JMR - Volume 1, Issue 1 - Spring 2009

JOURNAL OF MULTIDISCIPLINARY RESEARCH – VOLUME 1, ISSUE 1

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JOURNAL OF MULTIDISCIPLINARY RESEARCH

VOLUME 1 ■ ISSUE 1 SPRING 2009

MARIE-LINE GERMAIN, EDITOR

NICOLE GRANDMONT-GARIBOLDI, ASSOCIATE EDITOR HAGAI GRINGARTEN, ASSOCIATE EDITOR

JOURNAL OF MULTIDISCIPLINARY RESEARCH Volume 1 ■ Issue 1 - Spring 2009

EDITOR

Marie-Line Germain

St. Thomas University

ASSOCIATE EDITORS

Nicole Grandmont-Gariboldi


Hagai Gringarten


EDITORIAL BOARD

Judith Bachay, St. Thomas University Eldon Bernstein, Lynn University Russell P. Boisjoly, Lynn University Paul Breman, Utrecht School of Applied Sciences, Holland Angeles Carioni, Barry University Khalil Dirani, The University of Georgia Cheryl L. Engle, The Ohio State University Robin S. Grenier, University of Connecticut Raymond S. Kulzick, St. Thomas University J. Victor McGlone, Georgia Gwinnett College David McGuire, Queens Margaret University, Scotland

Pilar Maul, St. Thomas University Teri Ann Melton, Georgia Southern University Mary Claire Mucenic, Barry University Agavni Petrosyan, St. Thomas University Yufeng Qian, St. Thomas University Craig Reese, St. Thomas University Beatriz Robinson, St. Thomas University Carlos E. Ruiz, Georgia Gwinnett College Seok-Ho Song, St. Thomas University Jia Wang, Texas A&M University

Karen K. Wollard, Kelly, Wollard & Associates, Inc.

Editorial Office The Journal of Multidisciplinary Research is sponsored by St. Thomas University, Miami, FL. St. Thomas University, 16401 N.W. 37th Avenue, Miami, Florida 33054 - U.S.A. Email: [email protected] - Website: www.stu.edu/journal

ISSN 1947-2900 (print) - ISSN 1947-2919 (online)

JOURNAL OF MULTIDISCIPLINARY RESEARCH Volume 1, Issue 1

FOREWORD 4

Marie-Line Germain, Editor

ARTICLES

Got Values? Training and Cross-Cultural Understanding 5

Angeles Carioni, Barry University Mary Claire Mucenic, Barry University Carlos E. Ruiz, Georgia Gwinnett College

Pitfalls of the Use of Films in Management Education 16

Lynn M. Kendrick, Keiser University Marie-Line Germain, St. Thomas University

Human Capital Theory as a Motivator for HRD National Policies in Emerging

Economies 26

Carlos E. Ruiz, Georgia Gwinnett College Angeles Carioni, Barry University Mary Claire Mucenic, Barry University

Averting Predatory Abusive Financial Advising Practices:

The Case of the Elderly – A Series of Didactic Frameworks 39

Nicole Grandmont-Gariboldi, St. Thomas University

BOOK REVIEWS

American Business since 1920: How it Worked by Thomas K. McCraw 53 Eldon H. Bernstein, Lynn University

Outliers: The Story of Success by Malcolm Gladwell 55

Hagai Gringarten, St. Thomas University

INSTRUCTIONS TO AUTHORS 58

ABOUT THE JOURNAL OF MULTIDISCIPLINARY RESEARCH 60


FOREWORD


It is an honor to welcome you to the first issue of the Journal of Multidisciplinary

Research (JMR), an academic and peer-reviewed journal. The mission of JMR is to publish empirical and conceptual research that tests, extends, or builds leadership theory, contributes to leadership practice, and other current research topics. This first issue features articles ranging from theoretical to practical studies, across a wide range of interests and business topics. The first focal article in this issue, “Got Values? Training and Cross-Cultural Understanding”, written by Angeles Carioni, Mary Claire Mucenic, and Carlos Ruiz, shows how managing an international business is a complex balancing act between both the organizational and the national culture in which it is embedded. The second focal article, titled “Pitfalls of the Use of Films in Management Education”, authored by Lynn Kendrick and Marie-Line Germain, takes a stand on how professors ought to be using films in classrooms to illustrate management concepts. It investigates some of the frequently unobserved negative effects of the use of technology in the management classroom. The third article, by Carlos Ruiz, Angeles Carioni, and Mary Claire Mucenic, is titled “Human Capital Theory as a Motivator for HRD National Policies in Emerging Economies”. It explores how different leading emerging economies have included Human Resource Development practices in their national agendas with the purpose of economic development. Finally, our last article, “Averting Predatory Abusive Financial Advising Practices: The Case of the Elderly –A Series of Didactic Frameworks”, authored by Nicole Grandmont-Gariboldi, proposes a series of didactic frameworks for the development of strategies aimed at minimizing the elder’s exposure to predatory financial advising practices. To conclude this first issue, Eldon Berstein and Hagai Gringarten each present a synopsis and an evaluation of two recent bestseller books: American Business since 1920: How it Worked (written by Thomas K. McCraw) and Outliers: The Story of Success (written by Malcolm Gladwell). For each focal article, a team of reviewers was assembled to assess the fit and the quality of the manuscript. The reviewers deserve thanks for their contribution to this issue. Whether you are a scholar or a practitioner, in North America or abroad, we look forward to your scholarly contribution. We are committed to producing a high-quality, traditional scholarly journal that is accessible to an international audience. Once again, welcome to the Journal of Multidisciplinary Research!

Marie-Line Germain, Ph.D.

Editor


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ARTICLES

Got Values? Training and Cross-Cultural Understanding

Angeles Carioni

Barry University

Mary Claire Mucenic Barry University

Carlos E. Ruiz Georgia Gwinnett College

Abstract

As more organizations become immersed in the global marketplace, the awareness of

cultural dimensions and the role of cross-cultural values have become increasingly

important for international businesses. To be successful, business leaders must develop a

deep understanding of the culture in which they become embedded; therefore the need for

Cross-Cultural Training (CCT) for these leaders has risen dramatically. In addition,

every business will respond in a particular way when in need of solutions to

organizational problems. Managing an international business is a complex balancing act

between both the organizational and the national culture in which it is embedded. The

authors present a learning model for more effective CCT.

In today’s global environment, organizations must expand and adapt to rapid market changes to remain competitive. This means that as companies expand their businesses, they will do so in foreign counties and unfamiliar cultures. As such, organizations must cross cultural boundaries physically, technologically and financially. Managing multinational businesses implies being aware of one’s culture as well as others (Carioni & Mucenic, 2007). Many companies that were successful in their own countries fail in the global marketplace due in large part to their lack of cultural awareness. Perhaps the most important aspects of cultural understanding hinges on the differences in cultural values. Values are main elements of culture and can be defined as “broad tendencies to prefer certain states of affairs over others” (Hofstede, 1980, p. 43). Hofstede broadly defines cultural values as “the collective programming of the mind which distinguishes the members of one human group from another” (p. 3). Hofstede and Hofstede (2005) explained that national cultures differ from organizational cultures at the level of values. These values within the organizational culture are called practices. This is why every country, with its particular national culture, will respond in a particular way when providing solutions to organizational problems. The same will apply to managers’ legitimacy of decisions when facing organizational problems. Thus, as Hofstede and Hofstede explained, organizations have preferred ways of conducting day-to-day business. These preferences extend from strategic planning, management and leadership styles, organizational hierarchy to employee motivation and performance appraisals. Furthermore, within each country, individual organizations also exhibit unique cultures,


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so organizational culture should be distinguished from and understood within the national culture. The concept of organizational culture has become popular since the early 1980s. Robbins (1989) described organizational culture as common shared meanings held by the members of a particular organization. Robbins further explained that organizational cultures perform specific functions. These functions include creating distinctions among organizations (boundary-defining function), providing a sense of identity, facilitating commitment within the group, enhancing stability, and gluing the organization together by providing standards for behavior. Hofstede (2002) explained that the dimensions of culture vary in relation to the characteristics of the organization. According to O’Reilly and Chatman (1996), organizational culture “is a system of shared values that define what is important and norms that define appropriate attitudes and behaviors for organizations members” (p. 88).

Statement of the Problem

As more organizations become immersed in the global marketplace, the

awareness of cultural dimensions and the role of cross-cultural values have become increasingly important for international businesses. To be successful, business leaders must develop a deep understanding of the culture in which they become embedded; therefore, the need for CCT for these leaders has risen dramatically. Managing international business means handling both national and organizational differences at the same time (Hofstede & Hofstede, 2005). Cultural Values within Countries

Hofstede and Hofstede (2005) observed that when people interact, they show manifestations of culture. These authors represented culture as layers of an onion. They envisioned the skin of an onion as representing the symbols of a culture. Symbols are the most visible and superficial aspect of culture. In contrast, cultural values lie in the center of the onion. Values are represented as the innermost layer of the onion since values represent the deepest manifestation of culture. Cultural heroes and ritual lie in between (p. 7). The deepest level in which values are located is particularly important to understand because it holds the key to the way people in general and employees in particular relate to each other and to their authorities. Triandis (1989) conceptualized cultural differences as essentially different patterns of sampling information found in the environment. Triandis (2000) outlined what he refers to as cultural syndromes based upon the complexity of the environment; the rules norms and ideas of correct behavior; individualism versus collectivism; vertical versus horizontal cultures; active versus passive cultures; universalism versus particularism; diffuse versus specific; instrumental versus expressive; emotional expression versus supression; and the weights given to different attributes of social perception. More importantly however, Trandis observed that while the way individuals are predisposed to respond can be traced to culture, an individual’s behavior depends much more on the particular situation in which he is embedded. For instance, a highly individualistic culture may become much more collectivist when confronted with a perceived outside threat.


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Cultural Values within Organizations: Organizations and Cultures

Trompenaars and Hampden-Turner (1998) distinguished two dimensions to differentiate corporate cultures: equality-hierarchy versus orientation to the person/orientation to the task. With this, they defined four types of corporate culture: The Family, The Eiffel Tower, The Guided Missile, and The Incubator. It is the national culture in which organizations are embedded that influences which type of corporate culture is most represented. These four types of corporate culture “vary considerably in how they think and learn, how they change and how they motivate, reward and resolve conflicts” (pp. 161-162). So, it will be of utmost importance to have leaders understand these dimensions of the organization, which are deeply related to the cultural characteristics of the country. Cultural Value / Preferences / Social Identity and Self-Categorization

There is some evidence to suggest that there are key demographic characteristics such as age, gender, race, and socioeconomic status that contribute to differences, which affect the formation of social identities. These factors will determine the characteristics of the in-group and out-group formation and how cultural value dimensions impact social identity characteristics (Schaffer, 2006). Schaffer explained that there are principles of social identity and self-categorization theories from which employees will see themselves as similar or dissimilar to others. In other words, they will see themselves belonging to a group (in-group) or not (out-group). These interpretations of social identity and self-categorization will guide their decision-making that will consequently place them in one or another group. In this manner, they differentiate themselves from the qualities or characteristics of other groups. When individuals are immersed in a new culture, they need to define themselves according to social criteria. In essence, they need information regarding cultural norms and values so that they may make more useful social comparisons in their new environment (Tajfel, 1974; Turner, 1975, as cited in Schaffer, 2006).

Communication

Besides Hofstede’s (1980) Cultural Dimensions, there are other important cultural dimensions to consider when executives are sent overseas. Most importantly is communication. When relocated abroad, executives’ success or failure will depend not only on how well they command verbal and nonverbal communication, but also how well they know the social rules and etiquette which are part of the host culture. There are everyday aspects of communication, which expatriates must know and exercise in order to better adjust and avoid uncertainty. Whenever people interact, there are standards or norms of acceptable behavior that are necessary to recognize in order to avoid uncomfortable encounters. Many aspects of communication are different from country to country; therefore, executives must be ready to learn and adapt to new cultural norms and be willing to embrace the new culture. Some of these aspects are the way in which people greet each other, the way they dress, and patterns of conversation or conversational style, just to mention a few. Verbal communication

Triandis (2000) observed that members of other cultures are frequently not aware


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of their miscommunication because they think that others are similar to themselves. This is a stage that Triandis refers to as unconscious incompetence. It is only after several miscommunications that the individual realizes there is a communication problem that they reach the conscious incompentence stage. Finally, after they develop new communication skills in which communication is effortless and correct, do they reach the unconscious competence stage. Another frequent problem with communication is that individuals often do not correctly interpret the intent of the communication, often wrongly attributing their words and behavior to either internal factors (e.g. they are selfish by nature) or external factors (e.g. they were nice because they were forced to). This causes unnecessary conflict. Researchers have shown that people all over the world and from all cultures, make what is referred to as the “fundamental attribution error.”

Nonverbal Communication

Nonverbal communication is just as important, if not more important, than verbal communication in cross-cultural situations. Aspects of attire, chronemics or the use of time, conversational style and the use of context and space are all equally important for effective cross-cultural communication.

Attire In many countries and in various types of organizations, business is conducted vis-à-vis social events. Therefore, knowing how to dress is an important consideration for international business. What Americans consider casual (shorts and sandals) may be too casual for Europeans and Latinos. Clothing and body adornment tell a lot about oneself since “people make inferences about who you are – in part - by the way you dress” (DeVito, 1999, p. 151). Time From country to country, there is a big change in the way people deal with time. It is a fundamental aspect of culture in which all activities revolve. Chronemics, or attitudes toward time, vary from culture to culture. Chaney and Martin (2004) stated that the time system for international business may be monochromic or polychromic. Countries that are monochromic will perform one activity at a time. Countries which are polychromic will perform several activities simultaneously. The United States is a monochromic culture. Time is linear, therefore, regarded as something tangible and manageable. For many Americans, expressions such as “wasting time” or “losing time” are very common since they regard time as something manageable. For them, it is fundamental to keep appointments and/or arrive on time to a meeting. Contrary to this, Latin Americans and Mediterraneans approach time in a completely different way. They are polychromic, so they can manage to do several things at once, and time has a different meaning. “Understanding the difference between monochromic time and polychromic time is essential to success” (Hall, 1990, p. 179).

