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Contemporary Issues in Management - Globalisation and Culture

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Contemporary Issues in Management - Globalisation and Culture
Contemporary Issues in Management
Globalisation and Culture Introduction
This essay is about two contemporary issues, namely globalisation and culture, and the connection between them. It starts by reviewing the various approaches to defining globalisation before proceeding to give a narrative of how the phenomenon of globalisation started and how it has progressed through time. It then proceeds to define culture and to analyse the advantages and disadvantages of cultural diversity. The essay concludes by reviewing the impact of globalisation on cultural identity, organisations, consumerism and consumption.
In this essay, globalisation is perceived as encompassing several processes which involve economic and social integration and the creation of new relationships and new global citizenry. It is argued that culture is not a victim of globalisation but an effective force that challenges globalisation with the result that corporations intending to join the global market are placed under more rigorous scrutiny. This challenge to globalisation presents the opportunity for local culture to strengthen while creating cultural diversity in the marketplace and in the workplace.
Globalisation
Globalisation is a word that has found its way into popular discourse in a manner in which no specific meaning is attached to it. It is frequently identified in common contemporary political and academic forums as being related to: a free world market economy; global integration in which a single world community is emerging; the growth and spread of western forms of cultural, economic and political institutions; and the increase in the number of new information technologies such as the internet (Cameron and Stein 2000; Asgary and Walle 2002).
However, theorists in contemporary social theory view the concept of globalisation in a more precise manner. Although there are many variants of the definition of globalisation, the majority of social theorists share the view that it refers to the temporal and spatial changes that are taking place in the social existence of humanity. For instance, with the advent of the latest communications technology, geographical distance is now measured in terms of the time it takes to connect two locations (Larsson 2001).
Globalisation is therefore not a simple term involving a single concept that can be applied in a blanket form to cover all people in all situations. The reality is that all the theorists that have presented definitions of globalisation have done so from the perspective of their individual background which includes their political ideology, academic discipline, geographical location, cultural background and several other factors (Asgary and Walle 2002). Nikitin and Elliott (2000), for instance, defined globalisation from the point of view of social economists, as the emergence of a global market that is free from socio-political control. Larsson (2001) however, as a journalist, saw it in terms of geographical distances when he defined it as a process in which the world is shrinking, with distances growing shorter and shorter, resulting in better interaction amongst the peoples of the world.
This essay will adopt the definition given by Friedman in which he proposed that globalisation is the spread of free-market capitalism to every corner of the globe resulting in “the inexorable integration of markets, nation-states and technologies to a degree never witnessed before” (Freidman 1999, p.7). In his submission, Friedman (1999) accepted that globalisation enables individuals, corporations and large non-governmental organisations to communicate farther and faster in a much cheaper way, enabling them to operate more effectively and efficiently. However, he added that globalisation can result in negative consequences for those who are unable to adapt to change. Giddens (2002) provided a similar definition and concurred with Friedman (1999) when he stated that globalisation is a multitude of processes involving a proliferation of institutions into the world producing not only solidarities and new forms of partnership with different kinds of subsidiary organisations but in some cases destroying existing pacts and traditions. Oman (1996) pointed out that globalisation finds expression in the movement of goods and services across national, regional and political borders through increased trade and investments and on some occasions through migration. However it must be borne in mind that globalisation transcends economic activities and according to Giddens (2002), it reaches across political, cultural and technological dimensions.

