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Management In Developing Countries Research Paper
A November 25, 2006 article in The Economist titled “Steel the Prize” discussed the takeover battle between Tata, an Indian conglomerate, and CSN, a Brazilian Steelmaker, for Corus—Corus is the Anglo Dutch company that absorbed British Steel (p. 64). This may be a harbinger of the face of the future—two giant companies from developing countries, fighting over a developed country asset. The Indian company Tata is emerging as a pioneer in automotive innovation, and China’s carmakers continue to copy cars from traditional automakers (“Carmaking in India” 2006, p. 64); at the same time Chinese-owned businesses are investing around the world, Dubai is establishing itself as a global financial center, and small and large companies from developing countries around the world are now investing in the developed world. What literature there is on management interactions between developing and developed countries implicitly assumes that managers from developed countries will be adapting to the environment in developing countries. The reverse may be more and more the reality of the management challenges of the 21st century.
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In many ways, this is contrary to traditional thinking about developing countries. Until quite recently, the developing countries were seen only as the recipients of aid and investment from the developed world. This may be changing, although the developing countries remain the poorer countries of the world. Much of this research-paper will discuss the implications of wealth, or its lack, on management in developing countries; however, throughout, readers should keep in mind the changing world in which we live because this changing world will determine what effective management is.
At the beginning of the 21st century, there is much discussion of the global nature of business and the need for management to be aware of the impact of globalization on business. There is little question that factors such as the relative ease of movement around the globe, innovations in communication and transportation technology, regional and international free trade agreements, international investment, continuing immigration, and so on, all contribute to a sense of the world being a global village. The reality, however, is that when we talk of globalization and international management, we are usually talking about management in the developed countries of the world. These richer countries account for a large majority of global trade and investment. These rich countries also account for most of the world’s Gross Domestic Product (GDP; the richest 20% of the world earn about 85% of the world’s GDP and the poorest 20% only 1%); however, they represent only about 20% of the world’s population. The focus of this research-paper is on management in the other 80% of the world—the developing world. Figure 1 shows graphically the growth in the gap between the world’s richest and poorest countries from 1820 to 1997.
The most recent negotiations at the World Trade Organization, the Doha Round, had a “development agenda.” These negotiations reached a stalemate in 2006, partly because the growing power of the developing countries meant that these countries would not accept solutions dictated by their richer counterparts. The focus on the developing countries indicates the interest that the world has in these countries. There are a number of reasons for this. First is simply the fact that they do make up about 80% of the world. In addition, the gap between the rich and poor countries has been growing, from 3 to 1 in the late 1800s to 75 to 1 in the late 1900s, and this gap worries many people. On a more positive side, the developing world is of interest because it represents a substantial potential market and workforce, and these countries can provide an array of products and services for the rest of the world.
Figure 1 Gap Between Rich and Poor Countries
While developing countries are often discussed as a group, as they will be here, in reality it is difficult, if not impossible, to talk of them as a group because the group is made up of such diverse countries—ranging from very large (e.g., China and India) to very small (e.g., Samoa and St. Lucia); including relatively well-off countries (e.g., Taiwan) and very poor ones (e.g., Haiti); covering a multiplicity of languages, religions, histories, and geographies; and representing all continents. This means that any discussion of these countries as a group must be tempered by a recognition that there will be as many differences among countries as there may be similarities.
This research-paper begins with definitions of developing countries. It identifies the major differences between the developed countries and the developing ones. Drawing on the differences and on the literature on management in developing countries, implications for management are outlined including issues associated with ethics and corporate social responsibility. The research-paper closes with a discussion of the current situation in developing countries and of how this is changing in the face of expansion of the People’s Republic of China, as well as the forces leading to convergence/divergence in cultures and management practices.
