Module 2

GLOBALIZATION, DIVERSITY AND ETHICS

Module Introduction
It is an inescapable fact that the emergence of concerns and issues relating to the
increasing globalization, existence of diversity in the workplace and ethics in a global context
are already part of every business organization today. Organizational behavior plays a
significant role in addressing how the individuals and groups can cope up to this trend. OB also
aims to look at these concerns as an advantage rather than a challenge.
Globalization demands the human resources to be more competitive beyond their
national borders. As globalization opens the boundaries between countries, this leads to the rise
of a more diversified workforce, embracing cultures and individual differences within the
international firms. Consequently, diversity and globalization had led to the concept of ethics
and ethical behavior in organizations. This concern has been less discussed and with only a
little attention in organizational behavior. But now, the emerging perspectives on ethics have
brought up moral issues and choices as well as the deals with right and wrong behaviors. As
you go along the chapter, you will get to understand how these three concepts go together in
the context of human behavior in organizations. Moreover, these can now be viewed as issues
to make the management rethink about their approaches to their organization’s operations and
workforces.

Topic Outcomes
After reading and understanding this module, students will be able to:
1. Explain the strategic importance of organizational behavior in a global context
2. Explain diversity and diversity management
3. Discuss emerging perspectives on ethics

ORGANIZATIONAL BEHAVIOR IN A GLOBAL CONTEXT

Today, globalization is one of the major environmental aspects that creates a huge
impact on organizations. This paradigm shift has also challenged the organizations to respond
both in internal and external environments. In the context of OB, we understand that individuals
think, behave and act differently around the world. We may have similarities but have
differences as well. This is actually related to the next topic in this chapter, i.e. diversity.
Let us first discuss ​globalization​. This refers to the internationalization of business
organizations leading to a global economy. It is a trend whereby the national boundaries
become less relevant.

Globalization and Foreign Job Assignments

The increasing globalization has paved way to the foreign job assignments of its human
resources. Multinational firms assign employees to operate the businesses across countries.
Individuals who are tasked to work outside their home countries are known as ​expatriates or
“expats”. For expatriates, this is an exciting experience as an opportunity for learning and
growth but at the same time, is a challenge to take. Common problems encountered by the
expats include ​culture shock or the stress brought about by the individual’s difficulties and
challenges in coping with the requirements of life outside their home country. This is particularly
related to how one should behave and act in a new country.
 Culture, ​as defined, is a way of life, varies from one country to another. Some
acceptable behaviors in a given country may not be appropriate or morally right to the culture of
other nations. Aside from the challenging experience through a foreign job assignment, this can
also be considered as a rewarding one. Working with individuals coming from different countries
around the world is an opportunity for learning. Differences may be apparent, but so as new
ideas and creativity.
Cultural effects on international working relationships can be viewed through
high-context and low-context cultures. Countries with ​high-context cultures ​tend to
communicate and understand individuals through contextual elements. They consider looking at
the underlying meaning, gesture and tone in a message. They focus on valuing personal
relationships and trust. Most Asian countries like Korea, China, Japan and Philippines. On the
other hand, countries like Germany, the United States of America and Canada exhibit
low-context cultures. ​This means that they communicate through an established system. They
prefer no room for confusion. The purpose of low-context cultures is to make a message clear to
everyone so that it will not slow down the process. They value messages in black and white
rather than contextual clues.
In addition, there are some more related aspects of culture such as monochronic and
polychronic time orientation. ​Monochronic time orientation is manifested by individuals who
prefer working on tasks one at a time. They do not engage in multitasking and do not divert
attention from a planned task to minimize interruptions. Contrary to that, individuals with
polychronic time orientation work well even with multiple tasks at a given time. They have
more flexible plans and are not distressed by interruptions.
In most cases, individuals who differ as to high-context and low-context cultures have
difficulties dealing with one another; the same is true to those who work with monochronic and
polychronic time orientation. However, these issues may be resolved through proper training as
regards cultural differences. The outcome of the said training is known as cultural intelligence. It
is an individual’s ability to understand and adjust with the behaviors of people outside his/her
culture. For example, individuals may opt to learn foreign languages or may prefer working in
teams.

International Participation : Multidomestic, Global and Transnational Firms

Organizations that engage in foreign markets have more opportunities for growth yet
require understanding of which international approaches and related organizational
characteristics to consider.

