Corporate Ethical Behavior

1. What is the statement “all capitalism is crony capitalism” referring to? Do you agree with this statement or not? Give an example.

Crony is a slang word for describing a close friend or companion, often used as a derogative term [1]. With this definition in mind and in the context of the article The republic on a banana peel [2], the statement “all capitalism is crony capitalism” refers to the tendency in capitalist performance of companies of establishing close “friendship” relations with governmental or public representatives, in order to achieve certain benefits derived of close cooperation with the public sector. Now, to agree or not with this statement, it is important to remark that generalizations are dangerous and can lead to confusion or misunderstandings not based in objective perspectives. According to this, I would have to express my disagreement with this statement, well although “crony relationships” in capitalism are a common and very used approach for achieving certain goals, capitalism itself has been proved to regulate that kind of behaviors. For example, during the construction of the metro in the city of Medellin, several scandals of “crony” relationships with bidders were exposed by public representatives, who were target of financial offerings made by corporations in order to result elected in the bidding process. Nevertheless, the ethical and moral values of those public representatives prevailed over economic ones.

2. What is a Banana Republic? Why the author is comparing India with a Banana Republic?

A Banana Republic refers to the typical approach in social and political facts prevalent in those countries in which banana production was one main economic activity during the mid 1800s and the first half of the XX century. In this denominated banana republics, social injustice, labor exploitation, corporate abuse and absence of governmental presence were the constant characteristics.

In the article, the author appeals to this term, in order to express its perspective of corrupt behaviors performed by public authorities in conjunction with corporate firms, which aimed to achieve certain selfish and economic benefits by means of manipulation of the legal and political systems.

3. Why is it problematic that that in the business world “The Media” becomes a corporation?

In this matter, it is important to remember the power owned by the media in the expression and transmission of public opinion. When the media gets involved in business world, then it will not account only with its mission of serving as the expresser of public opinion, but instead will distort it into mixed interests, economic interests, derived of its involvement in the business world. Therefore, it will no more transmit and show what the public opinion manifests, in an objective basis (which is doubtfully achieved, even if media is not involved in business world, but that’s another discussion), but will then show or transmit opinion in a selective basis, where selection is determined by convenience for the businesses in which media is involved. The problematic in this matter becomes visible when the mission that media ought to perform is considered a social need of people and this need can only be satisfied through the media. Then, if media does not speak on behalf of the people, who will?

4. In this situation, what behaviors are considered unethical for corporations, journalists and the state?

In the context of the article, unethical behaviors are explicitly signaled as, for example, the owning of media by important politicians, relationships between corporate world with media firms and public representatives (aiming, obviously, to satisfy all their interests), no verification of the information provided by different sources, but just publishing as it comes, and so on. Nevertheless, what is important to remark on these behaviors is not which they are, but why they result unethical and a common factor between all these behaviors is the mix of public interest with private interest. That’s the unethical behavior expanded in all this punctual unethical behaviors. The distortion of public institutions as representatives of public interests clashes with the distortion, when becoming another multi-units corporation, of media’s mission of communicating those public interests in the way of public opinion, and that certainly with so many distortions acquires an unethical category in the scale of behaviors.

5. What can the Media, Corporations and the States do in order to behave ethically and in the benefit of the people and not their own interest. Give at least five good ideas.

• Remain consistent with the purpose for which they are created and with the mission they have stipulated.
• Remain accountable to civil society with clear rules of playing.
• Institutionalize monitoring of ethical behavior inside the administrative process of each organization, in order to exercise self control when performing its activities.
• The educational system must teach and get deeper into not only ethics, but also into the importance of an accordingly behavior, as well as the determinant level that denouncing and reproaching unethical behaviors have.
• Make positive the punishments that could be exercised when affording unethical behaviors through their inception in legal sets of rules and norms to be accomplished and the consequent actions to be executed against those who violate them.

[1] The oxford Dictionaries, 2011. Definition of Crony. Retrieved on March, 2011, from: http://oxforddictionaries.com/view/entry/m_en_us1237176#m_en_us1237176

[2] Sainath, P, 2010. The Republic on a Banana Peel. The Hindu (2010).

The Corporation

1. How can we ensure corporations are held accountable for their actions "ethically" and "legally"?

Through strict regulations from governments at the municipal, local, regional and national levels, accountability of corporations can have a formal framework able to exert vigilance, regulation of activities and punishment to unappropriate conducts that may stress ethical or legal standards. Nevertheless, a worldwide stipulation of those standards is required, in order to effectively exercise that kind of control. Moreover, taking into account that corporations are mainly motivated by financial incentives, any of these measures could possible work if there is not a civil society manifestation of rejection against non-ehtical and/or non-legal conducts, which can be translated in terms of  loss of market share and diminished revenues. Accountability demanded in those combined terms is the best way of pressure against corporations that want to play a no-rules game.

