Corporations from a critical perspective

This blog will first explain what a corporation is and later there will be developed some critical thoughts. To get your own thinkings started, I can recommend to watch the movie "The corporation" by Mark Achbar, Jennifer Abbott and Joel Bakan.

The most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. The corporation is seen as a person. This form of business is characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern. The process of becoming a corporation, call incorporation, gives the company separate legal standing from its owners and protects those owners from being personally liable in the event that the company is sued This condition is known as limited liability. Incorporation also provides companies with a more flexible way to manage their ownership structure. In addition, there are different tax implications for corporations, although these can be both advantageous and disadvantageous.

There may be many advantages to using a corporation to carry on business depending on your circumstances.  Some of the main advantages of using a corporation to conduct business include the following:

• Limited Liability:  The owners, or shareholders, of a corporation are not liable for the debts and obligations of a corporation. This means that, as normal rule, creditors of a corporation can  not  hold the  shareholders responsible for the debts of the corporation.  If the corporation can not pay its creditors, then the creditors have no right to claim payment from the shareholders.  There are exceptions to this general rule either by statute or because of some act done by the shareholders to make them personally liable. If you concerns about these exceptions, you should seek legal advise.

• Ownership Easily Transferable:   Ownership of a corporation is transferred easily by transferring the shares.  It can be as simple as endorsing the back of the share certificate in favour of the new owner of the shares.  The change of ownership is then recorded in the records of the corporation.  However, if the corporation is actively carrying on business, the new owners will require various representations and warranties both from the seller of the shares and from the corporation.  The seller will also wish to exclude liability in certain areas and limit the representations and warranties given.  Also, certain technical requirements of the governing legislation must be met.

• Perpetual Existence:  Since a corporation is a separate legal entity from the shareholders, the corporation can have perpetual existence.  It continues as a corporation in law even if the ownership of the corporation itself changes. This provides for continuity for  the business of the corporation.
  
  
• Tax Advantages:  Under Canadian income tax laws, there can be a tax advantage to operating a business through a corporation as opposed to a sole proprietorship, a partnership or some  other form. If a corporation qualifies as a small business and has active income, then it can take advantage of the small business deduction and pay income taxes at a substantially reduced rate.  There can be a substantial tax saving compared to doing business outside of a corporation.

• Raising Capital: For a number of reasons, it can be easier to raise capital for a corporation than it is for a partnership or sole proprietor.  Lenders are more willing to lend capital to a corporation.  There are more sources of  capital for a corporation.

As explained before, a corporation is seen as a person. But the first critical question is: Should corporations be entitled to the same legal rights as individuals? My answer would be yes, if they could bear responsibility in the same way as individuals. And that not just in terms of money. But corporations cannot go to jail and they simply cannot take the same responsibilty as human beings. It is an artificial construct, a roboter. They cannot feel and know from the bottom of their heart what is wrong and what is right, neither what is fair. So they can never feel any guilt. So how can you give them all the same legal rights as to a real human person? That is insane somehow. Maybe it is like giving a monkey a gun. It might go right and it might go wrong- you never know, it is contingency.
So where should be drawn the line? I honestly do not know where. Because in my point of view. A corporation could not breath and work without the humans behind it making the decisions. Therefore the directors, officers and partly the employees and shareholders should take the rights and the responsibility. The directors and officers could share the risk, rights and responsibilty all equal. In that way, competition between them might lead them in the right direction. And then they should are held accountable as every other person in the whole wide world too. Through their own minds, and of course law and judges.


References:

http://www.investorwords.com/1140/corporation.html#ixzz1395HkK3k
http://www.e-law.bc.ca/art_corpstructure.html
http://www.cinemapolitica.org/files/cinemapolitica/imagecache/poster/files/cinemapolitica/films/The%20Corporation.jpg
http://www.horschamp.qc.ca/images/photos/Corporation.jpg

IOM

This weeks blog is about IOM and what specifically they do to improve conditions of women migrant workers.

Established in 1951, IOM is the leading Inter-governmental Organization in the field of Migration and works closely with governmental, intergovernmental and non-governmental partners.

With 127 member states, a further 17 states holding observer status and offices in over 100 countries, IOM is dedicated to promoting humane and orderly migration for the benefit of all. It does so by providing services and advice to governments and migrants.

IOM works to help ensure the orderly and humane management of migration, to promote international cooperation on migration issues, to assist in the search for practical solutions to migration problems and to provide humanitarian assistance to migrants in need, including refugees and internally displaced people.

