Donald Tironi

Class Notes- 2/17/00

Organizational Behavior

Chapter 1- Culture and Management

The purpose of this draft is to recount the class notes for the Leadership class of February 17, 2000. In the first part of the draft, a recounting of the important fact will be given. The following section will look at the lessons learned by looking at this first chapter. The conclusion will be a summation of the entire draft.

Culture is a shared heritage that is passed on from one generation to another. Culture affects one’s behaviors and structures one’s perception of the world. This definition means that culture will vary from group to group. Ways the culture will vary are individualistic qualities, relationship to nature and the world, relationships with others, their primary type of activity, and their orientation in space and type. This can be related to today’s globalized economy. Two-thirds of today’s CEOs expect to generate employment and revenues from locations outside of their firms’ home country. There are also views of the future as optimists feel that developed countries will benefit from the increased demand from bigger export markets. Contrastingly, pessimists feel that developing countries will be viewed as villains, stealing capital and jobs from the developed countries. The developing countries will also be seen as creating inequities by destroying the wealth of the developed countries.

There are four phases of development. The four stages are:

1. domestic phase- culture viewed as irrelevant, an ethnocentric perspective
2. multidomestic phase- sensitivity to cultural difference becomes key, the need to address each foreign market separately is seen
3. multinational phase- price becomes significant, cultural awareness declines as price competition between like products diminished its need
4. global(transnational) phase- want to lower cost and have top quality, need to understand the clients’ needs, culture is critically important, leads to global human resources management

This describes organizational behavior in countries and cultures, and compares them across countries. The leaders seek to understand and improve the interaction of people. Parochialism is viewing the world through one’s own eyes and perspectives. An example is that Americans don’t speak many languages and are less interested in foreign affairs. The US has a domestic market, while the world is globalizing. There is a word coined to describe the new large-scale interaction in the global market, and that word is multiculturalism. Multiculturalism is when people from many different cultures interact regularly.

It is important to study multiculturalism in today’s business world because of the globalization of today’s economy. The days of isolationism are behind us, as it is essential to be global for a nation to survive and thrive economically. Ethnocentrism is an American disease. When starting from this view, the assumption made is that all others will have to adjust to us. The problem is that the population of the world is around 6 billion, while the US population is around only 250 million. Therefore globalization is essential to the success of any business.

Today’s world is shrinking, and everyone feels the effects. There is a greater amount of interaction between people. Also the distance and time are disappearing. The advances in technology have given people around the world instantaneous access to information. Also the Internet has made the exchange of ideas much easier. For example e-mail has made it much easier to exchange ideas from different countries. These advances have given rise to the need for people to understand the differences between groups and cultures. The only way to dominate these differences is by fully understanding the differences first.

The greatest effects have been felt in the ways business has had to operate. Due to the new developments, businesses have been forced to change and adapt to the new global economy. For many years, especially post-war periods, the United States has had strong isolationist sentiments. However, these sentiments would destroy the economy, since the new economy is the global economy. In order to be a success in this type of economy, businesses must fully understand the differences that exist between cultures. This knowledge will give them the ability to master the differences.

Culture is a shared heritage that affects one’s way of life. It has become increasingly important because of today’s globalizing society. The shrinking space in the world as well as the technological advances have cause more interaction between people. This is where multiculturalism has arisen. Ideas such as parochialism and ethnocentrism have become common topics in the world of international business. Today, a business must learn as much as possible about cultural differences so they can master the new global economy.

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