Need a RESPONSE that either CHALLENGES or SUPPORTS text below AND answers any questions asked.
250 word minimum, APA format (no title page needed though), MULTIPLE sources.
After reading about Hofstede’s (2016) four value dimensions on his website, I can see from a personal management style clear options with each one. The four dimensions of national cultures that he notes are: Power Distance, Uncertainty Avoidance, Individualism versus Collectivism, and Masculinity versus Femininity. Each dimension has its merits and the various levels work based on the working conditions at hand. For example, in the military, a high level power distance is clearly denoted by rank. The higher the rank, the greater the power distance. This was particularly true with high ranking officers vs. low ranking enlisted personnel. This system is very effective when orders must be carried out within a limited time frame and a clear mandate from the leadership that does need feedback from the subordinates in order to succeed.
Whereas a low power distance system is a far more effective culture for situations in which teams are created to establish an environment in which the input of the group or the team is necessary in order to produce creative input and solutions from all of the members not just the managers. From my personal perspective, after being in the military and in corporate America in the financial services industry, that I would use a mid-level power distance management style. It is the best option in my opinion because in my industry, senior management sets the agenda and then they allow a significant level of autonomy in order to address the implementation of that agenda. Based on how my industry works, that is the most effective method to use.
The Uncertainty Avoidance can be broken down the same way. In finance, there is the assumption of uncertainty that is known as risk. The theory being all thing being equal, a well calculated risk should be able to create a higher return vs. a low level well calculated risk. Societies with a high level of or “strong uncertainty avoidance cultures resist change” and the also “expect clear procedures” along with a stable environment. (Geringer at el, 2016, p. 78). In contrast, “weak uncertainty avoidance cultures see conflict as having positive aspects” including the creating opportunities. (Geringer at el, 2016, p. 78). The difference here from a management style is in the world of finance, a high level of uncertainty avoidance is operational suicide. The very nature of the financial markets demands creative and innovative ways to address its dynamic nature so by default, the low uncertainty avoidance level is in my opinion mandatory in order to proper in my industry.
With the Individualism versus collectivism culture, for the individual is can be described as “self-sufficiency and value independence, and placement of self-interest over collective interest. Confrontation is accepted as an attribute.” (Anastasia, 2015). Contrasting this with the group culture which can be summed as follows “Sharing of resources and readiness to give up personal interest keeping in mind the collective interest”. (Anastasia, 2015). It is impossible in today’s modern business world to be fully in one culture vs. another but for the business that I am in we have groups that we work in which have teams. However, there are benchmarks that highlight individual performances and a reward system directly tied to that measurement. Therefore, I believe that the individualism management style is the best one since it produces rewards in direct proportion to the production generated.
The final culture that was part of the original four dimensions is the masculinity versus femininity one. Anastasia (2015) defines this contrasting style as follows, “Masculinity implies a society’s preference for assertiveness, heroism, achievement and material reward for attaining success. On the contrary, femininity represents a preference for modesty, cooperation, quality of life and caring for the weak” (Anastasia, 2015). On the surface it would appear that the masculinity style is the superior one. However, one would have to take into consideration both the region and the industry that the management is operating from. That being said, the masculinity management style works best in the area of finance that I work in and I see little reason to alter it.
My company’s business culture has levels of flexibility because of the nature of what we do in the financial arena and the global operations that we have. That flexibility is based on location and situation which as situations arise, allow for a deviation from the normal cultural management styles as deemed necessary. With that in mind, the nature of the industry sets the cultural standard and overall it is in line with the management styles that I submitted.
A good example of how a culture flexibility is an enabler of both success and failure would be Barings Bank. Barings Bank was, until its demise, the second oldest merchant bank in the world founded in 1762. (Titcomb, 2015). The bank has expanded their services as has most major banks over the years but it was known for having a relatively high uncertainty avoidance level are far merchant banks go. They became that way “after a Bank of England-led rescue of the bank in 1890, following Barings’ near collapse when Argentina appeared close to defaulting on its debt”. (Titcomb, 2015).
The bank did well until it made what in hindsight was a terrible mistake in which it allowed flexibility in its uncertainty avoidance culture for its Singapore office. In 1992, a trader by the name if Nick Leeson was hired to trade the Nikkei 225 and the 10 year Japanese bonds. The way that those financial instruments were supposed to be traded was in a low risk arbitrage manner. The problem that was created was when as Titcomb states “Leesonwas put in charge of both the trading floor and transaction settlement operations. James Bax, who ran Barings’ Asian operations, warned that ‘we are in danger of setting up a structure which will prove disastrous and with which we will succeed in losing either a lot of money or client goodwill or probably both’”. (Titcomb, 2015).
He eventually created a secret account in which he made trades that were huge in size and well outside of the bank’s trading perimeters. The fact that he was over the two departments that are designed to create checks and balances designed to prevent those two things from happening should have been a big red flag. Even his supervisor’s statements showed gross negligence was in place. When the secret account began to suffer losses, he was able to cover them up so that they could not be discovered because of his duel supervisory roles. Then disaster hit in January 1995 when the “devastating Kobe earthquake caused $100bn in damage, or 2.5pc of Japan’s GDP, and shook its bond and stock markets. Leeson’s losses ballooned to £827m and he was no longer able to disguise them from Barings management”. (Titcomb, 2015).
The lesson here is when you have a high uncertainty avoidance culture, you cannot allow a low level culture to dominate in an office located in another country. They allowed this by bringing in a trader from a low uncertainty avoidance culture firm, essentially turn him loose without proper supervision, and allowing him to trade financial instruments in a way that no one knew what the negative ramifications would be. This chain of events caused a loss of over one billion dollars and the end of a 232-year old bank that is so steeped in history that they helped the US fund the Louisiana Purchase. In the end the Barings Bank picked the worst possible time to be flexible in its culture.
|Due By (Pacific Time)
||04/16/2016 05:00 am