I’m working on a business law case study and need the explanation and answer to help me learn.

2/18/24, 2:09 PMGlobal Shippers, Inc.
Course Resource
Global Shippers, Inc.
Notice: Contains Confidential Information
One of Colossal Corporation’s import-export companies, Global Shippers,
Inc., a New York–based company with facilities in over 37 countries
including the United Kingdom, recently submitted a bid for an exclusive
contract with the government of the small country Neristan. The contract
would provide Global Shippers with the exclusive right to export goods
from Neristan’s government-owned factories to the United States for
distribution and sale. It is projected that this contract would provide over
$20 million in revenue to Global Shippers per year, increase its stock value,
and allow the company to expand its international operations and
employee base.
Shortly after Global Shippers submitted the bid, Neristan’s prime minister
invited the CEO of Global Shippers, Robert Manning, to dine with him at
the most luxurious restaurant in Neristan.
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Global Shippers, Inc.
After Roger arrived to the dinner, the prime minister ordered the most
expensive bottle of wine on the menu, and as they drank, he made a
proposal to Manning. The prime minister said, “Here in Neristan we value
relationships above all else, and we have a great opportunity to help each
other.” He went on to say that he was recently tasked with “selecting the
best company for Neristan’s contract,” and he thought that “Global
Shippers has what it takes.”
Manning was excited by the prime minister’s comments. He agreed, “There
is the potential here for a great relationship.” Manning gratefully accepted
the prime minister’s offer of another glass of wine and listened intently.
The prime minister then went on to say, “It is customary in Neristan for
business associates to help each other prosper, and if you ensure a
payment of $100,000 is wired to my personal account in the next week, I
will make sure that Global Shippers gets the contract.”
Manning, who had dealt with similar requests from other foreign diplomats
in the past, responded, “I’m afraid that such payments are prohibited in my
country, but why don’t I fly you to New York tomorrow so we can discuss
business further?” Manning went on to say, “The trip will be all expenses
paid, and you will stay in the penthouse at the finest New York hotel. If,
after we are done conducting business, you want to see the sites, I can
show you around the city, and you can stay on us for a while.”
The prime minister gratefully accepted Manning’s offer, and Manning paid
the $3,500 bill for the dinner and wine on his corporate account. The next
day the two flew first-class back to New York. After conducting business in
New York for a day, the prime minister and Manning traveled around the
city, went to the theatre on Broadway, and dined in the finest restaurants.
Everything was paid for by Manning’s corporate accounts. After several
luxurious days in New York, the two of them then flew first-class to Los
Angeles, where, after several days of “living it up on the town,” they met
with Global Shippers Inc.’s board of directors, and the prime minister
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Global Shippers, Inc.
announced that Global Shippers had been awarded the contract. The prime
minister stayed in Los Angeles, all expenses paid, for two weeks after this
meeting, and then flew back to Neristan.
In the meantime, upon the announcement of the contract acquisition,
Global Shippers Inc.’s stock skyrocketed, and the company began hiring
more warehouse employees in Neristan and the United States to manage
its new lucrative contract. Manning received a substantial bonus from
Global Shippers Inc.’s board of directors for his excellent work related to
acquiring the Neristan contract.
Six months later, the first shipment of goods was ready to leave Neristan
and go to the United States, but the customs officials on the Neristan
border refused to allow the goods to leave the dock. The customs officials
stated that they needed time to inspect the goods for illegal contraband
and that it could be weeks before they were cleared for shipment.
Manning, who was visiting the prime minister at the time, was called to the
customs office by his head warehouse employee. Manning slipped the
customs officials $100 each and asked if they could expedite the shipment.
The goods were cleared the next day, and the first shipment left for the
United States.
A few weeks later the prime minister of Neristan was arrested by Neristan
authorities for embezzling government funds. Manning began to worry
that some of his actions may have crossed the lines into illegal or unethical
activity and (given his close relationship with the prime minister) that he
may soon also become the subject of investigation. He called the vice
president at Colossal Corporation, told him the whole story, and asked him
if he could help defend the legality and ethics of his actions.
© 2024 University of Maryland Global Campus
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Country Cultural Differences
Learning Topic
Country Cultural Differences
In workplaces, as in communities and nations, people spending time
together are likely to share certain values, attitudes, and beliefs. Because of
this established culture, people at work may have developed certain
preferences or orientations in the following situations:
interacting and communicating with others
working in teams
making decisions
responding to and evaluating risks and opportunities
managing or attempting to resolve disagreements and conflicts
interacting with those at different levels in the organization
engaging in numerous other workplace activities
Those who have studied and compared societal cultures and their possible
implications for the workplace have identified some differences that can
be important for success.
