Archive for the ‘Responsible business’ Category

Laws and social norms are different things

Posted: March 18, 2013 in Responsible business
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Law School

Law School (Photo credit: Tulane Public Relations)

A little over a week ago, the Australian Council of Trade Unions released recommendations for unions to improve their internal governance, primarily in the area of finances. The panel was announced at last year’s tri-ennial Congress as a response to allegations of misuse of union funds at one particular union.

It should be noted that the people involved in this incident have since been charged with fraud so there is no deficiency of regulation. The recommendations propose tightening-up of internal procedures so that it is more difficult for this kind of conduct to take place unseen.

This got me thinking again about the difference between regulatory compliance and ethics.

All laws have the effect of categorising human behaviour as acceptable or unacceptable. The problem is, the real world does not lend itself to tidy distinctions, so laws become more complicated as they define exceptions and then define exceptions to exceptions. Moreover, this process doesn’t take place in a vacuum; as soon as you proscribe one form of misconduct, another will spring up in its place. You could call this the ‘Hydra Effect’.

It’s worth asking what effect, if any, does legislative redress have on people’s sense of right and wrong?

I don’t think there is a hard and fast answer to this but can see three interpretations:

  1. It sends the message that society disapproves of the conduct and thus the law has a normative effect. This may be true in some areas -notably criminal law- but it seems a little naive to believe that law and morality could be so closely correlated in an era when the laws of the state run to thousands of pages. I once attended a defensive driving course where there was a free-for-all discussion about what were the correct road rules in certain situations – everyone was just guessing! (We know what drivers really do when faced with such ambiguous situations: they don’t consult the rule book, they simply fall back on politeness and decide who will give way using hand signals)
  2. Legislation could in some situations have the perverse effect of lowering standards. Take financial regulation for example: most people involved with finances are behaving honestly at the outset. Then, in response to the actions of a few individuals, the law steps in to set a certain benchmark. That benchmark will most likely be lower than people’s personal standards, as it sets only a minimum standard of behaviour. The normative effect of the law makes them ask themselves, ‘Why should I bother? Here is a clear signal that I don’t need to take as much care as I have been’. How many times have you heard someone say, defensively “But we were acting within the law”? Mandatory CSR targets fall into this category, e.g. carbon emissions treaties and ‘Fair Trade’ standards (see earlier post).
  3. You could attempt to sidestep this dilemma by taking a position that law-makers oughtn’t be interested at all in whether or not the law has a normative effect on people, they should simply see it in an instrumental fashion designed to bring about a particular result – or, even more cynically, see it as a way of reacting to public opinion. You might call this the ‘checks and balances’ view. Immigration laws are an example. Stock exchange rules are another: their purpose is simply to avoid certain outcomes and the moral status of human actors involved becomes irrelevant. This view has its place (see post) but if you apply it universally, you will end up ascribing unrealistic levels of responsibility to Governments, as if their mere fiat alone is sufficient to determine what people do in the real world. Or, if you admit that they can’t, then you’d have to advocate allowing individuals completely to follow their own moral lights. That is basically an optimist’s vision of the law of the jungle.

This leaves us between a rock and a hard place. Yes, laws do carry a normative effect but you can’t rely on that alone.

There was a book by Jim Collins a few years back that advocated the use of “Stop Doing” lists. The idea is that more work will always find its way to you, creating the need for an ever-lengthening “To Do” list; so, to be able to stay on top of things you need to discipline yourself to make a list of what you need to stop doing to free up the necessary time.

Legislators and pressure groups, take heed: more law isn’t always the solution. It might help, but of itself it won’t be enough to bring about the intended change.

Related posts:

Free entertainment? Yes – it’s called advertising

Posted: March 8, 2013 in Consumer campaigns
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20100426_cooky_1

Girls’ Generation endorse an LG handset.

Almost a year ago I first encountered ‘K pop’ (and that was before Gangnam Style I might add) and my musical taste has never quite recovered. I should have known it was too good to be true that these extremely high quality production music videos could be getting made without someone paying the piper.