Definitions Of Development
Over time, the terminology used for development has varied. In the mid-1900s, the poorer countries were often referred to as “underdeveloped” or “less developed countries” (LDCs). Sometimes they were referred to as the “third world” (in contrast to the first, rich world and the second, communist world), and sometimes a distinction was drawn between the north (where most rich countries are) and the south (where most poor countries are). Reflecting the level of industrialization that accompanies development, sometimes the richer countries are referred to as industrialized countries. More recently, the terms that have become popular are developed countries, transition economies—the countries of east-central Europe, the Balkans, the Baltics, and the CIS—and emerging markets according to the Economist Intelligence Unit (2007). In this research-paper, developed and developing are used because most readers are likely to be familiar with these terms.
Whatever terminology is used, the developed countries are the richer ones and the developing are the poorer. Of course, within each group, there is a range of GDP per capita and a range of incomes. Especially in the developing countries, the range is large, with some countries being quite well-off and others being very poor (the poorest are often now called the “least developed” to identify their special needs).
Developed nations are those countries of the world considered to be more technologically and economically advanced. In constrast developing countries are relatively poorer. The specific measure that is usually used for determining a country’s status is income per capita. Using this measure, according to the Economist Intelligence Unit (2007), the developed countries of the world are Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Gibraltar, Greece, Iceland, Ireland, Israel, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, United Kingdom, and the United States of America. All others are classified as emerging markets or transition economies.
While income per capita is traditionally used to classify countries as developed or developing, there are limitations to this measure, and it does not capture the quality of life that may be experienced in a particular country. An alternative measure is the Human Development Index (HDI), which incorporates a variety of additional measures such as health care, education, social benefits, and so on. By and large, the countries that score high on per capita income also score high on the HDI and vice versa. Nevertheless, the HDI provides a better sense of what one will experience in a particular country. For example, Barbados, although a developing country, was number 30 on the HDI list, indicating a relatively high standard of living.
Population growth in more developed countries is relatively slow, while population growth in the developing countries, especially Asia and Africa, remains high. The United Nations (UN) estimates show the population in Asia growing to over five billion by 2050.
Figure 2 Population Growth Estimates
The developing world already makes up about 80% of the world’s population. This percentage will increase in the near term. Of course, at the same time, some of these countries are becoming richer, and by 2050, they may no longer be listed among the developing countries. Nevertheless, it is clear that the sheer numbers of people likely to be in those countries now classified as developing mean that we cannot afford to continue ignoring them in research on management.
At the same time, the poverty of the developing world, combined with the richness of the developed, has resulted in substantial immigration from the poorer to the richer countries. This immigration provides pluses and minuses for each side. Migrants, both legal and illegal, are willing to undertake work that residents often eschew, and they contribute to the economies of their new countries. They send money home to their families and relieve their former countries of the burden of their welfare. Sometimes, however, they are seen as taking jobs from residents in their new homes, and contributing to a brain drain that leaves their former countries poorer.
The Reality In Developing Countries
According to a report on the BBC radio in April 2002, a poll of Europeans showed a negative view of developing countries, predominantly focused on poverty and illness.
In many ways, this is the reality of developing countries. As defined previously, these are the poorer countries of the world, so they exhibit the effects of being poor. There is a more positive side to the equation, however. For example,
- per capita incomes have been growing in developing countries, and there is a growing middle class in many of these countries;
- some developing countries score quite high on the HDI, indicating that they are good places to live;
- several developing countries are experiencing high rates of growth (the People’s Republic of China is a good instance);
- the developing countries represent a very substantial market, and source of supply; and
- concentrations of wealth in developing countries have allowed them to engage in outward international foreign direct investment.
Nevertheless, in most developing countries, being relatively poor means that
- people are concerned with basic needs or, in the better off developing countries, with achieving economic stability;
- infrastructure is limited—roads, railways, ports, and other physical facilities are nonexistent in some locations and only barely adequate in better off locations;
- social services are inadequate—education, health care, and social safety nets are minimal, if they exist at all; and
- resources are apparently scarce and their allocation is sometimes based on preferential systems such as individual and family need or influence.
