How much sleaze is too much? Putting cultural theory into practice. Since the world entered the new century globalization of all aspects of people’s lives has increased. More and more companies have been transformed into MNEs. According to Rugman and Collinson (2009) the number of employees working across borders nearly tripled over the last 20 years, exposing managers to various socio-cultural and ethical issues. Geert Hofstede argues that “culture is more often a source of conflict than of synergy.
Cultural differences are a nuisance at best and often a disaster” (cited in The Economist, 2008, para. 4). I used an article by Asbjorn Osland ‘How much sleaze is too much’ as a real life scenario while examining the cultural frameworks. The main character Eric is a field director for an American company- Development International (DI). DI assigned Eric to work on an international assignment in Senegal (Africa). While in Senegal, Eric was exposed to various cultural and ethical issues, the key issues included bribery and different social values and norms.
Lacking support from the management of DI Eric deals with all challenging situations by himself; decisions that previously he perceived as highly unethical/unacceptable now become a norm (Osland, 2003). By applying cultural frameworks, such as Hofstede’s dimension of culture, this essay will try to explain a) what DI could do to help Eric b) examine the effectiveness of cultural frameworks I used Hofstede’s cultural framework to understand the extent of understanding that DI could gather before sending Eric to Senegal.
The framework examines a foreign society from five different perspectives: power distance (PDI), uncertainty avoidance (UAI), individualism (IDV), masculinity (MAS) and long-term orientation (LTO) (see Appendix 1). According to Hofstede (1993) understanding these five aspects can help us predict the way a society operates. Hofstede (2001) and Husted (1999) found that societies with high PDI, UAI and MAS tend to be more prone to corruption and illegal actions (cited in Baughn et a. l, 2010). As seen in Figure 1 West Africa countries clearly score high in all of these three dimensions.
This suggests that a different management ought to be applied because the likeliness of cultural/ethical issues is very high. In addition, many researchers (Nwabuzor, 2005; Olaya, 2006 cited in Baughn et a. l, 2009) indicate that bribery is more apparent in developing economies, such as Senegal, where legal system has not been fully established, leaving gaps for illegal activity. Moreover, low-income societies are more likely to perceive bribery as “a necessary means of supplementing low income” (Baughn et al. , 2009, p. 16).
Unlike the US, Senegal scores very low in the IDV variable, suggesting that they are a highly collectivistic society. Hofested (1999) emphasises that high power distance societies often present a paternalistic approach, in which loyalty and favours are perceived as a norm. Moreover, a paternalistic approach is correlated with collectivistic societies, in which the power of group and a group’s interest is more important that written laws. Hence, individuals will make decisions that will not necessarily be socially acceptable but will benefit the group (cited in Baughn et al. , 2009).
These findings suggest that an American company should not assume that it can adapt an ethnocentric approach and operate in a foreign country by its own rules. As shown in the case study and research, complexity of culture and other economic and social factors have a strong impact on one’s decision making process (Baughn et a. l, 2009; Buller et al. , 2000; Palazzo et al. , 2012). In my opinion, cultural frameworks are a good starting point in understanding the basics of a culture, however it is fundamental that an individual realises that this is only an analysis tool that helps us see a big picture of the issue.
All frameworks have their limitations; as pointed out by Rugman and Collinson, some surveyed countries tend to lie about their national behaviour, for example “Poland and Denmark lie (…) on the gender-differentiation” (2009, p. 141). This example raises the topic of the limitations of Hofstede’s framework, such as the time scales of the research (1968-1973), which did not take into consideration aspects such as globalization and the fact that the study was solely based on IBM employees.
In order to gain more in depth understanding of cultural layers I would strongly recommend looking into studies of Trompenaars’ or the GLOBE project, which expand on Hofstede’s findings by providing more in depth analysis and putting it into the twenty-first century perspective (Rugman and Collinson, 2009). Another tool that I found especially useful when analysing Eric’s case is the below decision tree framework developed by Buller et al. (2000). The tree focuses around three variables: moral significance, power and urgency. Putting this into Eric’s perspective these could be his answers: a) Is this situation high in moral significance?
Yes. Bribery does not comply with my moral values, the company’s corporate culture and nationally accepted standards b) Do I have a high level of influence of the outcome of the ethical situation? No. Although I support local development I don’t feel like I’m having any support from my supervisors, hence I don’t feel like I can change anything c) Is there a high level of urgency to resolve this situation? No. Bribery is a serious matter; however in this case it’s done on a small scale, hence is not highly urgent. This brings us to the solution of either collaborating or educating.
However, as we find out from the case, once local authorities accepted Eric and appreciated his contribution to the well-being of Senegal, they stopped asking for ‘favours’. This suggests that the avoidance strategy could be also used in this case. In contrast, Eric went for an accommodation solution; he reached his goals but was left with a moral dilemma. Eric’s decision could be explained by a term of ‘ethical blindness’, in which “good people [like Eric, under certain conditions such as external pressure] become ethically blind” (Palazzo et al. 2012, p. 325). Moreover, Leila Trapp (2011, refer to Appendix 2) argues that it if the company builds trust and offers an open approach to talk about ethical dilemmas, they are more likely to influence decisions. Leila Trapp’s research indicates that this is a common practice in developed countries, i. e. US, Denmark (see Figure 1). Perhaps, if DI had understood the context of Senegal’s culture they would have been able to support Eric he was while dealing with cross-cultural issues.
In my opinion the key findings deriving from the case study and conducted research is that living in a globalized society does not mean that we all share the same values. People are brought up in different contexts, share different values, beliefs etc. It is crucial that managers realise a) the complexity and impact that culture has on business b) culture should be studied on a variety of levels c) there is no universal approach to study/understand culture d) understanding the core issues is the starting point when dealing with cultural/ethical issues.
In my opinion, Eric was too flexible in his accommodation approach; however, his flexibility helped a lot of people. I believe cultural frameworks are useful to get a better understanding but they should be used bearing in mind their limitations, and the complexity of culture. Word count: 1,099 Appendices 1. 1 Hofstede’s Five Dimensions of Culture 1. 1 Appendix 2: Leila Trapp’s illustration of cultural decision-making process in well-developed and developing economies Leila Trapp (2011) argues that companies operating in well-developed countries such as Denmark or the US are more approachable when dealing with cultural issues.
As seen in the below Figure 3, an employee who works for a company in Denmark has the ability to talk about cultural issues in his/her workplace before making a decision. In contrast, this is not a common practice in companies operating in developing economies. Asking managers/supervisors for help is perceived as a weakness and it shows lack of competence; hence all decisions are based solely on an individual’s perception of what is most appropriate in a particular situation. Reference Baughn, C. , Bodie, N. Buchanan, M. , & Bixby, M. (2010) ‘Bribery in International Business Transactions’, Journal Of Business Ethics, Vol. 92 (1), pp. 15-32. Available at: http://ehis. ebscohost. com/eds/detail? vid=11&hid=102&sid=e47300a1-ff88-457c-84fc-0d2205f2f2bb%40sessionmgr111&bdata=JnNpdGU9ZWRzLWxpdmU%3d#db=bth&AN=47817082 (Last Accessed 28 October 2012). Rugman, A. M. , Collinson, S. (2009) ‘Production Strategy’ and ‘International Busienss Strategies in Action, International Business 5th ed. Chapter 2 & 5.