The IOM Constitution recognizes the link between migration and economic, social and cultural development, as well as to the right of freedom of movement.

IOM works in the four broad areas of migration management:

• Migration and development
• Facilitating migration
• Regulating migration
• Forced migration.

Through its worldwide network, IOM activities include these areas: the promotion of international migration law, policy debate and guidance, protection of migrants' rights, migration health and the gender dimension of migration. With their network and expertise they can help also women worldwide. Read more on their website about specific countries, e.g. Women in Haiti.

References:

http://www.iom.int/jahia/Jahia/about-iom/lang/en

http://www.tunisiaonlinenews.com/wp-content/uploads/2008/11/iom_logo.jpg

Different Culture could lead to competitive advantage

According to the article from Mangaliso, M. about Ubuntu which is a humanist philosophy of Southern Africa, combining different cultures with your management style can lead you to a competitive advantage. This blog should explain how cross-cultural managers can be aware of cultural philosophies and use them as benefit.

Ubuntu are the beliefs, values and behaviors of a large majority of the South African population. It is invariably invoked as a scale for weighing good versus bad, right versus wrong and just versus unjust. It can guide, as other cultural philosophies as well, development of managerial practices for healthy competitive advantage. Ubuntu can be defined defined as humaneness which means a pervasive spirit of caring and community, harmony and hospitality, respect and responsiveness that individuals and groups display for another. It is the foundation for the basic values that manifest themselves in the ways African people think and behave toward each other and everyone else they encounter. There is a high degree of harmony and continuity existing throughout the system. The following will explain various aspects of ubuntu how to deal with them in order to get a competitive advantage.

Relationship with others

The individual is a member not just of the nuclear family, but also of the extended family or clan. Hiring of relatives could be a very positive decision because of ties within the organization. It is important to understand that the individual is predicated on belonging to collective. A team might accomplish more than if ech individual works alone. Organizations can ensure that individuals uphold this spirit by linking their reward systems to team performance. Regarding cultures with high collectivism, people are intrinsically motivated to contribute more when they are valued members. Mutual respect and empathy are advantages. The management style "fusion" offers a view of others as part of the same whole, recognition of similarities rather than differences, and an identification of common ground and a sense of community with shared vission, norms and outcomes. Another example could be the Matsushita Case.
While treating others with kindness, compassion and humility, people will always help you to succeed in your management task. It is about respect, deference and compliance. If people sense that they are being treated with respect and dignity, they will respond by showing greater commitment to organizational goals.

Language and communication

The importance of language in establishing a sense of community, belonging, shared heritage and common welfare is emphasized. Traditional ,management training places greater emphasis on the efficiency of information transfer. Ideas must be translated quickly and accurately into words, the medium of the exchange must be appropriate and the reciever must accurately understand the message. In ubuntu the social effect of conversation is emphasized. In ubuntu's oral tradition the meaning of words is strongly related to context. Poetic expression and the ability to play with words are signs of wisdom. The focus is more on oral words than on written pieces. Shared understanding of deeper meanings supports complex consensus. Ubuntu communication means concerted action that is adaptable.
Concerned more with efficiency than with healthy relationships, supervisors may discourage conversation and other forms of socializing in the workplace. Isolation results. One way to break this psychological impasse is to periodically hold company sponsered events and ceremonies. Allowing workers to establish relationships even when not required by the task structure, improves effevtiveness and decreases pessimistic feelings toward the organization.
Those organizations that provide an opportunity for their employees to give expression to their values and beliefs in the course of carrying out their corporate responsibilities are likely to gain competitive advantage over those that do not. It is important to provide opportunities for self-expression, achievement and self-fulfillment, consistent with employees values.

Decision making

Decisions by consensus. Process is circular. Polycular vision. Dispute resolution to restore harmony and unity. Ubuntu might be slow to action, but greater commitment to goals means more long-run effectiveness and efficiency.
Before a closure of a decision considerable time should be considered to assure all voices have been heard and the consensus has been reached. The goal of decision making in this context is to preserve harmony. A decision that is supported by most of the staff as the right decision is resisited by many.
Also if those decisions of Consensus are quite costly in terms of time and effort, their result can be seen in improved commitment to organizational goals, reduced supervisory requirements, decreased turnover and absenteeism. So effeciency will increase.