It all seems like harmless fun: the K pop idols come across as being more hard-working and modest than many of their North American counterparts. The whole phenomenon seemed to be emblematic of a newly confident 21st Century Asia. Still does.

Then as I was walking through Sydney’s World Square I noticed a familiar face in a shop that sells beauty products: Yoona from the group Girls’ Generation. Curious, I wondered what other products the group has endorsed.

Well, it turns out that Girls Generation, collectively, are rated as Korea’s single most influential product pushers.  Their list of endorsements is so extensive it has its own Wikipedia page and includes Samsung, Hyundai and Philips Van Heusen, all of whom have current labour and/or environmental controversies.

These nine sirens work very, very hard at persuading people to buy stuff, without asking too many questions about where it comes from or how it is made. They, or at least their label, SMTown, are getting paid a lot to do so.

K pop stars, you see, aren’t struggling artists trying to break through the clutter. They are employees, completely owned by their record labels who find, package and then promote them relentlessly. They sign on in their teens to fifteen-year contracts. The music is all written by other people and put in front of them to sing. Their employer has the power to decide everything from what they eat to who they can date (typically no one! … sorry fellas) I’m sure they get no say over their brand endorsements either. Faust-like, they barter away their right to object when they signed on with the label. Korea has such a culture of conformity that it’s difficult to imagine a lone objector anyway.

The performers are themselves in need of better protection of their rights. Four members of another girl group, KARA, recently tried to sue their label, asserting that their contract was unfair. Essentially it made them carry the risk of poor sales and in one year each of the performers were paid just $10,000.

South Korea’s corporate hegemony could be the closest thing we can see in real life to Huxley’s Brave New World, a place where everyone cheerfully keeps the wheels of production turning without daring to ask questions. Just keep buying those cellphones and televisions thanks very much.

This is the dystopian 'Neo Seoul' from the film Cloud Atlas. It's hard to pick the difference

This is the dystopian ‘Neo Seoul’ from the film Cloud Atlas. It’s hard to pick the difference

Evil masterminds?

So when you want to point the finger, who is it that is responsible? Does the buck really stop with a handful of charming but ethically undiscriminating young ladies? Not really. The K pop idols are only so popular because of dupes who are suckered in by all the colour and movement, and all I can say is “Touchez”.

We have met the enemy, and he is us ~Walt Kelly

* Al Jazeera also looked at this issue of ‘Who’s to blame?’ only a week ago. Here is the segment:

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Actually yes, do keep it personal

Posted: February 26, 2013 in Consumer campaigns
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3D TV static

3D TV static (Photo credit: Wikipedia)

The early advocates of universal literacy and a free press … did not foresee what in fact has happened, above all in our Western capitalist democracies – the development of a vast mass communications industry, concerned in the main neither with the true nor the false, but with the unreal, the more or less totally irrelevant. In a word, they failed to take into account man’s almost infinite appetite for distractions.

-Aldous Huxley, Brave New World Revisited (1958)

I was thinking more about the “Boomerang” theory of activism, which relies on getting results through media embarassment (see earlier post).

If you think about it, it’s inherently limited.

Realistically there is only so much airtime that the media is going to give to labour issues. Have a look at this infographic to see what I mean. Labour rights stories rarely make glamorous news, unless they are tragic.

There’s only space for one labour rights story at any given time. A few weeks ago it was Foxconn. Before that it was the Bangladesh factory fire. Before that it was the Pakistan factory fire. These factories represent a drop in the ocean. It just underscores the difficulty of ‘scaling up’ advances in labour rights.

Maverick social critic Ivan Illich was on to this decades ago. He asked people to take a hard look in the mirror: What is it that you are trying to accomplish? Do you want to “fix” things permanently? Why? He called this the ‘soft underbelly’ of delusions of power.

Institutions of public health and education are, he said, the empty husks of the formerly Christian values of Western society, trying to make things better but no longer wanting to make any personal contact with their beneficiaries. I suspect that he would include labour regulations on that list.

