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Scenario 3

Using the findings and recommendations of the Lord Davies Report argue the case for affirmative action to introduce more women into the boardroom. Propose an action plan for business to follow in order to encourage women to break through the glass ceiling.

Introduction

There is little contention on the need to have more women in the boardrooms. The Davies report reported that having more women in boards reduces the chances of such a board engaging in risky or corrupt businesses. However, the current boardrooms both in the UK as well as in most other countries in the EU have sidelined women and have largely favored the men in the higher positions of management. Having established that there is not contention over the advantages of having more women in the boardrooms, the question that follows is on how affirmative action can be implemented such that women are given a chance to break the proverbial glass ceiling. This section of the paper uses the findings and recommendations of Davies’s report and argues on the need to have affirmative action in the corporate and bring more women in to the boardrooms. The paper recommends that the most practical way of implementing affirmative action is through voluntary commitments from the corporate sector.

Theory and Application

Senator Davies’ report called for a voluntary approach where businesses would on their own volition elect to uphold affirmative action based on the obvious advantages that are to be reaped. However, breaking the glass ceiling will not be easy as business choosing to put women in the top management. The government should and it currently continues to reserve the right to use laws and quotas that will make it mandatory for businesses to be gender balanced right from the lower cadres to the top management positions (Hurn, 3).

According to Hurn (1) using legislation to enforce affirmative action in the business world is a lot murkier and should only be used as an option of last resort. This does not necessarily mean that it is completely irrelevant. Indeed, there is a general agreement among stakeholders that the last three years have seen unprecedented growth in the representation of women in the boards of corporations in the UK. All this progress has been made under the voluntary approach. Moving forwards, it is important that more businesses are brought on board so that they can willingly help build a new business culture for the benefit of all concerned stakeholders. The Davies report reported that the number of all-male board members has gone down from 21 in 2010 to a low of 6. This demonstrates that the pace of change in UK boards is considerably high (Hurn, 3).

This increase in the number of women may appear progressive but it is unfortunate that it has increased largely because of the appointment of women to non -executive positions. A report by the House of Lords (213) in the UK show that the number of women in executive board positions has remained at a low of 6.6 percent with a slight increase from 5.5 percent in 2010. Opponents of self-regulation have argued that the poor progress with regard to executive positions may be as a result of the self -regulation policy. However, it is important to note that executive positions are given to those who have worked in the firm and have the requisite experience to sit in the board. This will obviously take time given that is a process that starts from the lower cadres and through promotion; employees are able to attain the top management positions. Businesses should start developing strategies that will enhance the promotion of women to the executive positions in the same rate as their male counterparts (Teasdale, Fagan, and Shepherd, 62).

Naturally, women have a disadvantage when it comes to promotion in the work place. The roles they play in the family set up automatically disenfranchise them and provide men with an upper hand. The business world is such that even a small hiatus to a person’s career has the potential to derail the person’s career growth in the long run. In most instances, women in business have their career interrupted at the age when they start a family. Coincidentally, this is often the time where promotions to the executive positions begin. This is a problem that cannot be solved through legislative quotas. Rather, it calls for a holistic approach from industry players geared towards changing the entire business culture (Teasdale, Fagan, and Shepherd, 62).

The use of legislative quotas has been adopted in most of the EU member countries with Norway serving as the best example. While one would expect Norway to have made considerable progress compared to the other countries, it has been shown that the number of women in the board rooms has only been non-executive. Only a handful of women have managed to break the glass ceiling and become executives who run the businesses in the actual sense. This is a perfect example of why the use of legislative quotas may not be the perfect approach in as far as breaking the glass ceiling is concerned (Davies, 4).

Having regulated affirmative action may appear to be the most effective strategy especially when there is an urgent need to meet the set objectives as quickly as possible. On the flipside, such an approach will affect the working practices in the business world and will in the long run make it impossible to enjoy the objectives of affirmative action. This is because the issues which hinder women from entering the executive positions are deep rooted and are ingrained in the culture. It is important that changes to this culture are progressive such that the business stability is not negatively impacted. The competition in the current economic environment is more aggressive that it has ever been. As such, businesses should be given the chance to make their own autonomous decisions while at the same time committing themselves to affirmative action (Hurn, 3).

