THE RISE OF MNC’S

During one of the classes we saw the documentary “The Corporation”. This documentary help us understand many ways and reasons why corporations act in certain ways and the impact that their decisions have in the organization and in society.

The corporations were awarded with the power of having the same rights as a person. Even though they have the same rights as a person, corporations can have different interests and goals. Their main interests have always been profit even though they affect others or a society. “I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. ... corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”1

It is obvious that they help individuals and make their life easier with the products but their main goal is just their profit. They create good and services to help individuals but they create them not to help or make humans life easier, they create them in order to make money. Or that is what we have always seen or the image we have about corporations. We have had a bad image of corporations because of the effects they have caused to the environment and to individuals. In this documentary they list some cases where organizations harmed workers and human health (layoffs, union busting, fires, dangerous products, pollution, toxic waste, and using chemicals) they have also harmed animals when they destruct their habitat and when they experiment with them. Companies have generated irreversible harm to the biosphere through the emissions of CO2 and nuclear wastes. All of this horrible damages caused by corporations to the human beings and the environment are what everyone see of the corporations, just the bad side.

Corporations sometimes have good ideas that can be helpful but they have caused lots of damage. In the documentary they talk about privatizing many public goods. The idea is to give the public goods to a corporation that manages everything that has to deal with a specific good. In the documentary they generate a doubt or question of whether we should or shouldn’t trust a corporation to handle the world’s public goods. What we really know is that corporations will keep growing and new ones will be constantly emerging due to the globalization process. The bad thing about this is that we have been disappointed by the corporations in many ways and that is why some people are starting to go against many of the bad and unethical things that organizations do to our world.

QUESTIONS

1. Do Corporations pursue today other interest or the "bottom-line" remains as their single priority? What are the factors influencing the corporation’s objectives and goals?

Nowadays corporations still have a really bad reputation because we still have a bad image. They are trying to change that horrendous image we have from them and that is why they are starting to help in foundations in order to help animals and with the recovery of their habitat. Technology has become one of their allies in order to overcome with all of the challenges they can have during production but it has also helped with the environment because fabrics are not as harmful as before. But they are still exploiting individuals in developing countries because of the cheap hand labor they can have in third world countries. Even though human rights issues are crossing boundaries some corporations keep exploiting people in those countries. Some corporations are starting to care more about those issues and are decreasing working hours and constructing better infrastructures for employee’s safety. Not everything they do is bad and they are starting to have a considerable change that can benefit everyone. Organizations have learned from their mistakes and they are trying to emend their mistakes. Multinational corporations have a large and important impact in many aspects all around the world.



2. The film focuses on the negative consequences that the Corporation’s behavior causes to the environment, to human health and animal life. Discuss from a critical perspective, the possible benefits and arising from the actions of MNCs for these 3 groups.

The documentary showed a concern about what corporations are causing to the environment and the consequences that this will have for future generations. There are some images that impact and show all the bad things that corporations have done to the environment. Some corporations use oil that damage water, pesticides and toxic substances that cause irreversible damage to animals, humans and the environment. Many employees get sick because they have been exposed to highly toxic chemicals and they usually stay in the human body which in a long term can cause birth defects. Some animals are tortured because they are used in order to test different products. Organizations have caused global warming, extinction of many animals, human and animal intoxication and starvation, birth defects and pollution.

“Recently, the role of MNCs in economic development has changed from outside agent to partner; at the same time, host governments have increasingly acted on the need to conserve natural resources in the interest of long-term productivity. Citizens' groups and international organizations are also becoming more involved in environmental management.”2 People and governments are starting to be aware of all the bad consequences that corporations have created to the world, animals and human beings. That is why many human and animal rights groups have been created in order to help prevent more damage for future generations.

3. Do you think a corporation should be considered a "person"? Discuss the implications and limitations of granting such legal existence to corporations.

I think that corporations shouldn’t be considered as a person and shouldn’t have the same rights. A corporation is just a building and a brand name that has people working in the organization which are the brain of the corporation. A corporation doesn’t feel, doesn’t think and doesn’t take decisions by itself. The ones in charge of all this are human beings and that is why a corporation shouldn’t be seen as a person. The weird thing is that they are seen and have the same rights as persons but they don’t receive the same punishments as humans when they commit a crime or do something against human race. It is sad to see that when a corporation is accused of committing a crime the ones that go to jail are the employees in charge. “Why shouldn't anybody or any corporation be responsible completely for any damage that they cause? Isn't that the catchword from the 'conservatives' - personal responsibility? Isn't a corporation seen as a person in the eyes of the law? Aren't all persons seen as equal in America? If somebody took an oil truck and pumped 10,000 gallons of oil into BP's building would they do anything? Would the person be responsible? Would they throw the person in jail?”3 Also it is not fair that if corporations have the same right as people why they receive support when they have an economical crisis and why people don’t.

