Operating a Global Business the Right Way

Citizen of the World There are generally two types of people when it comes to daily life, culture and so forth. There are those that like to be in their own cultural space. They wish for that space to be free from interference and from influences from other cultural forces. On the other hand, there are those that actively prefer to interact with and seek out alternate and different viewpoints, societies and cultures.

The expansion of global technology, communication technology in particular, has made the world much smaller and this has had major impacts on how different peoples talk, how often they can talk and how businesses are run. The business world itself has been greatly impacted because international and global business arrangements are much more common and entrenched.

Due to the different and sometimes clashing cultures involved, this has led to the need for more cultural sensitivity, more cultural awareness and the redefinition of what is ethical and what is not when it comes to the interactions of all these cultures. While insisting on remaining within one's own cultural realm in terms of practices and habits might still work in many situation, it will create problems both ethical and cultural in many others.

Analysis The parameters for the assignment touches on the idea of how to speak and what to say to a Chief Executive Officer that wants or needs to learn more about the topic. There is the idea of what is necessary to prepare to work with and do business with people in other countries, developing ones in particular. There is all the important list of "facts of life" that must be taken seriously when engaging in such behavior.

Lastly, the other major point is how and what degree multi-national corporations must abide by the local laws and frameworks when in a host country or working with a host country culture. Best practices for all of these will be explained and a rationale for each idea and recommendation given will be presented as well. Culture Clash There are many combinations of countries where cultural differences are not a problem.

Many times, any problems that do exist are minor and do not impact the overall paradigm of doing business all that much. A good example would be work between the United States and Canada or between Spain and Germany. While marked differences may exist here and there, these pairs of countries are in the same regions, have very similar cultures and typically have the same goals and priorities in mind. However, this is far from being the case all of the time.

Whether it be historical strife, massive cultural differences or something else along those lines, there are some pairings that are difficult to impossible to pull off. Indeed, one example would be the fact that Israel does not get along well with many other countries in the Middle East due to religious, historical and other very protracted reasons. Similarly, India and Pakistan are direct neighbors but their cultural differences and history together make their relationship very tepid or outright hostile a lot of the time.

Obviously, most country-to-country relationships are somewhere in between those extremes and time does often heal historical wounds. Indeed, the United States had its inception as a result of breaking away from the British Empire of the 1700's. However, Great Britain and the United States get along quite nowadays and there is a good amount of trade and commerce that exists between those nations (House, 2015).

Reason for Buying Foreign Goods As noted above, the business relationship and "citizen of the world" paradigm does not lead to problem relationships like the Israel/Middle East or India/Pakistan style of relationship all that much. However, a common reason why businesses have become international in scope is to save money. This leads multinational corporations to do business with countries that are in lesser stages of development and economic prowess.

Indeed, Wal-Mart and other retailers get a lot of their goods from factories in China and other parts of Asia because the cost of those goods is consistently and measurably lower than if the same goods were bought in the homeland or in other Western/developed countries. In other words, the buying of good in bulk from Asia is done for competitive and cost reasons. Manufacturing is much the same way.

While some may think that making goods domestically is much cheaper than having them made abroad and then shipped in via ships or train, that is quite often not the case. There are many factories in Southeast Asia, Mexico and parts of Africa that make a lot of the clothes, electronics and other items that are sold in countries like the United States. Again, cost is the major reason.

The usual reason for this is that the wage and hour laws of the home retail/consumer market are much higher and much more expensive than if they are done in countries where the minimum or prevailing wage is much lower (Hongxin & Levary, 2002). Ethical Quandaries There are other considerations that can spring out of nowhere, however, and cause problems. A perfect example would be the recent spat between the Iranian government and Air France, one of the major airline companies in France.

Apparently, the Iranians demanded or required that female flight attendants entering Iran as part of doing their job for Air France to wear headscarves even though most women in France and that work for Air France are not Muslim. Rather than concede the religious and cultural differences, Iran demanded that Air France adhere to their cultural, societal and religious standards and they cared not if Air France or anyone else had a problem with it.

Air France's response was to allow flight attendants to opt out of working on flights to Iran if they would not like to be subjected to the requirement (RFI, 2016). Iran technically has the right to regulate what foreign companies do on their soil. However, Iran's stance on the matter is deemed to be too hard-line or too intolerant as it imposes a cultural or societal standard that not everyone around the world adheres to.

