Your abilities in international management have been recognize.docx

Your abilities in international management have been
recognized, and your consulting assistance has been requested.
The company Quasimoto Enterprises has been approached by a
reputed Chinese firm that wants exclusive production and
selling rights for one of its new high-tech products. The
company has been looking for a strategic partner for the
production of this product to reduce costs. Hence, Quasimoto
Enterprises is very interested in exploring the possibility of
developing relationships with this Chinese firm. This deal is
very critical to growth of Quasimoto in the international market.
Both parties are anxious and preparing for their first meeting in
a month’s time to move this deal forward. This is the first time
Quasimoto is doing business with China, and this is also the
case with the Chinese firm.
The bold question below is my part of the project That i need
you to complete. It has to be 5 double space written pages plus
reference page Disregard the other two question and, its not my
responsibility. I just added it to the email for you to have a full
understanding of the what assignment is.
What does Quasimoto Enterprises need to know about Chinese
bargaining behaviors to strike the best possible deal with this
company? What should the Chinese firm know about American
bargaining behaviors to strike the best possible deal with your
company?
In your small group, develop a strategic plan for the negotiation
and conflict resolution for Quasimoto's executive team for its
first meeting with the Chinese. Also, develop a negotiation and
conflict resolution plan for the Chinese firm for its first meeting
with the Americans. Please note that because this is an
important business deal for both companies, both of your plans
should include the bargaining behaviors of both countries. Are
there any similarities between their bargaining behaviors? Can

they have a win-win deal?
APA format is mandatory (in text and in the reference section).
There are two main types of databases accessible in the library,
through “FIND ARTICLES & BOOKS.” Keep in mind that the
most popular databases are: ABI Inform Global, Academic
Search Premier, and Business Source Premier. As a student, you
must steer away from inferior Web sites with anonymous
writers, articles found on consultant Web sites, materials on
sites like QuickMBA.com, MarketingProfs.com, etc.
Dictionaries and Encyclopedias most often repeat the
information from your text. Acceptable Internet resources
include among others government sites (especially for
statistics). You are not permitted to use any open-source Web
site in this course.
Present your findings as a 5 -7 pages Word document formatted
in APA style.
Submitting your assignment in APA format means, at a
minimum, you will need the following:
1. TITLE PAGE. Remember the Running head: AND TITLE IN
ALL CAPITALS
2. ABSTRACT. A summary of your paper…not an introduction.
Begin writing in third person voice.
3. BODY. The body of your paper begins on the page following
the title page and abstract page and must be double-spaced (be
careful not to triple- or quadruple-space between paragraphs).
The type face should be 12-pt. Times Roman or 12-pt. Courier
in regular black type. Do not use color, bold type, or italics
except as required for APA level headings and references. The
deliverable length of the body of your paper for this assignment
is 5 - 7 pages. In-body academic citations to support your
decisions and analysis are required. A variety of academic
sources is encouraged.
4. REFERENCE PAGE. References that align with your in-body
academic sources are listed on the final page of your paper. The
references must be in APA format using appropriate spacing,
hang indention, italics, and upper and lower case usage as

appropriate for the type of resource used. Remember, the
Reference Page is not a bibliography but a further listing of the
abbreviated in-body citations used in the paper. Every
referenced item must have a corresponding in-body citation.
Learning Material for course and chapter
Question 1: What does it take to be an expatriate manager in a
multinational corporation (MNC)?
Answer 1:
It is important for the expatriate manager to have a clear
perception that he or she is actually going to live and work in a
country that has a completely different culture and a completely
different language. This situation may also include new risks
and strains that a different way of living can naturally bring.
Many people do not like change because so much of it is
unknown, and the unknown feels dangerous. This uncertainty
avoidance coined by Hofstede is relevant to certain cultures but
is also a trait that is present at the individual level (Hofstede,
2001). A mindset that addresses the new experience positively
will make the assignment more enjoyable for the future
expatriate manager and any who accompany him or her.
It is critical to accept others' culture and to accept the mental
agreement that one's own culture is not necessarily the best. An
open mind believes that one culture deserves the same amount
of respect as the next culture. It takes mental training to
minimize feelings of ethnocentrism, that is, the feeling that
other cultures are inferior or should have the same priorities or