2. Should individuals (directors, employees, shareholders) bear any responsibility for the actions of a corporation? If so, to what degree?

On my opinion, people is more concerned with acting unproperly when a clear punishment or legal consequence is explicit of being applied when those conducts take place. Taking this into account, every single individual inside a corporation should bear responsibilities for the actions of the corporation they represent, specifically because of the fact that they do represent it for the outside world. This may sound a bit extreme, but taking into account that the ones who perform conducts of a corporation are persons, not robots or an invisible hand, and it's on the power of persons to decide whether to perform a determined task or not, having always the option of public exposure as a mean of protection. Then, in what degree should they bear responsibility? At the penal, financial, administrative and contentious levels. That is at every single legal degree to which a person can be subject.

3. What are the benefits of the corporate form? Could an alternative model offer these as well?

When talking about benefits of the corporate form, it may be said they're relative, although a visible benefit is always present: distortion of the personal responsibility for actions performed on behalf of the organization. This phenomenon can be accurately pointed due to the same consideration of the corporate firm as a company or group of people authorized to act as a single entity (legally person) and recognized as such in law [1]. This characteristic gives the corporation special benefits on distortion of personal responsibility, due to the fact that a legally person cannot be subject of penal punishments, for example. Just in certain cases, most of them related with financial fraud, a single person or a group of individuals from a corporation can be subject to it. If another alternative model can offer this benefit as well, it may be in the form of a political entity, in which punishable crimes performed by that political unit have as a consequence a legal one towards the political unit, not against that who performed it (notice I’m not talking here about administrative illegal conducts or about criminal conducts like homicide).

4. Search for a foreign multinational corporation that has operations in Colombia. Research if they are run under Colombian rules or regulations or if they have special regulations.

Siemens is a multinational corporation that develops certain activities in Colombian territory under the same rules as any national corporation, due to the principle of national treatment established in the international treaties in the framework of the World Trade Organization. Nevertheless, special treatment in taxes is normally given in Colombia to foreign investment, which makes it subject to a different taxation regime than regular Colombian companies. Another regulation applied exclusively in this kind of corporations that make direct investment in Colombian territory is labor regulations, which, as in this case, can be a restrictive one, in order for this company to perform activities in the country. Such regulation stipulates a minimum amount (percentage) of Colombian labor force working for that company compared with the total number of individuals employed by the firm. Such special regulations act as a stimulus for investment in the country and creation of employment, stimulus that benefit both parties’ interests, corporate and state ones.

5. Should economic efficiency (main argument for privatization) be the primary concern for common and public services? Are there other criteria to determine who should own or operate them?

As economic efficiency is one of the most important variables to be taken into account when determining the viability of a business, neoliberal economic logic would point to have it as a primary determinant in privatization decisions. Nevertheless, in common and public services, that logic may be not always applicable. This thesis is sustained on the basis that more than economic profitability or viability, the state primary mission is to guarantee and safeguard the security of its associate members. In that direction, common and public services such as education, health, personal security, water supply and basic salubriousness conditions are to be granted by the state. Of course, it cannot be ignored that economic efficiency is to be aimed in the provision of those services, but even if not completely present, it cannot be an argument for privatization measures based mainly on that assumption.

[1] Oxford Dictionaries, 2011. Definition of Corporation. Retrieved on Marce, 2011, from: http://oxforddictionaries.com/view/entry/m_en_us1236185#m_en_us1236185

Bibliographical Sources:

• The Corporation, 2003. Based on the book The Corporation: the Pathological Pursuit of  Profit and Power, Bakan, J.

Image Source:
Wuerker, M., 2007. Retrieved on March, 2011, from: http://aroots.wordpress.com/

Organizational Leaders and Cross-Cultural Environments

Cross-cultural environments may be explained as those contexts in which individuals from different cultural backgrounds get together and must interact with each other. This scenarios may be present in classrooms, forums, museums and, of course, international organizations. In the latter, it is the mission of organizational leaders to create synergies and adequate interactive frameworks, in order to accomplish a successful result in the performance of the organization towards its goalds and purposes.

The behavior of organizational leaders in this context should be characterised by a cross-cultural managerial approach, which means understanding the differences between his or her own culture and the ones' of those who constitute his/her colleagues, subordinates or superiors. However, this process of understanding shall basically start by being conscious about the fact that those differences exist and that may be exploited or become an obstacle in the performance of the organization's activities. Organizational leaders facing this kind of situations should then try to find those advantages present in different cultures and use them on behalf of the common goals and purposes shared by individuals in the organization, so that the results may be as satisfactory as the desirable ones, or even more, generating value to the organization and making of this advantages, competitive ones.