Indeed, there are roughly seven billion people on the planet Earth but only about one billion of them are Muslim (Grim & Hsu, 2011). Iran's stance on the matter is an example of what is noted in the introduction, that being that not everyone is open to cultural transmission and deviance from traditional societal or cultural norms.

With the growing globalization of the world, these firm requirements are even forced and foisted on foreigners that are just engaging in commerce in the area or are working for a company or someone that is (Pashmforoosh & Babaii, 2015)). Cultural Sensitivity While Iran is far from the only country that engages in this behavior, it is far from being conducive to doing good international business. Further, the requirements and norms that are involved in such situations are usually not this stark.

For example, some cultures see eye contact as a sign of respect and honesty. Other cultures, for example, see it as confronting and disrespectful. Another example is the setting of meeting times. Some cultures set meetings for a general time but the actual start of the meeting is not firm by any means. For example, if the meeting is to be at 10 am, it is not a big deal if people do not fully form and meet at the table until 10:15 AM.

In other cultures, a meeting time of 10 am being sent out means the meeting is to start at 10 am and anyone coming in after that without a good reason is not seen as being respectful or professional (Oswald, 2008). The point is that working with other cultures is not just an issue of times zones. Instead, there are other considerations that must be taken into account.

There must often be a good amount of compromise so that everyone is operating off of the same slate of business norms even if the norms are different than what is expected by all of the participants. The most important thing is for the parties involves to be culturally aware and sensitive so that they know not to be offended or otherwise react negatively when things are done or conducted in a way that is different than what is expected.

Further, the country that is investing the dollars into the host country generally has the purview and "right" to have their way if they really want it. However, the multinational company should not force the issue if they do not have to and it would be unethical to do so without a valid reason.

For example, if an American company is operating in India and there is an Indian holiday that Americans do not celebrate, the American company should by no means insist that things are "business as usual" for the Indian employees and that operations will continue with no interruption in India. It would be akin to an Indian company operating in the United States and requiring that the American employees work on Thanksgiving or Christmas Day.

As the employer, they can technically require this but they should not do so as it would obviously create distress and resentment for the American employees because the importance of that major holiday and what it means from a cultural or societal standpoint is being ignored or is not even known by the corporation.

With the exception of mission-critical operations and situations where staffing is a must no matter the day, corporations should generally be flexible so as to be sensitive and caring to the cultural and societal norms and needs of the host country or countries in question (Nguyen & Nguyen, 2014).

Ethical Considerations of using Cheaper Labor While it may seem like a no-brainer to use cheaper labor and/or goods to sell in stores, there are many advocates, elected officials of governments and other people that are quite displeased with some of the tactics that these multi-national companies use. Some of the disdain comes from the host country and other sources of criticism come from the home country of the corporation.

Regardless, the source of the hostility usually comes from two diverging sources on what it means to be ethical and well-acting. Some assert that compliance with the law is the one and only yardstick that matters. Many compare this to the assertions of Milton Friedman. Friedman was pilloried for asserting that the one and only main priority of a business is to maximize profit so as to give the best return on investment to investors.

However, people in the corporate social responsibility (CSR) and other similar realms assert that ethics often require a multinational corporation to exceed (or far exceed) what the local international standards or averages demand. This argument can be made both domestically and for foreign-based workers. A domestic example would be the fact that paying workers at McDonald's $7.25 an hour is legal in any state that does itself have a higher minimum wage.

However, there are others that assert that business and societal ethics demand that McDonald's pay a "living wage" even though the law does not require it (Worstall, 2016). Some jurisdictions like Los Angeles and Seattle have upped the ante and enacted local laws that align with the ethical demands of corporate social responsibility advocates. Foreign worker situations are different yet similar.

For example, if the USD equivalent of the minimum wage in China is $2.00 an hour, there are some that say that $2.00 would be the proper way to go as it maximizes profits. Others would say that paying a higher wage is a moral imperative because the multinational corporation can afford it. Others still would say that the multinational corporation only worry about what the prevailing wages are for the relevant work styles and forms in the area.

Obviously, this would probably be more than the bare minimum but it will still be far below what is paid in countries like the United States or just about any country in Western Europe (Dhanarajan, 2004). Another example regarding ethics and costs is just how loose or strong some business relationships are and how this can affect the ethical burdens of the parties involved.

