International Business Essay

Introduction

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People from different cultures are brought up in different environments with different values, norms and practices that shape their mindset accordingly. A difference in mindset is an influence of various acting elements within a culture and which further affects the behavior and the way of thinking of that person. As a result of these differences, managers who are apt to working in a certain country will starkly differ from managers in other countries. In this paper, we look into what differences lay between managers from Greece and managers from America. There are different managerial aspects that need to be explored in order to gain a better understanding of the business environments in the two countries and how they are shaping the mindsets of the managers in the specific region.

Cultural Differences

The cultural differences have the most impact on the managers and their way of thinking.

In America the social structure allows individuals to exercise more freedom, independence and liberty.

This is often reflected in the fact that men and women are often let out to stand on their own two feet once they reach the age of eighteen and sometimes even earlier than this age. The American culture is more apt to developing people internally on their own basis without the support of peers or family. This often tends to make them self-focused and lead lives on their own sustenance with the primary focus on reaching success heights for own self (Heifetz & Linsky, 2008). So in America, success is strictly dependent on a person’s own abilities, his involvement in business and his own enthusiasm for success. As a result, the norms, values and practices for one-self are determined pretty much by the individual himself and he applies them in his own way on his own rules (Daft, 2001). Family relationships, values and bondage weigh a lesser priority in the American culture than in the other culture and therefore the stress is more towards individualism and independence.

This starkly differs from Greece, located in southeast of Europe near Asia and Africa. The Greek culture is one where family is top priority. The cultural values, family relationships, bondage and association are highly ingrained in the business environment. In Greece, often generations of families are seen to be living together and people believe in remaining in close contacts with extended families and contacts. Independence, liberty and individuality are not considered worthwhile solution for people when family structures exist. The focus is on taking forward the family culture and heritage instead of digressing in a different direction to achieve a certain career dream. Family support and sustenance are seen as necessary for an individual (Robbins & Judge, 2004).

Although pursuing ones dreams is not hindered, but if a family business is already in practice, it will not be seen as a good deed to embrace independence and putting family on the backseat. As a result, Greek values tend to be more family centered rather than giving people the autonomy and liberty which they desire or should embrace. This is consequence also hinders the personal development of a person by constraining his wishes. Greeks are major advocates of education and especially their males family members especially to acquire high and quality education. However, it is observed that Greek families generally do not send their children to universities in UK or US even though the world’s best universities reside there. Even though the culture has adapted with time, the cultural values and practices described above are the traditional and inherent elements of the Greek and American region (Heifetz & Linsky, 2008).

Business Organization

The business structure in America and Greece differ strictly.

In America, especially in recent years, single owned businesses have opened up either physically on the land or online. The previously run family businesses in America are now being owned and run by professional managers who have the necessary talents and skills. Owing to greater autonomy and freedom, businesses are managed by groups of people who independently come together with a range of capabilities and skills to reap the benefits of success. People can start as early as possible depending on their own wish and often people tend to switch between jobs or workplaces to either gain more experience or to fulfill their needs better and to develop their personal abilities (Daft, 2001).In Greece, with a traditional focus on family structures, many businesses are owned and run by family relationships. Business organizations primarily tend to be ‘paternalistic’ which reflects the strong family ties and ethnic values that bind all Greeks together. People are inherently expected to join family businesses when they come of age instead of pursuing their won wishes and dreams.

Businesses are seen as family successions where the retiring CEO will pass his responsibilities to his offspring, relative or some other individual.

Business Structures

American businesses tend to reflect a non-rigid hierarchal structure with managers leading groups of subordinates below him. Autocratic organizations with a demanding influence are not very typical of American organizations (Heifetz & Linsky, 2008). Teams and group work is an essential part of organizational structures where people can showcase their team work abilities. Groups such as quality circles or societies headed by a manager are pretty much inherent in the system.Greek organizations tend to reflect a more family-oriented hierarchal structure wherein often family relationships and family positions dictate the position of an individual in an organization. There is a more rigid business structure in which family values and respect are expected to be observed by subordinates and lower level managers up to the CEO.

Such structures tend to confuse the personal relationships with business work which in certain circumstances may not be favorable for the business.

Role of Managers

The role of managers is pretty much defined by business environment and structure. In American businesses, top management places a lot of stress on basic Human Resource concepts of expanding the role of individuals and granting them more and varied responsibilities. The concepts of autonomy, freedom, liberty and empowerment are the main driving forces in today’s American business environment (Robbins & Judge, 2004). Managers are encouraged to show more decision making abilities and help subordinates develop and groom their capabilities and to put them in a way to which is in line with the strategic direction. The role of managers is more towards grooming individuals, helping them, allowing them more participation and freedom and guiding them rather than imposing decisions and portraying an extremely authoritative managerial nature.In Greece, the individual responsibilities of managers and workers are clearly defined.