Historical Perspective
Findlay and O’Rourke (2003) stated that the process of international integration can be traced back as far as the late 15th century, but the major surge in momentum did not occur until after the Napoleonic Wars. This is demonstrated by the fact that growth in world trade was recorded as 1% per annum during the period of between 1500 and 1800, whilst in the ensuing period of between 1815 and 1914, it grew by 3.5% per annum (Findlay and O’Rourke 2003). Globalisation as we know it today was spurred by the reduction of tariffs on grains in Britain and eventual abolition of these tariffs in 1846. This singular act galvanised the movement towards free trade because several European countries followed this example by entering into bilateral agreements which resulted in the reduction and in some cases, the elimination of, tariffs that had formerly hindered free trade across Europe. An example of this was the Cobden Chevalier Treaty of 1860 between Britain and France. However this trend was short lived, as Germany and France introduced new tariffs in 1879 (Findlay and O’Rourke 2003). With the onset of World War I in 1914 followed by the Great Depression, trade virtually collapsed due to rising tariffs in most countries and it was not until after World War II that the General Agreement in Tariffs and Trade (GATT) was successfully negotiated by the international community (Crafts and Venables 2003). GATT succeeded in negotiating several tariff agreements until 1994 when it was finally replaced by the World Trade Organisation. The reductions in tariffs paid dividends as the level of globalisation soon returned to its pre-war standard and even surpassed it (Chiswick and Hatton 2001; Crafts and Venables 2003). Global trade in the 20th century grew at a phenomenal rate and resulted in a much higher level of tradable production and services. Portfolio investments gradually gave way to direct investments that were both trade and production related (Chiswick and Hatton 2001).

Over the last century, commercial integration has been achieved at a higher rate because of multinational trade contracts such as the North American Free Trade Agreement (NAFTA) and the European Union. In addition, advances in technology have facilitated the lowering of costs, ease of communication and reduction in travelling time, thereby acting as a catalyst for the rapid expansion of globalisation (Crafts and Venables 2003).
Culture

Culture can be defined as the beliefs and behaviours of a social or ethnic group of people. According to Hoebel (1972), culture is an integrated system of learned behaviour patterns which resulted from the beliefs of society and must not be confused with traits of biological inheritance. Thus culture is derived historically from traditional concepts that are formulated to support societal values. Feldhusen (2008) believed that culture systems arise from actions that consist of patterns of behaviour that have been formed over time and transmitted with aid of symbols to constitute the distinctive achievements of social or ethnic groups. These may also be expressed in artefacts (Lillis and Tian 2010).

Culture is one of the factors that impact the workplace in organisations and the management of cultural diversity can determine the success of a business entity. In particular, cultural factors can cause invisible barriers within organisations that seek to expand their reach across different groups of people from diverse cultures (Sagiv and Schwartz 2007). Globalisation has meant an increase in the numbers of multicultural workplaces and implies that an understanding of how national culture affects the performance of multinational corporations is essential. Several research studies have been conducted into the dimensions that make up societal culture (Swartz 1999; Hofstede 2001). The Hofstede theory looked at culture from five dimensions, namely long/short term orientation, individualism/collectivism, masculinity/femininity, power distance, and uncertainty avoidance.

Long versus short term orientation was defined as the extent to which a society takes on a future orientated perspective as compared to a point of view that is either short term or historical in nature. According to Hofstede (2001), when a society exhibits a long term orientation, then certain values such as thrift, perseverance, sense of shame and the ordering of relationships using status are entrenched in the beliefs and behaviours of the people and the society places emphasis on investments for the future. However when a short term orientation is adopted, members of the society are characterised by their respect for tradition and personal stability.

Individualism and collectivism refers to the boundaries between the society and the individual. Swartz (1999) defined embedded cultures as those in which the individuals are seen to be part and parcel of the society. In order words, people are expected to build their lives by establishing social relationships and by being active in the shared vision of the society. Such cultures focus on keeping the status quo and protecting group solidarity and the traditional way of life. Wisdom, security and respect for tradition are the cornerstones of embedded cultures (Swartz 1999). Autonomy cultures occupy the other end of the spectrum and Swartz (1999) described them as societies that view individuals as autonomous and encourage people to develop and nurture uniqueness in their preferences, motives, abilities and emotions (Chen 2004).

The masculinity/femininity dimension was defined by Hofstede (2001) as pertaining to the differentiation of roles in the society between males and females. In a masculine society, performance is emphasised while in the feminine society, the emphasis is on love and caring for others (De Mooij and Hofstede, 2002). The dominant values in a masculine society are materialism, competitiveness and assertiveness. In a masculine type of culture, dramatic differences persist between the roles of men and women as opposed to in a feminine society.

Hofstede (2001) defined the power distance dimension as the extent to which power is distributed between individuals in the society and the degree to which the lesser authority accepts the authority of more powerful people in the society. In a large power distance culture, there is a social hierarchy in place as compared to one of low power distance in which consultation is emphasised.