Perhaps the leading expert on cultural differences and their potential
implications for business is Geert Hofstede, a Dutch scholar who worked
for IBM in the late 1960s. Hofstede’s early research (1980) examined,
compared, and categorized the culturally derived preferences of IBM
employees in many countries. He, and other scholars who have followed in
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Country Cultural Differences
his path, created a classification scheme that differentiates country
cultures across what were originally four dimensions, though they have
since been expanded to include six.
In what is probably his best-known book, Cultures and Organizations:
Software of the Mind (published first in 1991 and revised and republished
in 2010 with his son Gert Jan and Michael Minkov), Hofstede presents a
careful explanation of his work and its implications. Hofstede reminds his
readers that “culture is learned, not innate” (p.6), and introduces the
analogy of culture as “software of the mind.”
Hofstede uses the layers of an onion to help convey the way culture
manifests itself. Values are deep at the core or center of the onion and are
very slow to change compared with the other manifestations of culture.
Examples of common core values in US businesses include integrity,
accountability, fairness, and excellence. Other layers of culture include our
rituals (e.g., greeting with a firm handshake and direct eye contact), the
heroes we honor (examples include Warren Buffett and Steve Jobs), and on
the outside of the onion, the symbols that have special meaning for
societal members.
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Country Cultural Differences
Examples of U.S. Business Cultural Manifestations
Created by Christina Hannah
Using an analogy of culture as mental programming, Hofstede explains that
we are each conditioned (or programmed) by multiple societal levels:
national, regional, ethnic, religious, linguistic, gender-oriented, generational,
socioeconomic, and professional. Values associated with these levels may or
may not be in harmony. One consequence of these multiple sources of
programming is that it can be difficult to predict what will influence a
person’s response or behavior in particular situations.
Our present interest is not in delving deeply into the causes and
consequences of individual differences in values, attitudes, and beliefs, but
rather to learn about those shared at a societal level. Hofstede explains that
his extensive research, and that of others who have studied culture, make
it possible to differentiate between and among national cultures using a set
of dimensions. He originally proposed the first four dimensions in the list
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Country Cultural Differences
below, then added a fifth—long-term orientation (Moskowitz, 2009)—and
later added indulgence as a result of further research by and insights from
collaborators.
Here is a simple explanation of Hofstede’s current six dimensions:
Power distance (PDI)—In countries with a high power distance
dimension score, we can expect those in lower level positions to
respect or defer to those who outrank them. In other words, power is
thought to come with position. In such cultures, employees may
expect managers and leaders to make decisions and might be surprised
or uncomfortable when asked for input. In countries with a low power
distance score, we are likely to find that employees treat those they
report to more as colleagues and hold the view that respect must be
earned. There may, of course, be exceptions to this model (for example
in military and paramilitary organizations). Not surprisingly, the United
States’s score on this dimension is relatively low at 40. The score for
France is is 69. In comparison, the scores for Malaysia, Slovakia,
Guatemala, Panama, the Philippines, and Russia are all above 93
(Hofstede, Hofstede, & Minkov, 2010, pp. 57-58). This means that, in
general, we can expect employees in the United States to expect a
more egalitarian workplace than may be true in other societies.
Individualism or collectivism (IDV)—In countries with high scores for
individualism (like the United States), you are likely to find a shared
belief in developing strong individuals who are comfortable working
and making decisions on their own. In such workplaces, you will
probably find an emphasis on the importance of developing,
recognizing, and rewarding individual contributions. In countries that
score low on the individualism dimension, you are likely to find an
emphasis on the community, team, group, or department (i.e., the
collective). People may be embarrassed if they are singled out publicly
for praise or recognition, because they strongly believe their success
depends upon the support and work of others. For this dimension, the
US score is the highest, at 91. The score for France is 71. The country
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Country Cultural Differences
with the lowest score is Guatemala, with a score of 6 (Hofstede,
Hofstede, & Minkov, 2010, pp. 95-97).