Conversation style Conversation style is very important as well. When socializing, norms change from country to country. Ignoring these norms can bring misunderstanding and even conflict. Beebe and Masterson (1999) explained that, “people from some cultures love a good


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argument, while others, such as the Japanese, revere harmony and the ability to assimilate differences to build consensus” (p. 8).

Context and space

High context and low context deals with the amount of information that a person can comfortably manage. During a high context interaction, background information available between sender and receiver of the message is implicit. During a low context culture interaction, much of the background information must be made explicit in order for communication to take place, in other words, in order to have an effective communication during the interaction (Hofstede, 1986). Space, and particularly personal space, refers to the invisible boundary around an individual that is considered personal. This is the individual’s territory, and it cannot only be perceived visually, but “by the ears, thermal space by the skin, kinesthetic space by the muscles, and olfactory space by the nose” (Hall, 1982). So for example is somebody is standing to close, the other person might feel uncomfortable.

Theoretical Framework

Human resource development (HRD) is ideally suited to address individual and organizational needs associated with globalization. Although there is no universal view or agreement on a theory to support HRD as a discipline, we suggest that viewing HRD from a socio-cultural perspective may particularly useful in the context of cross-cultural training. The socio-cultural perspective is actually a combination of two specific areas of study, social psychology and cultural psychology. Social psychology is the study of how a person’s behavior, thoughts and feelings are influenced by others. Cultural psychology is the study of cultural norms, values, and expectations (Ciccarelli & Meyers, 2006). Viewing HRD practice from a socio-cultural perspective is ideal because it reminds people that their behavior is influenced not only by those around, but also by the particular culture in which they are immersed. As such, a socio-cultural approach is particularly relevant to understanding cross-cultural values and how they relate to organizational effectiveness. Rokeach (1979) believed it was important to understand the relationship of values to human needs. Moreover, to have a deeper understanding of the process through which people acquire these values is pivotal when it comes to training in general and CCT in particular. Based on Maslow’s (1970) Hierarchy of Needs, Rokeach (1979) proposed an interesting relationship between needs and values. In essence, people have the freedom to choose for themselves on how to respond to the everyday issues of life, and people base their responses on values, which are personal beliefs about what is or is not important in life. Rokeach explained that physiological, safety, social, esteem and self-actualization needs are intrinsically related to equivalent values which are survival, security, belonging, recognition, and personal growth. Once the basic needs are taken care of, people move to a higher level of needs (esteem and self-actualization) in which they are faced with the dilemma of choice. Ultimately, the way people resolve this dilemma is a response which reflects their values. Thus, values influence people’s preferences in how they satisfy their needs. The culture of the organization is a reflection


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of a broader dimension of culture: the country. This is why it is so important that expatriates deeply understand these dimensions.

Proposed Model

In order for executives to develop effective behavioral changes that reflect both national and organizational values, they must develop empathic understanding. Foster (1995) explained “to understand other people empathetically is to be in sympathy with them, to comprehend their needs and motives almost as well as if they were your own” (p.12). Bolman and Deal (1997) explained something similar to empathic understanding by encouraging leaders to step back and re-evaluate the everyday issues using different frames. These frames are like different lenses that can help managers to re-adjust their point of view and evaluate things from more than one singular perspective. This approach will eventually help executives widen their perspective when dealing in the international market. Ascalon (2004) explained that a global mind-set is necessary when conducting international business. Only emphatic understanding provides the cultural filter necessary to see and understand things in a non-judgmental fashion. Executives then are able to acknowledge others’ values, but still maintain their own. The ultimate goal is to conduct successful negotiations abroad; therefore, it is crucial to understand cultural differences that may impede negotiations. To better understand this process, is important to understand each part of the model as it relates to culture norms, values and needs based upon Maslow’s theories and what is empirically known about cross-cultural training. Maslow (1999) explained that each of us have "an essential inner nature which is, intrinsic, given, natural" (p. 3).Therefore, individuals enter a new culture with their own needs, knowledge, and values. In order to be successful, the expatriate must acquire new knowledge and understanding which is measured against his/her own knowledge and cultural values. Maslow further postulated that while an individual’s inner nature persists in developing its potential by seeking approval from the environment, it might also be easily overcome and suppressed for a variety of reasons. In the case of expatriates entering a new culture, fear, disapproval and unmet cultural expectations may interfere with acquiring new knowledge. It is at this stage that the individual must examine; then try to make sense of his or her own culture and the values that they bring to the new environment. It is only after an individual understands where they come from can they then develop an understanding of differences. It is then that the expatriate try to make sense of their environment by testing and experiencing it against their “new knowledge.”

Maslow (1999) explained that each person's inner nature has some parts which are common to all humans and some which are unique to the particular individual. Cross-cultural training is especially beneficial because, to be successful, it is important to know and understand the cultural values of the people executives are going to deal with. Thus, accordingly, each culture will have needs, which are similar or different to the ones of their origin. Here is where the expatriate is going to need to exercise an emphatic understanding response. Since we all have an inner conscience (called it “basic needs, capacities, talents, physiological or temperamental balances that goes with our traditional values) this intrinsic conscience is going to vary in strength and application between individuals and cultures.


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Maslow (1999) believed in a system of ethics, referring to it as “a court of ultimate appeal for the determination of good and bad, or right and wrong” (p. 8). A person who is “ethical’ and brings his personal values to the new culture, may not be expected to compromise their beliefs in order to match the values of the new culture. The most the expatriate may be expected to achieve is to learn to exercise an emphatic understanding in order to establish a civilized level of communication and understanding.

It is explained that this inner conscience may cause us pain, frustration, and conflict; especially when it conflicts with the social norms and values. At this stage, the expatriate must evaluate and adjust behavioral responses accordingly. This adjustment repeats itself again and again with each new piece of information and recently acquired knowledge that might or might not interfere with our personal values. If an individual is able to adjust their responses to fit to the culture, they will make a successful transition and cultural adjustment. For those who do not, it often results in the expatriates’ early return because lack of adjustment.

Another interesting aspect of the Model and Maslow’s theory is his concept of adjustment that ultimately applies so well to the expatriate going into the new culture. Maslow stated: “Clearly, what will be called personality problems depends on who is doing the calling” (p. 8). The same would apply to cultural values, and it is ultimately to the eyes of the beholder to call for an ethical or unethical response. Based upon the theory of socio-cultural psychology, we propose a model in which to better understand and expedite the expatriates’ process of acquiring, learning and exercising new cultural values (Fig. 1).

Figure 1. Carioni and Mucenic Expatriate Empathic Understanding Model®

Summary and Considerations for Human Resource Development Theory, Research,

and Practice

Recently Acquired Knowledge &

Understanding

Experience / Testing

New Knowledge

Empathic Understanding

Response

Evaluate & Adjust

Behavioral Responses


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The Importance of Personal and Organizational Alignment Values are the main elements of culture and can be defined as “broad tendencies to prefer certain states of affairs over others” (Hofstede, 1980, p. 43). Thus, it is possible to identify cultural value dimensions which refer to the psychological dimension, or value constructs, which can typically be associated with a specific culture (Schaffer, 2006). Organizations are composed of human beings that demonstrate their values through overt behavior. Organizational culture as a whole is the reflection of these values. The most effective organizations are those in which people share values and cultural understanding. An effective leader understands the importance of both national and organizational culture and strives to align personal values as well. Cultural values must be understood and shared in order to truly affect and guide the direction of an organization. In today’s global economy cross-cultural values are an important consideration since in the same organization employees might interact with a certain degree of variability in response to the predominant cultural values. Furthermore, there are other important demographic characteristics such as citizenship, date of entry, professional background, sexual orientation, and so on, that add to the complexity of cultural dimensions. Schaffer (2006) stated that through the examination of cultural values in the context of social identity, it is possible to better understand the circumstances under which certain outcomes might be interpreted as discriminatory or not. Thus, the consideration of cultural dimensions contributes to a better understanding of the importance placed on personal values in the field of the organizational development and effective leadership. For this reason, it is important to have the organizations’ values closely aligned with employees’ values. In other words, when employees experience compatibility between their values and the values of other individuals, teams, and the organization in general; they are likely to be more productive and willing to work toward common organizational goals.

A Proposed Research Agenda

Additional research is needed to promote more effective CCT. The field of Human Resource Development is in an ideal position to study and influence organizational training trends. In particular, it is important to better understand the psychological impact of cross-cultural environments on employees and their families. When researchers have a greater understanding of the psychological aspects of cross-cultural immersion, more effective training programs may be developed to facilitate expatriates’ adjustment. Ideally, the Expatriate Empathic Understanding Model® will be used for CCT and its effectiveness measured and compared to other training programs.

Conclusion

Only through meaningful and pertinent CCTs can expatriates be expected to adequately adjust to the host country. The Expatriate Empathic Understanding Model® that we propose is expected to improve CCT and HRD practice by positively influencing expatriates’ adaptation and performance. Leaders of international organizations must understand that global projects can succeed, but only through cultural awareness, cross-cultural communication, mutual respect, and openness to change. Without the necessary involvement, commitment, and participation required, international projects will be


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destined to fail. More so now than ever, organizational success is bound to human resource training and development to keep up with change and today’s competitive market.

References

Adler, N. (1991). International dimensions of organizational behavior. Belmont, CA: Wadsworth Publishing. Ascalon, M. (2004). Improving expatriate selection: Development of a situational judgment test to measure cross-cultural social intelligence. Tulsa, OK: The University of Tulsa [0236. Source: DAI, 65, no. 09B]. Beebe, S.A., & Masterson, J.T. (1999). Communicating in small groups. New York: Longman. Bolman, L. & Deal, T. (1997). Reframing organizations: Artistry, choice and leadership. Jossey-Bass: New York. Carioni, A., & Mucenic, M. C. (2007). Training implications for individuals and Corporations in a global economy. Paper presented at the Academy of Human Resource Development (AHRD). Indianapolis, IN. Chaney, L., & Martin, J. (2004). Intercultural business communication. Upper Saddle River, NJ: Pearson Education, Inc. Ciccarelli, S., & Meyer, G. (2006). Psychology. Upper Saddle River, NJ: Pearson. De Vito, J.A. (1999). Interpersonal communication. New York: Longman O.K. Foster, D. (1995). Bargaining across borders: How to negotiate business successful anywhere in the world. New York: McGraw-Hill. Hall, E. (1982). The hidden dimension. New York: Bantam Doubleday Dell Publishing Group. Hall, E. (1990). Silent languages of culture. New York: Bantam Doubleday Dell Publishing Group. Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Newbury Park, CA: Sage. Hofstede, G. (1986). Cultural differences in teaching and learning. International Journal of Intercultural Relations, 10, 301-320. Hofstede, G. (2002). Dimensions do not exist. Journal of Human Resources, 55(11). Retrieved June 2, 2005 from http://www.onepine.info/phof.htm Hofstede, G., & Hofstede, G. J. (2005). Culture and organizations: Software of the mind. New York: McGraw-Hill. Knowles, M., Holton, E., & Swanson, R. (2005). The adult learning: The definitive classic in adult education and human resource development (5th ed). Houston: Gulf. Maslow, A. (1970). Motivation and personality. New York: Harper and Row. McGraw- Hill. Maslow, A. (1998). Maslow on Management. New York: John Willey & Sons Inc. Maslow, A. (1999). Toward a Psychology of Being. New York: Willey, John & Sons Inc. O’Reilly, C. & Chatman, J. (1996). Leading and managing people in a dynamic organization. New York: McGraw-Hill.


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Robbins, S. (1989). Organizational behavior: How Organizational cultures have an effect on performance and satisfaction. New York: McGraw-Hill. Rokeach, M. (1979). Understanding human values. New York: The Free Press. Schafer, B. (2006). The role of cultural value dimensions in relational demography. Proceedings of the Southern Association, 360-365. Swanson, R., & Holton, E. (2001). Foundations of human resource development. San Francisco: Berrett-Koehler. Triandis, H. (1989). The self and social behavior in differing cultural contexts. Psychological Review, 96. 506-520. Triandis, H. (2000). Conflict and culture. International Journal of Psychology, 35(2), 145-152. Trompenaars, F., & Hampden-Turner, C. (1998). Riding the waves of culture:

Understanding diversity in global business. New York: McGraw-Hill.

Walton, L., & McKersie, R. (1965). A behavioral theory of labor negotiations: An analysis of a social interaction system. New York: McGraw-Hill.

Biographical notes

Angeles Carioni Angeles Carioni holds a Ph.D. in Leadership with a specialization in Human Resource Development. She is an adjunct professor for Barry University and a Trainer for The Center for Excellence at Miami Dade College. Her theoretical knowledge of Leadership and Education with the Human Resource Development (HRD) specialization, and her 15 years of experience as the CEO of her company, Consulting Across Borders, Inc., has provided her with the experience necessary to train executives in different areas of intercultural growth, communication, and development. The following are some of her clients: MTV- Latino, Nickelodeon Latin America, Seagram of Latin America, Dow Chemical Co., Siemens, Cartier, Enterprise Rent-A-Car, and the Office of Medicare Hearings and Appeals. Dr. Carioni has also published several articles on Human Resource Development and Education. She has presented them at national and international Human Resource and Development conferences. She is also a member of the Academy of Human Resource Development.

Mary Claire Mucenic Mary Claire Mucenic, Ph.D. holds advanced degrees in Clinical Psychology, Leadership and Education with a specialization in Human Resource Development. She currently holds licensure in the state of Florida, and is a nationally certified school psychologist and clinical educator. She has spoken nationally and internationally on a wide range of topics including cross-cultural training; communication, stress management, team-based problem solving, as well as, individual and organizational performance improvement. Dr. Mucenic serves as the director of SchoolHouse Educational Consultants, Inc. a leadership and consulting firm specializing in individual and organizational learning. She is a member of several professional organizations including the National Association of School Psychologists, the American Psychotherapy Association and the Academy of Human Resource Development.