attributes of another. Ethnocentrism's fallacy should be
especially apparent in light of the rich history and civilization
of many countries that extend hundreds or thousands of years
beyond that of others. A U.S. citizen should also consider how
the American way of life is viewed in the host country and the
perceptions that host country nationals may have of the U.S.
from sources such as movies or current events.
The following are some practical considerations and ideas for
new expatriate managers with families or significant others:
Many couples are conducting successful careers and the
spouses may not be willing to be uprooted unless there is a
strong financial or intellectual incentive that compensates for
the hardship.
· Some MNCs located in the same host country have developed
exchange programs where they employ the spouses of their
respective executives.
· The exposure to other cultures and ways of thinking and the
intellectual development that comes with learning a second
language can be a great advantage for children.
· A common agreement in families to face the challenges of the
assignment together enhances the expatriate’s adjustment and
performance.
Question 2: How can an expatriate manager prepare for a
foreign assignment?
Answer 2:
It is critical to learn the language and culture of the future
country of assignment. Foreign assignments are usually made
public 6 months ahead of the actual move. This may not be
enough time to learn the new language fluently, but it is enough
time to learn the basics including greetings, shopping, money,
transportation, directions, and the proper pronunciation of the
names of places to which the manager will need to go.
It may also be helpful for the new manager that is relocating to
take some lessons in geography to learn more about the
location, neighboring countries, population, resources, and

gross national product (GNP) of the country of assignment. For
basic data, a good place to start is the CIA country report. For
more details, the local embassy will be happy to provide the
relevant literature usually free of charge and in English.
Learning how the country’s people see themselves as a nation
and in what they take pride, including cultural qualities,
production, resources, and historical significance can also be
beneficial. The expatriate manager should try not to judge the
behavior or customs that are different from any in which he or
she has been previously exposed. Being accepting of the people
and culture of the host country is equally important. The
manager is a guest in the country of assignment. Being
adventurous with eating the food, viewing movies reflective of
the culture, and asking questions to understand how people
think and why will assist in making this transition more
comfortable. The longer the preparation, the better the
adjustment will be. If the new expatriate manager brings family
or significant others with him or her, helping them adjust will
also help the manager make his or her own adjustments and
assignments easier.
Question 3: Should a mentor help prepare the new expatriate
manager for the assignment?
Answer 3:
The answer is definitely yes. The person the manager chooses to
help him or her prepare should preferably be his or her
predecessor in the job. The new manager is expected to have
read all the reports coming from the future country of
assignment, but this is never enough. Mentorship is the number
one tool in knowledge transfer and, in particular, in the transfer
of tacit knowledge. Tacit knowledge is not conveyed in writing,
and there is much one can pick up from a predecessor that can
never be read in a manual.
The expression tacit knowledge was invented by the Hungarian
philosopher Michael Polanyi. Tacit knowledge is the opposite of
explicit knowledge, the type of knowledge that appears in

documents and reports (Smith, 2003).Tacit knowledge is what
Polyani described as when, "We know more than we can tell and
we can know nothing without relying upon those things which
we may not be able to tell" (Lord & Ranft, 2000). It is the way a
person acts and communicates to the other party through, for
example, a specific look, a tone of voice, or a form of posture
that cannot be translated in written language. Transmission of
tacit knowledge is still very much practiced even in Western
cultures.
A Delphi survey of 400 executives performed by Biren asked
where corporate knowledge resides. The answer was that 42% of
executives believed that knowledge is in employees’ brains,
26% in paper documentation, 12% in common electronic
databases, and 20% in electronic documents (Biren, 2000).
According to this survey, the best source of knowledge on the
new expatriate manager’s future assignment is surely his or her
predecessor in the job.
Question 4: How can the expatriate manager prevent making
cultural mistakes when entering into business negotiations?
Answer 4:
The key is for the new manager to learn about the culture of the
people with whom he or she is going to do business. Hofstede's
study on cultural dimensions is a good start, especially taking
into account the measures in different societies.
Power distance index (PDI) is the relative distance between
those who hold the power to those who do not in a society. The
rank is 40 for the U.S., 58 for Iran, 68 for France, 77 for India,
80 for China, and 93 for Russia. The higher the number, the
higher position in the company or society the decision makers
are likely to hold (Hofstede, 2001).
Uncertainty avoidance index (UAI) is the level of tolerance of
the unknown or lack of structure a country can sustain. The
lower the index is, the higher the level of tolerance. The United
States has a rank of 46 for uncertainty avoidance while the
world average is 64. Therefore, the United States has a high
level of tolerance for new ideas, thoughts, and beliefs