For example, if there is labor strife in a country that a multinational corporation operates in, that corporation may be inclined to capitulate to the workers and give them higher wages. On the other hand, they may stand fast and say that they'll just find new workers. Union laws and regulations can complicate the situation regardless of the other factors involved. Some firms have taken to trying to displace their ethical and legal responsibilities by using contractors in these foreign countries.

Rather than build and operate the factories and other locations themselves, they will partner with corporations in the foreign countries with the cheaper labor so as to protect themselves legally if something goes awry. Even if there is strong legal standing and justification for doing such a thing, there are situations where corporate social responsibility advocates and other similar people will not allow for such displacement. There are two good examples that the author of this report can point to. One was a factory complex that collapsed in Bangladesh (Clark, 2015).

Apparently, the structural integrity of the factory was so poor that it ended up collapsing. The factory was owned locally and the owners of that factory were the ones charged with operating an unsafe work location. However, the factory was the manufacturing site for a good amount of Western clothiers and those companies caught a lot of blowback for supposedly exploiting a company and a country that was apparently not ensuring the safety of its workers like the Occupational Safety and Health Administration does in the United States.

It's debatable whether the collapsed factory was emblematic of a larger problem in Bangladesh or if it was just an outlier. Regardless, the ostensible optics involved are obviously not good. However, it depends on who one asks and how culpable they feel the clothiers were (Clark, 2015). A much more specific example was a similar arrangement that Apple had with a contractor in China. It was much the same situation as the factory mentioned above.

Apple was having work done for some of their consumer electronics at this factory but they themselves did not own the factory. However, the safety and working conditions at the factory were apparently quite shoddy and Apple was the target of much vitriol when the news of these conditions came to light. Many government officials and advocates have asserted that Apple had a duty to make sure the factory is safe even though they do not own or operate the factory.

Of course, Apply can only control the factory's conditions so much as they do not have command and control. However, they could always pick another contractor to do the work if the factory cannot or will not align their safety and work performance with international or United States ethical standards when it comes to corporate social responsibility, worker safety and whether active exploitation is being engaged in.

Indeed, if Apple knew the factory was unsafe and stood pat when it came to their actions, that would be a stain on Apple's reputation even if they were not directly involved in any of the malfeasance (McDonald, 2014). Developing Country Considerations The infrastructure, culture and so forth of developing countries where multi-national corporations operate are quite different and often inferior to the home countries of the multinational corporations. It makes a ton of sense to say this but it may not entirely register with some what it means.

For example, India and the United States both have internet available to the people to at least some degree but the speed of that internet and the amount of market penetration of the two countries will be different. Clean water is generally not an issue in the United States except for situations like the current crisis in Flint, Michigan and the like (Hanna et al., 2016).

However, access to clean water in India is a major problem for many people and it is to the extent that many are actively harmed and diseased due to the water quality problems (Singh, 2015). The simple reason for this is that India, as much progress as they have made, is behind the curve of the West. A lot of this is due to colonialism and other world historical events that were running hot and heavy until about World War II.

Indeed, India and Pakistan used to be a single country and some or all of the area was controlled by Great Britain until the earlier part of the 1900's (Tully, 1998). With that being said, the presence of multinational corporations can be a boon to the host country because it allows for more people to make a living, for more and better infrastructure to be built and assembled and so forth.

Even with that, the multinational corporations must understand the conditions hat works are subject to at work and outside of it before they commit resources to the area. Preparation is Key The last sentence of the just-ended section provides a nice segue to this section. As with most things in business, planning and due diligence is key.

However, any prescient Chief Executive Officer or other company executive or leader has to know the full scope, depth and breadth of what goes into being prepared as it relates to starting or expanding operations in a foreign country. Of course, return on investment has been and remains the major benchmark and variable to take seriously. However, there are other things that are separate from this or that affect this that must be included in the calculus.

Just a few examples of things that need to be considered would include cost of labor, cost of materials, cost of shipping, time zone differences and the other usual ones that would permeate all business cases and major decisions. However, the author of this report would add a few more important ones that should never be omitted or disregarded.

These would include the proper wage levels to pay (from a legal and ethical/prevailing wage standpoint), whether the conditions for the workers will be acceptable (and this is true whether or not the workers are fully controlled by the corporation), business practice differences, cultural differences, societal differences, optics of the arrangement from a.