Time

Time is not a finite commodity under ubuntu's vision. It is considered as a healer. Allowing enough of it for important issues will ensure a good decision. Time is a reference that locates communities with respect to their collective past and their shared future. It assigns significance to patterns of events and it orders relationships and affairs. In the context of ubuntu time is reflected as a unifying and integrating construct that emphasizes interdependence, shared heritage, regularity and congruity. It is all about accepting the validity and reseonableness of a different worldview. This seams as a hidden competitive advantage.

Productivity and Efficiency

Productivity must be optimized. Ubuntu considers solidarity and social harmony important. So are rewards and suffering are shared. The competitive advantage lies here in the loyality to group goals and so it is for the good of the company. In a culture that is high on collectivism as ubuntu, across-the-board pay reductions would be much preferred to targeted layoffs. If important changes have to be introduced, this must be done using consultation and inclusive decison process. Sometimes with the strength fo a group there can be other soluitions be found than the traditional ones according to theory.

Age and Senority in Leadership

Age is an ongoing process of maturing and acquiring wisdom. Older people are respected. Older workers hiring experiences, wisdom, connections and informal networks can help you and in this way, your knowledge can lead to a competitive advantage. Hiring an older person who will face respect and trust of his staff is better than an expert who fails just because of his age. This approach to managing is gaining acceptance in more contemporary management thinking. More successful managers are seen to act as coaches rather than as experts or cops. But age can be messured in different ways, e.g. chronological age, service to the company or the experience in the position. The importance is to explain everybody why somebody is the best for this job.

Belief systems

In some countries and cultures, belief systems are quite different than ours. Some are into spirituality or others in different religions. Try to get to know the certain system you dealing with and you might be able to get out a competitive advantage as well. Show acceptence and interest. But another caution is against the assumption that culture is static and that there is a one-way causal relationship between culture and behavior. Changing behaviors also causes changes in culture through feedback and reinforcement over time. Differences between the behavior of younger and older generations contribute to the generation gap. So sometimes it is very useful to introduce different e.g. payingsystems or shift systems. In that way the people can make their own choice and feel respected and you are able to avoid gender problematics.

The company should also consider which manager is the best for another countries operation. Depending on the country and its culture, there are 3 different types to choose. The ethnocentric, polycentric and geocentric manager. It needs to be considered to either hire a local with all its expertise regarding the culture or a manger from the company's home country who is familiar with the corporate culture or somebody from a third country who is an expertise in his field.

Overall it is very important to say, that you should treat others with dignity and respect. Care and share with your employees. Be willing to negotiate and take your time for that. Be a good listener and try to understand your employees culture and values. Therefore don't judge. There is no right or wrong. Honor the work and loyality which is given to the company and everbody's good. Promote equity in the workplace. Be flexible and accomodative. Try to find the right balance of host country's culture and corporate culture. This challenge will lead you to success. Organizations infused with humaneness, a pervasive spirit of caring and community, harmony and hospitality, respect and responsiveness will enjoy more sustainable competitive advantages.

References:

Mangaliso M. P. (2001), Building competitive advantage from ubuntu: Management lessons from South Africa, Academy of Management Executive, Vol. 15 No. 3.

Hill, C.W.L. (2005), International Business: Competing in the global market place, 5^th international edition, MacGraw- Hill: Boston etc.

http://www.otherpriorities.com/wp-content/uploads/2010/05/south-africa.png

http://www.thecommonwealth.org/Shared_ASP_Files/UploadedFiles/%7B9211FB36-3F54-4C52-B5FD-A1AE769E7266%7D_SouthAfrica.gif

http://www.bugbog.com/images/galleries/south_africa_pictures/south_africa_pictures.jpg

http://www.bbusiness.co.za/images/pic022.jpg

http://www.greenline-sa.com/I10PSA2000093.jpg

CREATIVE METAPHOR

This week's task is to think of a creative metaphore that could be used for a Colombian organization that is trying to internationalize an unknown product in foreign markets. This task is based on the following article, Spencer, M (2010) "If InterContinental were a sound what would it be". In that article they tried to find an metaphore in form of music and sound that suits the InterContinental Hotel Group. One could see how hard it is to create something which will meet all target groups and reach as many people as possible- not matter what country, which culture or history,...

I thought about Juan Valdez Café. Right now they have the most stores in South- and Middle America. Also there are 11 in the USA and 7 in Spain. As they are trying to expand their business further to Northamerica and Europe, I thought it might be a great starting point for this task.

My metaphore is the following:
"Ever tried a sip full of LOVE and HARMONY? Enjoy Juan Valdez Café!"