Multidomestic Firms
These are organizations that utilize multidomestic strategy. Firms operate in such a way
that they respond to the needs in particular of each country. Products are tweaked to suit the
preference of a specific market. Nestle is a classic example of a multidomestic firm. It uses
specific and unique sets of strategies like marketing and sales approach. It caters to the local
taste of a given country and offers different products for different markets. In general,
multidomestic firms have low integration but of high responsiveness. Company employees then
have less chances of being deployed outside their countries.
Global Firms
These firms are characterized by high integration and low responsiveness. The strategy
of the organization is to offer standards and common products across different countries and
regions in the world. They seek to maintain centralization in the mother country while
maximizing efficiency through reduced costs. Global firms oppose multidomestic firms.
Commonly, pharmaceutical and luxury goods companies belong to this type of firm. These
firms often send expatriates across the organization.

Exhibit 2.2
Bartlett and Ghoshal’s Typology of Multinational Companies:
Global, Transnational, International and Multidomestic Strategy

Transnational Firms
Transnational firms use transnational strategy in becoming highly responsive to specific
needs of a country and at the same time, high in global integration. These firms somehow
exhibit the characteristics of both multidomestic and global firms. They try to tailor fit the
products to some degree to cater the needs of various countries but also seek to standardize to
some extent for cost efficiency. International travels and meetings and foreign job assignments
are also evident in this type of firm.

International Firms
These firms are not actually considered strategic as they have low levels of local
responsiveness and global integration. This is much known as an exporting strategy.
Dimensions of National Culture
One of the significant contributions to organizational behavior made by Geert Hofstede,
a social scientist, is the four dimensions of culture, i.e. Power Distance, Uncertainty Avoidance,
Individualism and Masculinity. This resulted from his research among 40 countries. Several
scientists and researchers followed after him and identified some more dimensions of national
culture.
Researchers under The Global Leadership and Organizational Behavior Effectiveness
(GLOBE) Project generated nine units of measurement or Cultural Dimensions. This research
was made across 162 countries.
1. Power Distance​. It refers to the degree to which the power and status privileges are
accepted by people to be unequally distributed in the society. Countries that score high
on this dimension are those who expect a more centralized or autocratic leadership.
Russia is one example for high power distance. Members of this country respect their
titles and status.
2. Uncertainty Avoidance​. It refers to the degree to which people do not feel like taking
risks in unpredictable outcomes. In high uncertainty avoidance countries, people focus
on following specific rules and put everything in order. Germany and Japan are countries
that score high on this.
3. Assertiveness. Hofstede identified this as “masculinity” in his four dimensions of culture.
This refers to the degree to which people are aggressive and confrontational. It reflects
the strong personality of individuals in high assertiveness countries. Often, those who
have low-context cultures score high on assertiveness. Germany and the United States
are high assertiveness countries as opposed to the Philippines where people are asked
and consulted before making decisions.
4. In-group collectivism​. It refers to the degree to which people take pride belonging to
their organizations and families. China scores high on this as they exhibit a strong
distinction between the members and non-members of their group or family.
5. Institutional Collectivism​. It refers to the degree to which integration of groups and
organization is being encouraged. This means that countries who have high institutional
collectivism oppose individualism. Individualism is one dimension identified by Hofstede
as the degree to which individuals feel good when they are self-reliant and focused in
their personal goals. Germany and Italy have low institutional collectivism but score high
on individualism. People in these countries are rewarded for their personal efforts and
outcomes. Japan and Singapore on the other hand have high institutional collectivism.
6. Performance Orientation. It refers to the degree to which excellence is recognized and
being rewarded. Innovation and competitiveness are encouraged in countries with high
performance orientation. They appreciate excellent performance thus, they value the
training and reward system. Singapore and the United States score high on this, while
Russia has low performance orientation.
7. Humane Orientation​. It refers to the degree to which people value fairness, kindness
and altruism in the country. The Philippines is one nation with high humane orientation.
Singapore and Germany on the other hand have low humane orientation.
8. Gender Egalitarianism​. It refers to the degree to which equality for men and women is
actualized. When gender egalitarianism is evident in a country, women are given
opportunity to achieve power and positions. Japan scores low on this. Women in this
country are less recognized and have lower status as regards work.
 9. Future Orientation​. It is the degree to which individuals value investing in plans for the
future. People value long-term gains in countries with high future orientation. Russia
scores low on this while Canada, Switzerland and the Netherlands are high on this.