I visibly encountered what he meant when I visited an aboriginal settlement in Australia’s Northern Territory some years ago. The largest building in town was the “CDEP” shed (the acronym stands for Community Development Employment Projects). It contained every imaginable kind of building or farming tool, up to and including articulated motorised diggers. It was all provided free by the Australian Government in a kind of guilty reparation for taking the aborigines’ land without compensation all those years ago. And it was all sitting there unused. People don’t put a value on free gifts.

You can pay people to work, but you can’t pay them to care

Similarly if labour advances are brought about by distant organisations that are not in touch with the beneficiaries, then who are they really for? The results will inevitably evaporate as they are not used. Advances won by public relations and legal means do not, on their own, represent a victory; the victory is the winning of respect.

The workers who’ve migrated from rural areas to manufacturing districts aren’t doing it so they can have lives filled with ‘things’, they just want to contribute to their families and gain dignity and respect along the way. When I glance around the train carriage, though, and see the number of people looking at their little glowing screens I sometimes wonder who is free and who is enslaved.

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Reciprocity – the basic problem with First World living

Posted: February 10, 2013 in Ethical decision-making
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Red Packets

Red Packets (Photo credit: xcode)

Reciprocity is so fundamental to social organisation yet we don’t often bother to name or think about it.

An underlying norm of reciprocity is by itself a powerful engine for motivating, creating, sustaining, and regulating the cooperative behavior required for self-sustaining social organizations, as well as for controlling the damage done by the unscrupulous. (Wikipedia)

An example of reciprocity in action are the hundreds of millions of packets of money being exchanged around the world today wherever Chinese culture has had an influence.

Reciprocity as a norm pre-dates its more recent manifestations such as the Golden Rule of Christianity or the similar formulation promulgated by Confucius (Do not do to others what you would not have them do to you).

In contemporary nation-states it finds its way into positive law and, when it doesn’t, it is what drives activism to make laws fairer.

The problem is that it is something we devised in a small group world, where co-operation is necessary for survival, whereas today we live in a planetary society. However the underlying necessity is no less valid, in fact if anything it is even more valid than it was in millennia past.

Pre-modern humans knew survival skills. They knew how to find their own food and could survive if isolated from their community. Larger scale social organisation meant specialisation and abandoning the ability to fend for oneself in every respect. Now that has gone a step further and arguably entire nations are now integrated in the same manner.

Yet … where’s the reciprocity gone in this equation? Those people who work in other nations making our clothes, growing our food, assembling our consumer knick-knacks, what do they get for their trouble? Poverty wages that would never allow them to aspire to the same kind of lifestyle. How fair is that?

We all tolerate this, we are all aware that we are tolerating it, and we feel uneasy about it because of reciprocity. If they were merely poor it would be another matter, but they are poor because people pay them peanuts, in the name of the consumer: i.e. you and me.

All of this because “they” are so far away we never get to meet them or learn their names.

Related:

Fox con?

Posted: December 29, 2012 in China, Consumer campaigns
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iPhone6

The second-ever post on this blog was about Apple and Foxconn. I haven’t come back to them since, mainly because I figured that the story had been picked up by the mainstream media and an investigation was commenced. Then I came across this:

Journalism is printing what someone else does not want printed. Everything else is public relations (George Orwell – via @FredrikGertten)

The so-called investigation into Foxconn which took place in 2012 has made me despair of the media who uncritically reported that lots of progress has been made. Anyone with a high school diploma who read the entire report could see that the main issues are not resolved at all, and wage levels are not even mentioned.

In response I have put together my own White Paper, highlighting the shortcomings of Apple and Foxconn’s remediation point by point, which you can download here:

I spoke with SACOM before publishing this. There is no democratic union at Foxconn so, as the people in touch with the workers, SACOM are probably the next best thing. They say the workers’ priorities are:

  1. A better system for scaling of production during peak times, and
  2. Worker input into selection of union reps.

As you’ll see in the Paper, neither of these issues have been addressed at all.