In my point of view, this metaphore is very international and could be used anywhere in the world. Of course, there should be people who drink coffee. But it is neither culturally directed nor it is just certain people targeting. It could be on posters in the streets, in magazines, on the napkins, cups, at the coffee- nearly everywhere. Attached to this slogan, I would put for example concerning the posters, photos of the amazing landscape of Colombian's mountain chains where the coffee is grown.

In magazines, I would write something about Colombia's coffee tradition, -culture and -zones. It will raise interest of the reader. Maybe also put some kind of olfactory test (like the one for parfums). It should stimulate as many senses as possible.

And, already feel the desire for a coffee? ;o)

References:

http://www.steadyhealth.com/2591/Image/coffee_heart.jpg

http://www.singleservecoffee.com/images/isp_CoffeeLove.jpg

http://imagecache2.allposters.com/images/TRGPOD/jbar-coffee-000001.jpg

http://www.guidedtourcolombia.com/guidedtourcolombia/fotos/jjkjww.jpg

http://www.gimmecoffee.com/galleries/colombia_origin_07_tr/colombia_23.jpg

This week's task was to visit some of our classmate's blogs. It was really interesting to see what the others did. Some I had to laugh about so much, others I was wondering about and again others were just nicely done. A lot of varieties. So here are the blogs I left comments on:

http://julianaespinosalopez.blogspot.com
http://miragemblue.blogspot.com
http://knowledgeinabun.blogspot.com
http://organizations-and-cultures.blogspot.com
http://marialeredondo.blogspot.com

Maybe you want to take a look too...

Personality, perception, attitudes, attribution and values

Summary

Personality is a relatively stable set of characteristics that influence an individual´s behavior and is shaped by hereditary and environmental determinants.

How a person evaluates him- or herself can be examined by different concepts. First the self concept with self efficacy, - esteem and - monitoring. Second the positive/ negative affect which indicates if a person's tendency towards themselfes and the surrounding is more positive or negative. And third the locus of control. This is parted into the internal and external locus of control. It is about a person's belief if the person controls its life and happenings itself or if everything is happening because of external control, eg. other people or destiny. Furthermore there are different personality theories existing as for example the Big5 and the Integrative approach.

Perception is based on a person's view about the world by using its five senses. There is a perciever and a target. Social perception is the process of interpreting information about another person. Perceptions are most of the times also culturally determined. Sometimes perceptions can be inaccurate impressions because of stereo typing, first impression error, projection, selective perception or the Pygmalion effect (which will be explained in more detail later).

Attitudes are defined as positive or negative evaluations, feelings and tendencies that individuals harbor towards objects or concepts. They are learned from role models and formed within a cultural context. At work it could be for example the attitude towards a perceived opportunity for success.

Attribution is about how individuals pinpoint the causes of our own behaviour and that of others. One's performance within an organization is affected by an internal source of responsibility and an external source. But there are biases existing. For instance the Fundamental attribution error which is the tendency to make attributions to internal causes when focusing on someone else’s behaviour and the Self serving which means the attribution of one’s success to internal causes and one’s failures to external causes.

Values are defined as ideas, beliefs, and customs to which people are emotionally attached. Relating them to business, they affect people´s work ethic and desire for material possessions. So to say, values reflect one's judgment and helps sort out what is important in life. Therefore Maslow created the so called B-values.

The Pygmalion effect in a real case

First of all the Pygmalion effect is a phenomenon in which the greater the expectation placed upon people, the better they perform. According to Goethe "treat a man as he is he will remain as he is. Treat a man as he can and should be and he will become as he can and should be."

The Pygmalion effect was described by J. Sterling Livingston in the September/October, 1988 Harvard Business Review. Livingston said about a supervisor, "If he is unskilled, he leaves scars on the careers of the young men (and women), cuts deeply into their self-esteem and distorts their image of themselves as human beings. But if he is skillful and has high expectations of his subordinates, their self-confidence will grow, their capabilities will develop and their productivity will be high." 

Other examples can be found in terms of school, sport, etc. If people have high expectations about somebody, this person will see even more an incentive in performing good and to give the best as he can. It is somehow related with motivation. 

References:

   Takao Inamori, Farhad Analoui, "Beyond Pygmalion effect: the role of managerial perception", Journal of Management Development, Vol. 29 Iss: 4, pp.306 – 321.