Masculinity and femininity (MAS)—The label used for this dimension
may not be the best. The basic idea is that some country cultures place
a relatively high value on competitiveness, assertiveness, achievement,
etc. Such countries are given a high score for masculinity because
these preferences and traits were historically associated with men
more than women. Other country cultures place greater value on
caring for others, cooperation, quality of life, etc. Such countries are
given a high score for femininity on this dimension. Despite the
problems with these unfortunate gender-based labels, when you step
back and compare countries you will probably recognize that there are
some where businesses seem to value competition over cooperation,
achievement and success over quality of life, and so on. Japan has a
masculinity (MAS) score of 95. The US score is moderate at 62. The
score for France is 43. Sweden has the lowest score for this
dimension, with a 5 (Hofstede, Hofstede, & Minkov, 20110, pp. 141143).
Uncertainty avoidance (UAI)—This dimension recognizes that there
are differences among countries, which results in differences among
the leaders of businesses that operate therein and the extent to which
they are willing to take risks. In countries that are low in the
uncertainty avoidance dimension, business leaders might be very
comfortable exploring new opportunities and see this as the likely
path to success. In other countries, this may not be the case.
Sometimes those in country cultures that are highly risk averse (with
high uncertainty avoidance scores) have a very good reason for their
responses. There may be, for example, significant legal penalties for
failure, including the possibility of being sent to jail in the event of
bankruptcy or reneging on debts. The country with the highest score
for uncertainty avoidance (UAI) is Greece at 112. France is relatively
high, with a score of 86, and the US score is 46, indicating a tolerance
for uncertainty and acceptance of risk-taking to achieve success
(Hofstede, Hofstede, & Minkov, 2010, pp. 192-194).
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Country Cultural Differences
Long-term versus short-term orientation (LTO)—In countries with a
high long-term orientation score, shared work values emphasize
learning, accountability, and self-discipline. Patience and waiting to
make a profit are acceptable. Creating and nurturing lifelong networks
is valued. In contrast, those favoring a shorter-term orientation tend
to focus on “the bottom line” and value achievement, freedom, and
independent thinking. Quarterly and annual profitability are
important. Korea, Japan, and China have high long-term orientation
scores (100, 88, and 87, respectively). France has a moderate score of
63. In contrast, the US LTO score is low, at 26 (Hofstede, Hofstede, &
Minkov, 2010, pp. 255-257).
Indulgence versus restraint (IVR)—In countries with high scores on
indulgence, you are likely to find people who value having fun and
enjoying life. In the United States, for example, it is common to find
that employees emphasize the importance of a good work-life balance
and quality of life. The IVR score for the United States is relatively high
(68) and for France is moderate (48). Pakistan has the lowest score (0)
among the countries studied. Territories with the highest indulgence
scores are Venezuela (100), Mexico (97), and Puerto Rico (90)
(Hofstede, Hofstede, & Minkov, 2010, pp. 282 – 285).
A very important caveat when reading and thinking about Hofstede’s work
is to remember that the comparisons are at the societal level, rather than
the individual level. In other words, in any country you will find individuals
who are different from what you see suggested as the norm for the
country culture. In fact, for any given dimension you may find yourself
thinking “but this isn’t what I’m like” or “this doesn’t explain what happens
in my organization.” Those who have studied and compared country
cultures ask you to suspend these responses temporarily and to try instead
to look at a country as a whole, and then consider how it compares on
these dimensions with other countries. When you adjust your imaginary
lens to consider cultural differences from a broader perspective, you are
able to discover things that may be helpful when explaining what happens
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Country Cultural Differences
when companies do business abroad, when people work together on
country teams, and when they work together in multicultural, multinational
organizations.
One challenge is that we are often less knowledgeable about our own
shared country culture than we are about the cultures of others (Hofstede,
1980). This is because our culturally derived values and preferences are so
deeply embedded that we may not be aware of how they influence our
decisions and behaviors. Those who have worked or studied in a country
other than their own are likely to have developed higher levels of cultural
intelligence than those who have not had this experience.
The United States has traditionally tended to place strong emphasis on
equality, individualism, risk-taking, assertiveness, achievement, and the
opportunity to enjoy life (pursuit of happiness).
This brief introduction to the comparative work on country cultures and
their potential consequences for individuals and their organizations, along
with the Resources below, should help you understand the possible
sources of confusion or conflict that could, if not anticipated and wellmanaged, result when multinational and multicultural team members work
together. These issues may include training, coaching, mentoring, and
effective leadership. Remember to consider as well the possible advantages
associated with building and using teams with members who bring
different country cultural perspectives to their work (Chakrabarti, GuptaMukherjee, & Jayaraman, 2009).
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Country Cultural Differences
Check Your Knowledge
Question 1
Using Hofstede’s onion metaphor, what are the ways in
which country culture manifests itself?
