Manager in Global Economy (Research Paper Sample)

Student’s Name Instructor’s Name Course Date Managers in the Global Economy Analysis of Managerial Challenges Political Risks There are a number of political risks facing the host country, Spain, in the mergers and acquisition. The rate of unemployment in Spain is alarming and is now considered as the highest in the European countries. The managers in the merger between Siemens and Gamesa must take this into consideration even as they seek to establish their base in Spanish. The rise in unemployment rates has also resulted in an exploding budget deficit where the government has to source funds outside. Apparently, there has been a collapse of the labor market which has led to a steep decrease in tax collections, and the communist government's extravagant policy reaction of growing unproductive public sector stimulus increased the deficit to 11.4 percent GDP (The Brussels Journal,). These factors present a clear risk to political stability in Spain. The host country has also been faced with a debt crisis that has pressurized the government to seek the establishment of a series of austerity measures that is targeted at decreasing the public deficit to a Eurozone limit. The International Monetary Funds (IMF) has pointed out some of the problems facing Spain ("Spain - Geert Hofstede"). These challenges include a dysfunctional labor market, external indebtedness, large private sector, deflating property bubble, weak competitiveness, anemic productivity growth, and a weak banking sector. In spite of the measures taken to cut down government spending, the Spanish trade unions have been against the move and have often called for nationwide strikes ("Spain - Geert Hofstede"). The weak relationship between the government and the labor unions may rupture a political discourse that may lead to protests. It is evident that these factors contribute to political risks in Spain and may negative implications on the merger. Thus, the managers in the merging companies should be ready to face these threats for their business. Cultural differences The Germany culture is based on individualism which rests on the extent of interdependence a particular society has among its members. On the other hand, the culture in Spain is less based on individualism that is people are not only expected to take care themselves but also to care for the welfare of others. In German culture there is a strong belief in the concept of self-actualization and loyalty is centered on personal preferences for others and a sense of duty and accountability ("Germany - Geert Hofstede"). This is mostly described in the contract between an employer and an employee. Due to their collectivist nature, the Spaniards can easily relate well with certain cultures especially the non-European ones. They perceive other cultures as being aggressive and blunt ("Spain - Geert Hofstede"). Spaniards consider teamwork as something entirely natural to them and employees will tend to work in this manner with no much motivation from management. Therefore, the cultural difference regarding employees relations are clearly seen, whereas the Germans employees are loyal basing on personal preference, the Spanish employees prefer working in teams, and they may not need any special motivation to be productive. These considerations are significant for the managers in the Siemens and Gamesa Merger since they would be able to identify the effective means to ensure a successful integration between the two corporations. Understanding the nature of the employees will go a long way in establishing strategies in the company that will enhance a peaceful co-existence. Differences in culture between the merging businesses can also be measured regarding uncertainty avoidance. This aspect addresses the fact that uncertainty avoidance is considerably determined with how the society accepts the fact that the future is always unknown. The ambiguity in uncertainty brings about anxiety, and different cultures have their way of dealing with the stress in various ways. Spain has a score of 86 in uncertainty avoidance which implies that their culture is much threatened by ambiguous or unknown situations ("Spain - Geert Hofstede"). In this country, people have rules in almost everything, but at the same time, they are always intended to avoid rules and laws that are perceived to make life more complex. On the other hand, Germany has a little preference for uncertainty avoidance, but there is a strong inclination to inferential rather than inductive approaches ("Germany - Geert Hofstede"). The Germans always rely on expertise to compensate for the higher uncertainty. This differences will also be reflected in the merger...