(Hofstede, 2001).
Masculinity index (MAS) describes gender differentiations in
roles of the sexes in a society. In a highly masculine society,
men are normally the main income providers and women stay
home and raise the children. The American society has a MAS
rank of 62 compared to a world average of 50 meaning it is
more masculine than the world average (Hofstede, 2001).
Individualism (IND) versus collectivism is another measure
used to compare cultures. In an individualist society, the person
cares primarily about his or her self and those close to him or
her as opposed to collectivistic societies in which the large
family and even the tribe is a cause of concern. The American
society has an IND rank of 91 as compared to the world average
of 50. It is largely individualistic (Hofstede, 2001).
Long-term orientation (LTO) indicates the degree to which the
country values long-term commitments and respect of tradition.
Such a country will be slower to accept change. The U.S. has an
LTO rank of 29 as compared to the world average of 45
(Hofstede, 2001).
How do these indices assist in an international negotiation? If
individual countries were researched, for example, the United
States and India (both English speaking countries), one would
find some of the following data (Geert Hofstede Cultural
Dimensions, n.d.):
· Power distance is close to 80 in India as opposed to 40 in the
United States. Decisions are committed at the highest echelon in
India. It is near impossible to get a decision from a lower level
as employees will not have permission to commit their
company.
· Individualism is the highest in the world in the United States.
In India, individualism is ranked close to the world average.
The American executive would care more about the personal
benefits that a successful transaction for the company will bring
that individual; the Indian executive will care more about the
company.
· The MAS index is more or less the same for both nations.

· The UAI index is more or less the same for both nations.
· The LTO is 60 for India and 29 for the United States. India
has a great respect for tradition. America is a young nation and
does not have a history of tradition. It embraces innovation.
These indices could impact negotiation for an American
executive if he or she may want to inquire if his or her
counterpart has the authority to negotiate. He or she should also
display a measure of respect for Indian history and tradition not
to offend the partner in business and ruin the transaction.
Question 5: How does knowledge of the other party's culture
affect negotiation?
Answer 5:
Imagine that the new expatriate manager has business with a
seasoned Indian negotiator. The negotiator imagines the
manager as being an American— results-oriented and more
interested in concluding than in bargaining. The negotiator
expects the manager to be in a hurry to conclude as fast as
possible.
It could also be that the negotiator knows that the manager is
aware of his knowledge of U.S. culture. The negotiator could
counteract the manager’s inherent tendency of speeding things
up by deliberately trying to slow the negotiation. The negotiator
may want to overcome what the manager considers a weakness
by deliberately speeding up negotiations. The manager can
possibly experience a cultural role reversal.
Game theory and the study of strategy can also assist the
negotiator. Negotiation is in large part the strategy and tactics
of accomplishing the ultimate goal of reaching the deal at the
best possible price. The more the expatriate manager knows
about the person with whom he or she sits at the table, the
better.
Question 6: What should an expatriate manager keep in mind to
not offend the person with whom he or she is in negotiation?
Answer 6:
The world of business has adopted Western rules as far as how

business people dress, show up on time to meetings, and meet.
The cultural dimensions of Hofstede are important to keep in
mind to not offend anyone. In socializing, the host country will
let the country members display behaviors typical to the culture
and reflective of the country's power distance. The host country
executives will expect the Americans to be more familiar than
the French, the Indians, and the Chinese for example. The
higher the long-term orientation (LTO) index, the longer the
decision-making process. Any show of frustration or impatience
on the expatriate manager’s part will be to his or her own
disadvantage.
Special rules may also apply to eating and drinking with the
host county executives. If the manager’s counterpart is Indian,
he or she may not eat beef or may be a vegetarian altogether. If
the counterpart is Jewish and orthodox, he or she might expect a
kosher meal. If the counterpart is Muslim, he or she will not
drink alcohol in the presence of those who are not Muslim.
It is important for the expatriate manager to show appreciation
and respect for the aspects of the culture that the host country
shares with him or her whether it be the food or wine of that
country, the history, or the sites. Disinterest or lack of
appreciation will not assist in negotiation.
Remembering that the counterpart will most likely always
appear impeccably groomed and dressed and have the same
expectations of his or her partner is also important. Any
sloppiness or informality of dress or appearance could be
considered very offensive.
Question 7: Is counseling needed when situations include legal
issues?
Answer 7:
The answer is yes. Even if the expatriate manager has legal
training from his or her home country, things are never exactly
the same in the country of negotiation. The manager may have
submitted the contracts he or she needed to sign for the home
office counsel where his or her parent company is, but this is
not enough. The expatriate manager must have legal counsel in