Show Answer
Question 2
What are the six dimensions of national culture identified by
Hofstede? Describe each one briefly.
Show Answer
Question 3
Why is the study of Hofstede’s dimensions of national
culture important?
Show Answer
Question 4
What is meant by the term Cultural Intelligence (CQ)?
Show Answer
Question 5
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Country Cultural Differences
What are the four key capabilities held by people who have
high CQ?
Show Answer
Question 6
Why is CQ important?
Show Answer
References
Chakrabarti, R., Gupta-Mukherjee, S., & Jayaraman, N. (2009). Mars-Venus
marriages: Culture and cross-border M&A. Journal Of International
Business Studies, 40(2), 216-236 http://ezproxy.umgc.edu/login?
url=http://search.ebscohost.com/login.aspx?
direct=true&db=bth&AN=36587323&site=eds-live&scope=site
Hofstede, G., Hofstede, G.J., & Minkov, M. (2010). Cultures and
Organizations: Software of the Mind (3rd. ed.). New York: McGraw
Hill.
Hofstede, G. (1980). Motivation, leadership, and organization: Do American
theories apply abroad?. Organizational Dynamics,9(1), 42-63.
Retrieved from http://ezproxy.umgc.edu/login?
url=http://search.ebscohost.com/login.aspx?
direct=true&db=pbh&AN=5143098&site=ehost-live&scope=site
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Country Cultural Differences
Resources
Hofstede shares some of his insights in An Interview with
Geert Hofstede (http://ezproxy.umgc.edu/login?
url=http://search.ebscohost.com.ezproxy.umgc.edu/login.asp
x?direct=true&db=bth&AN=12689650&site=edslive&scope=site) , while Hofstede’s Five Dimensions of
Culture
(http://dx.doi.org.ezproxy.umgc.edu/10.4135/97814129642
89.n468)
covers similar points addressed above. You
might also want to read Does Culture Matter? Refresher on
Hofstede, Trompenaars, and Gesteland
(https://leocontent.umgc.edu/content/umuc/tgs/mba/mba6
10/2192/learning-resourcelist/does-culturematterrefresheronhofstedetrompenaarsandgesteland.html?
ou=916053) .
Although Hofstede is probably the most frequently cited
theorist, there are substantial criticisms of his work such
as Mirror, mirror on the wall: Culture’s consequences in a
value test of its own design (http://ezproxy.umgc.edu/login?
url=https://search.ebscohost.com/login.aspx?
direct=true&db=bth&AN=34421995&site=edslive&scope=site) . Hofstede responds to criticism in Who
is the fairest of them all? Galit Ailon’s mirror?
(http://ezproxy.umgc.edu/login?
url=http://search.ebscohost.com/login.aspx?
direct=true&db=psyh&AN=2009-10240-012&site=edslive&scope=site)
There are also alternative models to Hofstede’s; the GLOBE
project is one such alternative, explained in GLOBE: A twenty
year journey into the intriguing world of culture and
leadership (http://ezproxy.umgc.edu/login?
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Country Cultural Differences
url=http://search.ebscohost.com/login.aspx?
direct=true&db=edselp&AN=S1090951612000053&site=ed
s-live&scope=site) .
Cultural Intelligence
(http://dx.doi.org.ezproxy.umgc.edu/10.4135/97814129562
46.n115)
explains a model for understanding how well
individuals might perform in cross-cultural settings. Examples
of effective methods of success for cross-cultural teams are
covered in Teams, Cross-Cultural
(http://dx.doi.org.ezproxy.umgc.edu/10.4135/97814129562
46.n528) .
© 2024 University of Maryland Global Campus
All links to external sites were verified at the time of publication. UMGC is not responsible for the
validity or integrity of information located at external sites.
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Cross-Cultural Ethical Business Decision Making
Learning Topic
Cross-Cultural Ethical Business
Decision Making
Management in the global arena involves addressing unique and difficult
issues of culture and morality. Although general ethical frameworks may
help you to assess management decisions in a cross-cultural context, there
are unique questions that arise in global settings. The resources below
provide guidance for situations involving conflicting ethical norms and
customs of different cultures within the business context.
How an organization addresses unique situations involving ethics and
customs will impact its success in the global arena. The first subtopic
examines the role of ethical theory in global business. The second subtopic
examines the role of cultural theory in global business.