In general, global business must understand that the functions and practices in
managing human resources are common, but the approach on how these will be performed
shall vary from one country to another. Effective management ensures that they are attuned
with their cultural surroundings.

MANAGING DIVERSITY IN THE WORKPLACE

Diversity: What is it?

The differences between and among individuals and groups are often viewed as sources
of conflict in the workplace. However, given the fact that everyone is unique and people are
heterogeneous, effective managers now consider diversity as an advantage. Esty, et.al defined
diversity ​as acknowledging, understanding, accepting, and valuing differences among people
with respect to age, class, race, ethnicity, gender, disabilities, etc.
A huge factor that brought about diversity is the changing demographics. These changes
are best exemplified with the changing role of women in the society and new family roles, equal
employment opportunity and organizational restructuring. Moreover, technological advancement
and globalization also led to new workplace practices.
Organizations who are able to manage diversity make it beneficial to both employer and
employees. Embracing diversity minimizes discrimination and consequent legal liabilities.
Diversity promotes a continuous learning environment, creativity and innovation in the
workplace.

Barriers to Achieving Diversity

Although managing diversity has been advantageous to groups and individuals,
organizations still encounter problems related to roadblocks and obstacles in creating an
inclusive workplace. The barriers and challenges to achieving diversity include:
1. Prejudice and Discrimination​. Prejudice is an unjustified and negative attitude of
individuals towards others who belong to social or cultural groups outside their own.
Example of this is racism and sexism. Prejudice influences the way a person thinks
about a certain group. Prejudiced views, if not at all times, often lead to discrimination.
Discrimination is the negative behavior resulting to unfair treatment towards people
based on individual’s social or cultural membership. Some prejudiced persons do not act
their attitudes. But for those who do, discrimination is manifested on three common
examples - racial discrimination, age discrimination and gender discrimination. For
instance, a married woman was not promoted in her job because the management
thinks that the roles of women at home are more prioritized than job. Another example is
an old-aged man who was not hired for the job without looking at his credentials and
simply decided on the grounds of age. Prejudice and discrimination are roadblocks to
diversity. Aside from it results in injustice and lawsuits, these barriers prevent an
organization from fostering creativity and innovation from diversity.
 2. Stereotyping. It refers to the generalized beliefs towards individuals belonging to a
certain group. This means that a person is judged based on what is perceived about a
given group. For example, black people are viewed and generalized as poor and
underqualified. People with Disabilities are considered weak. Whenever people think
that members of a group have the same characteristics, this is already a pre-judgement,
without seeing whether a certain member is really of the same characteristics with their
group. Thus, stereotyping becomes a barrier to diversity and stereotypes end up with
false judgements.
3. Differences in Social Identity. ​Social identity theory was proposed by psychologist,
Henri Tajfel. He defined social identity as a person’s sense of who they are based on
their group membership. In social identity theory, individuals take pride as they belong to
a certain group. The world was divided “them” and “us” based through a process of
social categorization (i.e. we put people into social groups). Religion, nationality, sexual
orientation and ethnic groups are examples of social groups. Affiliation to any of this
boosts self-esteem of an individual which sustains the social identity. However, the
differences in social identity became a barrier to diversity. When an individual’s social
identity is too prominent, the person becomes more aware of being different from the
rest of the group where he or she does not belong. Thus, the situation may result in
stress and dissatisfaction. Similarly, those from minority groups feel stressed and fear
about losing their social identity when the majority seem to indirectly “check their identity
at the gate”. Hence, people who belong to a common group think that they are better
than those who do not. This now can also result to stereotypes and discrimination.
4. Power Differentials. Power often comes from status and expertise of an individual.
When one seems to be of higher level than the other, say in terms of knowledge and
skills, he or she may gain individual power. This actually makes no problem when ethical
behavior is considered by those people in power. Although, power differentials often
exist and eventually creates a barrier to diversity. There is a tendency to have factions
and those who belong in low-status groups get frustrated as they often feel harrassed
and are not free to speak up. While, those in higher status tend to ignore and belittle the
others. Power inequality does not embrace diversity.
5. Poor Organizational Design and Structural Integration​. Good organizational design
creates a fair distribution of authority, workload and functions of individuals and groups
within the organization. This also ensures an effective organizational structure. Structural
integration likewise shows how men and women are represented in the positions in the
organization. A poorly integrated integration reflects what is being coined in
organizational behavior as glass ceiling. This term refers to the barriers that hinder
minorities and women from reaching their career aspirations. In addition, glass border
refers to the barrier that discriminates against women by not providing opportunities to
be given foreign job assignments. Lastly, glass floor or also known as sticky floor refers
to a barrier that hinders an even lateral movement into other positions at the basic level.
6. Communication Barriers and Resistance to Change​. Miscommunication and
resistance to change have also hindered the achievement of diversity.

