Module 15: Latin America (summary)

When we talk about Latin America we are making reference to all the countries in both central and South America since Mexico until Argentina. Main economic powers of the area are Brazil, Mexico and Chile. One characteristic of the companies from Latin America is that they usually tend to expand regionally before going further abroad.

We can find 9 dimensions in Latin America that explain most of the behavior in a working environment or when doing business. These are: Sympathy (warm personal relations), personal dignity and classism (rigid social divisions); personalism (personalized and individualized attention); particularism (high degree of sacrifice looking for the common welfare but just of the closest group of persons -“For friends everything, for strangers nothing, and for enemies the law”); trust (low level of trust with unknown people); collectivism, and in-group/out group behavior (loyalty to the group, lack of interest and distrust outside the group); paternalism and hierarchical relationships (this plays a major role in management); power (more power, more responsibilities); humor and joy (generate a better environment in the workplace); and fatalism (is a proof of indirect negativism).

There is a common factor that we have to take into account in many of these dimensions. Family and friends play an important role for Latin America. Good relations are very important so it has to be kept in mind when doing business and in the workplace.

Due to the unique background and the posterior mixture with other cultures we can say that Latin America have a hybrid model in human resources. This model is characterized for being, as said before, paternalistic, is also characterized by obedience and in a certain way a tendency for avoiding direct intervention.

In the recruitment process there are some factors that are taken into account as physical characteristics, friends, family and relatives, the social status of the applicant, and also in the transferences being near to the family and the close ones plays a major role.

As its constituted by mainly not developed countries, there is a lack of technical knowledge (this can be explained in the levels of education). There is a generalized mistake in directing low level of budget in training and preparation of the employees.

The working system is common to find that in Latin America people prefer working in teams, in which a leader is accepted and followed, and sometimes he is expected to take the decisions.

References:

Class presentation

http://sourcingthreads.files.wordpress.com/2009/03/latin-america.jpeg
http://neorepublica.com/media/blogs/republica/latin_american_flags_oas.gif
http://farm3.static.flickr.com/2377/2325462852_1e3864905a.jpg

Module 14: North America (summary)

North America is the third largest continent (after Asia and Africa) but is one of the most important in the world. The continent is composed by Canada, Mexico, some Caribbean countries, Greenland and the U.S. We are going to focus in the United States in this review and we will take a look at the consumist phenomenon occurring there.

It is an alarming situation the fact that they have 5% of the world population but it produces 30% of the waste and consumes 24% of world’s energy. United States is a very consumist country, and this culture has evolved over the years. Nowadays a regular American consumes much more than an average one would have done 50 years ago, and the tendency is not stopping so we can imagine that the future Americans are going to consume even more.

A main player in these high consumption rates is the media advertising. The advertising has a major role in the American consumption because it influences the consumer mind directly. The population is exposed to advertising since they are kids and this exposure to the Medias keep growing with their age building a mass consumer. We can also make a comparison with the Medias today and in the past. Nowadays a regular American is exposed to more advertising by the Medias in one year than an American in his whole life 50 years ago. Now we can deduce why has been evolving the consumption average.

So this evolution in consumption and advertising has marked the lifestyle of the people in the US, and as a consequence, their management styles have been adapting to these characteristics. Nevertheless, as the USA is the main economy in the world we can notice that these styles (both consuming and management) have been spreading all over the world. The important issue is not to demonize or take as a model none of them, but to know what are the main aspects to take or to reject in order to adapt them in the best way to your own culture.