Being a part of a family structure, a lot depends on your family position as well. The scope of an individual’s tasks may not be increased and expanded to add autonomy and empowerment. Managers traditionally will have to be given clear instructions on what they have to do otherwise directions to them will remain very vague and will not be able to be understood. The decisions or statements taken by the elderly group members holding a high position in the business are deemed to be paramount with no room for influence or change from others (Daft, 2001). This is directly related to the concept of strong and in-built family ties where the elder members of the family often dictate their instructions and expect them to be followed as they are. The concepts of employee empowerment, autonomy and independence are weak and constrained primarily due to family pressures and structures.

Superior-Subordinate relationship

In American culture, the superior-subordinate relationship tends to be democratic rather than influential and autocratic.

Managers and subordinates can interact personally; air their views, concerns, opinions and problems freely and without hesitations. In fact they are encouraged to act in a participative and involving manner. Decision making is encouraged and channels are designed to involve managers more in this process. This gives managers a felling of worth and is a means of motivating them. Channels of communication tend to be more personal and often managers can come and talk to one another face to face or on phone whenever a need arises. Resorting to memos and letters is less and this reflects the more participative, informal and interactive business culture. On the contrary, in the Greek business environment, superior subordinate role is clearly defined with in-built obligations and expectations.

Superiors and managers have to give clear-cut instructions to subordinates, with minimal scope for interaction or feedback. The decisions dictated by managers are seen as having a paramount value that cannot be changed or influenced (Heifetz & Linsky, 2008). A strict organizational structure follows with more of an autocratic rule wherein room for participation is very less. Managers in Greek culture tend to demand loyalty from subordinates due to the highly in-grained relationship bonds in the run in Greek culture. Manager-subordinate relationship is pretty much reciprocal wherein the manager will support and look after the interests of his subordinates only if he receives the esteemed recognition and respect (Robbins & Judge, 2004).

Composition of males and females

In the American culture, both women and men are seen as having capabilities to advance the cause of the business and display their talents and creativity to take the business to great heights. As a result, in America, men and women are both given equal opportunities for jobs, education and for promotions.

Moreover, women’s pay and other monetary benefits have also now been set in line with males and with the usage of more bonuses and performance-related pays, women are being given the motivation they need to work and excel. Women are encouraged to take up fields that were previously frowned upon and they have truly displayed their talents and business spirit by taking an enthusiastic and proactive business approach. So with equal opportunities, males and female composition in business organizations is almost equal (Heifetz & Linsky, 2008).However, in Greece, businesses primarily remain male-dominated with little scope and motivation for women to enter the business field. Even though there are some successful women managers working in Greece, the businesses mainly remain dominated by males. The male composition is more than 85% in businesses whereas females come in scanty numbers. The efforts and encouragement that seem to be taken in the American culture to progress the cause of women in the business environment do not seem to be taking pace in Greece.

Leadership Styles

Leadership is often confused with management and administration. So firstly, we would distinguish between the three terminologies. Leadership is about developing a vision and direction and then having the inner ability to pursue it and energizes others with it too. Management is about achieving the vision through the allocation of resources and to reach certain degree of profit or surplus. Administration is about procedures, guidelines and rules to ensure that they are being followed in the proper manner. Administration tends to be more general and remains same more or less worldwide. It is leadership that undergoes changes and evolves (Daft, 2001).

However, even though leadership and management may differ in meanings, in practice it is the mangers who have to take on the role of a leader in an organization. Therefore it is important to understand the leadership roles that are most dominant in America and Greece (Heifetz & Linsky, 2008).In America, leadership has evolved since inception. Firstly family owned businesses were the norm where leadership was passed down from fathers to sons and siblings. However, this practice has now changed and American organizations are now being owned and ruled by professional mangers and businesses later taken on by other professional managers. More sophisticated businesses now have programs to develop CEOs within the company. Capital is raised through capital markets instead of from the family’s own funds.

A CEO has an average of 30 years with the firm and about 4% of the company’s ownership. Since these are not family based businesses, there is less freedom for action for CEOs and boards in America than in Greece where family CEOs have much greater power and authority.In Greece, since businesses are mostly family owned, power lies with the family owners instead of capitalists who have invested in the firm and thus enjoy less influencing power. However, the greater share of the company they own, the more the influence and decision making they can be a part of in America. The difference lies that in Greece, businesses and leaderships are generally passed on ‘sons’ or ‘relatives’ basis whereas in America, people have to strive through year’s experience and training to reach the desired place in the business organization (Robbins & Judge, 2004).In America, the main leadership styles pursued by managers are:

• Directive leadership where the leader is very much in charge and stresses that the manager directs and leads people with less scope for autonomy for people. However, this trend is pretty much declining in America even though previously it used to be the norm.

• Participative leadership whereby teamwork and group work is stressed a lot. However, this is more common in Europe and Japan than in America. Even though Greece is a part of Europe, it is not typical of European business style.