The management must ensure implementation of effective diversity management

programs not only to minimize legal consequences, but to recognize each of the individuals as
they are. Effective managers should take into account two important programs, i.e. affirmative
action programs and diversity management programs. However, the latter provides a more
inclusive working environment. Shown in Exhibit 2.3 is the comparison of the two programs.
 Exhibit 2.3
Affirmative Action versus Diversity Management
(Hitt, Miller and Collela, 2012)

Basically, affirmative action programs were created by the government to eliminate

discrimation, thus promoting equal employment opportunities. However, this often does not
address the real problem but simply focuses more into the legal aspects. Diversity management
on the other hand responds to the needs of individuals and groups in terms of fostering a
greater inclusion in the workplace regardless of different backgrounds. It is likewise more
strategic as it also considers diversity as a source of competitive advantage. Some
organizations comply with AAPs just to minimize lawsuits; while organizations promoting
diversity management are voluntary in nature. Diversity management is proactive. It allows
individuals to learn from the views and perspective of other groups. This is more than AAPs and
EEOs.

Diversity looks at the differences of individuals, not the group’s. Hence, each one is
definitely unique and judging them based on their group preference and membership will be
helpful as they do not actually represent a group in particular. Hasty generalization leads to
discriminations and conflicts. There is no best practice to manage diversity. Each organization
must assess and understand what works best for them based on the dynamics of the
workplace. Personal awareness and empathy are keys to managing diversity effectively through
individual approach. For organizational approach, training programs are effective techniques.

ETHICAL PERSPECTIVE ON ORGANIZATIONAL BEHAVIOR

Ethics is a moral principle about what is right or wrong. Ethical values of individuals
guide them in creating decisions and making necessary actions. This has become an issue in
organizational behavior as these ethical values and behavior differ from the influences that
individuals consider.
 1. Cultural Influences. Examples of this includes family, religion, and friends. How people
are raised leads to personal ethics. Since personal ethics is apparently diverse,
professional ethics and organizational ethics shall help the organization in establishing
the guidelines to follow in the workplace.
2. Organizational Influences. These are the company policies and practices, codes of
ethics, reward and punishment systems. These are implemented in the entire
organization and attempts to create a company image behaving ethically.
3. External Environment. These forces include political, legal, economic and international
developments as well.

Ethics in the context of Globalization

Ethics can make a reputation of an organization. Ethical behaviors reflect an
organization's honest and just professional endeavors and activities. Employees even become
more productive when they think they belong and work for organizations that practice fair
business activities.
Ethical issues concern every individual in various countries all over the world. In
organizational behavior, ethics play an important role in several HR practices including
employee recruitment and selection, performance management, retention decisions and labor
relations. Since cultural influences differ from one country to another, corporate cultures are
significantly taking a big part in guiding the ethical principles of the organizations. The human
behavior in organizations and the ethical corporate cultures should go hand in hand to win in the
global market. The way the individuals behave in the organizations make up the representation
of the companies as a whole. Thus, the management must ensure that the organization
maximizes the economic outcomes without violating legal obligations and moral standards,
more importantly if one company operates outside its national border. Global responsibility is an
emerging concern today. Stakeholder-centered organizations look at the impacts of company
decisions on the multiple groups of stakeholders, inside and outside the organizations. This is
likewise very vital since there is no single universal recipe nor view of what is generally
accepted as right or wrong in the world. To address the different ethical perspectives, ethical
awareness must be embraced in each and every organization.