References:

Class presentation

http://ptjalogistic.com/userfiles/image/north_america_map.jpg
http://static-p3.fotolia.com/jpg/00/09/98/00/400_F_9980087_mbFJjGEjSRNbKerslBPfRF1cMxayPiH1.jpg
http://www.balloonplanet.com/shop/images/products/product_5223_large.jpg
http://www.funbumperstickers.com/images/USA_round_flag1.gif
http://www.gettyimages.com/detail/95909620/Flickr
http://pinwii.files.wordpress.com/2008/10/times-square-1024x7681.jpg

Module 13: Oceania (summary)

Oceania is a commonly forgotten continent. It is composed mainly by islands; the biggest continental territory is Australia (which is also an island). Nevertheless a common mistake is thinking in Australia as the only country in Oceania, this continent is also composed by Fiji, Kiribati, Marshall Islands, Micronesia, Nauru, New Zealand, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.

In this blog we will focus as usual only in one country: Australia. On its territory we can find a mix of cultures, mainly accounting for Europeans, Asians and Australian natives. Australian history comes from 40.000 years ago, when it was populated by natives coming from Southeast Asia, but its recent history starts in the XVIII century when Captain Cook discovered it in the name of Great Britain. It became a penal British colony until 1839, and finally in 1901 it became the independent country that we know today.

On its beginnings Australia held a posture of discrimination by the name of “white Australia”, but during the 60s and 70s it took a more relaxed posture towards immigration and diversity. Today it is considered as one of the most diverse countries. They defend the key concepts of egalitarianism, openness and individuality.

Australian corporate culture has had a great influence from European models. It counts with a decentralized management with flexibility, soft skills and humanistic values. Creativity is very important and is the result of an individualistic management approach. As a consequence of these factors and the key values mentioned above we can notice that all people in the organization have an important role to play and the managers recognize all value the specialized knowledge that employees at all levels bring to the company. An important characteristic in the Australian management style is that the managers play a very participative role, meaning that they listen the opinions of the different levels implied and let them do part of the decision making process.
Australian style has a high tolerance for taking risk in the decisions and projects, and is able to adopt any change. They value the hard work and the time, so missing a deadline can be seen badly. They are direct in the negotiations and are open to discuss different perspectives. We can see after this the European influence, but we can also notice some major differences that can be explained by the circumstances they’ve lived.

References:

Class presentation

http://www.world-atlas.us/oceania-map.gif
http://www.broadmindgroup.com/images/AustraliaFlagRound.jpg
http://www.movingforwardtogether.com.au/winningvisual_l.jpg

Module 12: Europe (summary)

Known as the old continent, Europe has a population of 735 million people distributed in 49 countries. This makes Europe one of the most (if not the most) diverse continents in the world. We can find a mixture of many different cultures, religions, backgrounds and languages coexisting in Europe, some of the in a very efficient and pacific way, others not that much.

When talking about Europe it is necessary to talk about the European Union. It is constituted by 27 countries of Europe and its origins can be found in the early 50s. Nowadays it constitutes the most powerful economy in the world. There are some European countries that are not part of the EU but they want to be. The case that we are going is precisely between one member and one candidate, Germany and Turkey, and the Turkish migration.

This migration finds its origins since the 17th and 18th centuries when the Ottoman Turks attempted to expand their territories through the Balkans. The German-Turk relations were strengthened by the mutual support of both during the different conflicts, especially the World War I. nevertheless it was during the post war period when the migration became to be massive.
Decimated by the war the German soldiers were not able to cover the labor force needed when they came back to their home. Until 1950 this gap in the demand was covered by the fugitives of the East Germanic zones. After this period Germany suffered a huge lack of qualified handlabor, so they created the concept of “Gastarbeiter” (guest worker), many of whom were Turkish men. These guest workers were expected to leave a few years later but they didn’t, starting this way the Turkish population of Germany.

Negative sentiments towards immigrants are often expressed as fears that immigrants adversely affect the economic welfare of the native population. These sentiments are not an exception in Germany, which have had led to many intercultural conflicts between locals and migrants, and the main problem in Germany is that the solution has to be by consensus and integration, but none of the parts want to do concrete actions. Turks want to preserve everything of their culture, but they have to adapt some aspects since they are in a foreign country; and Germans have to help to make the transition. Since none of them is doing anything concrete we can say that the conflict may take a long time to find a solution.