REFERENCES

1. U.S. President Abraham Lincoln, Nov. 21, 1864 (letter to Col. William F. Elkins) Ref: “The Lincoln Encyclopedia”, Archer H. Shaw (Macmillan, 1950, NY)
2. http://archive.wri.org/publication.cfm?id=2664&z=?
3. http://bigthink.com/ideas/20575
• http://www.globalissues.org/issue/50/corporations
• The Corporation, a documentary made by Mark Achbar and Jennifer Abbott. http://www.youtube.com/view_play_list?p=FA50FBC214A6CE87
• http://www.rau.ro/websites/e-society/lucrari/mariana%20preda%201.pdf
• http://www.globalissues.org/article/55/corporations-and-the-environment

IMAGES TAKEN FROM

- http://www.exonblog.com/wp-content/uploads/2010/03/online-marketing-graph2.jpg
- http://www.greencitizens.net/news/archive.php?c_name=World&month=March%2010

MERGING ORGANIZATIONAL CULTURES

As we know, mergers and acquisitions are strategic solutions used in order to improve the position that a company wants to have in the market. They can also be seen as a source of knowledge and learning. But there are also difficult decisions that have to be taken and when they are not managed on a proper way many issues can emerge. Such issues can affect the stability and the future of the organization. It is very important for a company that is having a merging or acquisition to have present the creation of values inside the company because without them there will not be a north or goal in order to achieve. The values can’t be created until capabilities are transferred. There is a concept or term that can describe what happens with mergers and acquisitions and the situation during the process of integration, the term is acculturation. The definition proposed in the document for acculturation is "the changes resulting from the interaction of one organizational culture with another, or the ways in which two groups adapt to each other resolve emergent conflict ". It is common for an organization that is going through the process of integration to have problems and conflicts during the process. It is hard for everyone inside the organization to adapt to all those instant changes.

In the text they explain the way in how two companies can merge on an effective way. It is possible to join two companies together and they can become one. A new organization is created and because of being new it also brings new ideas, objectives, a new cultural organization and a new environment. All of these are new facts that have to be taught to employees and it is very important to guide them through the process. The integration process is really important because this is where everyone has to start to adapt t the new ideas, projects, objectives, people, etc. this is the process where the two companies connect or join together as whole. It is important for the companies to create integration teams that work actively during the whole process. The executives play a really important role during integration because they have to show employees security and give example of commitment with the organization and the new transition. They are seen as guides for everyone in the company and they help to manage uncertainty, help others to understand the new goals and the reasons why merging will bring benefits to everyone. That is why the acculturation process is really important in order to have a successful integration.

QUESTIONS

Based on the required reading for this module, list and explain - using evidence from the cases presented in the reading - the main challenges and opportunities arising in processes of mergers and acquisitions from an organizational culture perspective. Include at least 3 challenges and 3 opportunities.

In the cases presented in the text assigned for this topic, one can see several opportunities and challenges, which I'll go looking for cases.

• Case 1: Integrating Deutsche Bank (DB) and Bankers Trust (BT)

In this integrating case three main challenges are clearly seen. The first and most important one is the conversion of a German bank in a global organization, in other words the integration process. The integration and the Bankers Trust helped the Deutsche Bank to have a wider and globally-orientated business. The Deutsche Bank has to start innovating in many aspects and guide its employees during the process.

The second challenge that can be seen is the internal conflict with the employees that think they are losing their identity. The company has to guide and support their employees during the process in order for them to not loose trust and confidence with the organization. The integration brought a new name and it was The Deutsche Bank - Alex Brown Investment Bank. They have to create an environment in which every employee feels comfortable and secure in the new organization. Employees need to feel love for the new brand and adapt to the new organization.

The last and third challenge was to defeat and understand what the Bankers Trust employees thought of the Deutsche Bank. They had the idea that the DB was a company with a strong and rigid bureaucracy that had problems when taking decisions. The leaders of this new organization had a great idea because they used this challenge in order to create new objectives for employees and the objectives where to improve the company having in mind all of those bad opinions.

The DB gained many good things with this integration. This bank gained a good reputation worldwide because of the integration with the oldest bank in U.S. because of the use of the good image of this institution.