The fifth dimension mentioned in Hofstede (2001) is the uncertainty avoidance which was defined as how much people in a society are concerned about uncertainty and to what extent people would try to avoid ambiguities and uncertainties. Cultures that exhibit strong uncertainty avoidance always emphasise rules and regulations and are always in search of truth. They also value and place a lot of confidence in expertise. Cultures that are very strong in uncertainty avoidance do not readily accept new ideas and are less receptive to changes and innovation (Yaveroglu and Donthu 2002; Yeniurt and Townsend 2003).
Cultural Diversity

Cultural diversity is a term that has emerged to describe the diverse nature of cultures that are present in modern day societies. Parvis (2005) defined cultural diversity as the composition of several social structures within an institution and this may be comprised of socioeconomic, ethnic, gender or racial varieties. In a statement from the Millennium Forum of the United Nations on cultural diversity and globalisation, cultural diversity was perceived not only as “diversity of customs, folklore, language or cultural expressions, but diversity of economic cultures, political cultures, social cultures, scientific cultures, educational cultures, territorial cultures, juridical cultures, ecological cultures, etc.”(Parvis 2005, p.10).

According to Cox, Lobel and McLeod (1991), the value of cultural diversity can be found in the ability to attract new ways of thinking and to foster creativity. According to Mueller (1998) there are other arguments for cultural diversity and these include:

1. Diversity empowers organisations to better fit into a global society thereby creating leverage in competition.
2. Minority and disadvantaged groups become better integrated.
3. Diversity facilitates better and more rapid responses to change.
4. Diversity satisfies the moral and social responsibilities of organisations.

However there are some researchers that believe that diversity can reduce performance because of the problem of communication within the diverse groups and that it can also lead to increased conflicts within organisations (Tsui et al. 1995; Jehn et al. 1999). Other arguments against diversity include the creation of complexities and ambiguities in the development of a common vision. Globalisation is viewed by many as having a destructive effect on cultural diversity or multiculturalism as it is sometimes referred to (Parvis 2005).

Levitt (1983) is credited as having introduced the term globalisation in 1983. In his paper, Levitt (1983) warned of a powerful force directing the world to a point of convergence in culture. He identified the force as technology. Levitt (1983) stated that technology had made communication, transport and travel so easy for everyone with the result that it transmitted information and experiences that spurred demand in almost all goods and services that had previously been inaccessible to most of the people. This demand created a new order in commercial reality and resulted in the emergence of global markets. Levitt (1983) warned that globalisation could herald the end of the multinational commercial world. In particular, Levitt (1983) pointed out that because a global producer is able to offer his goods internationally at a lower cost, he is then able to attract many more customers, including local villagers who had previously patronised local companies. Thus the local preferences gradually shift and the local culture will be slowly eroded. Also the global organisation sees the world as one stage rather than many customised markets. It therefore has a mission of global convergence.

Discussion and Conclusion

Globalisation and Cultural Identity
Tomlinson (1999) argued that there is a reciprocal relationship in which globalisation is as much a part of modern culture as culture is a part of globalisation. However he was quick to point out that the politics and economics involved in globalisation are not necessarily the only determinants of culture, but that the massive changes arising from these changes to the fabric of culture intrinsically ties them together. According to Tomlinson (1999), complex connectivity is the main hallmark of globalisation and this results in knowledge, capital and goods flowing to all corners of the globe. McGrew (1992) also stated that the emerging viral network of interconnectedness across international lines is diverse and ranges from social and institutional connections to individual relationships thereby making a considerable impact on culture.

Tomlinson (2003) expounded on this idea and stated that cultural identity can be regarded as a product of globalisation rather than the notion that globalisation destroys cultural identity. However many researchers such as Levitt have stated that, in the era prior to globalisation, there was a close connection between geographical location and cultural experiences. Identity in those days was a traditional possession which belonged to local communities. However in the early 80s globalisation began to reshape the local identities through a market price mechanism described above. This according to Levitt (1983) virtually obliterated local identities creating a homogeneous cultural identity across the globe. An example is the local preferences for soft drinks that has seen a virtual monopoly by Coca Cola and Pepsi in almost all corners of the globe. Thus globalisation resulted in the destruction of cultural identity and replaced it with the culture of stronger world economies such as the United States of America. Therefore globalisation has threatened the culture of weaker economies such as those in developing countries.