the country of negotiation even if the country has an advanced
legal system such as his or her own home country. There might
be small but critical differences in law even in such areas as
who witnesses and authenticates a legal signature.
In some countries, the protection of the laws is merely nominal,
and local courts will always favor the expatriate manager’s
opponents; therefore, it is best for him or her to partner with
locals when on business in those countries.
References
Biren, D. (2000). Building a corporate focus on knowledge.
Fontainbleau, France: INSEAD.
Geert Hofstede cultural dimensions. (n.d.). Retrieved July 31,
2006, from ITIM International Web site: http://www.geert-
hofstede.com/hofstede_dimensions.php?culture1=95&culture2=
47
Hofstede, G. (2001). Culture Consequences (2nd ed). Thousand
Oaks, CA: Sage Publications.
Lord, M. D. & Ranft, A. L. (2000). Organizational learning
about new international markets: Exploring the internal transfer
of local market knowledge. Journal of International Business
Studies, 31(4), 573–589.
Smith, M. K. (n.d.). Michael Polanyi and tacit knowledge. The
encyclopedia of informal education. Retrieved July 31, 2006,
from http://www.infed.org/thinkers/polanyi.htm
Importance of Ethical and Social Responsibilities in
International Business
The English word ethics comes from the Greek word ethos,
meaning character. Ethics is not so much obedience to rules as
it is the concern for one’s personal or organizational character.
Definitions of ethical behavior vary from generation to
generation and from culture to culture, but in general, it
includes the qualities of honesty, integrity, fairness, and
loyalty. Some of the ethical influences come in the form of
laws, rules, and regulations enforced by the government. Ethics
are the norms that each country or culture defines and

institutionalizes to prevent individuals from pursuing self-
interest at the expense of others.
When it comes to international business, social responsibility
and ethical operations are not simple tasks. Operating in
countries whose laws, coupled with their cultural and social
values, are different from those of the home country can be very
challenging for the international manager. With the increasing
expansion of American business around the world, it is
necessary to establish responsible behavior that fits across
borders and cultures. More and more of the world’s
multinational corporations are establishing guidelines that
provide some basis for evaluating their foreign operations.
Another movement underway is to have organizations like the
United Nations encode a charter of responsibility based on
global ethics.
Potential Ethical Issues in International Business
Business customs and practices around the world are so
different that it is difficult to make a valid generalization about
them. The only safe generalizations are that any person working
in another country must be sensitive to the local business
environment and must be willing to adapt when necessary. One
must also realize that no matter how long one resides in another
country, the outsider is not a native; in many countries, that
person may always be treated as an outsider.
More and more of the world’s international corporations are
establishing guidelines that provide some basis for evaluating
their foreign operations. Over 1,000 companies have joined
Business for Social Responsibility (BSR), an alliance of
companies based in Washington D.C. that work to develop,
support, advocate, and disseminate socially responsible business
strategies and practices.
Global Sullivan Principles
The main Global Sullivan Principles "are to support social,
economic, and political justice" by the organizations in the
countries where they conduct their business. This includes
supporting human rights, encouraging equal opportunity for all

employees at all levels of the organization, and providing
dignity and equality for workers and others in the communities
where they operate their business. Another objective is to
provide equal opportunities to all employees to train and
advance at all levels of the organization and to be considered
for positions in management. The Global Sullivan Principles
also promote greater understanding and tolerance among people,
thereby improving the quality of life (The Global Sullivan
Principles, n.d.).
Importance of Complying with the Laws of each Country
Multinational corporations operate in an increasingly complex
global marketplace regulated by many laws impacting almost
every facet of the business. The laws can vary from country to
country. More and more courts and agencies are not just finding
corporations responsible for improper or illegal business
conduct; they are holding employees personally accountable for
actions they took which may have contributed to the violation.
A business can only be law abiding if all of its employees and
representatives act with integrity and respect for the law.
Reference
The global Sullivan principles. (N.D.). Retrieved August 27,
2009, from The Sullivan Foundation Web Site:
http://www.thesullivanfoundation.org/gsp/default.asp
Activity 1: Short Paragraph
Question 1: As an upper-level manager for a large produce
distributor, Gorilla's Choice Banana Co., you face many crucial
issues when working with partners overseas. You are in the
process of evaluating a new team in Guyana. What are some of
the criteria you would use in evaluating the effectiveness of this
group? Please respond with a paragraph answer.
The model answer to question 1 is that several criteria can be
used in evaluating how effective a team has been. For example,
you may want to discern whether or not the members are
working cooperatively and collaboratively. The purpose should
be well defined as well as a common procedure for
communicating. A common language should be agreed upon and

used in all processes, and members should be sensitive to the
impact of their culture on their behavior. When standards such
as these are observed and evaluated, the manager can develop a
clear concept of the team's level of efficacy
Activity 2: Fill in the Blank
The manager from the Guyana subsidiary has recently relocated
to your location. As part of this new arrangement, he has asked
you to explain how to expand his understanding of his new
functions and responsibilities. "Everything I know about the
United States is general," he complains, "so how can I approach
a negotiation with such a limited knowledge?"
Fill in the blank with one of these three words:
Solution
s, Prepare, and Knowledge.
You respond:
As a manager, I always ensure that I do three things:
Question 2. First, I gain specific blank of the parties in the
upcoming meeting.
The answer to question 2 is I gain specific knowledge of the
parties in the upcoming meeting.
Question 3. I blank accordingly to adjust to and control the
situation.
The answer to question 3 is I prepare accordingly to adjust to
and control the situation.
Question 4. I am innovative in my ideas and blank.