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Carlos E. Ruiz

Carlos Ruiz holds a Ph.D. in Leadership with a specialization in Human Resource Development. He joined the faculty of the School of Business of Georgia Gwinnett College in August of 2007, and he is currently Assistant Professor of Management. Among his work experience, he has held different managerial positions in the private and public sector in Mexico. He has authored and co-authored different research articles presented at national and international conferences. His areas of research include international HRD, cross-cultural training, expertise, training and development, and managerial effectiveness. He is a member of the Academy of Human Resource Development.


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Pitfalls of the Use of Films in Management Education

Lynn M. Kendrick

Keiser University

Marie-Line Germain


Abstract

Current research in the field of science education suggests that technology is changing

the way we think, work, live and learn. It has become imperative to consider possible

repercussions of the use of technology in educational settings. Indeed, research has

greatly overlooked the potential adverse effects of utilizing some technology in the

learning environment. Specifically, the use of films can contribute to a digression in the

students’ learning and may encourage laziness on the part of the professors and the

students. This paper investigates some of the frequently unobserved negative effects of the

use of films in the management classroom.

For the past few decades, the growing availability of and reliance on multimedia

has caused the general public to shift away from the printed word as a primary method of obtaining information. Each generation of students is being exposed to more forms of multimedia. The current western culture is one in which most people rely heavily on computers to do almost everything. Computers are utilized to plan events, communicate, share information, instruct, and also to learn. This includes television, movies, mp3 music files, computers, the Internet, as well as images and text. Of the increasing popularity of film and television, Aquino (1977) writes that the effect of multimedia “is analogous to that of the novel in the nineteenth and early twentieth centuries when people crowded” (p. 7) to read the latest installment of their favorite serial. As technology columnist David Shaw (2004) asserts, the average American spends ten hours a day exposed to media, 25% of which consists of two or more forms of media simultaneously. Considering the impact technology has on the new generation of students currently known as the “millennials”, educators should be as technologically savvy as the students and proponents of multimedia use in schools. Indeed, education administrators should follow “the increasing dependence of students on film and other media for information over the printed word” (Corbitt, 1988) by incorporating multimedia into the curriculum. As Shaw asserts, “the very fact that young people spend so much time with media that have the potential to inform and educate gives our schools an enormous opportunity (and obligation) to teach new and increasingly valuable skills” (2004). Such skills include critical thinking and the examination of biases and motives. He notes that we live in the information age in which students must learn to handle data rather than accumulate it, and when they enter the workforce, they must have the skills to process immense amounts of new information efficiently and effectively. Because film is more immediate --its visual, aural, and fluid nature emulates the real world, researchers in higher education have speculated on films’ use in acting as a bridge


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between business and students’ professional lives (Champoux, 2001; Germain, 2003). Professors focus on the qualities films share with situations or behaviors found in organizational settings, such as leadership or organizational change. Hence, there is a trend towards an increasingly in-depth use of film in the classroom, curricula are becoming more welcoming to non-print texts, digital video has made filmmaking techniques more available to the public, and students are becoming more accepting of visual media than printed text or lectures (Golden, 2001; NCTE, 2003; Teasley & Wilder, 1997; Vetrie, 2004). Instructors and researchers recognize that film has grown in popularity because, simply, “students generally like to watch them” (Corbitt, 1988). Recent research conducted by Debevec, Shih, and Kashyap (2006) assert that technology and education are synonymous with effective communication, and this communication is what is required in our current learning institutions. Students and faculty alike are looking for new technology and pursuing that new technology to be able to compete in the current world economy. Debevec et al. (2006) state that, “students have grown up in a “high technology” environment and are adept at the use of computers and the internet for information exchange” (p. 293). For this reason, it is imperative that faculty gain more knowledge in the area of computer technology to further assist students in the learning process. Cuban (2001) states the following three goals for technology: “change makes a better society, technology brings about change, and therefore technology makes a better society” (p. 29). However, one has to wonder if all of the technology is really necessary for learning to take place. Can students still learn without the aid of technology? By implementing so much technology into the learning environment are students really prepared to deal with the constraints of the real world? Effective instruction is built upon more than enjoyment without a purpose and the use of film must serve specific instructional objectives.

The Benefits of Using Film in the Classroom

Years of research support the effectiveness of film in the classroom. In the 1930s,

the Payne Fund found that film has the potential to be an educational tool because of a “combination of important qualities inherent in the medium: wide variation in content, gripping narrative techniques, and an appeal to basic human motives and wishes” (Marshall, 2004). A 1958 study by LePore and Wilson showed television incorporated in education “compared favorably with conventional instruction” (Marshall, 2004). Finally, Marshall cites studies conducted by the Children’s Television Workshop assessing the effects of Sesame Street on children, noting especially the importance of merging education with entertainment. Researchers Palmer and Fisch, who summarized 30 years of Sesame Street research, conclude that regardless of age, socioeconomic situation, or background, the more children watched Sesame Street, the more they learned (Marshall, 2004). Accepting this fact, Shaw (1998) asserts that multimedia, especially film, has the potential to be a great educational tool that instructors are obligated to use in teaching students valuable new analytical skills. As an example of films’ unique and powerful language, we can turn to one of the most famous film experiments conducted in the school of film theory. The power of film’s potential as a medium for reader interpretation can be seen in Lev Kuleshov’s famous experiment, in which the same expressionless picture of an actor’s face was juxtaposed


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three times with three separate images: a bowl of soup, a little girl, and a woman in a coffin. When shown these pictures, subjects said that the emotion in the man’s face reflected hunger, affection, and grief, respectively (Beja, 1979). The experiment proves films’ power to convince the audience to interpret something that is not actually there.

Debevec et al. (2006) state that, “during the last decade, the use of computer-based technology in college education has dramatically increased to include emerging technology for visual presentation, simulation, accessing course materials and world wide web resources and interactivity” (p.293). Being able to utilize computer technology and instruct others helps to maintain a sense of a more informed society. Based on this fact, computer technology does hold a major role in the effectiveness of education. In a comprehensive report summarizing the major research studies examining technology and education, educational technology specialist James Marshall (2004) illustrates the connection between technology and human memory. Studies of the brain’s anatomy show that the more connections the brain is able to make between new and old knowledge, the more likely a student will be to retain—and retrieve— information (Marshall, 2004; Vetrie, 2004). In order to be learned, new information must be challenging, relevant, and interactive (Marshall, 2004; Vetrie, 2004), all qualities that technology can bring to the classroom. Technology uses images, sound, and text to show the viewer things they may never have experienced, creating “rich environments conducive to the acquisition of knowledge” (Marshall, 2004). Because media has become such a significant part of students’ lives, “the wise educator does not ignore the popularity of film and instead learns how to use it” (Vetrie, 2004). Further influence of the millennials requires that good education be collaborative and student centered approach to learning. Education needs to follow that lead and continue to train the leaders of tomorrow in these skills so that they can continue to function in the world economy. According to Cuban (2001), President Clinton stated the following: “frankly all the computers and software and internet connections in the world won’t do much good if young people don’t understand that access to new technology means access to the new economy” (p.18).

Marshall (2004) notes that multimedia, specifically film and television, helps students engage in active learning, a more effective way for students to retain information when compared to passive methods such as instructor lecture. Educators also agree that students are generally receptive to films and look forward to watching them (Corbitt, 1988; Teasley & Wilder, 1997). Research shows that when used with struggling students, film can improve achievement because technology is more immediate and engaging than printed texts. Yet technology’s unique dimensions are often ignored in the film-as-illustration approach, especially when presented passively to average and advanced students. Film is a medium that can shape a viewer’s reactions, and the only way students can critically read this powerful text is not by treating film as a transparent text but by reading and analyzing the very language of cinema. Film also works especially well for readers with non-linguistic multiple intelligences (Marshall, 2004; Teasley & Wilder, 1998; Vetrie, 2004). Film and multimedia appeal to Gardner’s multiple intelligences, utilizing the movement of pictures, moving images, and sound to engage more than just the linguistic intelligence (Marshall, 2004). Also, technology -including film- helps students make connections between prior and new knowledge, a quality proven to increase retention and learning (Marshall, 2004; Vetrie, 2004).


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Professional Development

The professional development of students is a key area of development that technology can enhance. As the youth of today enter into the workplace it is imperative to recall that the reason for being in school is to gain knowledge, skills, and abilities to be able to gain and maintain employment. Education is fundamentally a vehicle to help to prepare people to work in society and to give them a sense of belonging. As people work they are contributing to society and further to the economy. Increased and relevant computer technology would give students the professional tools to be better fueled to work in the competing market. Cuban (2001) states “increased use would then lead to efficient teaching and better learning which, in turn would yield able graduates who can compete in the marketplace” (p.18).

Instruction

Most instruction done at the college or the university level would benefit from the use of more technology in the classroom. According to Debevec et al. (2006), “new technologies offer new learning strategies for students who do not perform as well using traditional methods. With computer-aided instruction, instructors can provide different ways of learning besides traditional learning methods” (p.293). Multimedia such as PowerPoint, images, streaming video, and the Internet are all useful components that can be used for class activities, homework assignments and group projects. These methods can be used to instruct students in a more collaborative manner where real learning can take place. Due to the existence of technology the students of today have more difficulty learning from the traditional approach with a teacher who lectures. One of the other aspects of this new method of teaching is the concept of the leader learner. In this aspect the instructor is no longer the all knowing body of knowledge but considers herself more as a leader that is also learning along side the student. This methodology of teaching gives students a frame of reference that we can all learn from one another. In this collaborative style of education Cooperstein and Kocevar-Weidinger (2004) state that “students must think about and process the activity, not simply replicate an action, in order for learning to take place” (p.144). Through this theory of leader enforced learning, instructors can be certain that students will be able to retain and learn new material. Today’s students have been conditioned to think differently, work differently and explore life differently. This can be explained by the immersion of technology into our lives which has changed the way that we look at the world. As a result of this conditioning process, instructors need to be on the same page and tailor the teaching style to fully reach the student.

While there is a proven link between learning and video, the best practices for incorporating it into the classroom are not as clear. Experts in education believe that the best way to incorporate essential media literacy in universities is to include it in courses that already exist. Also, for practical considerations, instructor training, budgetary restrictions, and time constraints must be considered when integrating film in the classroom.

Obstacles to Using Film in the Business Classroom


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Educators face many obstacles when using film in instruction. The following section highlights some of those challenges.

Reliability on Technology

Some of the adverse effects are that the use of technology can stunt learning. Indeed, some students have learned to rely on technology much too heavily. Therefore, they tend to under develop and under use their own set of skills such as critical thinking, research, and proper writing skills.

Impairment of Human Relations

Although a proponent of the use of films in instruction, Champoux (1999) himself admits that “using film scenes in class takes time away from other classroom activities” (p. 214). With technology such as myspace.com, instant messengers, iPods, and the Internet, it could appear that students are not given the opportunity to learn how to deal effectively with others. We do know that social psychologists would disagree with this practice. If instructors rely heavily on technology and films in particular, students may not learn how to develop interpersonal skills, debate skills, or simply how to develop an argument, which in turn may impair their success at the workplace. If technology replaces this interaction and simple elements of human interaction are missing from their learning, how will students be prepared to really contribute to the workforce? The idea of students relying on technology and films in the classroom runs counter current with the concepts of team work and working collaboratively. Most business programs foster the knowledge that is gained by students working together in groups. The viewing of film is a very personal experience and individual students will deduce different meaning based on perceptions and conditioning. If students are not equipped to have adequate team work and collaborative projects in class, they will be less served to be able to handle the constraints of real work in the real world economy. This argument is further supported by Vyqotsky’s theories of education. Indeed, the study of Vygotskian concepts is important in that it encompasses, according to Ghosh (2004), “understanding the mechanisms and dimensions of learning” (p. 302). If one can fully understand all that learning is and how students learn then one can be better fueled in the needs of students and can really approach teaching in that manner. Vygotsky further addresses that “all cognitive learning occurs at a social level before occurring at an individual level. This principle carries with it several corollaries that: learning is mediated by others; social dialog is an important component of learning and cultural tools are accessed and acquire meaning in social contexts” (p.305). One final area of interest of the theory of Vygotsky is to understand how interaction helps us in our understanding and in our learning. Again, Ghosh (2004) offers much research in this area and states that:

“By interacting with others in dialogues, we are aided in formulating thoughts and tacit skills, as well as forced (or have the opportunity) to structure our thoughts and mental models and express them in an understandable way (in words and /or in images) for others. In the externalization-internalisation situation, we learn: 1. When we talk (when we express ourselves and/or explain something), 2. When we listen to others, and 3. When we give feedback to others, or receive it” (p. 306).


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Face value

Though film as a medium is presented —and more importantly, absorbed—as objective, viewers are often too willing to accept film’s narrative at face value. Film is fiction, regardless of how real it tries to be. According to Champoux (1999), “fiction writers and directors have much flexibility in how much reality they want their films to show” (p. 214). In this case reality is key in that many of the situations are over fantasized and over exaggerated. Films such as Office Space, The Secret of My Success, and Scarface are severely over-exaggerated and do not give viewers a sense of the real world and can be perceived as a farce. Reality is that most people would not have the opportunity to experience what most of these films represent and showing students films of this kind may not effectively validate organizational concepts. The film-as-illustration of management concept approach ignores the fact that a director has created a film text to shape the reactions of the viewer and the illustration may therefore not be realistic, as abovementioned. Many professors focus on reader reaction, gauging students’ reactions to a movie as related to their life experiences. While this approach is useful, instructors must not only consider how viewer/reader response shapes the movie, but how the movie is created to shape our reactions.

Forceful Fit

Another negative influence in the utilization of films is the idea of making it fit an organizational concept when not applicable or when the movie just does not clearly illustrate a concept. For instance, the use of the movie 8 Mile, for instance to illustrate concepts of introduction to management, is questionable. The scene in which Jimmy arrives late for work after riding the city bus because his car failed to start (Champoux, 2005, p. 7) is does not comprehensively exemplify the quality of a work environment.

