1. Cultural Issues and Supply Chain Sustainability of Multinational Companies

In August 2007 Mattel was forced to recall 19 million Chinese-made toys worldwide because the toys contained too high a level of lead. The recall was the latest in a series of such actions that in the same year involving Chinese-made goods, including contaminated pet food ingredients, children’s jewellery, defective tires and tainted toothpaste. In July, one of Mattel’s European retail partners noticed lead paint on some of its toys, and Mattel began an extensive investigation of the toys in its distribution chain and of the contract manufacturers that make half of its toys. The scandal fought because contract and subcontract Chinese manufactures deliberately violated their production agreements with Mattel. According to Roloff and Aßländer (2010), some potential causes for the violation were identified. First of all, the delegation of control and then the lack of commitment of the foreign partners were seen as crucial factors for Mattel. As the authors reported, in one case, the CEO of the partner company deliberately ignored the agreement with Mattel when he bought the paint from a friend. In addition, many Chinese manufacturers found it difficult to produce at low cost while meeting the requests of Western customers which demanded both low prices and higher social and environmental standards. Thus, they were forced to bend some of the rules and hide the violations to stay in business with. Also, differences in national cultures contributed to the supplier’s non-compliance as well as the high expectations of consumers and society regarding ethical production standards contributed to aggravate the problem.

Hofstede (1980) considered values “broad tendency[-ies] to prefer certain states of affairs over others” (p. 19). The scholar studied national culture differences through the analysis of some 116,000 survey questionnaires administered to employees of the IBM Corporation and identified five main dimensions of the national culture. They are: (1) Power Distance, i.e. the degree to which the less powerful members of a society accept or expect that power is distributed unequally; (2) Individualism versus Collectivism (IDV) that explores the degree to which people in a society are or not integrated into group; (3) Masculinity versus Femininity that represents a preference in society for achievement, heroism, assertiveness and material rewards for success in opposition to femininity that stands for a preference for cooperation, modesty, caring for the weak and quality of life; (4) Uncertainty Avoidance dimension expresses the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity; and (5) Long-term orientation versus Short-term orientation that associates the connection of the past with the current and future actions/challenges.

The “Global Leadership and Organizational Behaviour Effectiveness” (GLOBE) Research Program conceived in 1991 by Robert J. House of the Wharton School of Business empirically established nine cultural dimensions that make it possible to capture the similarities and/or differences in norms, values, beliefs—and practices—among societies. They build on findings by Hofstede (1980), Schwartz (1994), Smith and Hume 2005, and others. Power Distance: the degree to which members of a collective expect power to be distributed equally. Uncertainty Avoidance: the extent to which a society, organization or group relies on social norms, rules and procedures to alleviate unpredictability of future events. Humane Orientation: the degree to which a collective encourages and rewards individuals for being fair, altruistic, generous, caring and kind to others. Collectivism I: (Institutional) the degree to which organizational and societal institutional practices encourage and reward collective distribution of resources and collective action. Collectivism II: (In-Group) the degree to which individuals expresses pride, loyalty and cohesiveness in their organizations or families. Assertiveness: the degree to which individuals are assertive, confrontational and aggressive in their relationships with others. Gender Egalitarianism: the degree to which a collective minimizes gender inequality. Future Orientation: the extent to which individuals engage in future-oriented behaviours such as delaying gratification, planning and investing in the future. Performance Orientation: the degree to which a collective encourages and rewards group members for performance improvement ad excellence. (for more details see Chhokar et al. (2007).