Can political and economic risk be managed when investing in another culture? If so, what methods of managing risk would you use? How would you determine the effectiveness of your chosen methods of managing risk? APA Format. Professor does not want any cited or references. Must be completed in your own words. This can consist of 200 words or more
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UNIT I STUDY GUIDE
The Global Leaders Environment
Course Learning Outcomes for Unit I
Upon completion of this unit, students should be able to:
1. Explain how the political and economic environment affects decision making.
1.1 Examine the political and economic risks of investing in a BRIC country (Brazil, Russia, India,
1.2 Discuss the strategic role that corporate social responsibility (CSR) and codes of ethics play in
global management, in particular the responsibilities toward human rights.
Assessing the Environment: Political, Economic, Legal, Technological
Managing Interdependence: Social Responsibility, Ethics, Sustainability
Whether communicating locally, nationally, or internationally, managers must know how to implement
strategies that will have positive outcomes. Managers must also know how to communicate effectively
with people at work. While there are several cultural factors that must be understood when working in your
own country, this course is mostly about understanding the cultural factors that managers face when
Managers who work in various parts of the world can be very successful if they have a full understanding
of intercultural communication. Intercultural communication refers to exchanges, both verbal and nonverbal,
between people from different cultures. You may have heard of men and women who have taken jobs
in another country, found the culture there to be uncomfortable, and requested reassignment to their
Deresky (2014) provides information that will help leaders to meet some of the challenges of intercultural
management, nationally and internationally. First, one must have an understanding of the business climate
and the cultural factors that affect decision making. Deresky (2014) considers globalization to be the
competition that is organized in a system of networks through which people communicate with each other
around the world.
Successful management in global environments occurs when people understand:
1. that cultural factors when doing business locally or globally impact all decisions made in their
2. that the economies in countries such as China, India, Brazil and Russia, countries which are
referred to as BRICs, have changed over the past decade. In the United States, traditional
industries continue to decline (Deresky, 2014, p. 5). As change occurs globally, those
changes will impact his or her decisions over time;
BBA 2551, Intercultural Management
3. that organizations doing business globally must have a global orientation
challenges of world markets and rapid, fundamental changes (Deresky,
2014, p. 33). Legal
systems may differ around the world and managers must understand how those systems
operate and what drives them; and
4. those who manage on a global level have to use various strategies to handle operations
whether directly or through some form of alliance (Deresky, 2014, p. 3).
Successful managers must also understand their responsibilities in a corporate world. Corporate social
responsibility (CSR) is about the social and economic impact of decisions, especially when working in other
countries. Managers must be ethical at all times when making business decisions. For example, making
decisions about which systems to put in place in a particular country involves ones beliefs about and attitudes
toward that country. The systems that are used will be seen from differing cultural value systems, and
organizations will be judged by mores that govern local ways of doing business.
Large companies, such as Best Buy and Walmart, did not do well in the Asian markets where shoppers prefer
smaller stores. Walmarts well-known problems in Germany occurred because they did not fully understand
the culture. According to Landler and Barbaro (2006), Walmarts stores were unsuccessful because
management did not heed the local cultural outlook on large stores.
Consideration must also be given to the differences in culture when making decisions about human rights
issues. To be successful, managers have to be aware of how people in other cultures regard human rights
before assuming that the term human rights can only be viewed from one perspective. Reves (2014) is critical
about how the United States has responded to human rights issues.
Brazil has also been challenged with human rights violations. In an article about Brazils struggles, Muriel
Asseraf (2015), an institutional development coordinator at one of Brazils human rights watch organizations,
noted that to be successful in business, one had to pay attention to how the country is viewed by its trading
partners. Another country with human rights challenges is Russia, which is being charged on human rights
issues against gay and lesbian people and because of its incarceration of protestors, as reported in a Human
Rights Watch World Report (Human Rights Watch, n.d.).
As pointed out above, multinational corporations (MNCs) have to consider their stakeholders as they
implement systems in various countries. Managers must also take into account their consumers and their
employees and suppliers. It may be easy to reach employees outside business hours, but managers must
ensure they do not encroach on employees private lives.
Additionally, technology must be used ethically to sustain a good relationship between these stakeholders
and to retain their trust. Now that information is easily accessible, managers have to ensure that their files
The ability of managers to manage effectively when they operate in different cultural systems ultimately leads
to success and greater productivity. It is essential that managers understand the importance of cultural
competence wherever they work.
As you will read throughout this course, effective communication is not easily achieved. One has to think
carefully about the words that are chosen and the impact those words will have on the people receiving your
messages as well as the situation in which the message is delivered. For example, scheduling a mandatory
meeting in a foreign country at a time of day when the people in that country are attending religious events
can have negative outcomes.
Asseraf, M. (2015, January 22). Home and abroad: balancing Brazils human rights commitments [Website].
Retrieved from https://www.opendemocracy.net/openglobalrights/muriel-asseraf/home-and-abroadbalancing-brazil%E2%80%99s-human-rights-commitments
Deresky, H. (2014). International management: Managing across borders and cultures (8th ed.). Boston, MA:
BBA 2551, Intercultural Management
Human Rights Watch. (n.d.). World report 2014: Russia [Fact Sheet]. Retrieved
fromx STUDY GUIDE
Landler, M. & Barbaro, M. (2006, August 2). Wal-Mart finds that Its formula doesnt fit every culture. The New
York Times. Retrieved from
Reves, A. (2014, March 28). U.N. holds U.S. accountable for human rights violations at home and abroad.
ACLU Human Rights Program. Retrieved from https://www.aclu.org/blog/human-rights/un-holds-usaccountable-human-rights-violations-home-and-abroad.
The articles below are suggested readings or resources that can provide further information on intercultural
management. The first two articles can be accessed through the links.
Hummel, D. P. (2012). Understanding the importance of culture in global business. Retrieved from
Okoro, E. (2013). International organizations and operations: An analysis of cross-cultural communication
effectiveness and management orientation. Journal of Business Management, 1(1), pp. 1-13.
Retrieved from http://www.centreofexcellence.net/J/JBM/Vol1/No1/1.htm
The article below is a suggested reading that can be located through the linked DOI.
Janáková, H., & Magdolen, L. (2014). Creative impact measure of crosscultural managerial aspects.
Creative and Knowledge Society, 3(2), pp. 16-27. DOI: 10.2478/v10212-011-0035-z
BBA 2551, Intercultural Management
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