Distraction

In many cases, instructors need to be very cautious of the students that are in the class as some may take offense to some of the humor or vulgarities in the film. If this is the case films can distract the student from learning what the initial concepts were in the first place. According to Champoux, (1999) “the content of scenes might distract some students from the theories and concepts the scenes portray” (p. 214).

When students have already seen the movie

Though Teasley and Wilder (1997) suggest showing only films students have not already seen, since it would be a waste of time “discussing a film the majority of the class has seen” (Corbitt, 1988), Golden (2001) argues that films students have already seen can be useful, as students can concentrate on the concept illustrated itself rather than simply focus on following the narrative.

Overuse

Some opponents of computer technology have stated that when computer technology is used as a crutch instead of an aid in education it would not foster continued growth and development for students to gain the knowledge, skills and abilities to be marketable in the economy of today. When instructors and students rely too heavily on technology to


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do the work and do not bring in other learning tools then technology can be seen as a negative tool. The pedagogical principles of a constructivist educator would mandate the use of a varied approach of technology, projects, lecture, and written assignments. Just like www.edtechleaders.org suggests “there are agreed upon goals and best practices that define how computers should be used” in the development of the educational programs, the same applies to films as a teaching resource.

Lazy professor syndrome

One of the final aspects of the negative aspects of the use of technology is the lazy professor/lazy student syndrome (LPLSS). When one is utilizing technology there is a propensity to do nothing. If a professor shows a film there really is not much work that needs to be done on the part of the instructor or the students. One major obstacle to the use of film in the classroom is instructor hesitancy. Too frequently, a stigma is attached to using film because some instructors feel guilty when others see it as a time to sit back and grade papers once they push the play button (Golden, 2001; Teasley & Wilder, 1998). This type of film use in the classroom serves little educational purpose. Unfortunately, “movie day” often turns into just that, for instructors are seldom trained in the best practices for including film (Sheridan et al., 1965). Lack of training and poor lesson plans

Some may question when to show the film or the clip. If the clip is shown to the student first, it usually requires an explanation as to what the film is about and also some explanation about the story line. If the clip is shown after a discussion of the concept, then the student may only recall that scene and may not thoroughly recall the organizational concept in question. Marshall (2004) explains some failings of technology are similar to the failings of a poorly-planned regular lesson. If objectives are not properly aligned with the lesson and assessment, even technology cannot help learning. Technology, like any instructional element, is only useful if it adds a dimension of learning to what already exists in the classroom, engages the students in authentic activities, and promotes higher critical thinking skills (Bloom, 1956). Today’s abundance of technology means that a professor can no longer be a “talking head” that possesses all the answers. Instead, she must be a “participating learner” who takes risks and does not always have the “right” answer. Unfortunately, as Sheridan et al. (1965) note, educators often lack the training in film necessary to lead their students in this process of discovery. This problem of hesitancy and lack of film use is readily remedied by professional development focused on technology integration. Additionally, Champoux (2001; 2005) offers practical lesson ideas that integrate film and higher-level thinking in management and organizational behavior classes. Having a thorough discussion of the concepts and a brief discussion of the text with some appropriate handouts is key to an effective use of films as a teaching resource. Lazy student

When a professor presses “play”, students can just relax and either watch the film, pretend to watch the film, or just sleep. Once the film is over the instructor may have


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some kind of a discussion, hence no accountability on the part of the students. Also, often, students settle in their chairs and critical thinking skills are set aside. The key to passive students watching a movie clip is to harness their interest in film and redirect it from a passive activity to an active one by encouraging the practice of critical analysis skills. Such strategies would ask students

“to attend carefully while they're viewing, to notice details of visual and auditory images, to discover patterns in those images, to talk with each other about what they’ve noticed, to develop hypotheses and make predictions, to form opinions and evaluations, and to communicate their ideas about film” (Teasley & Wilder, 1997).

When used correctly, film develops critical thinking skills that might have otherwise remained dormant. With students becoming more immersed in multimedia, instructors must learn to integrate it into the classroom or risk losing students’ interest.

Just recall

Instructors often ask students to note differences between the film and a given concept, utilizing only lower-level skills of comparison and recall. Videos should enhance the comprehension of a text (Milner & Milner, 2003; Sheridan, Owen, Macrorie, & Marcus, 1965), an idea that has been recognized as useful but limited (Corbitt, 1988; Golden, 2001; Teasley & Wilder, 1997).

Selective challenging

The most common way instructors incorporate film into the classroom is by using film as illustration of a business concept, a method that treats film as a piece of evidence in that students analyze and interpret the elements that film has in common with a printed text. This method works to motivate struggling readers in giving them something they can understand and thus, something to discuss and analyze. Still, the film-as-illustration approach is limited. Average and advanced students may have already mastered the elements being discussed through this approach. In these cases, a film is not adding anything innovative to the business curriculum; film is simply a different way of talking about the same elements.

Recommendations for Future Research and Conclusion

As is common in education, the empirical research behind the use of film in the

classroom is limited. While there are studies that generally vouch for the use of television and film in the classroom, there are no empirical studies comparing use of film as film and film as illustration of business concepts (Muller, 2006). Further research might include an investigation of film use in a classroom of heterogeneous-ability business students versus the reliance only on printed texts among similar-ability students.

While no one can guarantee that students will continue reading management literature after they graduate, the chances are good that they will continue their exposure to multimedia texts such as film. Whether they spend their adult lives as passive viewers of such new and changing media or become active readers of multimedia texts depends on their exposure to multimedia as a valid text for critical study. Though film as film cannot replace reading, writing, learning to develop relationships, and the study of


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printed business literature, it has the potential to bridge students’ inherent interest in multimedia with the essential, active, critical thinking skills that are at the heart of our instruction. Markus (1994) suggests to “attend[ing] to users’ intentional choices about how to use technology and to unpredictable technology usage patterns that emerge when users interact with the technology and each other.” By harnessing students’ inherent interest in multimedia as a tool to teach essential critical skills, professors can show students that no matter what type of media is being viewed, each text has been specifically shaped to influence the viewer in one way or another, whether by an author, a director, an artist, or a musician.

References

Aquino, J. (1997). Film in the Language Arts. National Education Association Washington. Beja, M. (1979). Film and Literature. NY: Longman. Bloom B. S. (1956). Taxonomy of Educational Objectives, Handbook I: The Cognitive

Domain. NY: David McKay Co Inc. Champoux, J. (1999). Film as a teaching resource. Journal of Management Inquiry, 8(2),

206-17. Champoux, J. (2001). Animated Films as a Teaching Resource. Journal of Management

Education, 25(1), 79-100. Champoux, J. (2005). Our Feature Presentation: Organizational Behavior. Mason, OH: South-Western. Cooperstein, S. E., & Weidinger, S. E. (2004). Beyond active learning: a constructivist

approach to learning. Reference Services Review, 32(2). Corbitt, J. C. (1998). Au Revoir to Film Illiteracy: An Interdisciplinary Exploration of Au Revoir Les Enfants. English Journal (January), 83-87. Cuban, L. (2001). Oversold and Underused: Computers in the Classroom. Cambridge,

MA. Harvard University Press. Debevec, K., Shih, M., & Kashyap. (2006). Learning strategies and performance in a

technology integrated classroom. Journal of Research on Technology in

Education, 38(3), 293-307. Germain, M. L. (2003). Film as a Teaching Resource in the Teaching Methodologies for

the 21st Century. A Teaching Development Workshop. Southern Management

Association Annual Conference, November 14, Clearwater Beach, FL. Ghosh, A. (2004). Learning in strategic alliances: A Vygotskian perspective. The Learning Organization, 11(4/5), 302-311. Golden, J. (2001). Reading in the Dark: Using Film as a Tool in the English Classroom. Urbana: NCTE. Markus, M. L. (1994). Finding a happy medium: Explaining the negative effects of

electronic communication on social life at work. ACM Transactions on

Information Systems (TOIS), 12(2), 119-149. Marshall, J. M. (2004). Learning with Technology: Evidence that Technology can, and does, Support Learning. Cable in the Classroom Whitepaper. 14 June 2004. Retrieved on November 01, 2006 from http://www.medialit.org/reading_room/pdf/545_CICReportLearningwithTechnolo


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gy.pdf Milner, J. O., & Milner, L. F. (2003). Bridging English. Columbus, OH: Merrill Prentice Hall. Muller, V. (2006). Film as film in the English classroom: Using movies to help students visualize literary theory. Retrieved on November 01, 2006 from

http://64.233.161.104/search?q=cache:ki9HMIUfwHsJ:www.wm.edu/education/ 599/04projects/Muller.pdf+pitfalls+of+use+of+films+in+classroom&hl=en&gl=us&ct=clnk&cd=16

National Council for Teachers of English (NCTE). (2003). Resolution on Composing with Nonprint Media. NCTE Annual Business Meeting. San Francisco. Shaw, D. (2004). A Plea for Media Literacy in our Nation’s Schools. The Center for Media Literacy. 15 June 2004. Retrieved November 01, 2006 from http://www.medialit.org/reading_room/article631.html Shaw, M. (1998). What’s Hate Got to Do with It? Using Film to Address Hate Crimes in the School Community. English Journal, February, 44-50. Sheridan, M. C., Owen, H. H. Jr., Macrorie K., & Marcus, F. (1965). The Motion Picture

and the Teaching of English. New York: Appleton-Century-Crofts. Taylor, M., King, J., Pinsent-Johnson, C., & Lothian, T. (2003). Collaborative practices

in adult literacy programs. Adult Basic Education, 13(2), 81-99. Teasley, A. B., & Wilder, A. 1997. Reel Conversations: Reading Films with Young Adults. Portsmouth: Heinemann. Vetrie, M. (2004). Using Film to Increase Literary Skills. English Journal, January, 39- 45.

Biographical notes

Lynn M. Kendrick

Lynn Marie Kendrick is an Ed. D. candidate at St. Thomas University in Miami, Florida. She currently works at Keiser University as an Associate Dean of General Education. Her recent research is in the areas of online learning, teaching effectiveness and non-traditional students in higher education. Lynn used to be a competitive figure skater and spent the majority of her time training for local competitions.

Marie-Line Germain

Marie-Line Germain’s Ph.D. is in Leadership and Education, with a specialization in Human Resource Development. Her research interests include leadership, organizational psychology, and human resource development. Her research specializes in the concept of human expertise. She has authored several research articles presented at national and international conferences and has published book chapters and research articles in peer-reviewed journals. Dr. Germain is a current review board member for Career

Development International and has been a reviewer for The Journal of International Business Studies. She is a member of several professional organizations, including APA, AoM, AERA, AHRD, SIOP, and SMA and has been the recipient of several national grants and research awards.


Human Capital Theory as a Motivator for HRD National Policies in Emerging

Economies

Carlos E. Ruiz Georgia Gwinnett College

Angeles Carioni

Barry University

Mary Claire Mucenic Barry University

Abstract

This paper explores how different leading emerging economies have included HRD

practices in their national agendas with the purpose of economic development. HRD has

been central to the concept of economic development. Globalization has contributed to

considering HRD practices as a source of economic competitive advantage. HRD, as a

means to improve the economy of a country, is founded in the theory of human capital

which considers investment in human resources as investment in capital.

The impact of globalization is evident in every single country. Developed and developing countries have felt the effects of globalization in different ways and degrees. Even though it is true that developed countries were the drivers of globalization, developing countries have been playing a definitive role in this movement. One of the main contributions of developing countries to globalization has been the labor force. Developing countries have found in the labor force a source of economic competitive advantage. This is made evident by looking at the manufacturing labels of countless numbers of products. It is very common to find out when we read the manufacturing labels of world famous brand names (i.e., Nike, Addidas or Sony) that these products are manufactured in countries such as China, India or Mexico.

Studies in the field of Human Resource Development (HRD) have demonstrated the relevance that HRD practices have for the improvement of the workforce and thus the organization (e.g., Becker, Huselid, & Ulrich, 2001; Huselid, Jackson, & Schuler, 1997; Pfeffer, 1994; Singh, 2003; Shaw, Gupta, & Delery, 2005; Torraco & Swanson, 1996; Ulrich, 1997; Van Loo, 2003; Wofford, 2002). However, the impact of HRD practices is not restricted to the organization. HRD practices have been suggested to have a positive impact on the development of emerging economies (e.g., Cox, 2005; Hogendorn, 1996; Osman-Gani, 1999; Yang, Zhang, & Zhang, 2004). But how can HRD practices help the development of a country? Marquardt and Berger (2003) stated that in the political area, HRD can support governments in the creation of national policies to face the challenges of globalization. Hatcher and Reio (2003) indicated that HRD can be impacted by politics in three ways: 1) remove barriers that affect the development of human resources, 2) improve systems that favor HRD, and 3) develop a responsive workforce to social and political issues. The next question that arises is why HRD practices can help the development of a country? A possible answer can be found in the Human Capital Theory (HCT), which is one of the foundations of the HRD discipline.


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Problem Statement and Purpose

There is research that suggests HCT as a motor for economic growth (e.g., Aliaga, 2001; Hogendorn, 1996; Swanson & Holton, 2001; Zidan, 2001). HCT has its roots in economic theory which is one of the foundations of HRD. From the viewpoint of the economic theory, organizations make use of a variety of resources, including human resources, with the primary goal of maximizing gains. This study has two purposes: 1) to explore how HRD has been used as national policy for leading emerging economies and 2) propose a model in which HCT serves as a main motivator for governments of emerging economies to create national policies that promote HRD practices as a means for economic development.

Method

The methodology used for this study was a conceptual analysis. An analysis of the literature review on the impact of HRD on organizational performance and HRD as a national policy were conducted. We attempted to explore HRD national policy in the leading emerging economies in Asia and Latin America. In addition, an exploration of HCT as a foundation for economic growth was also conducted. The impact of globalization on HRD was also explored for the purpose of this study. The review of the literature provides a context to propose a model in which HCT constitutes a significant factor for governments of emerging economies to include HRD practices in their national agendas as a means for economic development. Electronic and manual databases were used to explore the literature that provides support for this study. Articles contained in EBSCO and PROQUEST were searched using keywords such as human resource development, national HRD, human capital theory, and economic development. In addition, peer-reviewed journal articles in the field of HRD and in the proceedings of the Academy of Human Resource Development were also explored.