• Case 2: Integrating British Petroleum (BP) and Amoco into a single organization.

In this case there is a clear and really hard challenge for any organization that is passing through a process of integration. In this case two companies are becoming one and when this happens the idea is to create one and only organizational culture. The hard thing is to unify different cultures into just one corporate culture. These two companies in order to unify and have a successful integration they had to have several meetings with all workers and managers in order to show and explain the new philosophy to everyone and guide employees with the socialization process with the other co-workers.

• Case 3: Volvo and Ford

For companies like Ford and Volvo having advanced technology is really important. Sometimes these companies get stuck in ideas and innovation and they have to try to search for partners that can help them keep growing, be better and offer new products with new features. Edge technology is one of the tools that make a big difference in an automotive brand. Volvo and Ford realized that each company was the best partner or allied in order to be bigger, better, to progress and endure through time. The integration process between these two companies required team work between engineers, managers, plant workers, etc. The idea was to learn from each other, share ideas and knowledge. With this integration process many challenges arise but the most difficult one was the challenge between the two different organizational cultures. The Volvo culture was team work oriented and decentralized and the Ford culture was hierarchical and structured. These companies had to create new cars and models in order to endure in the market and become competitive in the world market.

REFERENCES

• Alzira Salama, Wayne Holland, Gerald Vinten, (2003) "Challenges and Opportunities in Mergers and Acquisitions: Three International Case Studies – Deutsche Bank-Bankers Trust; British Petroleum-Amoco; Ford-Volvo", Journal of European Industrial Training, Vol. 27 Iss: 6, pp.313 – 321.
• http://en.wikipedia.org/wiki/Mergers_and_acquisitions
• http://www.bakerb.com/alexsaenger/Marketing/eMergerCS.pdf
• http://money.cnn.com/1999/01/27/deals/ford/
• http://en.wikipedia.org/wiki/Alex._Brown_%26_Sons

IMAGES TAKEN FROM

- http://dscedu.wordpress.com/
- http://www.pacificadventure.org/main/services/employment-engagement

MANAGING CHANGE AND CONFLICT

Organizational change is defined as “Companies that are undergoing or that have undergone a transformation.”1 In order to keep on track with the world’s constant change and evolution, companies have to be competitive and adapt to all the changes that come with the market and they have to evolve at the same pace. Organizations nowadays are seen as a dynamic entity because of the constant changes they have to deal with in order to adapt, improve or evolve in a world full of changes.

There are different types of changes but the most common are the changes that the organizations have already planned and the ones that are imposed by the organizations that are mostly known as regulations. Significant organizational change occurs when an organization changes its overall strategy for success, adds or removes a major section or practice or wants to change the way they operate. Change may also occur when an organization evolves through various life cycles because each cycle comes with new things and in order to develop they must undergo significant changes at various points of the life cycle.

There are different reasons that take an organization to transform in different aspects. There are external forces such as globalization, technology, diversity, market change, etc. There are also internal forces influenced by the organizational culture which involves workers and their expectations in the organization. Individuals inside the company are also in constant change and sometimes the leader fails and a new one comes but all of these forces are the ones that make a company more flexible to evolution. Another internal force can also be the financial situation of the organization and their desire to grow and improve. Companies have to face competitive environments each and every day which takes the organization, workers and products to improve. That is why managers continually make efforts to accomplish successful and significant changes in the organization. Some managers are very good at this effort but others continually struggle and fail. That is why leaders have to be well prepared in order to be able to face, lead and handle change.

In order for an organization to have a successful change leaders or managers must have the best communication with the whole organization. It is really important to involve each and every person inside the company and ask their opinion about wht they would change in the company in order to improve. It is also important that when a change is going to take place in a company, everyone knows about it and they must be well informed because it would be easier for people to understand and adapt to the new ideas and changes. Support and motivation are key factors that leaders have to implement in order to succeed in the change. Participation in organizational change is a useful tool which demonstrates commitment with the organization.



QUESTIONS

1. Ubuntu at the workplace

• It’s Ubuntu present at the workplace, it there a link between this philosophy and organizational culture?

Ubuntu “is a traditional African philosophy that offers us an understanding of ourselves in relation with the world”2. According to this there is a common bond between every person and it is through the interaction with other human beings that we discover our own human qualities. In other words: “a person is a person through other persons”3. Ubuntu is part of the African culture and because of that it is also part of the organizations that involve people that believe in this philosophy. It is seen as philosophy and as a way of living. This philosophy is linked with the organizational culture because it helps internal integration and allows people to know how to interact and treat others in the organization. Ubuntu philosophy can be seen in many ways inside the South African organizations. Some of them are: the way they communicate, the language, managing time, decisions making, the importance of age, ideas and beliefs.