Climbing the corporate ladder has largely favored men compared to women. Teasdale, Fagan, and Shepherd (62) researched on the factors that make it easy for one to climb the social ladder. It was noted that at the entry level, businesses are looking to hire the most talented employees. At the recruitment stage, there is little inequality between the male and female employees. As the employees continue to work, there are issues of mentors, role models, challenging work environments, and competition that ultimately result in a higher number of men in the higher echelons. Role modeling is one factor that serves to disadvantage the women in the modern business world. The traditional business environment was largely male dominated which naturally places more men in the executive positions compared to women. Given that succession plans play a huge impact in determining those who get to climb the corporate culture, it becomes easier for men given that they are mentored by the male role models while women are disenfranchised as they have no one to mentor them (Katz and McIntosh, 49).

In the same line of mentoring, Katz and McIntosh (51) reports that a majority of the women serving in the top positions have chosen non-executive positions given that they are easier to get and even less competitive. Thus, women who have followed have opted to follow in the footsteps of their mentors and hence reduced number of women is getting to the executive positions. As the Davies report recommended, businesses should broaden their efforts to have affirmative action. It is important that business focus their efforts to the executive positions and move beyond the current obsession which involves placing women in non-executive board positions. While self-regulation has the potential to transform the corporate culture, government should also be supportive of affirmative action and should therefore strive to complement the private sector. Through the relevant government bodies, businesses should be made to report their diversity policies and progress with regard to the representation of women both in the executive and non-executive board positions. It is also possible for the government to use its influence and ensure that investors support companies that have gender equality in the top management positions (Katz and McIntosh, 52).

There are still a number of corporations operating in the UK that are yet to make specific targets on the number of women they hope to have in the top management positions. Given that affirmative action will only be possible if there is a paradigm shift in the business culture, it is important that smart goals are made early enough so that the progress is clearly seen in the next decade. Business organizations that are yet to make a voluntary commitment on the number of women they hope to have in their boards should develop clear policy strategies as soon as possible. Specifically, a roadmap should be made for the executive positions where the performance has hitherto been dismal. For businesses where policy strategies have already been developed, it is recommendable that the progress is reviewed constantly and changes made to make it more adaptive to the environment and even easier to achieve. Davies (8) argues that the minimum target should be set at 30 percent with regard to the executive positions. It would also be progressive to have a couple of women chief executives managing the top business organizations in the UK.

Moving forward, it is important that companies start advertising for directorship positions and informing the potential applicants of the commitment to affirmative action. This approach will serve to encourage women who have hitherto had cold feet towards these positions. Indeed, a lot of women fail to get to the executive positions since they shy away from the recruitment process fearing that it is too competitive for them. If the women are encouraged to apply, then it would be possible to attract talented women and fast track the process (Davies, 9).

Conclusion

In determining the best method through which affirmative action can be implemented, it is prudent that we first understand the factors that have led to the historical disenfranchisement of women in the senior management positions. Some of the barriers were identified by Lord Davies and have been discussed in the paper. In enforcing gender balance in the top management positions, we must have a holistic approach that seeks to change the entire organizational culture. This change of culture should be made voluntarily by the business organizations without undue interference by the government. However, government can complement the measures taken by the business world by creating an environment that enables businesses to meet their targets.

Scenario 4

Using the business and managerial values in different countries and societies outlined in Fisher, Lovell, and Valero-Silva (2013:417- 428) evaluate using appropriate examples, how the ethics and values in different countries can be reconciled when doing business with each other.

Introduction

The business world continues to witness a number of changes that have affected the application of business values and ethics. As a result of globalization, businesses are operating in a multicultural environment. National boundaries have also become very porous which means that businesses are operating in different countries or are interacting with players from different countries. The consequence of this is that the risk of having cultural conflict becomes very high. Such a conflict would not only affect the general relations between the companies but it also impacts on the cultures and values of the different business players. It is important that business have an understanding of the internal and external cultures of the countries where they operate so that they are able to avoid conflicts in ethical and business values (Alas, Gao, and Carneir, 255). This section of the paper discusses how differences in ethics and business values can be reconciled when doing business with each other.

