Chapter 2: Challenges for Managers

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2 CHALLENGES FOR MANAGERS

CHAPTER SCAN

This chapter focuses on the changes and accompanying challenges those changes will bring about
in the coming decade. Four major challenges facing managers include globalizing the firm’s
operations, leading a diverse workforce, encouraging ethical behavior, character, and integrity,
and fostering technological innovation. Globalization has created a boundaryless market in which
all firms, large and small, must compete. Cultural diversity within the United States encompasses
all forms of differences among individuals, including age, gender, race, and ability. Technological
change is one of the keys to strategic competitiveness, but it is also complex and risky. Ethical
issues compound the complex challenges of management, and involve things such as white-collar
crime, computer use, employee rights, sexual harassment, romantic involvement at work,
organizational justice, whistle-blowing, and social responsibility.

LEARNING OBJECTIVES

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

attitudes.
2. 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. Discuss the assumptions of consequential, rule-based, and character ethical theories.
5. Explain six issues that pose ethical dilemmas for managers.
6. Understand the alternative work arrangements produced by technological advances.
7. Explain the ways managers can help employees adjust to technological change.

KEY TERMS

Chapter 2 introduces the following key terms:

24 Chapter 2: Challenges for Managers

character theory power distance

collectivism procedural justice
consequential theory reinvention
distributive justice robotics
diversity rule-based theory
expatriate manager social responsibility
expert system technology
femininity telecommuting
glass ceiling time orientation
guanxi transnational organization
individualism uncertainty avoidance
masculinity whistle-blower

THE CHAPTER SUMMARIZED

I. THINKING AHEAD: PIXAR ANIMATION STUDIOS – A Dream Challenged from the

Start

II. MANAGEMENT CHALLENGES IN A NEW TIME

Recent surveys indicate that U.S. firms are encountering unprecedented global competition. Chief
executives note their primary challenges as (1) globalizing the firm's operations to compete in a
global village, (2) leading a diverse workforce, (3) encouraging positive ethics, character, and
personal integrity, and (4) advancing and implementing technological innovation in the workplace.
Successful organizations respond to these challenges as opportunities instead of threats. The
United States faces tough competition from countries such as Canada, Germany, Japan, and the
United Kingdom.

III. THE GLOBAL VILLAGE

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 their 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.
Business ventures in China have helped to emphasize the importance of guanxi, or
networking, in order to accomplish personal and business goals.
 Chapter 2: Challenges for Managers
25

B. Understanding Cultural Differences

In order to compete globally, and because cultural differences affect work-related attitudes,
organizations must understand diverse cultures. 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. Group decisions are valued and accepted.

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. People are more willing to take risks in
cultures with low uncertainty avoidance.

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 low on power distance, and is a masculine culture
with a short-term orientation.

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
26 Chapter 2: Challenges for Managers

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.

C. Developing Cross-Cultural Sensitivity

As organizations compete in the global marketplace, employees must become more skilled
at working with individuals from divers cultural backgrounds. Cultural sensitivity training is
a popular method for helping employees recognize and appreciate cultural differences.
Human resource managers must prepare employees to live outside their native countries,
and must also help foreign employees learn to interact with U.S. culture.

IV. THE DIVERSE WORKFORCE

Diversity encompasses all forms of differences among individuals, including culture, gender, age,
ability, religion, personality, social status, and sexual orientation. Motivation and communication
skills must be adapted to account for diversity.

A. Cultural Diversity

Cultural diversity is increasing due to the globalization of business. Demographic changes

significantly affect diversity as well. Population shifts have dramatically increased the
proportion of Hispanic and African-American workers in the labor force. The challenge for
managers is to capitalize on the wealth of differences provided by cultural diversity.

B. Gender Diversity

Women made up over 60 percent of the labor force in 2004, 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. Women comprised only 13.6 percent of
corporate board members in 2003.
 Chapter 2: Challenges for Managers
27

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 an aging workforce.

D. Ability Diversity

The number of disabled individuals in the workforce has increased 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. Part
of the challenge in managing diversity lies in attempting to combat prejudices and
discrimination. 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.

V. ETHICS, CHARACTER, AND PERSONAL INTEGRITY

There is plenty of evidence that ethical problems are still a major concern in corporations. The
toughest of these problems include employee theft, environmental issues, conflicts of interest, and
sexual harassment. 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.
28 Chapter 2: Challenges for Managers

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, and consists of three types of harassment:
gender harassment, unwanted sexual attention, and sexual coercion.

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. Hierarchical and utilitarian romances are
especially problematic in the workplace.

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 outcome
allocation process.

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).