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Cross-Cultural Ethical Business Decision Making
Resources
Ethical Theory in Global Business
Global Business Ethics
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/global-business-ethics.html?
ou=916053)
Corruption in International Business
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/corruption-ininternationalbusiness.html?ou=916053)
Major Ethical Perspectives
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/major-ethical-perspectives.html?
ou=916053)
Cultural Theory in Global Business
Introduction to Culture and Business
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/introduction-tocultureandbusiness.html?ou=916053)
What is Culture, Anyhow? Values, Customs, and Language
(https://leocontent.umgc.edu/content/scor/uncurated/mba/
2218-mba630/learning-resourcelist1/what-is-culturevaluescustomsandlanguage.html?ou=916053)
Understanding How Culture Impacts Local Business Practice
(https://leocontent.umgc.edu/content/scor/uncurated/mba/
2218-mba630/learning-resourcelist1/understandinghowcultureimpactslocalbusinesspractices.html?
ou=916053)
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Cross-Cultural Ethical Business Decision Making
Ethical and Cross-Cultural Negotiations
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/ethical-andcrossculturalnegotiations.html?ou=916053)
Cultural Diversity
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/cultural-diversity.html?
ou=916053)
© 2024 University of Maryland Global Campus
All links to external sites were verified at the time of publication. UMGC is not responsible for the
validity or integrity of information located at external sites.
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International Business Law s, Ethics, and Regulations
Learning Topic
International Business Laws,
Ethics, and Regulations
The arena of international business law is highly complex and largely
polycentric in nature. Its major components are international treaties,
regulations and principles of international organizations (both soft and
hard laws), customary international law, and domestic laws with
extraterritorial reach. The laws of other nations also come into play when
one is conducting business on an international or even global scale.
Given the complexity and variety of sources of international business law,
it is of particular importance for you to seek expert assistance when
dealing with problems or other matters in an international context.
Companies often choose to partner with local constituents when
expanding internationally to gain localized knowledge and market share.
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International Business Law s, Ethics, and Regulations
Check Your Knowledge
Choose the best answer to each question:
Question 1
Which of the following is a correct statement about the
Foreign Corrupt Practices Act (FCPA)?
The FCPA is a model state law that is adopted by most
US states.
The FCPA is a treaty signed and ratified by the United
States.
The FCPA is a model international law that is adopted by
the governments of many countries.
The FCPA is a US federal law with extraterritorial reach.
Question 2
Which of the following statements about bribery is correct?
Bribery is prohibited by state law, federal law, and
international treaties.
Bribery is prohibited by federal law only.
Bribery is prohibited by federal law and international
treaties only.
Bribery is prohibited by some states but not others.
Question 3
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International Business Law s, Ethics, and Regulations
An individual who violates the FCPA is subject to which of
the following types of penalties?
criminal penalties only
civil penalties only
civil and criminal penalties
civil or criminal penalties, but not both
Question 4
Which of the following do the anti-bribery provisions of the
FCPA generally prohibit? Choose the most complete answer.
certain payments made to influence a foreign official in
his or her official capacity
certain payments made to induce a foreign official to do
or omit to do something in violation of his or her lawful
duty
certain payments made to secure any improper
advantage relating to business
all of the above
Question 5
Which of the following actions would most likely be
considered a “grease” or “facilitation” payment under the
FCPA?
paying for a business trip for a foreign official and his
wife to another country when that trip involved mostly
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International Business Law s, Ethics, and Regulations
tourism
making a payment to a customs official for the purpose
of scheduling an inspection of goods in transit across the
country
spending $10,000 to entertain a government official
with dinner, drinks, and shows
making a payment to a customs official for the purpose
of avoiding securing clearance of certain equipment
lacking certifications required under local law
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International Business Law s, Ethics, and Regulations
Resources
Foreign Corrupt Practices Act
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/foreign-corruptpracticesact.html?ou=916053)
Global Bribery
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/global-bribery.html?
ou=916053)
What Are Facilitating or Expediting Payments?
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/what-arefacilitatingorexpeditingpayments.html?ou=916053)
Gifts, Travel, Entertainment, and Other Things of Value
(https://leocontent.umgc.edu/content/scor/uncurated/mba/2218
-mba630/learning-resourcelist1/gifts-travelentertainmentandotherthingsofvalue.html?ou=916053)
Anti-Bribery Provision
(https://leocontent.umgc.edu/content/dam/learningresources/business-and-communication/management/AntiBriberyProvision_new.pdf?ou=916053)
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All links to external sites were verified at the time of publication. UMGC is not responsible for the
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