References:

Class presentation

http://www.bbc.co.uk/schools/gcsebitesize/geography/images/pop_003.gif

http://europa.eu/

Module 11: Islamic banking

Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law and its application through the development of Islamic economics. A number of innovative concepts and techniques were applied in early Islamic banking, including bills of exchange, the first forms of partnership (mufawada) such as limited partnerships (mudaraba), and the earliest forms of capital (al-mal), capital accumulation (nama al-mal), cheques, promissory notes, trusts, startup companies, transactional accounts, loaning, ledgers and assignments.

Islamic banking has the same purpose as conventional banking except that it operates in accordance with the rules of Shariah, known as Fiqh al-Muamalat (Islamic rules on transactions). The basic principle of Islamic banking is the sharing of profit and loss and the prohibition of riba (usury). Common terms used in Islamic banking include profit sharing (Mudharabah), safekeeping (Wadiah), joint venture (Musharakah), cost plus (Murabahah), and leasing (Ijarah).

In an Islamic mortgage transaction, instead of loaning the buyer money to purchase the item, a bank might buy the item itself from the seller, and re-sell it to the buyer at a profit, while allowing the buyer to pay the bank in installments. However, the bank's profit cannot be made explicit and therefore there are no additional penalties for late payment. In order to protect itself against default, the bank asks for strict collateral. The goods or land is registered to the name of the buyer from the start of the transaction. This arrangement is called Murabaha. Another approach is EIjara wa EIqtina, which is similar to real estate leasing. Islamic banks handle loans for vehicles in a similar way (selling the vehicle at a higher-than-market price to the debtor and then retaining ownership of the vehicle until the loan is paid). There are several other approaches used in business transactions. Islamic banks lend their money to companies by issuing floating rate interest loans. The floating rate of interest is pegged to the company's individual rate of return. Thus the bank's profit on the loan is equal to a certain percentage of the company's profits. Once the principal amount of the loan is repaid, the profit-sharing arrangement is concluded. Further, Mudaraba is venture capital funding of an entrepreneur who provides labor while financing is provided by the bank so that both profit and risk are shared. Such participatory arrangements between capital and labor reflect the Islamic view that the borrower must not bear all the risk/cost of a failure, resulting in a balanced distribution of income and not allowing lender to monopolize the economy.

Islamic banking is restricted to Islamically acceptable transactions, which exclude those involving alcohol, pork, gambling, etc. This is the concept of ethical investment complemented with moral purchasing under the islamic banking.

Islamic banking system has been gaining a lot of share in te whole world. One of Germany's biggest banks, Deutsche Bank, announced a joint venture with Ithmaar Bank of Bahrain and Abraaj Capital of Dubai to launch a $2bn Sharia-compliant financial fund. The banks say the fund is designed to boost education initiatives and investment in media and energy companies, and infrastructure in the Middle East. More and more conventional international banks, such as Citibank, HSBC and UBS, are converting some of their services to interest-free Islamic finance models. Looking at this we can say that there is a big potential in the future for the Islamic banking system.

References:

http://www.islamic-banking.com/

http://www.biyokulule.com/view_content.php?articleid=2061

http://islamonline.com/news/articles/73/Islamic-banking-Interest-free-or-interest-based-.html

http://www.biyokulule.com/sawiro/sawirada_waaweyn/Islamic%20Banking1.jpg

http://www.islamicmediacity.com/cms_files/news_images/1237554989.jpg

http://www.theworldonline.ae/wp-content/uploads/2008/09/business10.jpg

Module 11: Middle East (summary)

When talking about the Middle East we are talking about a region located in the southwest Asia and Egypt. The Middle East has always been a centre for world affairs throughout history and also nowadays remains as a strategically region in many aspects.

We can find a huge diversity in both religions and cultures. We can find religious groups as Arabs, Turks, Persians, Jews, Kurds, between many others; nevertheless we can say that Muslims are the main group (followed by Christians and Jews).