VI. TECHNOLOGICAL INNOVATION

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
 Chapter 2: Challenges for Managers
29

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. Emerging Managerial Realities

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. Computerized monitoring of employee performance can be beneficial in
many ways, but also holds great potential for abuse.

C. Helping Employees Adjust to Technological Change

Reinvention is the term for creatively applying new technology. Managers face a
substantial challenge in leading organizations to adopt new technologies more humanely and
effectively.

VI. MANAGERIAL IMPLICATIONS: BEATING THE CHALLENGES

VII. LOOKING BACK: PIXAR ANIMATION STUDIOS – The Dream Becomes Reality
30 Chapter 2: Challenges for Managers

CHAPTER SUMMARY

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

REVIEW QUESTIONS: SUGGESTED ANSWERS

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.

3. 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.
 Chapter 2: Challenges for Managers
31

4. 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.

5. 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.

6. 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.

7. 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.

DISCUSSION AND COMMUNICATION QUESTIONS: SUGGESTED ANSWERS

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.
32 Chapter 2: Challenges for Managers

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.
 Chapter 2: Challenges for Managers
33

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, ethics, technology,) 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 culture 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.

ETHICAL DILEMMA

1. Is sending jobs out of the country unethical?

Some students will argue that Jill’s first responsibility is to protect Ace’s stockholders. Given this
as her first priority, she should outsource immediately and anything less would be unethical.
Others will argue that no company operates in isolation and an ethical person recognizes that fact,
and if outsourcing all operations will destroy a community, then that move is unethical.

2. Using rule, virtue, rights, and justice theories, evaluate Jill’s options.

Rule – From a rule-based perspective, the greatest good for the greatest number would be
keeping the company operating and not outsourcing the work. However, utilitarians would say
that everyone loses if the company closes, so some kind of compromise needs to be made. One
way might be to outsource enough jobs so the company becomes profitable but not all operations.
Another way might be for Jill to negotiate with the workers to take a pay cut or reduce their
working hours.

Virtue – Virtue ethics is difficult to apply in this situation. It looks as if Jill is trying to do the right
thing. Her capacities to fully understand the situation or to think outside the box and come up
with a creative solution to solve the company’s financial problems may be limited, but her
intentions are appropriate.

Rights – Taking this perspective clearly says that some other answer should be found to solve
Ace’s problems other than outsourcing. If everyone acted in this way, we would outsource any
and all positions that would reduce a business’s costs.
34 Chapter 2: Challenges for Managers

Justice – Some here would argue that if management has dealt with the employees in a fair and
honest manner and a mechanism for reducing costs has not been found, management has the right
to look to other options to remain a viable entity. One of those options would be outsourcing.

YOU

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.

EXPERIENTIAL EXERCISES

2.1 INTERNATIONAL ORIENTATIONS

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.
 Chapter 2: Challenges for Managers
35

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 cannot 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.
36 Chapter 2: Challenges for Managers

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.

ALTERNATIVE EXPERIENTIAL EXERCISE

NUTTY BUDDY: AN EXERCISE IN INDIVIDUAL DIFFERENCES

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."
 Chapter 2: Challenges for Managers
37

(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.
38 Chapter 2: Challenges for Managers

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.
 Chapter 2: Challenges for Managers
39

EXTRA EXPERIENTIAL EXERCISES

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
relationships.

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

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

CASE QUESTIONS: SUGGESTED ANSWERS

GROWTH CHALLENGES FOR HARLEY-DAVIDSON

Linkage of Case to Chapter Material

Chapter 2 focuses on four key challenges for managers: globalization; managing a diverse
workforce; technological innovation; and ethics, character, and personal integrity. Three of these
four challengesglobalization, technological innovation, and ethicsare directly reflected in the
case. Managing a diverse workforce is not directly addressed in the case, but diversity is captured
in terms of Harley-Davidson’s evolving customer basewhich in turn has implications for
Harley’s workforce.

The challenge of globalization for Harley-Davidson can be framed in the context of Geert
Hofstede’s cultural dimensions of individualism versus collectivism, low versus high power
distance, low versus high uncertainty avoidance, masculinity versus femininity, and short-term
versus long-term time orientation. For Harley-Davidson, the challenge of technological
innovation focuses on the innovative design of motorcycles and their components as well as
the effectiveness and efficiency of the company’s manufacturing processes. One might argue
that most, if not all, decision and actions in an organization have the potential for ethical
implications. Thus, the challenge of ethics, character, and personal integrity is multi-
facetedethical issues may arise within the context of any of Harley-Davidson’s policies,
practices, procedures, and operations.
40 Chapter 2: Challenges for Managers

Suggested Answers for Discussion Questions

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 Pacific Rim
region. National cultures in these regions of the world 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.