See also:

Culture’s Consequences (Part 4): Masculinity-Femininity

Posted: December 18, 2012 in Ethical decision-making
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We Can Do It!

We Can Do It! (Photo credit: DonkeyHotey)

Continues from this post.

The last of Hofstede’s four cultural spectrums is masculinity-femininity.

Without pausing to get into a debate about gender stereotypes, Hofstede straighforwardly asserts that worldwide the predominant socialisation pattern is for men to be more assertive and women to be more nurturing. He simply describes these values as “usually more popular” with that sex rather than being necessarily gender specific (p. 176) and is fully aware of the occurrence of sex-role socialisation (pp. 180-181).

Having defined these labels he then looks at the survey results: in which countries do assertive values predominate and in which countries do nurturing values predominate.

Most masculine: Japan, Austria, Venezuela, Italy

Most feminine: Sweden, Norway, Netherlands, Demark

The implications of this? Feminine work values will prioritise such things as:

  • Relationships with co-workers
  • Leisure time
  • A comfortable environment, including work hours, conditions and travel

Masculine work values will prioritise:

  • Earnings and advancement
  • Working on projects of importance
  • Up-to-dateness

This comes up in my day job. A survey of working Australians was conducted in 2010, which asked people, among other things, if they would prefer to have an additional two weeks of annual leave (more feminine answer) or the equivalent pay rise: about 4% (the more masculine answer).

The results were:

  • 57% Holiday

  • 43% Pay rise

So a feminine value prevailed, narrowly. This actually contradicts the most recent data from the Hofstede Centre (http://geert-hofstede.com) which gives Australia’s culture an MAS score of 61 which means it is more masculine, although still less so than China, the UK or the USA. I guess the results are an aggregation; other questions might show different results. Moreover “holiday” does not necessarily equate to time with family, it could just as easily mean time spent jetskiing or playing golf.

Recently the (predominantly female) retail workers’ union also ran a campaign to keep shops closed on Christmas Day and Boxing Day, December 26, even though work on Boxing Day is paid at two-and-a-half times the normal rate of pay. Feminine values once again. Here is a summary of the campaign’s conclusion:

This index is worth remembering when trying to assist predominantly female migrant workers. If this survey is to be believed then getting a pay rise is probably not as much of a  priority for these workers as their hours and conditions of work.

Reference:

  • Pocock B, Skinner N, Williams P (2012) Time Bomb: Work, rest and play in Australia today, Newsouth Publishing, Sydney

Links:

Asian Labour Update 81: Gender and Employment – Link will be added here when available

http://www.academia.edu/2108604/Men_of_Steel_The_Masculinity_of_Metal_Industry_Workers_in_Finland_after_World_War_II

Book Review: Globalization and Cross-border Solidarity in the Americas

Posted: December 10, 2012 in Books, Consumer campaigns
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Mujeres saharuis en la maquila

Mujeres saharuis en la maquila (Photo credit: gaelx)

I’ve written a few times about Latin American workers (see links below). Here at last is a broad description of attempts to cross-border advocacy in Latin American apparel-producing countries and North American apparel-consuming countries.

The book uses four 1990s campaigns as case studies:

  • Guatemala: Phillips Van-Heusen
  • El Salvador: Gap supplier Mandarin International (Taiwanese-owned)
  • Honduras: Kimi (Korean-owned), supplier of retail store-label clothes
  • Nicaragua: Chentex (Taiwanese-owned), another supplier of retail store-label clothes

The picture is not a pretty one. These four campaigns attained the rare victory of union recognition but, after that, their companies invariably relocate. The wonders of Capital Mobility. It makes me think of trying to stop a vacuum cleaner by holding its nozzle; it can simply detach the nozzle and use another (I’m sure there are better metaphors … suggestions are welcome!) Even so, the author writes, capital is not omnipotent and with better co-ordinated campaigns could be held to account. The world is only so big and brands in this day and age should have nowhere to hide.