Theory and Application

According to Alas, Gao, and Carneir (255) ethics refers to a set of doctrine rules, values, principles, and virtues that shape the conduct of a person or of a group of people when relating amongst themselves or with other people. There exists a deep and intrinsic relationship between culture and ethics. Given that cultures vary, it is unavoidable to have a conflict of values and principles both in the social as well as in the business realm. However, it is important to note that there are certain universally agreed principles such as honesty and care for others that are agreed as ethical across different cultures. In resolving ethical conflicts, businesses should strive to ensure that the ethical code is in line with the universally agreed principles.

There are two major ethical systems that are used in explaining ethics. Deontological and teleological are two systems that are often used to explain ethical acts and conduct. Using deontology, we are able to determine whether an action is right or wrong albeit abstractly. Generally, the principle applied with deontology is that ethical actions are those that cause no harm to anyone. Deontological theories therefore teach people to act in a manner that does not cause harm to other people. They also teach people to act in accordance with the universal principles of moral rightness. On the other hand, teleological ethics take in to consideration the impact of an action to define when such an action is ethical or not. Generally, an act is considered ethical if it contributes in maximizing happiness for a maximum number of people. In determining the ethicality of an action, several factors come in to play. A key factor is the society which is the environment where the ethical code has been developed. The ethical code is developed based on the cultures of the concerned group (Pitta, Fung, and Isberg, 243).

Businesses are social institutions that exist within certain national cultures. As such, the management values and practices in a certain business will most likely be shaped by the culture of the society where it was founded. While the specific details of each culture will differ significantly, it has been found that there are only a few cultural dimensions throughout the globe. One dimension is the level of individualism. The other dimensions may be power distance, gender, or uncertainty (Lewis, 160). Individualism refers to amorphous social setups that people operate in and which are mainly meant for the protection of themselves. This is mainly a western phenomenon with countries such the US and Britain as the main perpetrators. Collectivism, on the other hand, collectivism is a concept where people exist in groups and look after each with a high level of loyalty, promotions are rarely based on meritocracy but rather on seniority. A good example of a country with a high level of collectivism is China.

Power distance, refers to a measure of the level that powerful bosses accept an imbalanced distribution of power. Within the low power societies, decision making is decentralized. On the other hand, the high power societies do not allow for decentralization (Adler, 107). The third area of divergence is on uncertainty avoidance, which is described as the level that managers and employees face ambiguity in terms of career security. Lastly, masculinity or femininity is relationships. A masculine society is one that emphasizes career success values such as money. On the other hand, a feminine society emphasizes strong relationships and high quality of life. For businesses that operate in either of these dimensions, it is important to discern the values in such a society before developing an ethical code of conduct.

Businesses that operate in the multi-cultural context will interact with these cultural dimensions. The ethical behavior in these countries is also influenced by these cultural dimensions which make it easy for businesses that understand the business environment to reconcile these cultural differences. The first important step in avoiding ethical conflicts is to avoid rules and guidelines that are not in line with the cultural values of the people.

Example 1

For example, in masculine societies such as in the US where material success is highly appreciated, it would be considered proper to give employees cash bonuses as a form of appreciation. Such bonuses would be considered conventional. However, in feminine culture such as the Netherlands where success is determined by non-material factors such as the quality of life and developing strong family relationships, providing material success may be seen as unethical. To avoid such conflicts, the business managers should take time to understand the culture of the society where they operate. A manager operating in the Netherlands may choose to provide the employees with a day off as a sign of appreciation (Lewis, 160).