“A person with Ubuntu is welcoming, hospitable, warm, generous, and willing to share”4. People with all of these characteristics are open and available to others, willing to help, affirming of others, they don’t feel threatened by others capabilities, they are committed and have always present in their lives that they belong to a whole group. All of these are great characteristics in order for a company or organization to succeed because the organizational culture will always be in harmony and that is really important in order for a company to keep growing and functioning. Ubuntu philosophy provides stories, symbols and structures of power inside the organization. They have a firm respect for elders because they are the ones with knowledge and wisdom which are the ones that teach and guide the organizations.

• Please select and explain 3 aspects of organizational life that evidence the presence of Ubuntu at the workplace.

1. An organizational aspect that shows the presence of Ubutnu philosophy is the way in which individuals relate within the organization and with others. Employees see their partners or co-workers as brothers and sisters, like a family that has to work together in order to grow and evolve. Their relationship are calid and respectful because they treat each other with respect in order to learn from everyone. They treat themselves between them as family members. In other words, the organization is seen as a home which involves a family that has to be united and supportive.

2. The way an organization manages time is another aspect of the Ubuntu philosophy. In other cultures time is fragmented and has a price but in this philosophy time is seen as a whole which can be used to have a progress in the community and because of that community progress everyone will also have a live improvement. They don’t have money as a priority, their community is their priority. Everyone has to be and feel good.

3. The decision making process is another aspect present in organizational philosophy. For them the collective welfare is the most important thing in the organization. They seek for profitability but as mentioned above they don’t have money as a priority. Their major priority is that everyone within the organization feels good and comfortable. When taking a decision everyone is involved and the most important thing is that it always seeks a favorable result for the community.

2. African Bank Miners Credit – Case study

This case study illustrates the main difficulties faced in a process of merging two companies and the role played by culture. It is very important that in this section, you try to build relevant links between the 2 readings and your research about change theory.

• Please identify and explain 3 strategies used by the acquiring company in order to facilitate the change process through the use of Ubuntu.

As I mentioned above, some changes in the organization are planned and other have to be done on the way. The African Bank Miners Credit is a great example of those changes that a company has to undertake. When the bank bought a controlling stake in the National Union of Mineworker's (NUM's) everything started to change. Even though the bank did this as a strategic movement and change all of this created a bigger and continuous change in the organization.

As we already know, Ubuntu “is a traditional African philosophy that offers us an understanding of ourselves in relation with the world”5 The African Bank decided to use this philosophy in order to adapt to all the changes when they decided to join together. Ubuntu is a way to help to adapt and explain the change to the individual's in the organization.

There are some strategies used by the company relying on the Ubuntu philosophy. One of the strategies was to use a kind of booklet where every person in the organization contribute with ideas and comments in order to help the company to improve. This booklet was taken from the Ubuntu philosophy because they use a booklet where everyone can express their ideas and feelings towards something they like or dislike. In that booklet they tell stories which help others in their evolution. This is a good idea to implement in the company because workers are free to express themselves and their feelings which can help managers understand the way they think and have better ideas to manage change.

In the Ubuntu philosophy they have the drum as a symbol of communication. The African Bank decided to have the presence of the drum inside the organization because of the importance it has a communication symbol. This shows how this philosophy and the organization can be linked and how having a good communication with workers and co-workers can help in order to have a successful change.

Another important strategy used by the organization in order to grow was the Ubuntu concept of working as a family. Ubuntu says that what is good for everyone is also good for the individual and that is why every person is seen as a brother or sister. This strategy was implemented by the Bank in order to grow and succeed because if all workers have the idea of the company as a family that has to work together in order to grow. If they family grows every individual will also grow.


REFERENCES

1. http://ccs.mit.edu/21c/iokey.html
2. http://www.buzzle.com/editorials/7-22-2006-103206.asp
3. http://www.buzzle.com/editorials/7-22-2006-103206.asp
4. http://en.wikipedia.org/wiki/Ubuntu_(philosophy)
5. http://www.buzzle.com/editorials/7-22-2006-103206.asp

IMAGES TAKEN FROM

- http://careerchoicecoach.com/managing-change/
- http://www.mennoniteusa.org/Home/Leaders/Equipping/Augustpastors/tabid/1529/Default.aspx