Yahoo business ethics sorely lacking

By Ephraim. Schwartz
InfoWorld |

Source: Retrieved from ​https://www.infoworld.com/article/2645247/yahoo-business-ethics-sorely-lacking.html​,

August 02, 2020

The latest news that Yahoo Yahoo claims, according to ​Dan "Does the fact that [Yahoo]
turned over private emails to the Nystedt , at the IDG News operates under Chinese law free
Chinese government which led Service​, "Just like any other it from all ethical
to the conviction and ten-year global company, Yahoo must considerations?" asked a press
sentence of Shi Tao, an editorial ensure that its local country sites advocacy group called Reporters
department head at the must operate within the laws, without Borders.
Contemporary Business News in regulations and customs of the
China's Hunan province turns country in which they are
my stomach. based," said Mary Osako, a
Yahoo Spokeswoman.
Tao's crime was sending an We all talk about different This is a major issue for every
email to a New York-based Web corporate cultures and how it corporation, especially as
site regarding the Chinese pervades everything a company companies more often than not
government warning to its does. Well, if a company's are partnering with totalitarian
governmental representatives to behavior reflects the attitude that governments.
watch for dissident activity making money is more important It should not be left to some
during the 15th anniversary of than ethical behavior doesn't that lower level PR person to make
the Tiananmen Square attitude become part and parcel glib pronouncements that, "just
massacre. of their corporate culture? like any other global company,
If Yahoo, and there are plenty of Doesn't that tell us about what Yahoo must ensure that its local
other companies as well, are not they believe in and how they do country sites must operate within
expected to have a conscience business? the laws, regulations and
when it comes to doing business When a company behaves like customs of the country in which
with whomever, then should we that and then turns around and they are based."
believe that they have a tells us the customer comes first Shi Tao and the rest of us
conscience when it comes to is there any reason why we deserve better.
dealing with us, right here in the should believe them?
U.S.? Shi Tao was a customer wasn't Copyright © 2005
he? IDG Communications, Inc
Do you think Yahoo will treat
your emails with anymore more
discretion if it threatens their
bottom line?

End of Chapter Test

Chapter Review

I. Essay.​ Briefly answer the following questions in not more than five sentences.
1. Compare and contrast Affirmative Action Programs and Diversity Management. How
does each of the two address diversity in the workplace?
2. Explain the dimensions of national culture. Discuss why it is important in organizations
with international participation.
3. In the context of organizational behavior, explain the concept of “Think Globally, Act
Locally” in maintaining a global brand. You may relate this with discussion of the
dimensions of culture.

A Question of Ethics
(George and Jones, 2012, p.61)
Emotional intelligence—the ability to understand and manage one’s own and other people’s
moods and emotions—can be increased through training. When people are high on emotional
intelligence, they are better able to understand and use emotions to influence others. However,
people can be influenced in positive and negative ways. As an example of the latter, historical
atrocities and cult tragedies have been attributed to the ability of certain individuals to have high
levels of influence over others.

Questions
1. What are the ethical implications of emotional intelligence training?

2. What steps can organizations take to ensure that employees’ emotional intelligence is
put to good use and not used for personal gain or unethical purposes?
References

Black, S., Gardner, D. G., Pierce, J. L., & Steers, R. (2019). ​Organizational Behavior​.
OpenStax Rice University.

George, J. M., & Jones, G. R. (2012). Understanding and Managing Organizational

Behavior (6th ed.). Pearson Education Inc.

Hitt, M. A., Miller, C. C., Colella, A., & Triana, M. (2017). ​Organizational Behavior (5th
ed.). Wiley Global Education

Hitt, M. A., Miller, C. C., and Colella, A. (2012). ​Organizational Behavior (3rd ed.). Wiley
Global Education

Luthans, F. (2010). ​Organizational Behavior​ (12th ed.). McGraw-Hill Education.

Mullins, L. J. (2010). ​Management and Organisational Behaviour (9th ed.). Pearson

Higher Ed.

Electronic References

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https://www.tlu.ee/~sirvir/IKM/Leadership%20Dimensions/globe_project.html

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https://www.yourarticlelibrary.com/organization/ethics-and-organizational-behavior/45114

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https://courses.lumenlearning.com/wmopen-organizationalbehavior/chapter/business-ethics-in-o
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https://www.infoworld.com/article/2645247/yahoo-business-ethics-sorely-lacking.html

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https://leeiwan.wordpress.com/2007/06/18/difference-between-a-global-transnational-internation
al-and-multinational-company/