October 1, 1999 – The Global Economic Crisis Revisited Welcome back to a new semester!
So...what's new in the world?
Has anything happened during the summer that's interesting?
Are people and organizations still working the same way they did a year or two ago?
Has the global economic crisis -- if it still exists-- affected organizational behavior in any significant way?
Global Snapshots
Here are a few recent events from around the globe that provide a glimpse into the myriad activities of organizations along with some trends that might affect organizations in the near future.
- "In Austria, Indonesia and South Korea, McDonald's sells Big Macs and Happy Meals. But its Vienna franchises also contain "McCafes," which offer coffee blended for local tastes. In Jakarta, the McDonaldÕs menu includes rice as well as french fries. And in Seoul, the burger chain sells roast pork on a bun with a garlicky soy sauce" ( New York Times, February 12, 1999 p.C1).
- 100 million Chinese workers are wandering throughout China in search of work ( New York Times, February 24, 1999, p.1).
- Japanese workers no longer expect lifetime employment and increasingly experience unemployment. In March 1999, to protest the restructuring of the corporation he worked for, a Japanese manager committed Hara-Kiri.
- Anti-Semitism in Russia is rising as a result of the continuing economic disaster.
- Ambassador automobiles, which haven't changed design in 41 years, and until recently was a monopoly in India, is experiencing intense competition.
- The economy of the United States continues to grow and waves of mergers and acquisitions are producing corporate restructuring.
- Evidence is emerging that the recent merger that created DaimlerChrysler is experiencing strain because employees of the German and American companies are becoming aware of cultural differences in management styles that were supposed to blend in the formation of the new company.
- Capitalists are to be granted official status in communist China.
Has National Culture and Values Changed As a Result of the Global Crisis?
The New York Times http://nytimes.com published four articles from February 15, 1999 to February 18, 1999 titled "Global Contagion: A Narrative," that describe the complex and often indirect ways that people and organizations around the world are connected through economic activity.
The articles point out that many individuals are unaware of their connection with people and cultures in remote places. Specifically, there appears to be relatively little consciousness of how the behavior of individuals and organizations in other cultures impacts their way of life including their behavior in organizations and the type of organizations they for which they work. For example, many Americans, who believe that they are not participants in the global economy, are unaware that the decisions of the managers of their investments--pension fund and mutual fund managers--include whether or not to invest in foreign markets. These decisions often directly affect the fate of organizations, for example, they either have capital for growth or, in many emerging nations, experience adverse economic conditions.
Asian Values
An area of sustained interest has been the role of Asian Values in the economic crisis. The central issues are: Are there distinctly Asian Values or was the concept a misinterpretation of Asian society by Western observers? If Asian Values exist, do they promote democratic institutions and some form of capitalism? How do Asian Values differ among the various countries in Asia?
A recent discussion that touches on some of these issues is "Two Cheers for Asian Values" by Nathan Glazer. Extracts of this article can be found at http://nationalinterest.org/issues/57/57.glazer.html
Has Behavior in Organizations Changed?
As noted above, one result of the economic crisis has been changes in people's behavior. But are these changes significant and enduring, or will behavior revert to previous patterns once the economic crisis passes?
Has the economic crisis accelerated the convergence of behavior throughout the world as a result of social, financial, and political interdependence or produced more diverse patterns because nations have determined that their own interests are paramount and become wary of too much collaboration?
Web Exercise
Use the World Wide Web to locate information concerning current developments in the economic crisis that has affected much of the globe. Is the crisis becoming more severe or improving? What changes in organizational behavior, if any, can be detected?
Additional Web Sites can be found in the June 1, 1998 MONTHLY WEB UPDATE: "The Economic Crisis in Asia: will It Effect Asian Values and Culture?"
- http://www.odci.gov/cia/publications/factbook/index.html
This is the Home Page of the Central Intelligence Agency. It contains brief statements on current economic conditions in all countries as well as information about their population, political processes, and social conditions.
- http://headlines.yahoo.com/Full_Coverage/Business/Global_Economy
This Site provides links to many sources of information on the global economy and how it affects workers, managers, and their organizations.
- http://www.stern.nyu.edu/~nroubini/asia/AsiaHomepage.html
This site provides updated links to sites on the economic crisis in Asia.
From the information you have gathered, attempt to forecast the next six months and one year. For example, will we be reading more about Japanese corporate restructuring and additional international corporate mergers, or will the events of recent months end with the result that organizational behavior reverts to more traditional types of activities? Or, will organizational forms and behavior develop into something entirely new and unforseeable?
E-Mail Exercise
Locate a Web Site or e-mail in a country other than your own that is experiencing problems as a result of the economic crisis. For example, use a Web Browser such as Altavista http://www.altavista.com to locate the home page of a university and use either the faculty or student pages for locating e-mail addresses. Once you have located an appropriate e-mail recipient, ask them how conditions in their country have affected values and behavior in organizations that might persist beyond the crisis.
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