Other differences characterize the developing countries. These include population growth, population dispersion, age distribution, literacy and numeracy levels, and gender roles according to United Nations Publications (1998, 2000, 2005). The following statistics illustrate the situation:
- Population growth rates have been substantially higher in the developing world (2%) than they have been in the developed world (0.6%). Fertility rates are also higher in the developing world (5 conceptions per woman vs. 1.9 in the developed world).
- The developing world remains more rural than the developed does (38% in cities vs. 78%). Cities are seen as places of opportunity for people in developing countries, and this results in continuing movements of people to cities that are often overcrowded and underserviced.
- People in developing countries are substantially younger than those in developed countries are. It is expected that by 2015, 18% of the population in developed countries will be over 65, while only 5% of those in developing countries will be.
- Life expectancy at birth is estimated at 72 years for the world, 78.6 years for the developed countries, and 70.6 years for the developing (the lowest group is Africa at 59.5 years).
- On average, people in developed countries have better access to education, and functional literacy and numeracy is normal. Even where developing countries have relatively good educational systems, lower levels of literacy and numeracy are more generally accepted.
- In most developing countries, gender roles are more pronounced than they are in developed countries. This includes discrimination against women in terms of land ownership, family inheritance, education, and income.
In addition, there appear to be some cultural differences between developed and developing countries. People in developing countries, in general, are more collective than those in developed countries are, power differentials are more pronounced in many developing countries, and people are somewhat more averse to uncertainty and risk. In addition, there is some evidence that, on average, people in developing countries are lower on need for achievement and more external in terms of locus of control than people in developed countries are. Figure 3 compares developed and developing countries on masculinity/femininity, individualism, power distance, and uncertainty avoidance, based on Hofstede’s (1984) measures of cultural values. As this comparison illustrates, the clearest distinctions are lower individualism and higher power distance in the developing countries.
Of course, these value dimensions were measured in the early 1980s, and we can expect that they may change over time, particularly in response to the changing environment of the 21st century. As countries become wealthier and as their middle classes increase in size, their cultural values will also likely change.
There also appear to be some political differences between developed and developing countries. Generally, the developed countries have well-established democratic processes, while the developing countries are more likely to be ruled by a powerful individual or an elite group; developing countries with democracies are often new democracies.
Figure 3 Comparison of Developed and Developing Countries on Cultural Values
Market approaches are also somewhat different between the two sets of countries. Developed countries, to a large extent, separate government and business, and support free markets and free enterprise. In developing countries, there is often a closer link between government and business, which is considered appropriate, and the state is seen as the agent of economic change. Governments in developing countries often accumulate capital from international agencies and use this wealth for economic purposes.
There is an interesting link between economic freedom and income levels as well. Gwartney and Lawson (2002) of the Fraser Institute described economic freedom as encompassing personal choice, voluntary exchange, freedom to compete, and protection of person and property. The Fraser Institute reported that, as incomes increase, economic freedom also increases. Consequently, the developing countries have scores that are lower on economic freedom than the more developed countries.
Most of the countries currently listed as developing were, until quite recently (the 1950s), colonies of the European powers. This colonial heritage is likely to influence their business practices in a number of ways:
- Colonies were traditionally producers for markets in the European countries. This means that for many colonies, the concept of marketing is largely ignored, with a focus on production instead.
- Colonies were in subordinate positions and instructed by the “colonial masters” (as the European powers were called) in matters of government, economics, and business. Decisions were made elsewhere, and in many of these countries, there is still a tendency to look to others for decisions.
- A top down decision-making style was enforced and accepted. Decisions were made at the master level, with little input from the local level, and these decisions were not questioned. This remains in the management style of many companies in developing countries.
It is difficult to be certain of the influence of colonization in a postcolonial society, but one can be certain that there is an influence. Further, as countries move further from colonial times, we can expect their management practices and styles to change.