It is important to remark, however, one conduct an organizational leader in a cross-cultural environment must never perform. This conduct is trying to change or attack other people's culture or set of beliefs and values that underlie their behavior. That mistake may significate the loss of valuable human capital and the failure of the mission which is appointed to fulfill, due to the judgement of very sensitive abstract components of human nature that are not ever available for judging.

Acknowledging that differences exist, that they can be exploited and that those differences may become competitive advantages of an organization able to lead it to a greater success ought to be the main characteristics present in the behavioral approach used by an organizational leader in cross-cultural environments.

Personalities

During the period while I was making my internship, the word "personality" adopted a special meaning on the daily development of my duties. A huge barrier between my female boss and me arouse, and conflict didn't take too long to appear. Was it that my performance was not being successful enough? Was it that my boss was the "bitter" component of the office as everybody used to say? Or was it maybe that personalities entered into conflict due to the ignorance of the fact that they were too different?

According to the American Psychological Association (2011), personality refers to individual differences in characteristic patterns of thinking, feeling and behaving [1]. Having this in mind, asking ourselves why is it important for managers and employees to be able to understand different types of personalities has a very simple answer: for not having an unbearable period together and to accomplish common goals!

Staying attached to my experience during my internship period, my boss could just not understand that the way I distributed my time was more than efficient for accomplishing the tasks I was appointed and that I just could not distribute it as she would, due to the simple fact that it was not my style to do so. However, I didn't understand either that she was absolutelly rigid in terms of time and exploitation methods of it, as well as should have also understood that she was a person accustomed to be obeyed just the way she said things and with no interest on having other opinions regarding that way. Not undestanding each other's styles made in fact a real chaos inside that office and 'unbearable' was a cute word to describe the feeling we had for each other. Nevertheless, studying international business had to work for something (I mean, I had paid very expensive semesters for not being that way) and fortunately, and with a little help of someone with whom I worked, she learnt to respect my time distribution way and I learnt to obey her orders, suggesting nicely my opinions from an approach she liked. We learnt to tolerate each other's personality and to work together as a team on behalf of the country's interests (we worked in the Colombian Ministry of Foreign Affairs).

So, maybe as a short illustrative personal case study, this experience may serve in answering the posed question. Why is it then important? Because of the huge difficulty that we humans have to accept that others are different than us and to bear those differences, and in order to overcome difficulties arising from that condition, the understanding of and respect towards differences is the only way to smoothly achieve common goals and performance of tasks.

1. American Psychological Association, APA, 2011. Personality. http://www.apa.org/topics/personality/index.aspx. Accessed 7 March, 2011.

Image source:
Doug Savag, 2007.
Retreived on March, 2011, from:
http://www.savagechickens.com/2007/06/religious-differences.html

Organizational Culture

Commonly, organizational culture is defined as a complex set of values, beliefs, assumptions and symbols that define the way in which a firm drives its business (Peters and Waterman, 1982) and acts as a cohesion factor on behalf of the successful performance of an organization at its daily operation. Nevertheless, for an individual to acquire a determined behavior, based on the corporate or organizational culture, when becoming part of that organization, he or she requires to experience an adaptation process that leads him or her to interiorise the customs and attitudes which will finally give that individual the character of a full member of this organization. But when does it come to be an adaptation mechanism to the logic of the company, for example, and when would organizational cultura constitute itself as a manipulation mechanism for having under control its human capital?

Well, at first sight one could say organizational culture is merely a set of formal or informal behavioral rules which ought to be followed by employees, as it happens in a society or a country, where behavior is certainly limited by legal norms and separation from them or extralimitation of freedom, gets a punishment related to degree of the extralimitation. Then, under this inductive reasoning, an organization is just a reflection of any constitutional political regime, which has determined behaviors as required. It is normal, isn't it?

However, what is manipulation? If it could be understood as I do it, manipulation would be the "art" of accomodating circumstances on a certain way so that the outcome resulting from the interaction of those circumstances is my desired outcome! As I'm pretty comfortable with this definition due to the fact that it summarizes what dictionaries say in nice words, I will then use it to say that indeed organizational culture is nothing more than a manipulation mechanism designed to make its constituents act on the way the organization needs them to act, in order to fulfill the posed objectives.

Uniforms, anthems, symbols, ways of addressing to others, of writing and even of thinking towards situations are just the kind of elements used and neccessary to manipulate minds of people, very commonly used by religions, political regimes and corporations, all of them: organizations. These elements in conjuction with others try to give cohesion, uniformity and standardization inside an organization, so that its purpose is accomplished by the traced means. But anyway, isn't it what a company should somehow do?

Image Source:

'Easy boy! Easy Prince!!'

Kohl, Joe.

Retrieved on March, 2011 from:

http://www.cartoonstock.com/cartoonview.asp?catref=jkon477