Showing papers in "Problems and perspectives in management in 2005"

Business culture in modern Russia: deterrents and influences

Abstract: In this paper we identify three major influences affecting entrepreneurial culture in modern Russia and other countries that were formerly parts of the Soviet Union and evaluate their effects. It is argued that the diffusion of new patterns of business culture required by the process of market reforms in the country is going to be slow and idiosyncrasies will persist. As a result, a noticeable variance between national and international entrepreneurial culture is to remain a challenge to foreign firms doing business in Russia and a deterrent to the process of Russian marketisation in general. Business Culture, Economy and Systemic Change National culture is instrumental in arranging professional values and attitudes and determines the forms in which some universal principles get incorporated into business practices and thus become generally acceptable, for the duration of a particular historical period, at a national level. Societal culture puts constraints on the economy. They are informal but nonetheless, as noted by North (1990), very pervasive. As an inherent social institution, culture influences some “written rules” that enable and guide common interactions within societies. Culture also affects the progression in economic life. According to Arrow (1974), it asserts an additional set of variables expressing social demand through “internalised demand of conscience”, which has real, practical economic value and increases the efficiency of the economic system. Changes in the economic foundations of the society cause changes in cultural norms and values. This in turn stipulates alterations in the “demands of conscience” in respect to the economic system. Clearly, contradictions between culture and the economic environment are inevitable. We may expect economic parameters to be capable of faster and more radical change than those attributed to culture. The latter as an aggregation of accepted social rules endorsed by tradition, long standing norms and role models secures the continuity of features constituting a national character and other nation specific features. Post-communist transition has proved to be one of those rare historical events in which both the culture and economy experience radical changes simultaneously. Consequently, culture cannot play to a full extent its role of an institutional safety net helping to structure economic relations according to the premise of the “demands of conscience”. The process of economic and social changes has taken a particularly dramatic form in countries that were formerly parts of the Soviet Union because there the central planning model had been most prominent, putting these countries, in terms of social and economic experience, at odds with other countries at the similar level of development. Such a situation is bound to put particular stress on the formation of the national pattern of entrepreneurial and managerial behaviour, which counts reliance upon past experience and stereotyping among its important elements. This behaviour is built around a search for information about situations and options for the purpose of taking business decisions. Information is then processed and evaluated in the course of what is essentially selective filtering of input against certain criteria. If some of them become vague the efficiency of decision-making may suffer. Conventions associated with a national culture occupy a prominent position among these criteria as they are related to both institutional and subjective aspects of business. In their established form such conventions constitute a national business culture, making it easier to decision-makers to choose successful responses to signals emanated by the economic environment and the society. In modern Russia the task of developing adequate attitudes in terms of business culture represents a formidable challenge. First, radical transformation of the economic set-up urges economic agents to produce responses that are entirely new to them. Importantly, these responses have to be based on the set of values and the type of rationality which are different in comparison to those that was significant before and, due to social inertia, still constitute a notable part of the national culProblems and Perspectives in Management, 2/2005 26 tural tradition. Second, information coming from the economic environment is likely to be distorted, confusing and incomplete following the inefficiency of transitional institutions (Kuznetsov, 1994). Under these circumstances the ability of entrepreneurs and managers to take decisions and develop long-term strategies is hampered. Academic literature suggests that economic agents should react by attempting to obtain greater knowledge or redefine their decision problem so that uncertainty is no longer critical (Cohen and Cyert, 1965). Because decision-making in business has a cultural dimension, the accumulation of knowledge