Tomlinson’s (2003) reply to this was that contrary to the assertions of people such as Levitt (1983), globalisation, if viewed from a different interpretation of cultural identity and a more detailed look at the process of globalisation, was in fact a catalyst for creating and proliferating cultural identity. In fact Castells (1997) had proposed a similar hypothesis when he stated that the powerful expression of cultural identity was the principal opposing force to globalisation. For Castells (1997), local identity is a powerful factor that offers resistance to the technological driving force of globalisation. Social identity groups based on gender, religion and ethnicity are good examples of forces that are able to oppose globalisation. These identity groups become stronger and more prolific as they engage in the process of resistance. Thus the impact of globalisation becomes an interplay of forces, rather than the victimisation of cultural identity.

Tomlinson (2003, p.3) added a dimension of modernity to the debate by stressing that “globalization is really the globalization of modernity, and modernity is the harbinger of identity”. From his point of view, the concept of identity should not regarded as being universal and with fixed implications but should be regarded as a modern way of expressing oneself in a cultural context. Thus identity must be assumed to have different ways of articulation and varying consequences across the globe. Giddens (1990) defined modernity as the detachment of social and cultural experiences from the concept of local characteristics to place them in the dimensions of time and space. In this argument, Tomlinson used the definition of modernity proposed by Giddens (1990) to show that modernity entrenches and regulates cultural practices.

Impact of Globalisation and Societal Cultural Values on Organisations
Globalisation has resulted in the emergence of multicultural work teams and markets. The question here is how do the cultural values of the locality in which an organisation is sited impact upon those of the organisation. According to Swartz (1999), the cultural values of an organisation, being the shared broad goals that individuals are expected to pursue within an organisation, are critical in the determination of the existence and survivability of the organisation. Hofstede (2005) stated that societies develop cultural values as a way of responding to issues encountered within the environment. Organisations however have two levels of challenges to respond to. In the first instance they must respond to challenges posed externally within the environment and in the second instance, organisations must adapt to changes that concern internal integration (Wright et al. 1998).

The effect of globalisation is therefore to impact upon the external environment as described above and in addition, to broaden the base and increase the complexity of operations performed by the organisations. By operating in a global village, control of the external environment is transferred from the government to the forces of capitalism because organisations have crossed national boundaries. By this move cultural diversity is introduced as a process that involves the movement of people across the globe in an integrated manner (Held and McGrew 2000).

According to Mannix and Neale (2005), cultural diversity affects the performances of teams in three ways. Firstly people, quite naturally, find it easier to work with people who share the same cultural background and have similar values, beliefs and attitudes. This is known as the similarity theory. Secondly, social identity and social categorisation theory states that individuals form specific groups and treat members of their social group with favouritism and in addition, look adversely upon theory (Tajfel 1982), These two views represent the negative effects of cultural diversity in teams. The third perspective states that cultural diversity brings different points of view into the teams thereby increasing the potential for creativity and innovation.

Impact of Globalisation on Consumerism and Consumption

It was mentioned earlier in this paper that technology is the engine for globalisation. Thus the creation of a global market together with the speed available in the communication technology field have made it possible to spread new cultural values in the context of consumerism and consumption across the globe in an unprecedented manner (Anderson 2001). With this new development, corporations have been enabled to create brands which engender brand loyalties across the globe. Communications technology has made a big impact on the preferences of consumers even as far as the village levels thereby supporting the theories of Levitt (1983). The revolution in brand marketing across the globe has helped to create a global consumer culture and corporations seeking to tap into the global market are now presented with the challenge of creating and sustaining brands for leverage in competition (Belk 1996). Freedman (2007) sees this challenge as a centralised approach to global marketing which inevitably leads to a global consumer culture. Tomlinson (2003) introduced the idea of modernity to support the interplay of forces of globalisation with those of cultural identity. This is particularly relevant in the case of this apparent shift in global consumerism and consumption. New communication methods such as the internet, media and smartphone technology have made it possible for people to connect with others within a new concept of global citizenry to experience new cultures, while at the same time the forces of local identification are acting in the opposite direction to resist globalisation (Larsson 2001; Gregory 2002). Examples of resistance can be found in the accusation that British Petroleum is encouraging global warming and the Nike Shop engaging in undesirable labour practices (Gregory 2002). Thus the corporations entering the global market are subjected to more rigorous scrutiny and need to operate at higher standards than local enterprises.