Example 2

Alas, Gao, and Carneir (259) advise managers who run businesses in multicultural contexts to desist from developing lists or rules that defines acts that are allowed or disallowed in an organization. This is because having such a list is too simplistic and could easily cause an ethical conflict. For example, an American business operating in China may come up with a rule disallowing its employees from receiving or giving gifts in business transactions. However, in the Chinese culture, business gifts are a part of the business culture. They are given as a sign of respect and declining is seen as rude and unethical. These gifts are not given with the intention of influencing the behaviors of the other business partner. This example demonstrates an ethical conflict that could potentially destroy the business. To ensure such conflicts do not occur, business operating in the multicultural context should develop principles and values that guide their business as opposed to developing rigid lists of ethical or unethical conduct. In the example provided, the business manager should have developed an ethical code of conduct that required employees to uphold integrity and honesty. As such, the employee will be free to accept gifts that are given as a sign of respect and decline those gifts that are given with the intention of influencing the person’s actions. Indeed, ethical values very universal. A bribe is considered unethical in almost all cultures as it is not only fair but is also an act of dishonesty (Alas, Gao, and Carneir, 258).

Ethical conflicts will also occur if businesses are unable or unwilling to satisfy the needs of all those in the society where they operate. All ethical codes that are developed in modern and traditional societies are generally aimed at upholding decency in the society. As such, businesses, through their representatives have a duty to conduct themselves in the highest ethical standards. They must act decently and respect the cultural diversity of the global markets. If all businesses were to engage each other in an environment of respect for the other party and for the cultural values, then there would not be ethical conflicts (Fisher, Valero-Silva, and Lovell, 421).

Example 3

In countries such as China, verbal contracts are common even in formal transactions. Business partners do not necessarily have to write down all the details of a business agreement. On the other hand, the American society is very strict when it comes to contractual agreements and unless there is a clear proof of an agreement, the agreement may not be honored. While the ethical practices in these countries would automatically conflict, the ethical values in both countries are not in conflict and would therefore form the best method of reconciling the parties. This is because both societies value agreements made in good faith. As such, honor serves an ethical value that could be used to reconcile a conflict in the example provided above (Fisher, Valero-Silva, and Lovell, 420). 

Conclusion

The examples provided have shown that business can easily fall prey to ethical conflicts especially when they operate in different national cultures. However, these conflicts can easily be avoided if both businesses take their time to learn the business culture of the other party. The values that are considered ethical in most cultures are universal. These values include virtues such as honesty, good faith, honor, hard work, and respect for other people. Despite this convergence, the business practices create ethical conflicts if they are viewed abstractly. As such, businesses operating in multicultural environments should learn to use ethical values as opposed to developing rigid rules on the practices that are ethical or not. 

Works Cited

Adler, Nancy J., and Allison Gundersen. International dimensions of organizational behavior. Cengage Learning, 2007.

Alas, Ruth, Junhong Gao, and Jorge Carneiro. “Connections between ethics and cultural dimensions.” Inzinerine Ekonomika-Engineering Economics 21.3 (2010): 255-262.

Davies, Evan M. Women on boards. London. Retrieved from: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/182602/bis-13-p135-women-on-boards-2013.pdf

Fisher,  Collin, Nestor Valero-Silva, and Alan Lovell. Business Ethics and Values: Individual, Corporate and International Perspectives. Harlow: Financial Times Prentice Hall, 2013. Print.

House of Lords.  EU Sub-Committee on the Internal Market, Infrastructure and Employment Women on Boards inquiry Oral and written evidence. Retrieved from: <http://www.parliament.uk/documents/lords-committees/eu-sub-com-b/GenderImbalanceintheBoardroom/Women%20on%20Boards%20-%20Evidence.pdf>

Hurn, Brian J. “Momentum building for more women in senior appointments.” Industrial and Commercial Training 46.1 (2014): 1-1.

Katz, David A., and Laura A. McIntosh. “Developments Regarding Gender Diversity on Public Boards.” New York Law Journal (2013).

Lewis, Richard D. When cultures collide: Leading across cultures. Nicholas Brealey Publishing, 2006.

Pitta, Dennis A., Hung-Gay Fung, and Steven Isberg. “Ethical issues across cultures: Managing the differing perspectives of China and the USA.” Journal of Consumer Marketing 16.3 (1999): 240-256.

Teasdale, Nina, Colette Fagan, and Claire Shepherd. “Women’s Representation on the Boards of UK-Listed Companies.” Women on Corporate Boards and in Top Management: European Trends and Policy (2012): 128.

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