   Gregorio Martín-de-Castro, José Emilio Navas-López, Pedro López-Sáez, Elsa Alama-Salazar, (2006) "Organizational Capital as Competitive Advantage of the Firm", Journal of Intellectual Capital, Vol. 7 Iss: 3, pp.324 – 337

 http://humanresources.about.com/od/managementtips/a/mgmtsecret.htm

 http://inwiki.pabo-inholland.nl/_media/pygmalion_effect.jpg?w=&h=&cache=cache
 https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhleW3Qe-yMOQQdfgOFadhlMhyjzd0olk2Wx32EOMTql59I7yD8a8NcreCqJ_nz0e1opwqYP3yTMnmFAtNdoQ7LyKbdjHEnanOFJfd6XvG78U7J-74JaBCNhAmmJo4vZ3HVLC6j4zRmZprL/s400/ATT00001.jpg
 http://darmano.typepad.com/logic_emotion/images/2008/10/16/perception.jpg
 http://www.valueindesign.com/images/values_circle.gif

Organizational behavior and culture

Summary

Organizational Behavior is the individual behavior as well as group dynamics in organizations. Studies about that field are primarly concerned about psychological, interpersonal and behavioral dynamics in organizations. But there are also other organizational variables important, eg. jobs, communications, organizational structure, Leader's philosophy, values, visions and goals, organizational culture, etc..

You may also understand that behavior is a function of all- the organization as its whole, the persons as individuals and the surrounding environment. A complete understanding of organizational behavior requires an understanding of both human behavior and organizational context where behavior is enacted.

So what is an organization? It is a social arrangement which pursues collective goals, controls its own performance and has a boundary seperating it from its environment. Types of organizations can vary from public to private, formal or informal, manuacturing, service, non-profit, religious, military, political and so on... Organizations are open systems composed of people, technology and structure comitted to a task. 

Organizational  behavior is based on scientific knowledge and applied practice. It involves the study of abstract ideas, such as valence and expectancy in motivation, as well as the study of concrete matters, such as observable behaviors. There are different theoretical frameworks existing, such as the behavioristic framework, the cognitive and the social learning appraoch. Systems interprete people-organization relationships in terms of the whole person, whole group, whole organization, and whole social surrounding. Its purpose is to build better relationships by achieving human objectives, organizational objectives and social objectives. Finally one can say, it is the understanding, prediction and management of human behavior in organizations. The outcome are performance of organization and individual, personal satisfaction, growth and development.

As Culture is one of the elements which can influence organizational behavior, it will be explained in the following more. The definition of Hofstede is: "Culture is the collective programming of the mind which distinguishes the members of one human group from another... Culture in this sense includes systems of values and values are among the building blocks of culture." This implies that culture is learned. Different  social groups have different cultures and therefore may respond to similar situations in different ways. Cultural groups can vary from national cultures, sub-cultures, industries and organizational cultures.

 

Concerning national culture, Hofstede came up with a model which basically compares value differences between countries. Therefore he uses four different categories.

At first, he mentioned the Power Distance which means „the distance between individuals at different levels of a hierarchy“. If power distances are low, hierarchical differences are less respected. So it would mean that subordinates are involved in decision processes.

The second dimension is named Uncertainty Avoidance. Here it is the matter of lack of knowledge between the cultures. It is about the extent to which a group or the individual is prepared to uncertain situations. The higher (lower) the level of uncertainty avoidance, the more the members are ready to take risks and feel opened to new inventions and technology.

The third dimension, Individualism vs. Collectivism is about the relationship between the individual and the groups to which he or she belongs. Individualists expect competition, group decision are seen as subordinated. Its importance in reference to negotiation lays in the reaction to other groups and individuals, weather are cooperative or not. Collectivists aim to keep harmony in their environment.

The last dimension, Masculinity vs. Femininity, refers to the old problem of gender roles. In masculine cultures the men should be the bosses in the company and the women care for the household. Men are seen as the strong gender that could fight conflicts out if necessary. In contrast to this, in feminine cultures, men and women are treated equally. They both are found in the highest ranks in all professions.

Organizational culture is the personality of the organization. Culture is comprised of the assumptions, values, norms and tangible signs of organization members and their behaviors.

References:

   Mead, Richard. 2004. International Management: Cross-Cultural Dimensions London: Blackwell Publishing. Chapter 1.

   Millman, Gregory J. . 2007. "Corporate Culture: more myth than reality? ." The Free Library 23:44-47. Millman, Gregory J. (2007, July 1).

   Nelson, D.L. & Quick, J.C. 2010. Organizational Behavior: Science, The Real World and You, South-Western College Publication, 7th edition. Chapter 1.

  http://www.youthcan.eu/conimages/Cultural-Diversity.jpg