Implications For Management In Developing Countries
There is relatively little research on management in developing countries. Thomas (1996) and Baruch (2001) commented that examinations of management have focused on locations in the industrialized world, particularly North America and Western Europe, resulting in management theories that are biased. In other words, management theories are based on the developed countries, and it is not clear which theories apply in developing countries and which do not. Because of this, it is very difficult to make statements about management in developing countries. The best approach then is to look at the factors that have been identified as defining developing countries and to make informed judgments about how these are likely to affect management, necessarily using the lexicon and conceptual constructs of the available literature, which is based on management in the developed world.
It is important to remember that the group of developing countries is made up of very diverse countries—ranging from China and India to Samoa and St. Lucia and including Taiwan and Haiti—with many languages, religions, histories, and geographies, and representing all continents. This means that any discussion on managing in these countries as a group is necessarily limited, and must largely ignore the specifics of individual countries. There is some literature on specific developing countries, and readers with an interest in a specific country should seek out these studies. Unfortunately, this literature is often not available outside of the country of origin, and rarely are translations done so that access can be limited. In recent years, there has been a substantial interest in the People’s Republic of China and some research on management has been done comparing management in the People’s Republic of China to the United States and other developed countries. In India, there is a substantial body of indigenous management literature. The same is true of some Latin American, African, and middle-eastern countries. The so-called BRIC countries— Brazil, Russia, India, and China—are currently the focus of some interest.
Management And Characteristics Of Developing Countries
Management has traditionally been described in terms of a process and five activities that make up the management process—planning, organizing, staffing, leading, and controlling—are usually discussed as basics of management. These are often portrayed in texts as sequential and iterative. Management begins with planning which sets the strategies, objectives, and goals for an organization—planning drives the organization and other management activities are intended to help achieve plans. Planning is followed by organizing, which provides structure to ensure that plans can be realized. Organizing is followed by staffing, in which people are identified to carry out the necessary functions to achieve plans. Staffing is followed by leading, which ensures that staff behaves in desirable ways that lead to achieving plans. Leading is followed by controlling, an activity that is designed to measure progress toward plans and allow for corrective action.
This model of management will be used to discuss how the management process in developing countries may differ from that in the developed countries. First, however, it is important to look at the model itself and its western biases. The process in the model is based on a sequential, logical, rational set of discrete activities, which are typical of a western, developed country viewpoint. The model assumes control over the environment so that making plans, designing structures, choosing people for specific jobs, and measuring outcomes are all reasonable activities.
Non-western countries often do not see the world in the same straight, sequenced pattern. Time in many non-western societies has been described as analog rather than digital and the context of communication is as important, or more important, than the content. A contrast of Saudi Arabian decision making with that of the United States talks of the Saudis circling while the Americans are linear. Many non-western countries believe more in the role of fate and do not assume that people have control over their environment.
These fundamental differences in worldview may mean that the very term management will mean something quite different in some developing countries, if it can be thought to exist at all. Nevertheless, the management model that is the norm in developed, western countries will be used for this discussion, because it will be familiar to most readers. Developing countries have generally been found to be somewhat more collective than developed countries, somewhat more accepting of power differentials, somewhat more averse to uncertainty, and more fatalistic. All of these attributes are likely to influence management and how the processes of management are carried out, as the following illustrates.
Collectivism suggests that planning will be generally be a group activity and the idea of consensus will be important. At the same time, acceptance of power differentials suggests that ultimately decisions will be made by those in positions of power, although input may be sought from subordinates. Preference for certainty/aversion to uncertainty adds to the likelihood that subordinates will look to their superiors for decisions because this eliminates a degree of risk. Preference for certainty may suggest a need for careful decision making, with contingency plans; however, this is not likely the case where the society is fatalistic. Fatalism implies an acceptance of the will of a supreme force or set of forces without question, and this may in turn make planning in detail seem contrary to this acceptance.
Collectivism suggests that work will be organized on a group or team basis, with tasks to be accomplished by groups rather than by individuals. Acceptance of power differentials likely means that clear cut hierarchies will be established, with power residing at the top. Preference for certainty/aversion to uncertainty means that rules, policies, and procedures will be important and that employees want a clear idea of what is expected of them. Fatalism implies acceptance of what happens without question, and this is likely to reinforce the acceptance of decisions from the top and willingness to follow the rules imposed from the top without question.