We will focus our study in Israel. Israel is the main Jew country in the world. Its origins are found in 1947 where the division of Palestine was purposed in order to create a Jewish state. The idea was accepted by Jews by rejected by the Arabs. Israel is considered one of the most developed countries in southwest Asia and we can find important cities such as Jerusalem and Tel Aviv.

There is a specific and very interesting phenomena occurring in Israel. This is of course, the Kibbutz and its particular management style. Kibbutzes are societies based on mutual aid and social justice and have a socioeconomic system in which people share work and property. The social organization of work is unique in Kibbutz society. It is based on democratic foundations, with equal say for all members on work planning and the division of labour within their agricultural or industrial branch. They don’t use any differential type of retribution for the members, their reward is motivational.

It is important to clarify that the Kibbutz system has evolved along the history to become what we know now. It started as a miracle done in the hostile lands of the desert, and it was built up under some socialist principles. We cannot say that it was part of the former Soviet Union but some of their ideals and goals matched with the ones of the communist power. Nevertheless the systems in the Kibbutz have evolved in an accelerated way becoming in a very efficient capitalist form.

Nowadays we can find differentiation in the Kibbutz, where different members can earn more money and save at their own will. Even if many aspects of this practice have changed, the common ideals shared by its people are still very strong, and we can assure that Kibbutz is a very important source of power (both cultural and economic) for Israel.

References:

Class presentation

http://www.autosuficiencia.com.ar/imagenes/israel.gif
http://communa.org.il/hcommuna/tmunot/34-comun.jpg
http://www.good-hotels-guide.com/middle-east/middle-east.gif

Module 10: Africa (question)

We will analyze the Ubuntu philosophy and its application to a very specific case. We will see how it helped in the case of the African Bank Miners Credit. In order to understand the context of the case it is important to know what this organization is. Established in 1993, African Bank Miners Credit is a division within African Bank. The company provides mine workers with access to finance. The challenge was to change the traditional behavior and mentality of the mining population and merge it with the new financial program. They were planning to do so by using the Investors in People (IIP) standards, but it was needed to be careful in the process. It was successfully done due to the implementation and internalization of the process by applying the Ubuntu philosophy. Now we will see what is exactly Ubuntu and how did it help.

Ubuntu is premised on the philosophy that one finds one’s own humanity in helping others to find theirs. It is a philosophy that reinforces the collectivist behaviors and creates a strong sense of community. It is a common philosophy in Africa no matter the differences in tribes or particular traditions. It argues that their existence depends on the welfare of the others, “I am, because we are”. At the workplace, Ubuntu generates trust for the relatives, a preeminence of the collective, kinship ties, teamwork, and also is very important to legitimate the power.

As a perfect example of the integration of the Ubuntu culture into the organiz

ation, African Miners Credit has used drums as an important part of the Ubuntu process and e

very employee has been given a drum. An Ubuntu drum even stands beneath the company’s Investors in People plaque. Drums have been used to symbolize communication and loyalty.

Another clear example of a successful measure was the explanation of the five key areas that the company would be focusing on using the medium of storytelling. Every employee was given one of the company’s “Our Ubuntu” booklets, which not only explained the Ubuntu culture campaign, but how employees would be able to contribute towards the overall success of the campaign.

Ubuntu was also an important tool to eradicate fraud from the organization, if one person is dishonest; this impacts negatively on the entire company. Employees were told that it was everyone’s responsibility to work together to eradicate dishonest practices and to create an environment in which respect, trust and honest business practices are upheld. They were also instructed to report any dishonest practices, irrespective of the level of the perpetrator.

References:

African Bank Miners Credit – Case Study
http://media.photobucket.com/image/ubuntu%20africa/MotherTongues/SouthAfrican8.gif
http://www.ruby-sapphire.com/images/madagascar_sorcerers/swiss_bank_low.jpg