Theoretical Framework

The study is conceptualized on the idea that human resources are equivalent to capital, which is the central idea of the HCT. According to Swanson and Holton, 2001, HCT relies on three main assumptions. The first assumption is that education and training lead to learning and that capital invested in education and training will enhance learning. In fact learning is a key component in multiple definitions of HRD. For example, according to Gilley and England, as cited in Swanson and Holton (2001), “HRD is organized learning activities arranged within an organization to improve performance and/or personal growth for the purpose of improving the job, the individual and/or the organization” (p. 6). The second underlying assumption of human capital is that learning translates into productivity. And, the third assumption indicates that increases in productivity lead to better salaries for employees and more gains for the organization. According to the theory of human capital, training and education increase productivity by equipping the workforce with proficient skills, knowledge, and attitudes. In fact, the most tangible concepts derived from the HCT are training and education. These concepts


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constitute the direct linkage between human capital theory and human resource development (Aliaga, 2001). Training, which is a tangible concept of HCT, is central to the definition of HRD proposed by Swanson and Holton (2001). According to this definition, “HRD is the process for developing and unleashing human expertise through organizational development and personnel training and development for the purpose of improving performance” (p. 4). At the macro level, HCT provides support to explain the relationship between HRD and economic development. According to Zidan (2001) human capital theory visualizes human capabilities (knowledge, skills, health and efforts) as a fundamental component of the capital of the country. Hogendorn (1996) contended that the argument of the HCT is that investments made on educating and training of the workforce pays economic dividends for the organization and for the country. The effects of developing human resources go beyond individuals and organizations; these effects have the potential to impact the economy of a country (Zidan). Therefore, in order to motivate economic growth, governments need to create national policies that promote investment in human resources. HRD and Organizational Performance

In order to fully understand how HRD practices contribute to the economic development of a country we consider it necessary to first indicate how HRD practices contribute to the development of the organization. Literature that supports the relationship between HRD practices and organizational performance is extensive (Becker, Huselid, & Ulrich, 2001; Pfeffer, 1994; Singh, 2003; Torraco & Swanson, 1996; Ulrich, 1997). Studies conducted by the cited scholars show a correlation between HRD interventions and organizational performance improvement. For example, Swanson (1998) conducted research on the role of HRD practices on performance improvement. He concluded that investing in HRD interventions leads to high returns. Pfeffer indicated that HRD practices such as team-based systems, employee training, and employee participation are sources of performance improvement. Huselid (1995) also found a relationship between HRD practices and performance improvement. Huselid found a relationship between work performance and productivity. He found that an increment in work performance results in an increase in productivity. Moreover, Huselid, Jackson, and Schuler (1997) found a positive relationship between the capabilities of the workforce and the effectiveness of the organization. Wofford (2002) suggested that organizations looking for performance improvement should look at the human resource function as a key function for the performance improvement of the organization. Human resources as a function need to be incorporated in the strategic plan for performance improvement. The human resource function focuses on improving the performance of the workforce, increasing the efficiency of labor, and investing in employees with the ultimate goal of increasing the profits of the organization (Wofford). HRD and Competitive Advantage

When discussing HRD and performance improvement we cannot put aside the role of human resources as a source of competitive advantage. HRD practices as a source of competitive advantage have been addressed by different scholars (e.g. Becker, Huselid, &


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Ulrich, 2001; Kearns, 2004; Pfeffer, 1998; Torraco & Swanson, 1996; Ulrich, 1998; Wright, 1999). Moore and Peterson (2005) pointed out different factors that motivate organizations to pay attention to human resources as a source of competitive advantage. They indicated increased work knowledge, increased competition, and a more participative workforce as factors that have forced companies to consider human resources as a means to increase competitiveness. Moreover, Moore and Peterson stated that organizations looking to survive in a competitive world must develop their workforce at every single level of the company. Torraco and Swanson (1996) indicated that human resources have the potential of influencing the performance of the organization because they are a source of sustainable competitive advantage. The role of HRD as a means for achieving sustainable competitive advantage and improving the performance of the organization is to develop a highly capable workforce. It is relevant to mention that studies that address HRD as a source of competitive advantage and performance improvement are not restricted to the United States. For example, Khandekar and Sharma (2005) did research in India with the purpose of exploring the link between organizational performance, human resources, and competitive advantage. The results of the study found a correlation between HRD practices that had to do with workforce development and the performance of the organization.

HRD, Globalization, and Emerging Economies

The role of HRD practices in globalization cannot be fully understood without an adequate definition of HRD that embraces concepts of globalization. In light of this, the definition of global HRD that we use for the purpose of this study is the one provided by McLean and McLean (2001). McLean and McLean defined global HRD as the “process that has the potential to develop adults’ work-based knowledge, expertise, productivity, and satisfaction, whether for personal or group/team gain, or for the benefit of the organization, community or nation” (p. 1067). McLean (2001) suggested that in today’s business world globalization is an inevitable trend, and HRD practices have a significant role in supporting companies becoming more competitive in the global market. Emerging economies are specially impacted by globalization because they must become more competitive if they want to take advantage of the opportunities of globalization and overcome the challenges associated with it. Cox (2005) indicated that globalization brings opportunities and particular threats to corporations of developing countries. In light of this, it is necessary that developing countries look at HRD practices as a means to increase competitiveness through the development of the workforce. The impact of HRD practices in emerging economies is very relevant because these practices have been demonstrated to maximize the capabilities of the employees in the organization. Osman-Gani (1999) suggested that to a great extent the development of a country relies on the development of its business organizations. And the success of business organizations is dependant to a great extent on the ability that the organizations have to take part in the global market. HRD practices are critical for those organizations looking to compete in today’s global world (Osman-Gani). HRD is expected to help domestic companies to be better prepared to compete with foreign companies (Kimmerling, 1989; McLean, 1991; Nadler & Nadler, 1989; Reich, 1991). An educated and skilled workforce is a critical source of competitive advantage in today’s business world. This is manifested


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everyday; organizations are paying more and more attention to HRD practices as a significant source of competitive advantage and performance improvement (Khandekar & Sharma, 2005). HRD as a National Policy

In discussing the role of HRD in national policies, it is important to point out that the objectives of HRD at the national level might not be the same as the objectives of HRD at the corporate level. For example, as noted by Marquardt and Berger (2003) HRD at the national level can support governments in the creation of policies to face the challenges associated with globalization. This argument is supported by McLean (2001) who indicated that there are different reasons to include HRD in the national agendas of different countries, globalization being one of the main factors. According to Paprock (2006), one of the purposes of HRD at a national level is to increase the national output. In this regard, Paprock considered it important to differentiate the outcomes of national HRD and organizational HRD. At the organizational level the outcomes of HRD go from learning to performance. At the national level, the outcomes of HRD go from humanitarian to economic (Bierema, 2002; Kuchinke, 2001). Paprock (2006) also indicated that the focus of HRD in developing countries might be different from the focus of HRD in developed countries. HRD as a national policy does not necessarily pursue the same objectives in every single country. The degree of economic development and even the culture of the country can influence the goals of HRD as a national policy. HRD as a national policy is present in many developing countries. India, Singapore, South Africa, China, Mexico, and Poland are examples of developing countries that are including HRD in their national agendas. Literature indicates that many countries around the world are making HRD a national policy. Because this study addresses the importance that HRD has for the economic development of emerging countries, and being one of the purposes of this study to explore how HRD has been used as national policy for leading emerging economies, we have included examples for the role of HRD as a national policy in Singapore, India, China, Latin America, and Mexico.

National HRD Policy in Singapore

The Ministry of Manpower is the government agency in charge of the national HRD policy in Singapore. This agency is responsible of the improvement of the workforce in the country. The Workforce Development Agency is another government institution that promotes HRD practices in Singapore. This agency is responsible for enhancing the competitiveness of the workforce in Singapore (Osman-Gani, 2004). According to Osman-Gani (2004), HRD has been permanently included in the Economic Plan of Singapore. The economic development of Singapore has been to a great extent possible due to the investment made by the government in human resources. The function of HRD in the Economic Plan of Singapore has focused on the improvement of the workforce through training and education. The strategies in matters of HRD included in the Economic Plan are constantly revised in order to make adjustments based on the economic policies of the country.


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In Singapore, HRD is one on the main national policies that the government has for the development of the country. The national policy of HRD in Singapore resulted from of the partnership between the employers, the labor unions, and the public sector. One of the strategies that the government has used to promote HRD practices in Singapore is the creation of the Skill Development Fund (SDF). This fund provides financial resources to employers to provide training. In Singapore, training has contributed to a great extent to the development of the nation. The success of the main sectors of the industry (financial, manufacturing, and commerce and external trade), has been accomplished thanks in part to a skilled workforce (Osman-Gani, 2004).

National HRD Policy in India

In the particular case of India, HRD as national policy is focused mostly on education and culture. In India the main agency in charge of HRD is the Ministry of Human Resource Development. According to Rao (2004), the complexity and the diversity that characterize India have been a barrier for the incorporation of a national HRD policy that unites education and business practices. Nevertheless, a progression to a more effective HRD policy is expected to take place in India. The interaction of the different ministries of the country is expected to result in an improved and more effective HRD policy (Rao, 2004). The focus of the HRD policy in India is to increase the education and develop the skills of the people in India. The policy focuses on the improvement of the content of the education and supervising the quality of the education offered in the country. At the corporate level, HRD in India focuses on the development of the workforce, productivity, teamwork, and organizational culture. In the business sector in India, HRD is related to practices such as training, learning, and networking. HRD practices in India, relevant to the corporate sector, have not been addressed as a national policy (Rao, 2004).

National HRD Policy in China

There is no doubt about how globalization has impacted China. China is considered a country that is successfully experiencing the transition from a central economy to a free-market economy. China has set an excellent example for other emerging economies. When discussing the relevance of HRD as a national policy, it is impossible to ignore the case of China because it provides a clear example about the role that national HRD policies can have on developing countries. In China, HRD is known as human talent, which places emphasis on human growth and development. HRD and human talent have in common that they both address the development of the workforce as a means to maximize value and wealth. HRD in China is influenced by three factors: socialism, capitalism, and Confucianism. Socialism relates to morality and loyalty. Capitalism pertains to organizational performance and growth. Confucianism addresses social harmony. Three government agencies in China are responsible for human resources: the Ministry of Personnel, the Ministry of Labor and Social Security, and the Organization Department. The Ministry of Personnel is accountable for the human resource practices performed by professionals with higher education who are employed in the public sector and in state owned enterprises (SOEs). The Ministry of Labor oversees activities such as workplace safety, vocational training, and practices of labor employment in the public sector and SOEs. The Organization


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Department is the government agency accountable for promotion, training, and evaluation of leaders of the different government agencies (Yang, Zhang, & Zhang, 2004). In China, the national policy in HRD is comprised of two main strategies: the strategy for modernization and economic development of the country, and the strategy for workforce skills improvement. The role of HRD as national policy in China is remarkable. Chinese leaders, executives, and scholars agree that the human resources are the main competitive advantage of the country (Yang, Zhang, & Zhang, 2004).

HRD in Latin America

According to the World Bank, all the countries located in Latin America are developing countries. Mexico and Brazil are the leading emerging economies in the region. Hasler, Thompson, Lynham, and Paprock (2004) indicated that the drivers of HRD policies and practices in Latin America are different from the drivers of HRD in developed countries. Horwitz (1999) stated that “in emerging economies the notion of intellectual capital has become important to leverage competitive success” (p. 180). Hasler et al. said that the drivers of HRD in Latin America are related to the social, economical, and political environment. Hasler, Thompson, Lynham, and Paprock (2004) also indicated that HRD in Latin America revolves around two main purposes: workforce development (micro perspective) and the development of the country (macro perspective). Workforce development embraces training, career development, quality circles, and quality management. On the other hand, the development of the country embraces areas such as training, skills development, and bilingual education. Hasler et al. also added that the HRD drivers in Latin America can be categorized at the micro and macro levels. At the micro level these drivers focus on organizational and individual development. At the macro level, these drivers focus on regional and national levels. The North American Free Trade Agreement (NAFTA), resulting from globalization trends, is considered a driver for HRD at the macro level. Professional growth, organizational performance, and organizational culture are examples of HRD drivers at the micro level (Hasler et al., 2004).

National HRD Policy in Mexico

The major government agencies accountable for the national policy in HRD in Mexico are the following: the Ministry of Labor, the Ministry of the Economy, the Mexican Bank of Foreign Trade, and the Secretary of Economic Development (Comision Intersecretarial, 2006). Alvarez (2004) indicated that the programs included in the national HRD policy in Mexico focus on the development of the Mexican workforce as a means to increase productivity. Mendoza (2004) stated that if Mexico wants to be more competitive it is essential to increase the productivity of the Mexican companies. And in order to increase productivity, it is necessary to enhance the development of the Mexican workforce. The focus of the national HRD policy in Mexico is mainly on training and development. The Ministry of Labor is the main government agency that is in charge of the largest program for the development of human resources in Mexico. This program is known as the Training Support Program (TSP). With this national program, the Ministry of Labor


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succeeded in creating a national program for training and development. The objective of the TSP is to promote the training of human resources as a source of continuous improvement of the workforce and as a motivator for competitiveness and productivity. TSP is a key component of the National Development Plan of Mexico (Analitica Consultores, 2004). HRD as national policy in Mexico has been considered by the Mexican Labor Law. According to the Labor Law in Mexico, the training of human resources is mandatory. Employers are obligated to provide training and development (Beck 2001; Mendoza, 2004). Urtega-Trani (2003) suggested that globalization has had an impact on the national policy of HRD in the country. The Mexican foreign policy in the past ten years has placed special emphasis on the incorporation of the Mexican economy into the global markets. Because of globalization, Mexican companies are facing strong competition, and this is being faced to a certain extent with an HRD national policy. The national HRD policy in Mexico includes specific HRD programs that help exporting companies to become more competitive to face the challenges associated with NAFTA. The HRD programs developed by the Mexican government have as a main objective to increase competitiveness so as to face the challenges brought by globalization.