References.
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Castells, M., 1997. The Power of Identity, The Information Age: Economy, Society and Culture. 2nd edition. Oxford: Wiley-Blackwell.

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Cox, T., Lobel, S. and McLeod, P., 1991. Effects of ethnic group cultural differences on cooperative and competitive behavior on a group task. Academy of Management Journal, 34 (4), 827-847.

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Friedman, T., 1999. The Lexus and the Olive Tree. New York: Farrar, Straus and Giroux.

Giddens, A., 2002. Runaway world: how globalization is reshaping our lives. London: Profile Books.
Gregory, J. R., 2002. Branding Across Borders: A Guide to Global Brand Marketing. Chicago: McGraw-Hill.

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Jehn, K. A., Northcraft, G. B. and Neale, M. A., 1999. Why differences make a difference: A field study of diversity, conflict and performance in workgroups. Administrative Science Quarterly, 44 (4), 741-763.

Larsson, T., 2001. The Race to the Top: The Real Story of Globalization. Washington DC: Cato Institute.

Levitt, T., 1983. The globalization of markets. Harvard Business School Review, 61 (3), 92-102.

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Yaveroglu, I.S. and Donthu, N., 2002. Cultural influences on the diffusion of new products. Journal of International Consumer Marketing, 14(4), 49–63.

Yeniurt, S. and Townsend, J.D., 2003. Does culture explain acceptance of new products in a country? International Marketing Review, 20(4), 377–396.

References: Asgary, N. and Walle, A. H., 2002. The cultural impact of globalisation: Economic activity and social change. Cross Cultural Management, 9 (3), 58-75. Anderson, W. T., 2001. All Connected Now: Life in the First Global Civilization. Boulder: Westview Press. Belk, R.W., 1996. Hyperreality and Globalization: Culture in the age of Ronald McDonald. Journal of International Consumer Marketing, 8 (3), 23-38. Cameron, D. and Stein, J.G., 2000. Globalization, culture and society: The state as place amidst shifting spaces. Canadian Public Policy / Analyse de Politiques, 26 (2), 15-34. Castells, M., 1997. The Power of Identity, The Information Age: Economy, Society and Culture. 2nd edition. Oxford: Wiley-Blackwell. Chen, T. M., 2004. Introduction: Thinking through Embeddedness: Globalization, Culture, and the Popular. Cultural Critique, 58 (1), 1-29. Cox, T., Lobel, S. and McLeod, P., 1991. Effects of ethnic group cultural differences on cooperative and competitive behavior on a group task. Academy of Management Journal, 34 (4), 827-847. De Mooij, M. and Hofstede, G., 2002. Convergence and divergence in consumer behavior: implications for international retailing. Journal of Retailing, 78 (1), 61–69. Feldhusen, M., 2008. The Social Life of Objects: Interpreting Our Material Culture. Art Education, 61 (6), 25-32. Freedman, K., 2007. Centralisation: One size fits most - Brand Strategy [online]. ProQuest: UWL Lib., La Crosse, WI. Available at: http://www.proquest.com [Accessed 10 December 2013]. Findlay, R Friedman, T., 1999. The Lexus and the Olive Tree. New York: Farrar, Straus and Giroux. Giddens, A., 2002. Runaway world: how globalization is reshaping our lives. London: Profile Books. Gregory, J. R., 2002. Branding Across Borders: A Guide to Global Brand Marketing. Chicago: McGraw-Hill. Held, D Hofstede, G., 2005. Cultures and Organizations: Software of the Mind. 2nd edition. London: McGraw-Hill. Hofstede, G., 2001. Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations. 2nd edition. Beverly Hills: Sage. Jehn, K. A., Northcraft, G. B. and Neale, M. A., 1999. Why differences make a difference: A field study of diversity, conflict and performance in workgroups. Administrative Science Quarterly, 44 (4), 741-763. Larsson, T., 2001. The Race to the Top: The Real Story of Globalization. Washington DC: Cato Institute. Levitt, T., 1983. The globalization of markets. Harvard Business School Review, 61 (3), 92-102. Lillis, M. and Tian, R., 2010. Cultural Issues in Business World: An Anthropological Perspective. Journal of Social Science, 6 (1), 99-112. Mannix, E. and Neale, M. A., 2005. What differences make a difference? Psychological Science in the Public Interest, 6 (2), 31–55. Oman, C., 1996. The Policy Challenges of Globalisation and Regionalisation: Policy Brief No.11. OECD Development Centre, p. 5. Parvis, L., 2005 Sagiv, L. and Schwartz, S.H., 2007. Cultural values in organisations: insights for Europe. European J. International Management, 1 (3), 176-190. Schwartz, S.H., 1999. Cultural value differences: some implications for work. Applied Psychology: An International Review, 48 (1), 23–47. Tajfel, H., 1982. Social psychology of intergroup relations. Annual Review of Psychology, 33, 1–39. Tomlinson, J., 1999. Globalization and culture. Cambridge: Polity Press. Wright, P., Kroll, M. and Parnell, J. A., 1998. Strategic Management: Concepts and cases. 4th edition. Upper Saddle River, NJ: Prentice Hall. Yaveroglu, I.S. and Donthu, N., 2002. Cultural influences on the diffusion of new products. Journal of International Consumer Marketing, 14(4), 49–63. Yeniurt, S. and Townsend, J.D., 2003. Does culture explain acceptance of new products in a country? International Marketing Review, 20(4), 377–396.

