalization

Management and Ethics

Introduction

The concept of globalization traces its roots from the period of technological developments a few decades ago. Globalization has received different definitions from different people who view it in different perspectives. This paper utilizes the definition provided by Clott, (2004) who saw globalization as a worldwide social relation that operates to link the distant localities such that what happens in one location is shaped by other events occurring several miles away. This definition infers that locations are interrelated and interdepend on one another to achieve certain desired effects. Such changes take place within space and time. In this way, globalization tries to shrink the distance between places through time and space. Globalization has affected management approaches especially human resources management as a result of people from various cultural fronts meeting in workplaces far away from their homes. The current workplace, therefore, presents a variety of cultures all represented and working together to achieve a common goal (Goldin & Reinert, 2007). The act of harmonizing these people from different cultural backgrounds is the sole work of the managers that sometimes find it very challenging to handle effectively.

Despite the challenges associated with the dawn of globalization, the vice has also presented valuable business opportunities in different societies that were once locked out of reach of the masses. Various business enterprises are today, expanding their operations into the former virgin lands that remained entirely unexploited (Goldin & Reinert, 2007). Tulip International, an international ICT services providing company, is one such company that have found interest in expanding its business enterprises into the Netherlands. The company deals in various kinds of ICT services to a wide array of customers across the globe. The company is extending its business operations into the Netherlands and plans to send a budding, female, Muslim, Moroccan manager in her mid-thirties to manage its operations on a two-year contract at the Netherlands.

The young manager is expecting to face a lot of challenges in the foreign market. The company for which I work, the Windmill App is specializing in providing cross-cultural management advice to international managers across the globe. The company has been contracted by the client to provide cross-cultural management advice relevant to her new workstation at the Netherlands. This report highlights some of the key factors of thematic concerns addressed in the content of the advice document.

Macro-level facts of The Netherlands

Socio-political environments of Netherlands

The political environment in the Netherlands is characterized by various striking continuities of various political and social factors. The current Dutch political and social cultures are conditioned by the Dutch political and institutional alignments of the Dutch republic of 1579-1795. The Dutch social setting covers a wide array of thematic concerns including education, the employment levels and income characteristics, health issues, socio-political participation of the Dutch people, mobility and public safety in the wake of rapid globalization and changes in the world patterns of mobility.

The Dutch population is one of the modest growing ones according to the international standards. The population of the country is said to grow by about 0.5% per annum. The growth of population is mainly due to natural population growth factors. This is because the country has the least number of immigrants annually in the region. However, a significant increase in the number of immigrants into the country has been experienced in the last 15 years from 17% in June 2000 to about 21% as of June 2015 (Goldin & Reinert, 2007). This presents a good mix of the clients and employee base that ca present complex management situations for Tulip International. There, is, therefore, every need for the company to consider intercultural management tools available to ensure successful expansion and management of the business in the region. The largest composition of the immigrants into the Netherlands is made up of non-western immigrants as well as the eastern European migrants. The region has had relatively stable political fronts making it one of the safest places to invest in among the European markets (see Appendix 1 for political risks levels of Netherlands).

The two categories of immigrants described above form up to 40 percent of the total immigrants into the region (Legge, 2005). Considering the democratic composition of the region, it presents a good and favourable ground for doing business if well managed and more insight provided. Moreover, the economic disparity between the Dutch populations is smaller than in the neighbouring regions. McCourt, & Eldridge, (2004) noted that the income level difference among the population, according to the 2011 census is estimated at 7.5%. This good income characteristic presents a good business ground for harnessing by Tulip International. The manager will, therefore, need to know much about the need to balance the employee salaries to cater for the balanced difference that is already in existence.