2. How might technology affect Harley-Davidson’s competitive position in the global

marketplace?

A good deal of Harley’s growth has been fueled by acquisitions that enabled the company to
capitalize on new technologies. For instance, the use of fiberglass components in motorcycle
manufacturing is the result of one of the key technological acquisitions. In recent years,
Harley-Davidson has embraced technological innovations that refine and streamline
production methods and improve product quality. Most likely, Harley-Davidson will continue
to use technology to improve both its products and its manufacturing processes. The company
is also likely to rely more heavily on information technology to facilitate communication with
its worldwide network of dealers and to assist in supply chain management.

3. How is diversity affecting the growth of Harley-Davidson’s business?

 Chapter 2: Challenges for Managers
41

Age diversity and gender diversity are especially relevant to Harley-Davidson’s continued
growth. A significant portion of the company’s loyal customer base has been rather affluent
men who are in their late 30s or older. In recent years, however, women motorcycle
enthusiasts have come to represent about 9 percent of Harley’s customer base. Moreover, the
company is being challenged to address the wants and needs of male motorcycle enthusiasts
who are in the 25-to-34-year-old age range. This market segment seems to prefer sleeker,
sportier motorcyclesnot Harley-Davidson’s heavyweight highway motorcycle, which has
been and continues to be its core business. Clearly, to continue its growth, Harley-Davidson
must effectively address the needs and desires of the female and younger male motorcycle
enthusiasts. Doing so will require, at the very least, a dealer network and product designers
that are sensitive to the implications of an increasingly diversified customer base. This, in turn,
has implications for needed diversity in Harley’s workforcein short, an increasingly diverse
workforce should put Harley-Davidson in a better position to respond effectively to an
increasingly diverse customer base.

4. 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 continue to face ethical challenges associated with
competing in the international arena. In the 1980s, for example, 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.
The company will also be challenged to deal with the different ethical standards that exist
around the world regarding business practices. Harley-Davidson 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. Harley-
Davidson may also face ethical challenges as it seeks to maintain revenue growth while
addressing the wants and needs of a changing marketplace. Finally, the company’s goal of
“creating and fulfilling the demand for 400,000 motorcycles in 2007” can generate pressures
to cut corners and engage in questionable practices if the goal is unrealistic.
42 Chapter 2: Challenges for Managers

TAKE 2

BIZ FLIX

MR. BASEBALL (1992)

Jack Elliott (Tom Selleck) lacks cultural sensitivity and clearly did not have any cross-cultural pre-
departure training before arriving in Japan. His behavior in this scene is a model of how not to
behave in another culture. How many cultural errors does Jack make in this brief scene? The
following lists them in their order of appearance.

 Holding his chopsticks incorrectly. Eating with chopsticks often is difficult

for a Westerner. People in cultures that use chopsticks usually will understand
that you cannot use them well; simply ask for a fork.
 Loudly slurping his noodles. Japanese culture accepts as polite some noise
while eating. Bringing the noodles from the bowl with chopsticks and slowly
drawing them into one’s mouth while making a subtle slurping noise is
acceptable behavior. Jack’s loud slurping while sucking the noodles into his
mouth is unacceptable.
 Asking for the sake. Hiroko’s father (Ken Takakura) has priority in serving
because he is her father and senior to Jack. Hiroko (Aya Takanashi) faces a
dilemma at that moment about whom to serve first. Serving himself and
pushing away Hiroko’s sake pitcher was another of Jack’s errors. In traditional
homes, the women at the table typically serve the men.
 Sticking his chopsticks into his rice. One should never do this, as it is
considered bad luck.

Jack also shows physical discomfort from sitting on the floor. His long legs do not easily go under
him, a practice that likely he had not tried before this moment. If he intends to have a long,
successful visit in Japan, and play successfully for the Chunichi Dragons, Jack will need to learn
more about Japanese culture and begin adapting to it. The rest of the film tells his story.

WORKPLACE VIDEO

MERRILL LYNCH: TELECOMMUTING

1. Why does Janice Miholics of the AWA Department at Merrill Lynch say that that the
traditional work environment is about "face time" and that telecommuting is a "leap of faith"
for employers?