Human Capital Theory, HRD National Policy, and Globalization

In an attempt to clarify the relationship among HCT, HRD national policy, and globalization, we propose the model below which illustrates globalization and HCT as major factors that impact HRD as a national policy (Figure 1).

Figure 1. Human Capital Theory as a Motivator for National Policy in HRD for Economic Development (Ruiz, Carioni, and Mucenic Model)

According to the proposed model, national HRD policies could be motivated by two major factors: HCT and globalization. The model proposes HCT as the theoretical foundation that supports HRD as a national policy based on competitive advantage. According to research (e.g. Becker, Huselid, & Ulrich, 2001; Kearns, 2004; Pfeffer, 1998; Torraco & Swanson, 1996; Ulrich, 1998; Wright, 1999), HRD practices have been suggested to be a source of competitive advantage. For example, Tregaskis and Francoise


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(1996) indicated that human resources have been found to be a source of competitive advantage for those organizations doing business in a competitive environment. This model founded in the HCT, proposes competitive advantage (derived from the application of the HRD practices) as a factor for governments to create HRD national policies that lead to economic development. Hogendorn (1996) contended that according to the HCT, investments made on educating and training of the workforce pays economic dividends for the organization and for the country. Hongendorn added that in order to motivate economic growth, governments need to create national policies that promote investment in human resources. Finally, the model acknowledges the influence of globalization in the creation of HRD national policies. As indicated by Marquardt and Berger (2003), and McLean (2001), HRD at the national level can support governments in the creation of policies to face the challenges associated with globalization. Considerations for HRD Theory, Research and Practice

As established in the literature, different emerging economies are including HRD as national policy as a means to support economic development. Singapore, India, and China are examples of countries in Asia that are including HRD in their national agendas. Mexico in Latin America, has also considered HRD policies and programs as a tool to procure economic development. It is important to point put that Singapore, India and China are leading economies in Asia. In the case of Latin America, Mexico is also a leading economy. Even if it is true that these economies are not fully developed, it cannot be denied that the governments of these countries are engaging in extraordinary efforts to achieve economic development and reduce poverty. What is relevant for HRD scholars and practitioners is to explore the role that HRD could play as a key ingredient in the formula to accomplish the economic development so desired by the mentioned countries. It is imperative for HRD scholars and practitioners to explore the importance of HRD for developing countries because HRD could play an essential role in the process of economic development. If we agree that HCT is a main motivator for the implementation of HRD national policies in a global world, better are the chances that HRD practices could be considered one of the main components for the developing formula. More research that explores the real benefits that HRD national policies have brought to emerging economies needs to be conducted. It is essential to find out in what ways, if any, national HRD policies have contributed to the economic development of those countries that embrace them.

Conclusion

In the process of globalization, emerging economies have been forced to take

significant steps in order to increase competitiveness. Globalization has brought opportunities but also a countless number of challenges for developing countries. Leading developing countries such as Singapore, India, China, and Mexico in Latin America have found in HRD practices a means to support economic development. Geographic location and culture have not been a factor for the consideration of HRD practices as tool for economic development. From the Far East to Latin America, governments have recognized the benefits that HRD practices can bring to development. In the process of inclusion of HRD practices in national agendas, HCT theory has been suggested to be the


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engine that motivated governments to include these practices as part of the economic plan of the country (Aliaga, 2001; Hogendorn, 1996; Swanson & Holton, 2001; Zidan, 2001).

References

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Biographical notes

Angeles Carioni Angeles Carioni holds a Ph.D. in Leadership with a specialization in Human Resource Development. She is an adjunct professor for Barry University and a Trainer for The Center for Excellence at Miami Dade College. Her theoretical knowledge of Leadership and Education with the Human Resource Development (HRD) specialization, and her 15 years of experience as the CEO of her company, Consulting Across Borders, Inc., has provided her with the experience necessary to train executives in different areas of intercultural growth, communication, and development. The following are some of her clients: MTV- Latino, Nickelodeon Latin America, Seagram of Latin America, Dow


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Chemical Co., Siemens, Cartier, Enterprise Rent-A-Car, and the Office of Medicare Hearings and Appeals. Dr. Carioni has also published several articles on Human Resource Development and Education. She has presented them at national and international Human Resource and Development conferences. She is also a member of the Academy of Human Resource Development.

Carlos E. Ruiz

Carlos Ruiz holds a Ph.D. in Leadership with a specialization in Human Resource Development. He joined the faculty of the School of Business of Georgia Gwinnett College in August of 2007, and he is currently Assistant Professor of Management. Among his work experience, he has held different managerial positions in the private and public sector in Mexico. He has authored and co-authored different research articles presented at national and international conferences. His areas of research include international HRD, cross-cultural training, expertise, training and development, and managerial effectiveness. He is a member of the Academy of Human Resource Development.

Mary Claire Mucenic Mary Claire Mucenic, Ph.D. holds advanced degrees in Clinical Psychology, Leadership and Education with a specialization in Human Resource Development. She currently holds licensure in the state of Florida, and is a nationally certified school psychologist and clinical educator. She has spoken nationally and internationally on a wide range of topics including cross-cultural training; communication, stress management, team-based problem solving, as well as, individual and organizational performance improvement. Dr. Mucenic serves as the director of SchoolHouse Educational Consultants, Inc. a leadership and consulting firm specializing in individual and organizational learning. She is a member of several professional organizations including the National Association of School Psychologists, the American Psychotherapy Association and the Academy of Human Resource Development.

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Averting Predatory Abusive Financial Advising Practices: The Case of the Elderly –

A Series of Didactic Frameworks



Abstract

This paper proposes a series of didactic frameworks for the development of strategies

aimed at minimizing the elder’s exposure to predatory abusive financial advising

practices. The frameworks represent workable tools for the elderly and interested

individuals. They can also be used for teaching in the area of financial gerontology. In

addition, a number of scenarios are presented for discussion in the classroom.

Introduction

It is well known that elderly persons are excellent targets for unscrupulous individuals who do not hesitate to give priority to their personal gains in advising their customers. While the phrase elder abuse is well-known, the phrase financial elder abuse is not so familiar. Until the seminal work of Cutler (1997) subfields of gerontology included social gerontology, occupational gerontology, political gerontology, recreational gerontology, and administrative gerontology. Given its ubiquitous character, the term “money and finance” became recognized as the most common denominator of all the subfields of gerontology. Subsequently financial gerontology developed into a new field of study. The American Institute of Financial Gerontology (AIFG) defines financial gerontology as “multidisciplinary, building on relevant teachings from biology, psychology, sociology and demography to understand the lifelong wealth span issues and aspirations of aging individuals and their families” (AIFG, 2007). Recognizing the patterns that influence behavior and events should enhance one’s ability to influence reality. Senge (1990) introduces the concept of “metaiona” (i.e. shift of mind), and offers a number of mental models that could help avoid the fallacy of relying mainly on symptomatic signals for problem solving. Building on the author’s idea of “systems thinking”, this paper proposes a number of frameworks and scenarios for teaching strategic positioning in the area of financial gerontology. They could be used as interactive tools for assessing an elder’s exposure to potential abuses by financial advisors and for developing strategic prevention measures. Particularly, we propose the combination of a didactic SOWT framework with a modified REAL model for developing strategies aimed at forestalling predatory unconscionable financial advising practices. A number of scenarios are also presented for discussion in the classroom.

The SWOT Framework

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The SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) characterized early prescriptive models on strategy formation developed in the 1960s. The SOWT model presented in this paper is an adaptation of a framework developed earlier by Grandmont-Gariboldi (2005). Annex 1 presents the SOWT model, which involves five wheels representing respectively the strengths and opportunities on the left side [SO], the weaknesses and threats [WT] on the right side, and in the middle, the strategic actions that can be used to maximize the SO and minimize the WT. The three pillars at the basis are essential for a successful strategy. The critical part at the center of the SO wheels is the individual’s area(s) of leverage. In normal circumstances, focusing on the strengths and opportunities should allow to minimize weaknesses and threats. This is why the small circle is adjacent to the SO circles. The likely shrinking effect on the threats and weaknesses is reflected in the decrease of the size of the WT circles. The initial dimension of each circle can be determined based on quantitative and qualitative analyses of an individual’s exposure to possible mistreatment. For instance an initial likert-scale questionnaire could be helpful. Adjustments in the relative size of each circle can be estimated for instance using percentage changes in a person’s readiness and willingness to resist unethical pressures. The idea is to avoid a defensive approach, which focuses on threats and weaknesses and bears the risks of developing vicious circles of actions-reactions involving the elderly person and the financial expert. However, some weaknesses and threats may never be eliminated. Thus, they have to be included as inherent part of the process as a whole. Also, the model allows shifting the small circle to the right in particular cases, such as crisis situations. Here in this paper we will focus on the three pillars, on the individual’s area(s) of leverage and on the SO side of the model. Following is a short discussion of the basic elements expressed in terms of advice for the elderly, as presented in Annex 2. Trust: At certain points in our life we need to trust someone. Isolation is a major threat especially to an elderly person. Family/Friends Support: Think about your golden years as early as you can. We all need to be realistic and ready to face the inevitable ageing process and its financial consequences. Try to nurture good relationship with family or friends. Even a truly committed financial professional could be a trustworthy friend. Financial literacy: If you have no desire, patience, or talent to get educated on financial matters, make sure that the people who will manage your finances have the adequate credentials. If a family member or a friend is in charge of your finances, make sure that they have the minimum intellect to evaluate the qualifications of your financial manager. Look for Help: Do not try to do it all. It is possible that you are able to manage everything on your own at this point in time, but you do not know what the future holds. So you need to have a back-up plan. The opinion of others can make a difference. Awareness: Do not always think of others in terms of yourself. You may have a candid and optimistic view of the people you entrust your affairs, but you need to be aware that financial professionals may not all be worthy of your trust. Beware of potential conflict of interest or even dishonesty especially if the person or the firm is not well established. Moreover, even in well established financial institutions, there are possible internal conflicts of interest. Readiness: Although you or your representative may have an adequate level of financial literacy and a certain level of awareness, the willingness to face reality and react to unethical behavior becomes crucial. Also, you need to provide for the eventuality that your physical/psychological condition may not allow you to face abusive practices. This is why it is so important to

41

plan early and make sure that your representative will have the strength of character to take the appropriate actions. Be receptive: Remember that principles and practices that were adequate in the past may not be optimal today. In addition to a basic financial literacy, you or your representative needs to have an opened mind to learning. Trust yourself: Most of all trust your own capacity to take control of your financial affairs, to the extent that this is possible. This does not mean that you need to manage everything on your own. However, make sure that your representative is acting according to your wishes and your directives. Do not let anyone intimidate you, especially if the person who administers your affairs is also taking care of other aspects of your life, such as the choice of an assisted-living residence.

The proposed SOWT framework can be easily adapted to particular situations. It allows interactive inputs from students in the traditional or virtual classroom. It also provides a basis for team learning. In addition, the possible combination of this working tool with other models, such as the REAL model, offers opportunities for creative thinking in strategic positioning. The REAL model proposed by Hollander et al. (2000) uses the resources, events, agents and location as the main pillars of information system analysis and development. It can be very well be adapted for identifying the elements signaling potential predatory abusive financial advising practices and for developing strategies aimed at averting such practices. Annex 3 presents our application/adaptation of the model. For the purpose of simplicity, we assume that the agents involved are the elderly on one part, and the brokers or other involved entities on the other part. We also consider that the events are ubiquitous; hence we exclude the location from the framework.

Selected Scenarios

The AIFG considers financial gerontology as the educational bridge between gerontology and the study and practice of financial services. Recognizing that the financial wellness of the elderly is closely linked to other areas of gerontology, the scenarios we present here in this paper involve other facets of gerontology. Following are examples of possible situations in which the elderly are ideal prey of abusive care takers and financial advisors who often use obscure and almost imperceptible pressure tactics. The suggested mini cases can also be used for teaching ethical issues in financial gerontology.

Scenario 1:

An elderly woman who was living with daughter and her son in law found out that they had been spending with her credit card without her knowledge. Since she did no want to press charge against her own daughter, she then found herself liable for a substantial amount of debt. With the help of her son, she moved to an assisted-living residence. Her son also took the responsibility of managing her financial affairs. Over time she realized that the living conditions at this residence were barely endurable. When she expressed her desire to relocate into a better residence, her son threatened to stop taking care of her personal affairs including all financial matters. At ninety years of age,

42

she was very hurt by this and she did not know where to turn to. Luckily, a niece accepted to help her and eventually she moved to better facilities and she managed to pay off her credit card balance. Questions:

1. Discuss why financial gerontology issues cannot be dissociated from other areas of gerontology.

2. How could the consequences of this type of situation be minimized by taking action in a timely fashion?

Scenario 2:

Maggie, an elderly woman, was living in a low-income apartment close to her bank. She paid visit to the bank many times a week to update her accounts. This was probably an important part of her social activities. People had witnessed that she had been pressured by at least one financial advisor at that bank to invest in risky mutual funds. This financial advisor tried to convince her that she could make much more money from a mutual fund investment than from her current savings account. However, he never mentioned the higher risk associated with the funds. More importantly, he used a very authoritative tone, making her feel that she was almost guilty of doing something wrong. Given her rather timid personality, Maggie almost succumbed to the temptation. Luckily, a friend of her who happened to be at the bank could not help overhearing Maggie’s conversation with the bank employee. She advised her to talk to her accountant before making a decision. Fortunately, Maggie followed her friend’s suggestion. Questions:

1. Discuss the ethical concerns suggested by this scenario. 2. Discuss the issues that should be included in a financial institution’s guidelines for employees 3. Provide other examples of pressure tactics that could be used by financial advisors.