The correct answer for Question 4 is I am innovative in my
ideas and solutions.
Activity 3: Yes or no answer.
The manager from the Guyana subsidiary has recently relocated
to your location. As part of this new arrangement, he has asked
you to explain how to expand his understanding of his new
functions and responsibilities. "Everything I know about the
United States is general," he complains, "so how can I approach
a negotiation with such a limited knowledge? I know that
consulting my own code of ethics is one resource, but my
understanding is that there are many other sources to which I
should go first. What are they?"
Question 5: Which should be consulted first, the International
Codes of Conduct for MNEs or the laws in both the host and
home countries?
The correct answer to question 5 is first, the laws in both the
host and home countries should be consulted, then the
International Codes of Conduct for MNEs.
Question 6: Which should be consulted next in order, the
company's code of ethics documentation or a higher-level
manager or executive?
The correct answer to question 6 is next, consult the company's
code of ethics documentation and then consult a higher-level
manager or executive.

Reference
Deresky, H. (2006). International management: Managing across
borders and cultures. Upper Saddle River, NJ: Pearson.
End of Activity
Scenario: You have been hired as a junior analyst at Planet
Power Inc., a multinational corporation and energy industry
leader. Your new boss wants to gauge your positions on a
number of international business ethics practices and standards.
He has given you a pamphlet of case studies documenting
ethical issues that Planet Power Inc. has had to address in recent
years. Read each case study and answer the questions that are
provided.
Case Study 1: Planetary Photovoltaic
Based in Nogales, Mexico, Planetary Photovoltaic, one of our
most lucrative subsidiaries, makes the solar energy panels that
the firm sells to cities and municipalities looking to “go green”
by reducing their nonrenewable energy consumption. The
manufacturing plant where these products are produced and
assembled has been cited numerous times in the last year for
compliance failures. In particular, the company has been under
fire after a series of discriminatory hiring practice allegations
that claim management has conspired to limit the amount of

female employees working in its assembly plant. Management
has responded by providing statistics proving that they have met
federally-established antidiscrimination requirements, although
these minimums do fall below the standards set within Planet
Power Inc.'s own corporate policy. In response to questions
from headquarters, management in Nogales cited a local custom
that maintains a separation of work duties between men and
women as a reason for the disparity in their hiring numbers.
Additionally, recent reports citing faulty and dangerous
products manufactured in Nogales has the corporate office
worried. Four instances of customer injury linked to improper
wiring have already been documented, and corporate has
instructed the legal department that personal injury lawsuits
filed against Planetary Photovoltaic are likely.
Question 1: What ethical issues are evident in the situation in
Nogales?
Model Answer: The disparity between the hiring of men and
women at the Nogales plant should be of great ethical concern
to Planet Power Inc. Discriminatory practices are not only
illegal in many countries, they can do significant damage to a
corporation’s image and reputation among consumers and
business partners—the final consequence being reduced profits.
Furthermore, discrimination lawsuits, whether unfounded or

not, usually do harm to a company by bringing with them the
negative publicity that commonly accompanies such cases.
Arguably, there is no greater negative impact to a company than
faulty and dangerous products. What’s even worse, however, is
any type of public disclosure that a company knew about its
substandard or hazardous products and did nothing to correct
the problem. Very simply, this type of problem should never
even be allowed to become an issue involving ethics—defective
products must be removed from the market and repairs or
replacements be made available to customers through recalls. A
quick and definitive response to this type of issue prevents a
company’s ethical integrity from ever being called into
question.
Question 2: Given Planet Power Inc.’s reputation as an industry
leader and respected corporate citizen, what actions would you
take to remedy the problems there?
Model Answer: While enforcing corporate policy over those of
the host country’s legal requirements could result in reduced
profits, ensuring against claims of discriminatory practices is of
great ethical importance to any company. Steps should be taken
to ensure corporate policy is implemented in the hiring practices
at the Nogales plant. Furthermore, product recalls should be
issued on all products suspected of defective wiring and be

replaced.
Question 3: Holding the opinion that a host country would do
better by adopting the ethical standards and practices of one’s
home country is referred to as which of the following?
a) Ethical Imperialism
b) Ethical Relativism
The correct answer to Question 3 is: b) Ethical Imperialism
Case Study 2: Bengali E & P
Planet Power Inc. owns a subsidiary exploration and production
operation that is drilling for natural gas reserves outside of
Barisal, Bangladesh. Profits stemming from this subsidiary,
Bengali E & P, have been extraordinary; however, local
opposition to the drilling has recently caught the attention of
international environmental watchdog groups. Claims have been
made that the work of Bengali E & P has caused significant and
ongoing damage to the local environment. Poorer air quality,
soil erosion, and increased carcinogens in the water table are
just a few of the allegations these groups contend are the direct
result of the company’s drilling operations.