The author, Ralph Armbruster-Sandoval, explains how pressure in each case was applied across borders, at both ends of the supply chain. He calls this the Keck-Sikkink or Boomerang Model (p. 22). Mis-coordinated boomerang campaigns, he argues, keep allowing the ball to be dropped after a short-term victory.

He sets out the history of overlapping pressure groups, something I’ve noticed before. Apparently the Workers Rights Consortium (WRC) was set up in 1999 specifically by people unhappy about the compromise-solution of the Fair Labor Association (FLA) which, among other things, does not insist on a minimum living wage (p. 12). The FLA are now famous as Apple/Foxconn’s inspectors (more on them next month). Likewise the IGLHR, formerly NCLC, was set up in 1981 by people unhappy with the AFL-CIO‘s pro-US foreign policy approach during the Cold War (p. 82). The AWU-APHEDA spat in Australia is another symptom of the same division. People have long memories.

Even allowing for these historical differences, there is a recurring difference in approach between groups that push the need for independent unions, and groups that push for independent monitoring (p. 13). I wish I’d learned this sooner. Throughout this blog I’ve looked at campaigns run by both camps and I’ve been somewhat biased towards the AFL-CIO approach. As a union official, it’s hard not to be. I just don’t see how you can have a successful campaign without involving the people who stand to benefit from it; you’ll end up with a result on paper that is not enforced.

In Keck and Sikkink’s (1998) model, domestic non-state actors establish ties with NGOs, creating transnational advocacy networks (TANs), who, in turn, put pressure on their respective states to bring about social change. This model [...] is quite useful but it inadvertently places too much emphasis on TANs, making them seem like they are the “saviors” of the “poor, downtrodden masses” …

[T]heir model gives one the impression that domestic non-state actors cannot independently determine their own fates without “outside assistance”. (p. 103)

and again:

[W]omen maquiladora workers have often been framed as “victims” while U.S.-based consumers and activists are seen as “saviors”. (pp. 149-150)

However you need the consumer advocacy to open up the space for organising; it’s not often there as a given. Indeed weak labor regulation is usually one of the reasons production has been moved to these countries to begin with. It’s all very comforting to prefer organising over distant advocacy but it might not always be practicable. Consider the IGLHR report into the KYE Systems factory, maker of Microsoft peripherals (which I covered here). The only options for a local partner are the Chinese state union or unrecognised local NGOs whose leaders risk prison.

If it were ever used properly, the boomerang model would actually render the dilemma moot. Successful campaigns draw on moral and material leverage (p. 59). As one wit (@WithoutDoing) recently put it on Twitter:

For something to be changed it must be both pushed and pulled (12 Oct)

This is absolutely not a theoretical debate. The two camps need to have more than a passing regard for one another, they need to actively co-operate. Using the example of the Salvadoran maquila (garment) industry, the author notes:

Consensus between the NLC, AFL-CIO and UNITE existed, on the surface, during the Gap campaign. In reality, tensions ran high. It should be pointed out that all three groups did work together, but their strategic and historical differences generated unnecessary conflict. The NLC distrusted the [local peak groups'] involvement in the Gap campaign because of their previous ties with AIFLD [the pro-US foreign policy outfit which generally sought to undermine leftist regimes in Latin America]. AIFLD’s uncritical stance towards El Salvador’s human rights abuses generated dissent within the AFL-CIO, sparking the establishment of the NLC in 1981 [...] The NLC rejects working with all “corrupt” centrist unions like the CTD, CTS and CNTS [...]

The ACILS, AFL-CIO and UNITE also claimed that the NLC’s campaigns are too “media-driven” and that they leave workers defenseless after they are inevitably fired. These organisations suggest that the NLC should work towards empowering workers and making them (rather than consumers, students, or [NLC leader] Charles Kernaghan) the primary agents of change, on the ground, through unionization.

These perspectives highlight a crucial, though unstated point: officials from the NLC, UNITE, the AFL-CIO and ACILS generally mistrust each other (p. 82).

Touchez!

People need to focus on this bigger picture, an awful lot depends on it.