Scenario 3:

Joseph, a ninety-year old man asked his daughter Nancy to take a look at his investment portfolio statements. She realized that eighty percent of his portfolio was invested in risky stocks. She also noticed the large number of transactions and the high commission fees that were charged to her father’s account over the past few months. To her knowledge, her father had limited financial resources. So she suggested that they pay a visit to the financial advisor. During the conversation, they discovered that this individual had been a pharmacist for many years and that he had been working for the financial institution for only a few months. Given his limited experience in the field, Nancy started to feel quite uncomfortable and she started having some doubts about the financial advisor’s competency. Moreover, she started questioning the true motives

43

behind the frequent portfolio reallocations involving many transactions and consequently high commission fees. Fortunately, Nancy decided to consult another financial advisor. The portfolio was rebalanced according to a risk level Joseph was able to afford. Nancy followed up and noticed that many of the stocks included in the old portfolio had lost much of their value over the following months. Joseph told the story to other members of the family. Thank heaven I listened to Nancy! Questions:

1. Discuss important issues or aspects that should be covered in the process of selecting a portfolio manager.

2. How can we express an individual’s risk tolerance? 3. What factors should be considered in determining the appropriate risk tolerance level

of an elderly person? 4. How is it possible to estimate the risk of a given portfolio?

Scenario 4:

A bank manager served as a confident and financial advisor of Sylvia, an elderly woman. He suggested setting up her will in such a way that he would have total control of her assets in case of death. This came as an incredible surprise to her only daughter who always thought she had an excellent relationship with her mother. As a result, it became very difficult and very expensive for her to object to the excessive fees he had charged her mother.

Questions:

1. What areas of gerontology are implied in is this scenario? 2. Do you think that the bank manager acted in bona fide in following Sylvia’s

instructions? 3. What are possible assumptions about Sylvia’s real, genuine wishes?

The scenarios presented here are a modified version of factual events. Future research could benefit from additional real and fictitious examples.

Information/Knowledge as an Asset

Annex 4 presents a perception of information/knowledge as an asset. As suggested by Chiappelli, Koepke, and Cherry (2005), important motivators for planning are control and independence. The ongoing awareness/readiness process imbedded in the framework suggests additional motivators: higher resistance to abuses, better control of financial assets, increased sense of ownership, increased sense of safety, improved overall wellness, and avidity for more information.

A Comprehensive Virtual Organization

Many online resources provide excellent search engines on various aspects of financial fraud prevention. They include the Financial Industry Regulatory Authority (FINRA), a main non-governmental regulator for securities firms doing business in the United States,

44

and the Security Exchange Commission (SEC). For instance, FINRA provides a series of investor alerts to help avoid scams and other investing problems. They can be retrieved from: http://www.finra.org/InvestorInformation/InvestorAlerts/index.htm. However, a comprehensive network of regulatory and support organizations could be provided in the context of a virtual organization. Annex 5 presents a perspective of this type of entity.

Leveraging on Expert Systems

In Annex 6, we propose the use of online expert systems to offer the elderly and concerned individuals a systematic approach for dealing with most common predatory financial abusive practices. Rather than focusing on obvious fraud, we consider obscure subtle tactics that are almost imperceptible until a pattern is uncovered. Recognizing these patterns that influence an investor’s behavior and providing solutions to various archetypes could be achieved with the use of interactive expert systems, which comprise diverse entities such as regulatory organizations, professionals, and support groups/organizations. This paper contributes to the still-early literature on abusive financial advising practices aimed at older persons. It expands on the NASD Foundation Fraud Study Final Report (2006), which explores how investment fraud among older persons could be prevented and how victims of investment fraud might differ from non-victims. We particularly focus on patterns of abusive maneuvers, which taken individually, may not appear fraudulent. While specific actions may not appear clearly illegal per se, they often take the form of subtle, almost indiscernible persuasive strategies. As a result, these schemes are more likely to remain unreported than more recognizable fraudulent activities. For instance, arguments brought by financial advisors in a seemingly courteous, respectful, but persistent manner over an extended period of time can be very effective in persuading older investors to buy unsuitable financial products. Frequent portfolio asset reallocations may also be achieved in an incremental fashion with periods of interruption to hide the real purpose of generating commission fees.

The proposed frameworks and the examples of financial elder abuse provided here offer the elderly and other concerned individuals, such as care givers, family members, friends, educators, and students, workable tools for awareness and wellness improvement. The suggested models add to the current literature in financial gerontology. They can also be used for short seminars intended for senior citizens or interested individuals.

Future research could benefit from linking the SOWT model to quantitative and qualitative measuring tools. In addition, empirical studies on the profile of the older investor more likely to be a victim of deceitful financial advising practices that are difficult to identify could be helpful. Educating the elderly on how to recognize tacit unethical financial advising behavior patterns would provide additional insight for averting such tactics.

45

Conclusion

This paper discusses the vulnerability of elderly persons to predatory unconscionable financial advising practices. It also proposes the use of frameworks for developing prevention strategies against abusive financial advisors. In addition, recognizing that financial gerontology cannot be dissociated from other areas of this discipline, we offer a number of scenarios involving mistreatment by financial professionals and by other individuals such as care taker and family members. The frameworks and the scenarios can be used for awareness improvement and thought-provoking among the elderly and concerned individuals. In addition to providing methods for averting fraudulent financial practices, we offer strategic approaches aimed at recognizing patterns of seemingly legitimate actions. They can be used for didactic purposes in financial gerontology. Their flexibility makes them potential workable tools for creative thinking in strategic analysis and development in that area. In addition, they can be easily adapted to particular situations. Furthermore, they allow interactive inputs from students in the traditional or virtual classroom, hence providing a basis for team learning. Future research aimed at educating the elderly on how to recognize unethical financial advising behavior patterns would help them avert such tactics.

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Annex 1 - The SOWT model

Actions

Threats to Financial Status Opportunities for Well Being

Opportunities

Strengths Weaknesses

Strategies Minimize Maximize

Information

Threats

Wellness Satisfaction

LIFE QUALITY

Realized Not Realized

Family/Friends Support Trust Financial Literacy

47

Annex 2 - The SOWT model applied

Look for Help

Threats to Financial Status Opportunities for Well Being

Strengths Weaknesses

Strategies Minimize Maximize

Information

Wellness Satisfaction

LIFE QUALITY

Realized Not Realized

Family/Friends Support Trust Financial Literacy

Awareness

Readiness

Trustworthy

Environment

Unethical Advisors

Unscrupulous Family/Friends

Isolation

Self-Pity Trust Yourself

Be Receptive

48

Annex 3 - A M

odified REAL Perspective

Trigger Event

Risky Event

Preventive Event

Resources

Looking for finan

cial advisor

Interview w

ith finan

cial

Consu

lt guidelines for ch

oosing

www.finra.org/brokerch

eck

Advisor

a finan

cial m

anag

er

(800) 289-8999

Investm

ent report req

uest

Found unsu

itab

le asset

"Sen

ior" Specialists an

d A

dvisors:

SEC's Investm

ent Adviser

allocation

What You Should Know A

bout

Public Disclosu

re W

eb site.

Telep

hone sales pitch

Sen

d m

oney

Nev

er invest on solicitation

FIN

RA investor alert

Invitation – Free meal seminar

Invest out of fear of

missing

Rem

ember: the main purpose is to sell

FIN

RA Fraud Fighting 101:

a good opportunity

Smart Tips for Older Investors

False promises of pen

ding

Do not wan

t to m

iss

Scarcity creates false sen

se of urgen

cy

SEC's Investm

ent Adviser

initial public offerings (IPOs)

deal of a lifetime

Public Disclosu

re D

atab

ase

www.advisorinfo.sec.gov

"Risk-free" or "guaran

teed

"

Invest in infreq

uen

tly

Ask yourself: w

hat if

North A

merican

Securities

return offer

trad

ed security

I wan

t to sell in a w

eek from now?

Administrators A

ssociation

Ped

dling in an aggressive

Engag

e into conversation

-Sim

ply say

: NO than

k you.

AARP in The Lure of Money

or persisten

t way

Listen to actual investm

ent frau

d victims

-Stereotype of investm

ent frau

d victims

as isolated, frail, and gullible.

49

Annex 4 - Inform

ation / Knowledge as an asset

A f

luid

conce

pt

A g

old

cu

rren

cy t

hat

is

captu

red t

hro

ugh

T

rust

wort

hy E

nvir

onm

ent/

Res

ourc

es

B

y T

he

Eld

erly

an

d t

hei

r S

upport

Fam

ily/F

rien

ds/

Pro

fess

ional

s

Ongoin

g A

war

enes

s/R

eadin

ess

Pro

cess

To p

erm

eate

Rec

epti

ven

ess

to L

earn

ing

Em

pow

ered

E

lder

ly

Ris

k E

xposu

re

Aw

aren

ess

Hig

her

Res

ista

nce

T

o A

buse

s

Bet

ter

Contr

ol

of

Fin

anci

al A

sset

s

Incr

ease

d

Sen

se o

f S

afet

y

Impro

ved

O

ver

all

Wel

lnes

s

Incr

ease

d S

ense

of

Ow

ner

ship

Avid

ity f

or

More

Info

rmat

ion

50

Annex 5 - Virtual Organization

Product [output] A network of entities stripped to their core competencies [ legal, financial, regulatory, etc.] using:

• Leadership

• IT

• Human resources

• Synergy from alliances, partnership, teams resulting in all Stakeholders' Awareness/Readiness

Participants

- Support organization as the Host entity. - The elderly & concerned entities - IT specialists - Other specialists: Legal, financial, Regulatory, etc - Others: system builder, tool

builder, support staff.

Information [input]:

- Knowledge from: - Support organizations - Available research data - Regulations - Professional organizations ethical rules -Reported cases of abusive Practices -Reported cases of predatory practices

Technology

- IT platform with supporting IT building blocks [ same as those included in ES supporting building blocks - Emphasis on Communication software: -interface: for communicating with user, obtaining new facts from user or from external databases - Communications should allow easy and real time feedback from stakeholders [inside or

outside].

Initiation Development

Implementation Operation %

Maintenance

Phases

Process

An iterative and interactive process

Time frame: depending on availability of resources

Assuring coordination

51 Annex 6 - Experts Systems

Product [output] - Expert knowledge in specific areas of financial gerontology is available - Decision made in a guided [by rules or frames], systematic [making sure the steps are followed], comprehensive [making sure most important criteria are applied],

timely [expertise available at any time], and convenient manner

- Some benefits of this type of decision making: ex. improved awareness & readiness

- Most ES provide explanation of decision

Participants

-Provider of knowledge: Regulatory organizations, professionals & Support groups/organizations - Knowledge engineer for development and maintenance of ES - Users of ES: expert, ES builder, elderly persons, educators, & concerned individuals - Users of decision: elderly persons, educators, & concerned individuals or entities

- Others

Information [input]:

- Database that includes: facts [what is known about the domain area or situation: obtained from other databases, [including CAD/CAM] by interaction with user, or by inference rules - Knowledge base: rules supplied by expert [logical reference, causal relationships] - Specific problem/situation to resolve -Common abusive practices -Common predatory practices

Technology

- Inference engine: uses rules and database to “infer”, i.e. pattern matching according to predetermined path of independent criteria. - Explanation module: I] explains how the reference engine drew specific conclusions 2] or why the system is asking a specific question now. - Interface: for communicating with user, obtaining new facts from user or from external databases

- Communications

Initiation Development

Implementation Operation %

Maintenance

Phases

Process

An iterative and interactive process

Assuring coordination

Customer User of decision inside/outside

the Organization

Product: Timely Decision

Customer-Centered Advantage

52 JOURNAL OF MULTIDISCIPLINARY RESEARCH – VOLUME 1, ISSUE 1

References

American Institute of Financial Gerontology (n.d.) Retrieved March 31, 2009 from http://www.aifg.org/aboutaifg.cfm

Chiappelli, T., Koepke, C., & Cherry, K. (2005). Planning for long-term care involves more than money. Journal of Financial Service Professionals, 59(2), 60-64.

Cutler, N. E. (1997). Financial gerontology. Journal of the American Society of CLU ChFC, 51(1), 24-30. Grandmont-Gariboldi, N. (2005). A proposed SWOT model for teaching strategic

analysis and development. American Society of Business and Behavioral Sciences, 1(1). Grants Approved 2004 (n.d.). Retrieved March 31, 2009 from http://www.finrafoundation.org/grants_approved_2004.asp Hollander A. S., Denna E. L. & Cherrington J. O. (2000). Accounting Information

Technology and Business Solutions, McGraw-Hill Higher Education. Senge, P. M. (1990). The fifth discipline: the art and practice of the learning organization. New York: Doubleday.

Biographical notes


Dr. Nicole Grandmont-Gariboldi is an Associate Professor of Accounting/Finance at St. Thomas University. She is a Canadian Chartered Accountant and she holds a DBA from Nova Southeastern University. She has published several research papers mostly in the areas of Finance, Strategic Decision Making, and Information Technology, in well recognized peer-reviewed journals. She also reviewed several papers for well known academic associations and journals. Included in her awards and memberships are the Sigma Beta Delta Honor Society in Business, Management, and Administration, and a “Best Paper Award” for a research presented at the American Society of Business and Behavioral Sciences in 2005.