Concurrent with these environmental accusations are demands
for increased wages for the local workforce. Living standards,
particularly in this area of Bangladesh, are very poor. The
general belief among workers is that while Bengali E & P does
provide them the means to eke out a living, the minimal pay
they receive for the often dangerous work is clear evidence of
their exploitation. Given the record profits, this issue could
become a significant public relations problem for Planet Power
Inc. and jeopardize not only its relations with the Bangladeshi
government but its other operations at work in the South Asia
region.
Question 4: What are the possible ramifications for Bengali E
& P and Planet Power Inc. if the issues brought forth by the
international environmental watchdog groups are not addressed?
What effects on business, if any, might result if these concerns
are professionally handled?
Model Answer: Should Planet Power Inc. and Bengali E & P
choose to not address the environmental issues at hand in
Barisal, a number of unfavorable things could occur. The
environmental watchdog groups could put pressure on the
Bangladeshi government to void or rescind the contracts
allowing Planet Power Inc. to continue its drilling operations

through Bengali E & P. Strict national legislation could be
passed, making it difficult for firms like Bengali E & P to
realize such windfall profits through the revocation of tax
breaks or simply increased taxation. Furthermore, international
attention to the issue could certainly tarnish the corporation’s
reputation, which would also have a negative impact on
profitability should consumers and business partners choose to
terminate relationships because of the issue.
On the other hand, properly and transparently addressing the
issue would do much to bolster the corporation’s image as an
honest, ethical, and environmentally conscious enterprise.
What’s more, good conduct in the face of a potentially
disastrous business situation would reveal to other nations the
degree to which Planet Power Inc. values its international
relationships and its ability to work with governments and
agencies to solve problems for mutual benefit. However,
undertaking any action to remedy the problems at hand would
likely cost the corporation millions of dollars as well as prevent
such high profits from being attained in the future.
Question 5: How would you deal with the problematic
situations occurring in Bangladesh?
Model Answer: Studies should be conducted to confirm or
disprove the claims of environmental damage being done

through the gas drilling. If confirmed, steps should be taken
immediately to remedy the situation—even if this results in a
negative impact to the bottom line.
While the low wages paid to workers might be a substantial
driver of the company’s profitability, a corporation must also
look at employee job satisfaction and standard of living to
accurately gauge its prospects for future success. An unhappy or
underpaid workforce could cost the company much more than
the advantage it receives from paying low wages: low employee
productivity, theft, tardiness, and absenteeism all have negative
impacts on a business. The question of whether or not to
increase the salaries of those working for Bengali E & P is a
very serious one and should be thoroughly examined before a
decision is made.
Question 6: Which of the following ethical policy perspectives
assumes a high level of community/corporation interaction and
cooperation, whereby the corporation proactively seeks to
positively serve its surrounding community?
a) Corporate Social Responsibility
b) Corporate Compliance
c) Corporate Responsibility

The correct answer to Question 6 is: a) Corporate Social
Responsibility
Case Study 3: Peninsula Oil
One of Planet Power Inc.'s largest international partners is
Peninsula Oil, a large, family-operated petroleum refining
company in Saudi Arabia. Operating control of Peninsula Oil
has recently been passed from father to son, and reports from
expatriated employees assigned to negotiate new contracts with
Peninsula have not been positive. In particular, a senior member
of Planet Power Inc.’s legal team reported being approached by
a representative who offered him a large sum of money and
assurances that Planet Power Inc. would receive favorable new
contracts should it broker a side deal that would ensure that the
cousins of Peninsula’s ownership be placed in lucrative
management positions within Planet Power Inc.’s U.S.-based
operations. The account of this action was denied as a simple
misunderstanding when brought before Peninsula Oil’s
governing officers, and since then, relations have been strained
and contract negotiations have met with considerably more
objections and delays than in any other past dealings.