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    Superflat

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    Hall, S. (1995). New Cultures for Old. In D. B. Massey & P. Jess (Eds.), A Place in the World?: Places, cultures and globalization (pp. 175–213). Oxford; Milton Keynes: Open University; Oxford University Press.…

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    Holton Cultural Consequences

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    ABSTRACT: Globalization has been associated with a range of cultural consequences. These can be analyzed in terms of three major theses, namely, homogenization, polarization, and hybridization. The homogenization thesis proclaims that global culture is becoming standardized around a Western or American pattern. While some evidence supports this view, the presence of cultural alternatives and resistance to Western norms suggests that polarization provides a more convincing picture of global cultural development. Global interconnection and interdependence do not necessarily mean cultural conformity. Culture, it seems, is harder to standardize than economic organization and technology. Yet the idea of polarization has its limits, too. The hybridization thesis argues that cultures borrow and incorporate elements from each other, creating hybrid, or syncretic, forms. Evidence to support this view comes mainly from popular music and religious life. The cultural consequences of globalization are therefore diverse and complex.…

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    fashion globalization

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    Crane, D. (2002). Culture and globalization: Theoretical models and emerging trends. In D. Crane, N. Kamashima, & K. Kawasaki (Eds.), Global culture (pp. 1-28). London, UK: Routledge.…

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    and promote its cultural goods in every corner. Nor will I take up the argument –…

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    Mister

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    Friedman, T (2011) Lexus and the olive tree New York: newyork times colomist. Pg 1- 30…

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    Cox, Taylor H. 1991, ‘Effects of Ethnic Group Cultural Differences on Cooperative and Competitive Behavior on a Group Task’ The Academy of Management Journal, vol. 34, No. 4, pp.827-847…

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    Case: globalisation of health care- shortage of radiologists in the US and demand is twice as large as the rate of graduation. Solution is to send images over the internet to be interpreted by radiologists in India? In 2004 170,000 foreigners visited India for medical treatments and is expected to grow at 15% for the next several years.…

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    5. Mackay, H. (2000), The globalization of culture. In: Held,D. (ed.), A globalizing world? Culture, economics, politics, London, The Open University.…

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