BOOK REVIEWS McCraw, Thomas K., (2009). American Business since 1920: How it Worked. 2nd edition Harlan Davidson, Inc., 317 pages, $26.95 (Paperback). ISBN: 0882952666 Reviewer: Eldon H. Bernstein, Lynn University

Book Synopsis

At the turn of the twentieth century, advances in technologies, materials, processes and energy provided an engine for growth often referred to as the Second Industrial revolution. This book chronicles the history of American Business from shortly after the Second Industrial Revolution to the present day. Its focus is on the people who were responsible for the growth, and sometimes the demise of some of the iconic firms in the United States. From Henry Ford to Steve Jobs, the role of the entrepreneur and innovator serve to explain how businesses and industries developed. McCraw has extended the timeframe of this second edition to include chapters on the empowerment of minorities, an examination of the fiscal system and a history of the introduction and development of information technology. The three new chapters that were added are unlike the first five because rather than chronologies, they center on the particular topic. He deftly weaves the interactions among corporate entrepreneurship, government policies and technological developments to document the rise of many corporate giants, and in turn, the demise of several of them. Ford, McDonald’s, Microsoft, Apple and Google, along with an alphabet soup of companies such as GM, P&G, RCA, AT&T offer an incisive look at how business was done during differing periods of social and economic conditions during the twentieth century. He presents a clear argument that the American system has benefitted the public. Whether in low cost motor vehicles or in the convenience of an Ipod, the large industrial firm has supplied the U.S. citizenry, and the world in many instances, with goods and services that made their lives easier, longer and more productive. The theme that is central to this work is the Schumpeterian theory of “creative destruction”. Constant innovation and subsequent replacement mark the success or failure of virtually every organization and industry. From Henry Ford’s totally centralized decision making to the decentralization that is so common in the current century, the changes in the decision making process are documented. While much of the book is usually complimentary to the people and organizations that are included, McCraw points out many of the less noble activities and results of the capitalist system on social and economic conditions in the United States and in the world.

Evaluation

Any student of business or of history needs to read this book to understand how the organizations that define the American Capitalistic system evolved. For the consumer, it is a fascinating story of products and people and explains how and why they succeeded.


For the businessman or business student, it provides graphic evidence of the constant change in the marketplace and how companies dealt with it or succumbed to it. McCraw’s writing style is crisp and clear; subtleties abound that keep the reader riveted. He notes about Henry Ford that “Ford’s celebrity brought with it daily opportunities to speak out on subjects about which he knew absolutely nothing; and he loved to pontificate.” He then develops that to explain how that egotism helped to spell the decimation of Ford’s market share. He provides valuable insights into the rise of consumerism in the United States and the increased power of the buyer; the effect of government in regulating, and later in deregulating industries to provide the strong infrastructure for business. But he does not fail to point out how some of the practices of business have led to undesirable conditions in both individuals and social groups.

In the Author’s Own Words

In his introduction, McCraw says: “This book takes the vantage point of people working within companies rather than the external perspectives of consumers, governments, or other groups. It focuses on the entrepreneur, the firm and the industry. It shows from the inside how businesses operated.”

Reviewer’s details

Eldon H. Bernstein, Ph.D. is a Professor of Management at Lynn University in Boca Raton Florida. Bernstein’s Ph.D. is in Strategic Management, with a specialization in Business History. His research interests include business history, strategic management small business and entrepreneurship.


Gladwell, M. (2008): Outliers: The Story of Success. New York: Little, Brown and Company, 309 pages, $27.99 (Hardcover). ISBN: 9780316017923. Reviewer: Hagai Gringarten, St. Thomas University

Book Synopsis

Malcolm Gladwell defines "outlier" as a scientific term to describe things or phenomena that lie outside normal experience. In Outliers: The Story of Success (2008), Malcolm Gladwell argues that “the true story of success is very different” and contrary to popular belief, it is not only a product of ability, motivation and persistency. According to Gladwell, a staff writer for The New Yorker and an international best selling author of The Tipping Point and Blink, “we should spend more time looking around them-at such things as their family, their birthplace, or even birth date” (Front book jacket), if we want to have a better understanding of how and why people thrive. Outliers: The Story of Success (2008) begins with a thought provoking look at the town of Roseto, Pennsylvania, where no one under 55 showed any signs of heart disease. As a matter of fact, the town of Roseto is an example of an “outlier”. Gladwell continued with the “Matthew Effect” where he suggests that many successful players in the Canadian ice-hockey league share birthdays between January and April due to the age cut-off date for playing in junior leagues, which created opportunities for better coaching and more training”. In the second chapter, Gladwell deals with one of the most pivotal points of the book when he asserts “the 10,000-Hour Rule” (page 35). According to Gladwell, 10,000 hours of practice is the required minimum for success. He points to outliers such as the Beatles who preformed 1200 times before their initial success, or Bill Gates who “been programming practically nonstop for seven consecutive years” (page 55). According to Gladwell, great talent and practice is not enough. He brings us the story of Chris Langan, an American with a reported IQ of 195 (30% greater than Albert Einstein) who today lives on a horse farm in rural Missouri. According to Gladwell, “extraordinary achievement is less about talent than it is about opportunity” (page 76), and even a genius like Mr. Langan cannot make it alone without helpful circumstances. Gladwell then shifts his focus to cultural influences on success --or lack of it. He brings us the story of Eastern European Jewish immigrants that became the most successful group of lawyers in New York due to circumstances, hard work and ethnicity. Due to cultural discrimination, Jewish lawyers could not find jobs in big law firms at the time, so they opened their own law offices. Specializing in unpopular work (at the time) in which the big firms did not want to engage, they gained “10,000 hours of practice” in mergers and acquisitions and corporate litigation. Gladwell’s most interesting cultural point is his “ethnic theory of plane crashes” (page 177). He points to cultural influences of Korean pilots and first officers, which contributed to above normal crashes involving Korean Air airplanes. Mr. Gladwell argues that high “power distance” in certain cultures makes it harder for first officers to question or alert their superiors.


By the end of the book, Gladwell argues that outliers are the results of extraordinary circumstances, cultural legacy and most of all hard work. As we all know, there is no shortcut to success and Gladwell reminds us by quoting a Chinese proverb “no one who can rise before dawn three hundred sixty days a year fails to make his family rich” (page 224).

Evaluation

In the Tipping Point (2000), Malcolm Gladwell changed the way we look at individuals and their power to create change through social networks. “In Blink (2002), he changed the way we think about thinking. Outliers will transform the way we understand success” (back book jacket). In this third book of his “success trilogy”, Malcolm Gladwell’s Outliers: The Story of Success (2008), seeks to make a profound point about success and attempts to explain why some people succeed while others fail to reach their full potential. Malcolm Gladwell strives to provide a better set of explanations of the phenomenon of success and by the end of the book, we realize that it is basically common sense. The right combination of upbringing, genes, cultural heritage, circumstances and hard work will most probably make a person an “outlier”. Gladwell has a canny talent of explaining social phenomenon through intellectual story telling and anecdotes. This explains why currently all of his books are on the New York Times best seller list. Although at times it felt like Malcolm Gladwell wrote a bit too much and “had” to write more pages to reach the average American book size of 300 pages, I found Outliers: The Story of Success to be thought-provoking, interesting, and entertaining. This book is unlikely to change the way readers think about success. It is basically a good read among many other conventional thinking self improvement business books. For academics, Gladwell disappoints a bit because he provides little empirical evidence for his arguments.

In the Author’s Own Words

“Everything we had learned in Outliers says that success follows a predictable course. It is not the brightest who succeed…nor is success simply the sum of the decisions and efforts we make on our own behalf. It is rather, a gift. Outliers are those who have been given opportunities-and who have had the strength and presence of mind to seize them.” (Page 267).

Reviewer’s details

Hagai Gringarten, A.B.D., St. Thomas University Hagai Gringarten’s doctoral research is in Global Leadership with a specialization in Branding. His research interest includes branding, international business, and marketing.


He has authored a non-fiction best selling book Over a Cup of Coffee (Shiram Shachar, 2000), and earned a certificate on case study methods from the Harvard Graduate School of Business. He currently teaches marketing and business courses at St. Thomas University, and serves as the Associate Editor for the STU Journal of Multidisciplinary

Studies.


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Criteria for Publication All articles published in the Journal of Multidisciplinary Research must make strong empirical contributions. Methodological articles are welcome, but they must contain accompanying theoretical and empirical contributions. All articles published in the Journal of Multidisciplinary Research must also be relevant to practice. The best submissions are those that identify both a compelling multidisciplinary issue and a strong theoretical framework for addressing it. We realize that practical relevance may be rather indirect in some cases; however, authors should be as specific as possible about potential implications. All articles published in the Journal of Multidisciplinary Research must be accessible to a wide-ranging readership. Authors should make evident the contributions of specialized research to general leadership theory and practice, should avoid jargon, and should define specialized terms and analytic techniques. Manuscripts should also be written as simply and concisely as possible without sacrificing meaningfulness or clarity of exposition. When first received, manuscripts will be evaluated by the journal Editor in terms of their contribution-to-length ratio – i.e., manuscripts that make strong contributions will be permitted more pages than those making narrower contributions. Initial guidelines are these: manuscripts should be about 25, double-spaced pages (using one-inch margins and the Times New Roman 12-point font), inclusive of references, tables, figures and appendixes. However, papers intended to make very extensive contributions or that require additional space for data presentation or references (such as meta-analyses, qualitative works, and work using multiple data sets) will, at the discretion of the Editor, be allotted additional space. Although it is generally in an author's best interests to be very judicious about manuscript length, we recognize that some manuscripts are more complex and extensive than others and we will attempt to accommodate such differences.

Submission Requirements

When authors submit their manuscripts to JMR for publication consideration, they agree to abide by JMR publication requirements. Specifically, an author must:

• Agree that their manuscript is not under review for publication elsewhere, and will not be submitted to another publication entity during the review period at JMR.

• Attest that the manuscript reports empirical results that have not been published previously. Authors, whose manuscripts utilize data that are reported in any other manuscript, published or not, are required to inform the editor of these reports at the time of submission.

• Confirm that their manuscripts have not previously been submitted to JMR for review. Submission of manuscripts previously published in conference proceedings is acceptable; similarly, prior presentation at a conference or concurrent consideration for presentation at a conference does not disqualify a manuscript from submission to JMR.


• Agree that working papers, prior drafts, and/or final versions of submitted manuscripts that are posted on a Web site (e.g., personal, departmental, university, or working series sites) will be taken down during the review process.

• All manuscripts should follow the APA 5th edition formatting guidelines. Manuscripts that are inappropriately prepared tend to be less favorably reviewed, and may be returned to the author for revision prior to submission to the full review process.

• Submitted articles must support the mission statement of the University (St. Thomas University, www.stu.edu).

The Review Process

Desk rejections. When a manuscript is first received, the editor makes an initial judgment (sometimes with the assistance of an expedited blind review) about the suitability of the manuscript for JMR. Manuscripts deemed not to fit with the mission of JMR (e.g., no conceptual foundation or no empirical data, for example) or to be extremely weak (e.g., containing fatal methodological flaws or no incremental theoretical or empirical contribution) may be rejected at this point. Normal review process. JMR is a peer-reviewed journal. For each manuscript that passes the initial review stage, the editor assigns an action editor (either him- or herself or an associate editor or guest editor) and two to three reviewers. The manuscript's action editor makes publication decisions about it. However, these decisions are made in conjunction with recommendations provided by members of the Journal's Editorial Board or other qualified reviewers. All submissions will be blind reviewed; manuscripts prepared in a way that compromises blind review may be returned for revision prior to being reviewed.

Submission of a manuscript to the Journal also carries an implicit quid pro quo: willingness to review for the JMR. The cornerstone of the editorial process at JMR is the willingness of colleagues to provide each other feedback through the peer review process. Authors who submit manuscripts to JMR for review are expected to reciprocate by reviewing for JMR if called upon to do so.

The Journal strives to provide constructive and developmental feedback to authors within approximately 5 weeks. However, the initial quality of the manuscript can dramatically influence both the efficiency and effectiveness of the review process. The better developed a manuscript and the ideas it contains, the easier it will be to review, and the better the feedback its author will receive. Therefore, manuscripts should always be reviewed by your scholarly colleagues prior to submission to the Journal.

Technical note: Authors who use the tracking facility of the reviewing tool in working on successive versions of their manuscripts should be aware that the latest versions of Word (e.g., those using Windows XP and above) show corrections to previous versions if the “Showing Markup” option is clicked when the Reviewing tool


bar is activated. To prevent showing corrections before submitting your manuscript you should (1) click on “Final,” (2) select the entire document, and then (3) save this version as a new file under a new name. Submit this “clean” version. To submit a manuscript, first make sure you have a Word file from which the title page and all author-identifying references have been removed. Then send it to the Editor.

ABOUT THE JOURNAL OF MULTIDISCIPLINARY RESEARCH

ADVERTISING For advertising information, please contact the Journal editor.

DISCLAIMER The publisher, editor, and associate editors cannot be held responsible for errors or any consequences arising from the use of information contained in this journal; the views and opinions expressed do not necessarily reflect those of the publisher, editor and associate editors, neither does the publication of advertisements constitute any endorsement by the publisher, editor and associate editors of the products advertised.

EDITORIAL BOARD MEMBERSHIP The editor of JMR is elected for a 1-year term (2 journal issues). Renewal of term is possible if elected by the Editorial Board. The same applies to the positions of associate editors. Reviewers are elected for a 2-year term. Practitioners or researchers interested in becoming a reviewer for JMR should submit a letter of interest and curriculum vitae to the editor of the Journal.


JOURNAL OF MULTIDISCIPLINARY RESEARCH Volume 1, Issue 1 – Spring 2009

FOREWORD


ARTICLES

Got Values? Training and Cross-Cultural Understanding

Angeles Carioni, Barry University Mary Claire Mucenic, Barry University Carlos E. Ruiz, Georgia Gwinnett College

Pitfalls of the Use of Films in Management Education

Lynn M. Kendrick, Keiser University Marie-Line Germain, St. Thomas University

Human Capital Theory as a Motivator for HRD National Policies in Emerging Economies

Carlos E. Ruiz, Georgia Gwinnett College Angeles Carioni, Barry University Mary Claire Mucenic, Barry University

Averting Predatory Abusive Financial Advising Practices: The Case of the Elderly –

A Series of Didactic Frameworks

Nicole Grandmont-Gariboldi, St. Thomas University

BOOK REVIEWS

American Business since 1920: How it Worked by Thomas K. McCraw

Eldon H. Bernstein, Lynn University

Outliers: The Story of Success by Malcolm Gladwell

Hagai Gringarten, St. Thomas University

ISSN 1947-2900 (print) ISSN 1947-2919 (online)

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JMR - Volume 1, Issue 1 - Spring 2009