Question 7: Should Planet Power Inc. consider the recent
circumstances in Saudi Arabia as posing an ethical dilemma?
Why or why not?
Model Answer: Yes, the situation in Saudi Arabia should be of
concern to Planet Power Inc. As Peninsula Oil has been one of
the corporation’s largest and most lucrative business partners,
this relationship should be of utmost concern to Planetary
management. The alleged bribes offered to Planet Power Inc.’s
legal consul constitute a serious infraction; however, because
bribery and institutional nepotism are common business
practices in this part of the world, the firm must handle this
situation with extreme care. Any suggestion of offense could
destroy a relationship that has taken decades to cultivate. Still,
in light of the accusations, Planet Power Inc. will also have to
determine how it will make clear its own ethical position to
Peninsula without jeopardizing this relationship further. Very
simply, bribery and nepotism are not tolerated within Planet
Power Inc. and the firm expects the same high standards of
those with whom it does business. As this situation clearly
exemplifies, there often runs a fine line dividing doing what is
ethically right and doing what is financially prudent.

Question 8: Given Planet Power Inc.’s reputable, worldwide
image and its longstanding relationship with Peninsula Oil, how
would you handle this situation in Saudi Arabia?
Model Answer: While there is no definitively correct or
incorrect answer, your decision must include consideration of
what this relationship truly means to your firm. Ask yourself the
following questions:
* What harm might come should the company accept the deal
and install the business partner’s cousins as employees?
* What would abandoning this relationship mean to my
company?
* Do any substitute business options exist for the company
should this relationship be terminated?
You must also consider the cost to your firm’s reputation and
standing with other partners and consumers should any type of
disclosure reveal your firm’s engagement or acceptance of
unethical or illegal business practices.
Challenges in the Subsidiary
A home-country manager is sent by the home office to a
subsidiary to manage the subsidiary. Home-country managers of
foreign subsidiaries face several challenges. The foreign
subsidiary business is usually conducted in a language different

from that of the home office, and it is governed by laws of the
host country. It operates in a cultural environment that is not
the host-country cultural environment, and it is not the
corporate cultural environment, but rather, a blend of both.
Language and Cultural Challenges
The first challenge a new manager faces is the language barrier.
Not speaking the language of the host country might impair the
manager’s capacity to do his or her job effectively. Using a
translator always reduces the efficiency of communication
because of the “lost in translation" phenomenon. Conversely,
speaking the language of the host country opens barriers and is
a demonstration of respect for the host-country culture.
Another important challenge is the cultural one. Home-country
managers should be trained in cross-cultural management for
the culture of the country of assignment (Black & Gregersen,
1998). Open-mindedness and knowledge of other cultures,
particularly of the host-country culture, is a must.
Dual Allegiance
When trying to implement the rules established by the home
office in his or her subsidiary, the manager may face a strong
resistance sometimes voiced as, “This is not how things are
done here.” It will be the manager’s obligation to find out if
indeed he or she is going against a local custom or if the staff is
just testing him or her. In due time, both parties will get
accustomed to each other, a common ground operational

solution will be found, and a subsidiary subculture will be
developed with a blend of local and “imported” corporate
culture. Eventually, it will be the home-country branch manager
who will become the advocate of the branch before head office
while still keeping his or her mind on the goals of the home
office. Home-country managers must always face the challenge
of dual allegiance to both the home office and to the subsidiary.
Law and Ethics
There will be cases in which the home office will request the
application of legal solutions with which it is familiar. When
these solutions are not applicable in the country of the
subsidiary, there will be need for local legal counsel. For
example, in France, management cannot fire an employee
without going before a special tribunal.
In the United States, it is absolutely prohibited to give gifts to
officials. In other countries, this is not considered bribery but
an efficient way to speed up business. The American executive
must struggle between compliance with the home-office laws
and rules and the local mentality always keeping within the
laws and guidelines of the Foreign Corrupt Practices Act.
International Teams
International corporations will have international composed
executives from several nationalities. This where corporate
culture can become predominant among absence leading culture.
As far virtual teams concerned (that is, group people in

different countries communicating via Internet and working
together on a project), research indicates fact members are
familiar with each other not something that will impair work of
team long as the assignment is short-term (Fiol & O’Connor,
2005).
International executives will be required to display the same
critical thinking skills they are expected to use when operating
in their home-office environment in addition to the extra
dimension of good operability in the foreign culture in which
they are performing.
Negotiation and Conflict Resolution
Negotiation and conflict resolution in an international
environment will require the executive to examine the power
distance of the country with which he or she is doing business
as opposed to his or her own country. The greater the difference
in the power of distance indices between the two countries, the
closer to the top of the hierarchy the decision makers will be
(Hofstede, 2001).
References
Black, J. S., & Gregersen, H. B. (1998). So you're going
overseas. San Diego, CA: Global Business Publishers.
Fiol, C. M., & O'Connor, E. J. (2005). Identification in face-to-
face, hybrid and pure virtual teams: Untangling the
contradictions. Organization Science, 16(1), 19–32.
Hofstede, G. (1997). Cultures and organizations: Software of