In traditional work arrangements, employers can see their employees in the office and monitor
their work. Employers generally believe that this "face time" is necessary to keep people
working and to prevent them from slacking off. In telecommuting arrangements, employers
have no similar personal contact. Therefore, they must fully trust their hired workers to
perform the tasks assigned to them. Janice Miholics of Merrill Lynch's AWA Department
believes this "leap of faith" is beneficial; the telework arrangement enables employees to work
in whatever ways they find comfortable as long as they produce the expected results.
 Chapter 2: Challenges for Managers
43

Kemiko Lawrence, technology coordinator in the AWA Department, agrees, saying, "People
do not need a babysitter…. If the company is hiring you, that is saying that they are entrusting
you to do a good job."

2. List at least five benefits telecommuting offers to employees.

Telecommuting enables workers to be more efficient by eliminating time that is wasted on

socializing and on commuting to and from work. Telecommuting's flexible schedule conforms
to an employee's own work habits, and workers say they experience fewer distractions
working at home. Employees in telework arrangements say they attain greater levels of
productivity and become more effective in balancing work with family responsibilities.
Finally, telecommuting gives employees greater overall satisfaction and happiness on the job.

3. List at least five benefits telecommuting offers to employers.

Telecommuting enables employers to improve the bottom line through the reduction of office-
space expenditures and related overhead costs. Companies that offer telecommuting
consistently report increases in worker satisfaction, productivity, and retention. Since many of
today's workers seek out employers that offer alternative work arrangements, telecommuting
can be a tool for recruiting talent. Finally, many companies assert that telecommuting is
necessary for managing remote offices and employees in today's global business environment.

COHESION CASE: SUGGESTED ANSWERS

GOOGLE™ (A)

1. What can a potential entrepreneur learn from Sergey Brin and Larry Page?

Sergey Brin and Larry Page had a highly innovative idea and they were very passionate about
it. Passionate commitment to a good idea is essential for entrepreneurial success. Brin and
Page also had the foresight to involve others where their own talents were more limitedthis
too contributes to entrepreneurial success. Finally, Page and Brin are committed to surprise
and innovationtheir prime competitive advantages. Ongoing innovation provides the
essential seeds of entrepreneurship. Being able to surprise the marketplace and competitors
helps entrepreneurial ventures to become established and experience rapid growth.

2. What lessons about leading and managing organizations does Google provide?

Perhaps the most important lesson of Google (A) is that an outstanding idea alone does not
necessarily make for business success. Clearly, Brin and Page had a superb technological
ideathey developed a search engine that reflected both the relevance of a Web site to a search
query and the number of other Web pages that are linked to that particular site. This enabled
Google to become the provider of what is widely recognized as the world’s best Internet search
engine. But the search engine alone did not make for a viable and sustainable business. Revenues
and profits had to be generated. This is where other important lessons enter the picture. First,
revenue-producing products are needed; free services, while relished by users, cannot generate a
viable business. Second, even if there is “slick technology,” a solid organizational infrastructure is
44 Chapter 2: Challenges for Managers

needed to ensure that the technology benefits the company and helps to sustain it over the long
term. Third, effective management and leadership are needed to operate a company; a company
cannot survive with just innovative technology. Fourth, innovative technology is not the sole
factor in organizational success; rather, it is essential for continuing success in any highly
competitive, technologically oriented industry. Fifth, rapid growth must be managed effectively
rather than letting it get out of control. Sixth, business success most often requires the
involvement of other peopleseldom can one person working alone achieve the kind of business
success that Google has experienced, particularly in the short time frame that it has.

3. Which of the organizational challenges––globalization; managing a diverse workforce;

technological innovation; and ethics, character, and personal integrity––are likely to have
the greatest impact on Google’s future operations? Explain your answer.

Clearly, globalization will have a very strong impact as Google continues to expand and enhance
its worldwide presence as a premier search engine and with it associated revenue-generating
services. Indeed, over 50 percent of Google’s user traffic is now outside the United States and
there are almost 82 million unique global users per month. Google provides an interface in 97
languages and gives results in 35 languages. Of course, Google’s global success and its ability to
meet competitive challenges depends upon the company’s capacity to continue developing new
products and improving existing products—both of which rely on continuing technological
innovation. Thus, global success and technological innovation are intertwined.

The challenges of globalization and technology are linked to diversity as well as ethics, character,
and personal integrity. 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. Internet products
and their supporting technologies may 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 ethical issues. The Internet provides
access to enormous quantities of varied information, some of which has very profound moral
implications.

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, rapidly expanding companies like Google—is that one
managerial challenge cannot be isolated from the other challenges. All four challenges––
globalization; managing a diverse workforce; technological innovation; and ethics, character, and
 Chapter 2: Challenges for Managers
45

personal integrity––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
the other challenges are handled. Managers and leaders must be vigilant about all the challenges;
they cannot relegate any challenge to a back seat.