International Management the European Union Is \"A

International Management

The European Union is "a unique economic and political partnership between 27 European countries" (EU, 2012). The European Union describes its objectives are relating to the idea that "countries who trade with one another become economically interdependent and so more likely to avoid conflict" (Ibid). There are a number of stated objectives. The first is "to promote human rights both internally and around the world," including human dignity, freedom, democracy, equality, the rule of law and respect for human rights" (Ibid). Economically, the EU has the objective of "enabling most goods, services, money and people to move freely" and to "develop this resource to ensure that Europeans can draw the maximum benefit" (Ibid). The EU also seeks to make its own governance more transparent and democratic.

For its flaws and missteps, the EU has largely been successful. Economically, the nations of Europe face far fewer trade barriers than they did prior to the Union. There is greater freedom of movement for people, goods and capital within the Union, especially when EU offshoots like the Schengen Zone and the Eurozone are taken into consideration. In addition, there have been no armed conflicts between members of the EU since its inception.

Brenton, DiMauro & Lucke (1999) found evidence to support the idea that the EU has facilitated in increase in foreign direct investment in the Union. The EU creates a large common market, encouraging firms that would otherwise be discouraged from entering the much smaller individual markets in Europe. The removal of physical and financial trade barrier improves the profit potential of European operations. Lastly, common regulatory frameworks and the common currency have also facilitated ease of operating in Europe, reducing both the learning curve and the risks associated with European market entry.

2. According to Luthans and Doh (2008), the four foundations of law are Islamic law, socialist law, common law and civil law. Islamic law is based on the Quran and the teachings of the Prophet Muhammed. Socialist law is rooted in Marxist or totalitarian socialist systems and emphasizes the supremacy of the state. Common law derives from the English tradition and is based on codes of rules. Civil law derives from the Roman tradition and is based more on principles rather than rules.

While there are instances of legal systems co-existing (Louisiana and Quebec operating civil law within common law countries, for example), there is also the potential for significant conflicts. While common law's rules are based on roughly the same Western principles as civil law, socialist and Islamic law are fundamentally different. These laws are based on ideology rather than principle and this alone means that the conflicts could be significant when they occur. For example, there is going to be some conflict in international law where nations using these fundamentally different systems come together. Some things illegal under one system could be perfectly legal under another, representing a major impediment to doing business. The Foreign Corrupt Practices Act is cited by the text authors as an example, because corruption of the form deemed illegal in the U.S. is not illegal in many countries. Negotiating the practical and philosophical differences between legal systems in different countries remains a challenge for international businesses.

3. Ethics are defined as "the study of morality and standards of conduct" (Luthans & Doh, 2008). Morals are codes of conduct, usually within a society, while ethics are frameworks for understanding morals (Gert, 2011). This explanation offers no particular clarity, as both are codes of conduct -- the study of codes and understanding the codes are two ways of saying the same thing.

However, the subject of ethics typically arises in international business, when the manager faces a conflict between his or her own ethical standards and those of the nation in which the business is being conducted. What the manager needs to have is a defined code that is to be used. Going back to the Foreign Corrupt Practices Act, this is an attempt by the U.S. government to enforce a standard of behavior on American firms, regardless of where their activity is. The morals of foreign countries can be quite different from those of the U.S., but American firms are supposed to adhere to American standards everywhere.

Managers are often faced with challenging decisions that are well within the laws of both countries, for example the decision to offshore work to another country. In such a situation, the ethical code would still apply even though there is no moral issue since both potential actions are legal. This again highlights the need for firms to have a set of ethical standards that can help their management to interpret ethical dilemmas consistently and effectively.

4. An achievement culture is one where "people are accorded status based on how well they perform their functions (Luthans & Doh, 2008). By contrast, as ascription culture is one where "status is attributed based on who or what a person is." SCIE (1999) explains how some of the differences between the two manifest. For example, in achievement societies the use of titles is limited, whereas it is extensive in ascription societies to show one's status within the organization. There is greater respect for hierarchy in ascription societies as well, whereas in achievement societies respect is for the achievements of senior managers rather than for their position.

For international managers, distinctions such as these can be important. The SCIE page provides tips on dealing with people who are from the other type of culture and recommends that people accept how the other culture works rather than trying to change it. This may mean, when doing business abroad, adjusting one's own job title, and one's response to others based on how the other person perceives himself or herself, rather than on how you perceive them.

Doing business internationally means being exposed to a wide range of different cultures, and the best approach is simply to understand those cultures and adapt to them. It is important for ascription cultures to have strong technical knowledge, or they will not be taken seriously by those in achievement cultures. Conversely, those in achievement cultures will need to send older, more experienced people with titles of distinction, even if those people are not the most technically competent (Luthans & Doh, 2008).

5. Trompenaars identified four types of organizational culture. The first type is family culture, which is "characterized by a strong emphasis on hierarchy and orientation to the person" (Luthans & Doh, 2008). This culture has a top-down orientation, guided by the idea that there is a "parent who knows what it best for the personnel." The top managers are completely in charge, and are the only ones truly empowered to make decisions.

The second is the Eiffel Tower culture, which is characterized by "strong emphasis on hierarchy and orientation to the task" (Ibid). Unlike the family culture, the firm is not built around any personality at the top, but is focused on the task. The function of these firms is more rational and business-like than at family firms.