As to the issue of Capital Mobility, Armbruster-Sandoval suggests region-wide organizing as a means of limiting companies’ tendency to ‘cut and run’ (p. 133). It had not been launched at the time this book was published but the Asia Floor Wage campaign does exactly that.

Related posts:

Culture’s Consequences (Part 3): Individualism

Posted: November 17, 2012 in Ethical decision-making
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Concert Crowd (Osheaga 2009) - 30000 waiting f...

Concert Crowd (Osheaga 2009) – 30000 waiting for Coldplay (Photo credit: Anirudh Koul)

Continues from this post.

Association and collective bargaining are both strongly collectivist values … or are they?

Hofstede’s third index of cultural value variance is individualism-collectivism (IDV).

His research found that nations where individualism is rated highly tended to be those:

  • With a low Power Distance Index (except for Latin America, where both are low),
  • With higher GNP per capita, and
  • Located in higher latitudes

Survey respondents in these countries (1) valued their personal time, (2) made a calculative involvement with their company and (3) prefer decisions made by individuals.

Those in low IDV countries (1) valued company-provided amenities, (2) made a moral involvement with their company and (3) prefer decisions made by groups. Unsurprisingly countries with a strong Chinese/Confucian influence were low IDV.

One interesting observation he makes is that modernisation tends to take countries on a trajectory from collectivism to individualism (for art buffs: this is a central theme of Wagner’s Ring cycle, written in nineteenth century Germany). However as they move from a modern to a post-modern state, the trend seems to reverse and they become more collectivist. He cites other authors who have noted the emergence of “a new type of collectivist who takes his bearings from his peer group and the mass media” (p. 152) (see also my last post). How prescient! This is in a book written before the Internet - even before MTV. Once again The Life of Brian said it best:

Crowd: “We are all individuals!”

Indeed.

Hofstede then uses this concept to explain the gradual shift that occurs when organisational practices are out of alignment with local values:

More collectivist societies call for greater emotional dependence of members on their organisations; in a society in equilibrium, the organisations should in return assume a broad responsibility for their members. Whenever organisations cease to do that – as in the incipient capitalism in nineteenth-century Europe, and today in many less-developed countries – there is disharmony between people’s values and the social order; this will lead to either a shift in values toward more individualism, or pressure toward a different, more collectivist social order [...] or both. (p. 152)

Those few lines neatly explain why labour-management relations are often so antagonistic.

This might seem surprising but I believe Hofstede’s research implies that nations with a strong preference for individualism can still have strong unions. He describes “moral” collective activity and “calculative” collective activity (p. 153). In the latter situation, an aggregation of individualist values can produce the same outcome (the concept of the Union Wage Premium for example).

What this confirms is that collectivist values are not necessary to obtain collective benefits. There’s no escaping the rule that every action produces an equal and opposite reaction. As long as organisations diminish their responsibility towards their workforce, formal or informal, there is going to be a counteracting response.

Finally Hofstede also notes that most of the literature on organisational behaviour comes out of the United States, which globally speaking exhibits extreme individualism. The preference is so strong that American writers will tend to speak of collectivism as ‘bad’, putting themselves at odds with much of the rest of the world.

Next up: The Masculinity Index.

Further reading:

  • Peetz, D (2006) Brave New Workplace: How Individual Contracts are Changing our Jobs, Allen & Unwin, Crows Nest NSW, especially pp. 23-47

Culture’s Consequences (Part 2): Uncertainty Avoidance

Posted: October 23, 2012 in Ethical decision-making
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116 of 365 - Ambiguity

116 of 365 – Ambiguity (Photo credit: Yogesh Mhatre)

(continues from this post)

The second spectrum identified by Hofstede is called Uncertainty Avoidance (UA). All people everywhere seek to eliminate some degree of chaos from their lives, it’s the strength of this preference that varies from country to country. Actually an even bigger predictor of this preference is age: the older you are, the more likely you are to prefer order, stability and predictability.