Collectivism suggests that staffing decisions will be made on the basis of people being able and willing to work together. This may mean people of similar backgrounds including the use of family members working together in groups (a practice that might be viewed negatively in North America and Europe). Acceptance of power differentials likely means that staffing decisions made by those in positions of power will be accepted and not questioned and those in power will make decisions about staff that reinforce their power. Factors such as ethnicity, religion, age, and gender that relate to power will be taken into account in staffing decisions. Preference for certainty/aversion to uncertainty reinforces acceptance of staffing decisions made by superiors as this is seen as providing security, and this is reinforced by fatalism, which encourages such acceptance, even where it may be unpleasant. In many developed countries “nepotism” or the favoring of one’s relatives in business dealings is seen as negative, in contrast, in developing countries, family members are trusted, and therefore to be favored.
Leadership that is collective, based on power, and providing certainty may best be described as paternal or benevolent autocracy. In other words, the leader is concerned with the good of the group, and both leader and followers believe that the leader knows best, therefore an autocratic style is expected and accepted. This style of leadership provides security because the leader’s power position is accepted by his (possibly her in unusual situations) subordinates. Fatalism supports this leadership style because the powerful leader cannot be wrong—bad decisions become “God’s will.”
Controls in a collective society will be group rather than individual based—that is, goals will be set for groups and teams, output will be measured at the group level, quality will be a group responsibility, and so on. Controls will be determined by those in positions of power and they will control rewards and punishments that will be meted out in response to good performance or unacceptable performance or behavior. Rules, policies, and procedures that are clear will provide security and, thus, will be desired. At the same time, fatalism combined with acceptance of power differentials means that the superior may make exceptions to the rules, and this will be considered acceptable, even right.
The management style just described is one that in North America is often called “Theory X.” It is essentially top down, with management in tight control. The difference is that employees accept this style; therefore, it may work. In addition, there is a certain implication that, while autocratic in nature, it is a benevolent autocracy. The leader is expected to look after subordinates (as a father is expected to look after the family) and in return for this, employees are loyal to the leader.
Having discussed these management processes and how culture might influence them, it is appropriate to question them more generally:
- Is planning a necessary part of management? If events are predetermined, planning may at best be a waste of time, and at worst a questioning of a higher power.
- Should firms be formally organized? If personal influence is important in day-to-day activities, it may not be appropriate to identify positions within the firm.
- Can people be allocated to fill positions within the firm? If people prefer to work at tasks as they arise, it may not be helpful to allocate them to specific slots.
- Does management actively seek to direct and motivate subordinates? If people believe they should work hard for the good of their group, it may be counterproductive to lead them actively.
- If people accept responsibility it may not necessarily mean that they have committed to performance, as they react to a changing situation.
- Are control systems necessary to achieve desired outputs? If employees are willing to act as instructed by their superiors, controls may be redundant.
It is important for managers in different cultures to be aware that their own assumptions may be questioned. This is particularly for managers from developed countries operating in developing ones and vice versa.
Ethics And Corporate Social Responsibility In The Context Of Development
A critical consideration for managers everywhere is that of ethics and corporate social responsibility. It may be particularly a concern in developing countries because what is considered ethical in a developed country may be considered unethical in a developing country and vice versa. For example, in the United States, lobbying is considered a normal activity—companies and industries send lobbyists to influence government representatives, asking these government representatives to make decisions that will positively affect the company or industry and offering political support in return. In other countries, this is considered unethical and the equivalent of bribing the government. Similarly, in North America, it is normal to tip restaurant waiters and taxi drivers, but people from many parts of the world are mystified or even insulted by this practice because the waiters and taxi drivers are simply performing an expected service—doing their jobs. In parts of Africa, Asia, and Latin America, it is customary to tip customs officials, while North Americans see this as bribery, because it is intended to get preferential treatment.