Economic environment

Moreover, it is good for the company to recognize that though the average household purchasing power of the Dutch people has been low for quite some time, there is every indication that the immigrating populations are likely to improve this trend in the coming future. Economically, the Dutch economy is the best performing in the European continent (see Appendix 2). In the year 2010, the country registered an average GDP of 35,600 Euros per inhabitant (Minkov, 2007) (see Appendix 3 for GDP per inhabitant). The country’s GDP growth was the highest for the last ten years in the region. In addition, the country also has the lowest score regarding the misery index within the European continent. In the year 2010, the economic indicator survey, the government of Netherlands spending on the public project rose significantly from 23 percent in the year 2000 to 28 percent by 2010. The spending helped in alleviating the service delivery in the public sector as well as curtails the rising cost prices of commodities.

Concerning the profit derivations, the net profit that was accrued from the government by the citizen was derived mainly from the low and high-income groups in 2010. The survey results recorded low accrual from the middle-class populations. Minkov (2007) note that the performance by the middle class was, to be specific, below average performance. This information provides the company with a lot of information concerning the investment demands and patterns to be capitalized upon. Tulip International will, therefore, need to invest in the low and high-income groups in developing the products that best reflect their interests. The company need this information to structure its performance and investment policies in the new business environment.

The government of the Netherlands has put in place measures to cushion the spending and income levels of the Dutch people. About this, the government has developed a program to cushion the income levels of various economic groups represented within. In this respect, the lowest income earning group receives up to 9,800 euros from the government kitty through the use of government-sponsored public services. The middle and higher income groups receive up to 7,900 and 8,500 euros respectively. The economic risks of the country are therefore very low since its economy is driven by external trade, which involves a wide array of business opportunities such as the agro-industries, machinery and equipment, as well as chemicals and fuels.

Hofstede’s 5 cultural dimensions

Today’s business environments have been made more complex by the variety of cultural differences presented within. Firms that are operating their business internationally have to outsource most of the times. This means incorporating people from a wide array of cultures and regions to a central workplace. International firms face a lot of challenges regarding their expansions and business operations abroad (Taras, Kirkman, & Steel, 2010). Tulip International is one such company that has been presented with hard times trying to overcome the cultural barriers and expand their business in the Netherlands. Originally a Moroccan based manager going into a foreign and different world with different cultural aspects is a case to consider.

This analysis utilizes Hofstede’s 5 cultural dimensions to describe the cultural differences and their correspondent influences on the management styles and systems that are likely to affect the operations of Tulip International in the new destination. Table 1 shows a summary of Hofstede’s cultural dimension. Culturally, Morocco is a Muslim nation with almost 90% of her population being of the Muslim origin. The nature of the relationship between Muslims and Christians has not been good for a long time. The Netherlands is one of the regions that have been under constant threat of terrorism from the Jihad followers.

Table 1: Hofstede’s cultural dimension

Based on Hofstede’s cultural dimensions and analysis, the business regions can be comparable in terms of their cultural orientations and differences in social norms available in the regions (Minkov, 2007). These factors, as Hofstede analysis concludes, are determined by the cultural differences that exist between different countries and impact considerably on the management styles and systems adopted by different persons and firms across the globe (Hofstede, & Minkov, 2010). Morocco is a Muslim nation that is controlled by Muslim beliefs and mannerisms. Netherlands, on the other hand, is a Christian majority nation whereby Christian values and mannerisms dominate in most production fronts. These norms also influence the power distance in various firms. According to Hofstede, employee relationships and interaction t

Critique of Hofstede’s cultural dimension

Culturally, the Muslim nations are often patriarchal. Patriarchal societies tend to suppress the voice of female members. The male parties dominate every aspect of the society in the patriarchal societies such as Morocco. According to House, Javidan, Hanges, & Dorfman, (2002) women professional from masculine societies find it rather hard to socialise and climb up the ladder in the society to gain effective management skills due to domination by the male members of the society. Even though the manager in question had managed to go against all the odds of the masculine society in which she thrived, several constraints are still a major limiting factor for effective management in a purely liberal society such as that of the Netherlands. In this manner therefore, there will be much need for the manager to learn more about the culture of the new region in order to discern the best ways and methods of relating to the employees as well as the management teams available.