and problem setting will be affected by major cultural influences to which entrepreneurs and managers are exposed, including the national cultural tradition as carried over from the previous historical period; new cultural trends induced by changes in domestic business and economic environment; the example of business practices in countries with mature market economies. To trace the three influences in the behaviour of economic agents is a very important issue that may throw light on the future of Russian business culture as well as help to explain some unorthodox patterns of behaviour existing in transitional Russia (Hansen, 2002). Capitalist Values and the Realities of Transition The doctrine of free entrepreneurship contradicts everything that the Soviet system stood for. Yet we cannot expect modern Russian entrepreneurs to liberate themselves entirely from any social experience gained under socialism. This is as much impractical as impossible because common social experience provides the framework for a meaningful exchange of information necessary for carrying out business activities. As pointed out by Hampden-Turner and Trompenaars (1996), cultures are neither wrong nor right: hereditary cultural holdings provide orientations to issues “because there would be chaos unless they did so.” Accordingly, in modern Russia, there is a pronounced tendency for informal rules, which previously existed as a superstructure over now extinct formal rules, to remain in service as temporary substitutes for more formal arrangements. This fulfils the prediction of the institutional theory that in the absence of a developed institutional infrastructure informal constraints including those rooted in a common cultural background become crucial in resolving basic exchange problems among economic agents (North, 1990). In the context of a transitional economy this brings about particular complications following a contradiction between the origins of informal constraints applied (a centrally planned economy) and the circumstances under which they are put to use (a proto-market economy). A conflict between informal rules in use and formal rules introduced in the course of reforms becomes inevitability. There is a paradox: economic agents have to comply with informal constraints until a functional institutional framework is in place but by doing so they make the installation of the latter even more difficult. Another aspect of this problem is that reliance on a transient set of rules brings to life a specific type of short-term oriented rationality that precludes businesses from strategic commitments, which has a negative effect on economic growth in the country. Understandably, in modern Russia the selection of norms of behaviour and experiences carried over from the past by managers and entrepreneurs reflects the realities of the present setup. What makes this choice bear important social and cultural consequences is that almost everything that was praised under the old system appears to be irrelevant or even counterproductive under current circumstances while behavioural patterns that were anathematised or seen as improper acquire importance. The shift in perspective puts the first generation of Russian entrepreneurs, in terms of culture, in a rather uncomfortable position of being at odds with the traditional cultural model. They are forced to abandon some of the norms, which for millions of Russians are still synonymous to a socially responsible model of behaviour, in favour of practices that were stigmatised during the lifetime of several generations. The paradox here is that new entrepreneurs act objectively as propagators of new cultural norms and values which, however, in the minds of many of their compatriots bear a strong resemblance to something old and well known, something they grew accustomed to regard as vicious on moral grounds. This contradiction is prone to create strife and tension in the relations between social strata. In modern Russia the circumstances under which the advancement of capitalism occurs contribute to the vilification of the image of the entrepreneur. This prejudice has its origin in the times Problems and Perspectives in Management, 2/2005 27 when most forms of seeking economic self-interest were outlawed as antisocial and subversive as it was necessitated by the contemporary economic and political systems. In terms of culture this transferred into an attitude that treated the activity of that kind as something low, indecent and shameful. Still nowadays opinion polls demonstrate that Russian public tends to deny entrepreneurs such virtues as morality, integrity, talent or hard work. Characteristically, Russians regard dishonesty and connections as the keys for business success in their country (based on the survey of 2000 Russians by the All-Russian Centre for Public Opinion. See: Journal of Commerce, November 21, 1997). The torrent of derogatory jokes about “new Russians” is another sign of the resistance that the traditional culture offers to the intrusion of n

