Effects Of Free Trade On Managers

The lowering of barriers to trade and investment and the decline of distance and culture barriers has created enormous opportunities for companies to expand the market for their goods and service through exports and investments in foreign countries. The manager's job is more challenging in a dynamic global environment because of the increased intensity of competition that goes hand in hand with the lowering of barriers to trade and investment.

Some managers however might see regional free-trade agreements as a threat because the agreements exposed a company based in one member country to increased competition from company based in the other member countries. In essence the shift towards a more open, competitive global environment has increased both the opportunities that managers can take advantage of and the threats they must respond to in performing their jobs effectively.

EFFECT OF NATIONAL CULTURE ON MANAGERS
Despite the evidence that countries are becoming more similar to one another and the world is on the verge of becoming a global village, the culture of different countries still vary widely because of critical differences in their values, norms, knowledge, beliefs, moral principles, laws, customs and other practice that unite the citizens of a country. National culture shapes individual behaviour by specifying appropriate and inappropriate behaviour in interactions with others.

Researchers have spent considerable time and effort identifying similarities and differences in the values and norms of different countries. One of such model was developed by Geert Hofstede from IBM. He developed five dimensions along which national cultures can be placed.

1. Individualism Vs. Collectivism
2. Low power distance Vs. High power distance
3. Achievement orientation Vs. Nurturing orientation

4. Low Uncertainty avoidance Vs. High Uncertainty avoidance

5. Short-term orientation Vs. Long-term orientation

“INDIVIDUALISM VS. COLLECTIVISM”: Individualism is a world view, that values individual freedom and self-expression and adherence to the principle that people should be judged by their individual achievements rather than by their social bar ground, while Collectivism is a world view, that values subordination of the individual goals of the group and adherence to the principle that people should be judged by their contribution to the group. Managers must realize that organization and organizational members reflect their national culture's emphasis on individualism or collectivism. This brings to bear the variation of management practice by Americans and Japanese because the Japanese-culture, value collectivism while US-culture value individualism.

“POWER DISTANCE” according Hofstede was the degree to which societies accept the idea of inequalities in the power and the well-being of the citizens are due to differences in individual's physical, intellectual capabilities and in heritage. This concept also encompasses the degree to which societies accept the economic and social differences in wealth, status and well-being that result from differences in individual capabilities. In a higher power distance societies; workers who are professionally, successful amass wealth and pass it on to their children, as a result inequalities may grow over time

ACHIEVEMENT VS NURTURING ORIENTATION: Societies that have an achievement orientation value assertiveness, performance, success, competition and results while Societies that have a nurturing orientation value the quality of life, warm personal relationships and service &care for the weak.

UNCERTAINTY AVOIDANCE: Societies as well as individual differ in their tolerance for uncertainty and risk. Societies low on uncertainty avoidance is easy going, value diversity and tolerates differences in personal beliefs and actions. Societies high on uncertainty avoidance are more ridged and skeptical about people whose behaviour or beliefs differ from their norm.

LONG-TERM VS SHORT-TERM: The last dimension Hofstede described it, as orientation towards life and work. A national culture with a long-term orientation rests on values such as savings and persistence in achieving goals while a national culture with a short-term orientation is concerned with maintaining personal stability or happiness and living for the present.

Difference among national cultures has important implications for managers and entrepreneurs as a whole. The purpose of this paper is to inform managers and capitalist seeking to operate on the global level to guide themselves with “Hofstede's Model of National Culture” to enable them to become effective and efficient in their management practice and the engagement of human resource. Furthermore to guide management with a model that exposes them to attitudinal nature of a particular country which becomes a pillar to adopt managerial practice tailored to suit the cultural context.

In my conclusion remarks, I will recommend that a cultural diverse management team can be a source of strength for an organization participating in a global market.

Tweneboah Senzu (PhD.)
Managing Director Bastiat Ghana
(Free market Economic Think Tank Institute)
[email protected]
www.bastiatghana.org