Part 1: In this part, the reader would be able to understand the diversity in the European Union and how this affects businesses.
The European Union started after the Second World War with the objective of finish a period of wars between neighbors, establishing a peaceful continent, based on cooperation and good relations between countries. The Union began in 1950 with the creation of the European Coal and Steel Community; six European countries were the founders of this union: Germany, Belgium, France, Luxemburg, Italy and the Netherlands. During the Treaty of Rome in 1957 the six countries increased cooperation and create the European Economic Community, that latter becomes the European Union. Nowadays, the European Union has 27 member states and three candidate countries are waiting for a future membership, which are: Croatia, the Former Yugoslav Republic of Macedonia and Turkey.
Image taken from: The official website of the European Union
Member States: Germany, France, Italy, the Netherlands, Belgium, Luxembourg, Denmark, Ireland, United Kingdom, Greece, Spain, Portugal, Austria, Finland, Sweden, Czech Republic, Cyprus, Estonia, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia and Slovakia.
New Member States: Bulgaria and Romania.
Candidate Countries: Croatia, the Former Yugoslav Republic of Macedonia and Turkey.
Taking into account that 27 European countries are member states, and each country has its own culture, which includes history, behaviors, beliefs, values and language, between many others cultural differences; the European Union is a “Unity in diversity”. The high degree of diversity means that every country has a different culture for example for businesses. Therefore, this aspect needs to be known by multinationals or by any company that wants to enter into one or more European countries.
As an example of the importance to analyze the country and not just the big and diversify European Union as a totality, it is important to understand the example of Wal-Mart, which was successful in England, but its entrance into Germany with a similar strategy, was a failure, because both countries have a different culture and the market need to be treated different.
Image taken from: Getty Images
Some aspects that Wal-Mart didn’t consider in Germany were: for Germans a good service is not to smile at shoppers, and didn’t want services as grocery bagging, which were offered by the company; Wal-Mart forbid employees to date with colleagues, and were obligated to work longer hours, therefore it ends in high labor costs because employees consider this kind of treatment, unjust; and finally, two German discounters competed with prices, so Wal-Mart wasn’t competing with its main attribute: price.
Part 2: In this part, it would be answered the following question, according to the class presentation done by the lecturer about co-determinism: Select, define and explain 3 arguments in favor and 3 against such principle.
Co-determinism was born in Germany in the steel, coal and iron industry in the 1950´s. This concept gives a lot of importance to workers in organizations, because allow them to elect six members of the supervisory board, including two Union members. The other six members and the head of the supervisory board are elected by the stockholders. It means that workers are well represented in the board, influencing company decisions.
The following are three arguments in favor of co-determinism:
One argument in favor is the quality of decisions, which are made by two different perspectives: owners and workers. It means that a decision made by owners and workers together will benefit both sides and not just one; therefore it will be a good decision because the company can obtain benefits in the long term.
Image taken from: Getty Images
Another argument in favor is that co-determinism promotes integration in the company, because decisions are made by workers and owners representatives, that work together for the welfare of the company; it is also motivating for workers, because allow them to participate and protect their interests and rights.
The third argument in favor is the high possibility to achieve innovation, giving participation to workers in important decision, because a dictatorial management creates barriers to innovation.
But co-determinism also has arguments against, three of them are:
It is regard as a bureaucratic monster, because the concept was born many years ago and nowadays it is considered as an old fashion and not competitive principle for modern companies.
Another argument against co-determinism is the belief that the German industry is sufficiently strong and stable and doesn’t need to apply this concept in order to be more competitive.
The third argument against, is that co-determinism damages the interests of shareholders, because their main interest is profit, but the main interests of workers are for example benefits to the society, to their family, among others that are not considering profit. Therefore, shareholders´ interests can be difficult to achieve when there is a high contradiction between the owners and workers objectives and workers have and important representation in the decisions of the company.
Image taken from: Getty Images
BIBLIOGRAPHY:
EUROPA- The official website of the European Union, “About the European Union” [Online] Permanent URL: http://europa.eu/index_en.htm. Last accessed: April 21, 2010
Getty Images, “Profit”, [Online] Permanent URL: http://www.gettyimages.com/Search/Search.aspx?contractUrl=2&language=en-US&family=creative&assetType=image&p=profit#. Last accessed: April 22, 2010
Getty Images, “quality of decision”, [Online] Permanent URL: http://www.gettyimages.com/Search/Search.aspx?contractUrl=2&language=en-US&family=creative&assetType=image&p=quality%20of%20decision#3.Last accessed: April 22, 2010
Getty Images, “Failure”, [Online] Permanent URL: http://www.gettyimages.com/Search/Search.aspx?contractUrl=2&language=en-US&family=creative&assetType=image&p=Failure#. Last accessed: April 22, 2010
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