Low UA national traits include:

  • Openness to change
  • Job-switching
  • Rules are often disregarded
  • Optimism about political change
  • Tolerance of protest
  • Amateurs will try their hand at things

Examples: China, India, Philippines, Protestant Europe, USA

High UA national traits include:

  • Resistance to change
  • Stays with employer
  • Rules are followed
  • Pessimism about political change
  • Less tolerance of protest
  • Specialists control their fields

Examples: Japan (the highest by far), Latin America, the Arab World

This concept is quite profound and you could spend ages unpacking it. Just a few points of relevance to the issues discussed in this blog:

1. In the first half of the 20th Century, corporations in North America and Northern Europe built up Taylorist models of production and their counterparts in the labour movement developed similarly systematic responses like wage bargaining and labour regulations such as unfair dismissal laws. When the increasing complexity of modern work put pressure on this system, these countries tolerated deregulation and uncertain working hours (and hence income) whereas Japan for example has not.

One consequence of this trend is the outsourced world we now live in, with everyone pragmatically altering their production models to reduce costs.

Another is diffusion of responsibility; people feel less loyal to their employer, executives feel less loyal to their workers, shareholders feel no abiding sense of ownership. The result is unethical situations brought about because no one feels responsible.

By and large, organised labour’s response to this trend has been to oppose it and try to roll it back. I’m only aware of one employee organisation that embraces the fragmented, precariously-employed workforce and that is the Freelancers Union.

2. Ad hoc solutions are more popular than systematic solutions to labour disputes in low UA countries. This is the case both in the now largely non-union developed world and amongst the newly formally-employed in the developing world. Take a look at what’s going on in China: People with grievances don’t even bother involving the union, they self-organise protests.

3. Preference for charismatic or arbitrary authority may be more persistent than I thought. A country with low uncertainty avoidance would also have low tolerance for bureaucracy and red tape.

None of this is good news for organised labour so far as I can see, it all presents an uphill challenge.

Next: Individualism

Related posts:

Culture’s Consequences (Part 1): Power Distance

Posted: October 9, 2012 in Ethical decision-making, Statistics
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COVERS of Sino Foreign Management Magazine

COVERS of Sino Foreign Management Magazine (Photo credit: \!/_PeacePlusOne)

After the Ericsson post I started reflecting on the causes of culture clashes.

A very important book on this issue was written in the early 1980s, called Culture’s Consequences. It arose from a survey conducted by IBM.

The book distilled four key areas in which values differ across cultures. The first is Power Distance. This is “the extent to which the less powerful members of organizations and institutions (like the family) accept and expect that power is distributed unequally” (Wikipedia).

In a country with high power distance you’d be more likely to see:

  • Conformity in schools
  • Autocratic / paternalistic decision-making
  • Belief that work is a necessary evil
  • Distrust amongst employees
  • Employees fear disagreeing with their boss

In a country with low power distance you’d be more likely to see:

  • Students displaying independent thought
  • Consultative decision-making
  • Belief that work is enjoyable
  • Co-operation amongst employees
  • Employees more likely to express disagreement with superiors

Going back to the failed Ericsson collaboration: the study rated Sweden as having the sixth-lowest power-distance (31/100) while Colombia had one of the highest (67/100; comparable to Singapore).

Now check out the scores of the world’s three most populous developing nations:

  • China: 80/100
  • India: 77/100
  • Indonesia: 78/100

I’m Australian and Hofstede’s study gives us a rating of 36/100. I admit I am certainly biased towards consultation and the right of sensible dissent. This study suggests that those are rarely going to be popular suggestions overseas; hence the ongoing wave of strikes and rioting in China and the two million out on the streets in Indonesia last week. Talking gets these workers nowhere because managers don’t believe they need to listen.

(Next: Uncertainty Avoidance)

Related:

Further reading:

  • Hofstede (1980) Culture’s Consequences: International differences in work-related values, Sage Publications, Newbury Park, Cal.
  • Salk (1981) World Population and Human Values: a new reality, Harper & Row, New York
  • Donleavy et al (1995) Whose Business Values? Some Asian and cross-cultural perspectives, Hong Kong University Press, Hong Kong
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