An assessment of various approaches for cross-cultural consumer research

Abstract: The rapid growth in international marketing has created a need for cross cultural consumer research in a fast changing environment (Douglas, Morrin and Craig, 1994). Two major deficiencies have been distinguished in cross-cultural research (e.g. Douglas and Craig, 1983; Douglas and Craig, 1992; Boddewyn, 1981; Albaum and Peterson, 1984; Yaprak, 2003): lack of strong theoretical framework and difficulties concerning data collection in more that one country, data comparability and implementation of methodological techniques. Scholars have discovered that their models and measures have to be psychometrically sound across cultures. Therefore, there is a need to pay a greater attention to the methodological rigor and conceptualisation, design, and application of the research tools, analysis in drawing conclusions from research findings when conducting cross-cultural studies. Thus, the purpose of this paper is to examine cross-cultural consumer research conducted during the 1990-2003 years period from a methodological perspective. The paper is structured as follows: first, we review the literature on key issues involving studies in culture and consumption and role of values in consumer behaviour. Subsequently identify methodological difficulties that are commonly overlooked by cross-cultural/national research, concerning conceptualisation, design and application of research tools, construct and other equivalencies, choices in the design of the study and in analytical techniques used. Finally we present some conclusions.

Self and Superior Ratings of Organizational Citizenship Behavior: Are there Differences in the Source of Ratings?

Abstract: This research compared ratings of organizational citizenship behavior (OCB) from two different sources: self and superior. OCB was measured basing on five dimensions: altruism, courtesy, sportsmanship, conscientiousness and civic virtue. Participants were hotels employees in Malaysia. A sample of 557 subordinates and 287 superiors from the hotel industry provided ratings of OCB. The results indicated that self-ratings and superior ratings of OCB were significantly correlated. However, the magnitude of the correlation was moderate. The results also indicated that there were significant differences in the mean ratings across the two sources. Specifically, ratings for all OCB dimensions made by self were significantly higher than ratings made by superiors.

Managerial Competency and Organizational Flexibility in Small and Medium Enterprises in Botswana

Abstract: Although the discovery of diamond has propelled Botswana from one of the poorest countries in 1966 to its current stage of development as a middle-income country, the country still faces the problems of economic diversification, employment creation, income generation and distribution, and poverty alleviation. Governmental and non-governmental organizations have put many efforts on the development of Small and Medium Enterprises (SMEs) to diversify the economy away from mining, to create jobs and alleviate poverty. However, the pace of development of SMEs, after 30 years, is very slow and discouraging. The SMEs failure rate, caused by a plethora of internal and external factors, is now estimated to be over 80 %. There is a general consensus among policy makers, politicians, and researchers in Botswana that this trend should not be allowed to continue indefinitely. The purpose of this paper is to investigate the perceived critical managerial factors (PCMFs) affecting the development of SMEs by collecting primary data from 203 SMEs in 3 cities in the Republic of Botswana by means of questionnaire. Both descriptive and inferential statistics were employed to present the demographic distribution of the sample firms, the identification, ranking and association of PCMFs. The findings showed that five PCMFs (human resources development; organizational development, managerial background; managerial leadership and competitive strategy) affect the performance of SMEs. The PCMFs are strongly related among themselves, indicating the need for a holistic and systematic approach in addressing them. Important relationships were also found between the PCMFs and firm-specific demographic variables such as ownership status, experience and operating period. Recommendations and implications of the findings for future research, policy makers, practitioners in SMEs, and SMEs support agencies and groups are also forwarded.

The Praxis of Strategic Management in contemporary organisations: what are the implications for research and teaching?

Abstract: The strategy field should have matured after four decades of academic teaching and research. Scholars in Europe argue that the field is still lacking direction, respect, roles and contribution. Some scholars go as far as claiming that the field is in crisis. The author argues that the field is replete with various competing fashions, perspectives and directives, and as a result, it has become ambiguous, fragmented and to a large extent multi-vocal. This article examines the praxis of strategic management and draws on a number of vignettes from contemporary organisations to bring fresh insights into the field of strategic management. The aim is to contribute some fresh empirical evidence to inform research and pedagogical development in the field. The study seems to show that the strategy field is not in crisis as argued recently by scholars. Whilst it is ambiguous and lacking direction, it is still playing an active management role in contemporary organisations. However, its praxis cannot be fully understood from a single theoretical perspective and there is no foundation to the claim that one perspective is intrinsically more relevant than any other. There is always an inevitable epistemological problem of revealing the praxis of strategy in contemporary organisations due to the complexity of the internal and external conditions and environment in which that strategy exists. The possibility of achieving a consensus standard model, the insights from which allow us to teach and research the field comprehensively remains a forlorn hope. However, the study seems to conclude that the praxis of strategic management in contemporary organisations is better understood and research from a contingency perspective adopting interor multi—disciplinary approach.

Investment of Resources to Become Competitive: A Survey of Polish Manufacturing Companies

Abstract: In view of unprecedented transition of the Polish economy, the privatization of manufacturing organizations and the investment of foreign funds in Polish companies, we wanted to learn about manufacturing practices in Polish companies during the period of transition. Analyzing how the companies use forecasts and then where they allocate limited resources may help us to better understand the transition economy and estimate if the way they have chosen may lead them to become world class manufacturers. Poland is a gateway country to other countries in the Eastern European region and many companies in those countries will use the experience of Polish companies either to follow good results or to avoid mistakes.