Developing countries have often been portrayed as more corrupt than developed countries. That is, there is more need for unreported payments and gifts in business dealings. These payments may be to civil servants, government officials, or other businesses. Transparency International (2007) prepares an annual index of corruption across the world. The countries at the bottom of the list are all developing countries, and those at the top are developed countries. While this suggests that managers in developing countries may have to deal with issues of “extra payments,” it is worth noting that, often, managers from the developed countries make these payments and contribute to the continuation of the practice. The mismanagement of funds in Iraq by U.S. companies, and the scandals relating to Australian companies and the food-for-oil program in Iraq are two illustrations of the fact that corruption has to exist on both sides.
Other ethical issues that may arise in developing countries have to do with the laws in these countries or sometimes with the lack of laws and regulations. For example, child labor is still common in many parts of the developing world, slavery continues, harmful pesticides are allowed, environmental protection is lax, working conditions are poor, and so on. In some cases, a practice such as child labor, which is seen as unethical in a developed country, is necessary in a particular developing country for families to survive. In other situations such as killing elephants and poaching ivory, the practice may be considered unethical in the developing country, but the country, because it is poor, lacks the resources to police existing regulations.
The New Reality
On September 16, 2006, The Economist had a cover that proclaimed “Surprise! The power of the emerging world.” A special report titled “The New Titans” was headlined by the following: “China, India and other developing countries are set to give the world economy its biggest boost in the whole of history,” and it goes on to ask, “[W]hat will that mean for today’s rich countries?” (p. 3). As this research-paper pointed out at the outset, the developing world includes most of the world’s population. Improvements in these economies, therefore, can have an enormous impact on the global economy. “The New Titans” article indicated that in 2005 the combined output of emerging (developing) economies reached a milestone of more than half of total world GDP (measured at purchasing power parity [PPP]). In addition, their share of world exports had increased to 43% from 20% in 1970, they consumed over half the world’s energy, they accounted for four fifths of the growth in oil demand, and they hold over 70% of the world’s foreign exchange reserves. A comparison on GDP percentage increases over a year earlier shows the emerging economies growing at a higher rate than the developed economies, and the gap widening.
This is all good news for the poorer people of the world, suggesting that the gap between the rich and the poor, identified at the beginning of this research-paper, may now start to move in the opposite direction. As the people of the developing countries become better off and have greater access to the goods and services that are now common in the developed world, what will this mean for management? From a management research perspective, it is likely to mean that there will be more interest in these countries and their management. This research-paper will likely need to be revised in a decade’s time, it may have more literature to draw on, and there may be quite different views on developing countries at that time. Students concerned with management in developing countries should watch their progress with interest. It may be that the weight of China and India is such that these two countries need to be considered separately from the rest of the developing world.
Of particular interest today is the impact that the People’s Republic of China will have on the world economy, as well as particular economies around the world. Cheap Chinese exports have been flooding around the world to the delight of consumers in both the developing and developed world but equally of concern to producers. Producers in developing countries may be particularly disadvantaged because they cannot compete with the artificially low wages maintained by the Chinese communist government. The growth in Chinese manufacturing and industry has been accompanied by a need for raw materials and resources and the People’s Republic of China has moved globally to source this need. The Chinese have been investing around the world, including in Africa, the Caribbean, and Latin America to ensure access to the supplies that it needs for its own manufacturing. This is changing relationships around the world. The Development Gateway Foundation’s Web site (2007), a Web site devoted to development issues, noted that the potential impact of China’s rapid growth on the United States and European Union has been well documented but that less is known about its impact on the developing countries. An OECD working paper (No. 252) by Blazquez-Lidoy, Rodriguez, and Santisto (2006) concluded that Latin America will benefit most from China’s expansion.
At the same time as China is expanding, India is as well, and it was announced in late 2006, that Wal-Mart, the American retailing giant, would open a chain of stores across India. This also changes world relationships. As China and India become more global and as companies like Wal-Mart open in more countries, the following question arises: Will the countries of the world simply become more and more alike, as influences from one country or region spread across the world? The next section of this research-paper addresses the issue of convergence and divergence.