As Hofstede, (2001) notes, good management styles encourage positive communication and relationships between the management and the employees. Masculine societies tend to put a limit on the extent of the relationship between the male and female members of the society at any rank. In fact, such societies discourage women domination and leadership in favour of the male members. In this respect, therefore, it is necessary for the manager to adopt the new culture by balancing effectively between culture and profession. On certain occasions, the manager will be forced to manage in the context of the Netherlands and abandon her former Muslim cultures. This must be shown in the dressing styles, socialism and interaction between the male and female employees in a more liberal society.

Moreover, untying the social norms defined in the two cultural regions is yet another factor that the Tulip International will have to contend with. According to Hofstede, (2001), social norms are the major determinants of success in workplaces around the globe. This is because, these social norms determine the way people relate, have fun and socialize with one another at various capacities. The masculine societies such as the one in which Tulip International is situated, Morocco, limits the social interactions between men and women. Open societies such as the Netherlands are likely to present a viable challenge to the interaction models to be adopted by the new manager and hence her management styles. Much learning and awareness of the existing cultural differences in terms of social norms and how to navigate through these differences need to be well maintained and upheld in order to make sure the management duties and responsibilities are carried out effectively and efficiently.

Conclusion

The human management sector is one of the most challenging sectors in the world. The coming of technology and its advancement in the current world has presented a lot of challenges as well as business opportunities. Multinational companies have cultural differences presented at their workplaces to manage alongside the need to improve the companies’ performances in terms of profit making. Tulip International will have to be aware of the different cultural presentations in the new business destination, the Netherlands. The new manager will, therefore, have to manage the different cultural representations both in the employees as well as in the expected clients. The Cultural analysis in the workplaces, as described by Hofstede, will be useful and considerably sound for application in the manager’s case described in the previous section of this paper. The primary cultural considerations that the manager will have to consider in respect to Hofstede’s consideration is the differences in cultural norms which influences the extent of socialisation and thus effective and efficient human resources as well as company management

References

Best, A.M. (2014). AMB Country Risk Report. Netherlands: A.M. Best Company, Inc.

Budros, A. (2002). The Mean and Lean Firm and Downsizing: causes of Involuntary and Voluntary Downsizing Strategies. Sociological Forum, 17(2), 307-342.

Clott, C. (2004). Perspectives on Global Outsourcing and the Changing Nature of Work Business and Society Review, 109(2), 153-170.

Goldin, I. & Reinert, K. ( 2007). Globalization for Development. New York: World Bank and Palgrave Macmillan.

Hofstede, G. (2001). Culture’s Consequences: Comparing Values, Behaviours, Institutions, and Organizations Across Nations (2nd ed). Thousand Oaks, CA: Sage Publications.

Hofstede, G., & Minkov, M. (2010). Long- versus short-term orientation: New perspectives. Asia Pacific Business Review, 16, 493–504

House, R., Javidan, M., Hanges, P. & Dorfman, P. (2002). Understanding cultures and implicit leadership theories across the globe: An Introduction to Project GLOBE. Journal of World Business, 37, 3–10.

Legge, K. (2005). Human Resource Management, Rhetorics and Realities. New York: Palgrave Macmillan.

McCourt, W and Eldridge, D. (2004). Global Human Resource Management. Managing People in Developing and Transitional Countries. UK: Edward Elgar Publishing.

Minkov, M. (2007). What makes us different and similar: a new interpretation of the World Values Survey and other cross-cultural data? Sofia: Klasika i Stil.

Taras, V., Kirkman, B. & Steel, P. (2010). Examining the impact of culture’s consequences: A three decade, multilevel, meta-analytic review of Hofstede’s cultural value dimensions. Journal of Applied Psychology, 95, 405–439.

 

APPENDICES

Appendix 1: Summary of political risks in Netherlands (1= best/stable, 5=worst/most unstable)

Source: A.M Best, (2014, p

Appendix 2: Economic growth of Netherlands (2005 – 2014) and projections (2016-2019)

Source: A.M Best, (2014, p.2)

 

Appendix 3: Vital statistics of Netherlands

Source: A.M Best, (2014, p.2)