the mind. New York: McGraw-Hill.
Conflict and Culture
Human behavior is greatly influenced by underlying beliefs,
values, and assumptions. These beliefs, values, and assumptions
are, to a great extent, a by-product of culture. Ting-Toomey and
Chung (2005) define culture "...as a learned meaning system
that consists of patterns of traditions, beliefs, values, norms,
meanings, and symbols that are passed on from one generation
to the next and are shared to varying degrees by interacting
members of a community" (p. 28). Most of the time, people are
not conscious of how culture influences their values, beliefs,
assumptions, and behaviors because culture is so all-
encompassing.
Acculturation, Assimilation, and Ethnocentrism
An important distinction that impacts conflict must be made
between acculturation and assimilation. Acculturation occurs
when the attitudes and behaviors of people from one culture are
modified as a result of contact with a different culture, and it is
often used to imply a mutual sharing wherein elements of both
cultures mingle and merge. This tends to be a more equitable
exchange in contrast to assimilation whereby one culture, often
a minority group, is absorbed into the dominant cultural body.

Both acculturation and assimilation can produce ethnocentrism,
which is the view that one’s own group is the center of
everything by which all others are comparatively rated, often in
an inferior way. This can create a sense of superiority, as well
as a sense that one’s own assumptions are universal. As might
be imagined, these assumptions can greatly affect how conflict
plays out if parties in conflict come from different cultures. If
assimilation is encouraged in a workplace setting, the dominant
culture may be more likely to feel superior and increase the
likelihood of conflict; however, even when cultural diversity is
encouraged, ethnocentrism will occur. The parties may not
understand that they are acting from different assumptions and,
therefore, jump to conclusions about why the other party is
behaving in a way they believe is inferior.
Communication Style Differences
Through empirical research, different cultures have been found
to have different communication styles, which have been
labeled high-context and low-context (Hall, 1976). It is
important, however, to remember that these style differences are
generalizations and there will always be individuals within a
culture that do not fit these generalizations.
· High-context cultures favor an indirect verbal style; prefer
ambiguous, cautious, and nonconfrontational ways of working
through communication issues; rely on nonverbal behaviors and

subtleties; and are very listener-oriented. High-context cultures
tend to place a higher value on harmony, tactfulness, and saving
face. Someone from a high-context culture will likely ease into
a conversation and will wait to be invited to speak or request
permission. Individuals will first connect on a relational level
and only after that has occurred, introduce substantive issues.
High-context cultures include much of the Middle East, Asia,
Africa, and South America.
· Low-context cultures prefer communication that is direct and
frank. An open confrontation of issues is ideal and a speaker-
orientation is valued. Directness and self-assertion are preferred
in low-context cultures; therefore, an individual will likely
verbally assert him- or herself into a conversation and will
promptly acknowledge content issues. This group includes the
United States, Canada, and much of Western Europe.
In the United States and other countries with histories of mass
immigrations, cultural values and beliefs that have been passed
down may remain intact for many generations. This may take a
conflict manager by surprise when two “native born” workers
begin to demonstrate vastly different cultural communication
styles. High-context versus low-context cultures can also differ
among genders as in the United States where women are
socialized to communicate more in a high-context style and men
in a low-context style.
One communication style is not better or worse than another,

but they are different; however, parties in conflict, due to
ethnocentrism, may judge the other party’s style to be inferior
and even offensive. Parties with these different communication
styles may also have problems communicating with each other,
therefore, making interventions such as mediation more
challenging.
The Role of the Conflict Manager
LeBaron (2003a; 2003b) believes cultural fluency must be a
core competency for conflict managers. A culturally fluent
conflict manager will be able to recognize communication style
differences and help coach parties to a more similar
communication style or utilize skills in reframing, reflecting,
paraphrasing, and summarizing to translate what is being
communicated for each party. When a conflict manager sees
ethnocentrism, he or she can ask one party questions about how
the other party may see the situation and/or gently make
different attributions for behavior. This gentle prodding may
help one or both parties see that the different assumptions and
beliefs of the parties are playing a role in the behaviors that are
manifesting and creating conflict.
References
Hall, E. T. (1976). Beyond culture. Garden City, NY:
Doubleday.

LeBaron, B. (2003a). Communication tools for understanding
cultural differences. Retrieved March 27, 2008, from Beyond
Intractability Web site:
http://www.beyondintractability.org/essay/communication_tools
/
LeBaron, B. (2003b). Culture and conflict. Retrieved March 27,
2008, from Beyond Intractability Web site:
http://www.beyondintractability.org/essay/culture_conflict/
Ting-Toomey, S., & Chung, L. (2005). Understanding
intercultural communication. Los Angeles: Roxbury.

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