Convergence or Divergence?
The global business environment that is today’s reality means that national economies are more closely linked than in the past. A variety of factors suggests that national cultures may become more similar because of globalization—these can be thought of as forces for convergence. For example,
- increased trade means that people around the world are exposed to products from other countries (many people point to the fact that people around the world wear basically the same jeans and t-shirts);
- increased foreign investment means that companies take their corporate cultures and practices into new locations and also learn from these new locations, taking aspects of culture and practice home (many people identify similarities in subsidiaries from Argentina to Zimbabwe);
- increased travel and communication for business and personal purposes means that people experience and learn about different behaviors and adopt and adapt these to suit their preferences (many people comment on the availability in every big city of restaurants serving foods from every corner of the world);
- increased regional and global trading agreements and organizations have as their mandate the standardization of trade arrangements across countries (many people decry the loss of specialized products because of these agreements);
- the advent of the internet and the consequent globalization of the media means that awareness of events around the world is the norm (many people listen to radio stations ranging from BBC to NPR and Aljezeerra on their computers); and
- shared global concerns such as global warming, which are not defined by national boundaries, require global responses and lead to shared values (solutions found in one location need to be shared by all).
All of these factors suggest that we are moving toward a global culture and greater global integration, and less importance for the nation state. In addition, as developing countries’ economies grow and improve, we can expect that their citizens will want many of the consumer goods currently common in the developed world. At the same time, these countries may want a stronger voice for their nation states, and there are other forces leading to divergence. Listen to the news, and this becomes obvious. The differences also are greatest between developed and developing countries. Consider some of the following:
- Terrorist attacks around the world illustrate the vast differences that some people perceive between “us” and “them.”
- Religious differences in 2006 often pitted Christianity against Islam, Hinduism against Islam, Catholic against Protestant, Shia against Sunni, and so on.
- People are proud of their cultural uniqueness and seek to maintain their cultural values, sometimes trying to legislate these (e.g., the French language “police” responsible for maintaining the purity of French used in France).
- Jeans and t-shirts may be popular around the world, but equally, women wear the traditional middle-eastern veil in London, New York, and Toronto.
- Immigration has led to a mix of peoples around the world, but these immigrants often live in ethnic communities within cities and maintain their national and cultural characteristics within these communities.
- Extensive exposure to foreigners and foreign media can increase awareness of home values, which contrast to these and are seen as especially “good.”
There seems evidence, therefore, that there are still major differences to be found around the world and that cultural differences are likely to persist. This is likely to remain the case for developed/developing differences, simply because of the major economic gap that continues between countries.
This research-paper has given the reader a broad overview of the situation that exists in developing countries, and has contrasted developing and developed countries. The differences between the countries have been used to discuss various aspects of management. The research-paper began by looking at some recent developments in global business activities that show a changing business world from a developing country perspective. The research-paper looked at definitions of development and reviewed how these have changed over time. It then considered population figures and the reality of the developing world, both positive and negative. The known characteristics of the developing world were discussed in terms of management implications, and specific cultural values were explored in terms of management processes and practices. Ethics and corporate social responsibility were discussed in terms of corruption and differing interpretations and expectations about what is ethical. The research-paper concluded with a look at the new reality in developing countries, especially in light of developments in the People’s Republic of China and with a discussion of forces leading to convergence and divergence between developed and developing countries. Throughout, it was stressed that within the group of countries classified as developing, there are vast differences from country to country; therefore, it is simplistic to discuss “management in developing countries”; and nevertheless, these countries share some characteristics and these can provide a basis to think about management issues. Readers are encouraged to explore the characteristics of a wide array of the developing countries to develop a better understanding of specific countries. In conclusion, readers are also reminded of the changing and dynamic nature of the business management environment—nowhere is this more than the case than in the context of the developing countries today.
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