The Chemnitz University of Technology and the Faculty of Economics and Business Administration kindly invite students from their partner universities in all over the world to take part in the interdisciplinary and intercultural study program of the 7th American-African-European Summer School in Chemnitz. The summer school is supposed to be an outstanding learning opportunity to study organizational management and intercultural communication in an international setting. This year’s AAE summer school will focus on “Formal and Informal Economies in a Globalized World” as a result of discussions of the last summer school in South Africa 2012.

Introduction

Globalization is a blurring term. On the one hand, the ongoing discourse on Globalization promises a world society (Nassehi 2003). A world society includes the assumption that every person has open access to economic production and consumption to the same extent. Likewise, a world economy institutionalizes globally mimetic forms of organizations and enterprises (Drori et al. 2006): it is taken for granted that formal economic norms, rules and models work in principle everywhere in the same way. In this respect, formal economic institutions stand for more openness and inclusion than ever before.

On the other hand, besides the formal economies more informal economic practices appear. In fact, today there are vast regions that have only little opportunity to participate in the formal world economy (Luhmann 2000). In many countries huge parts of economic performance are achieved informally (Wallace et al. 2004). Most recently, it became obvious that also in developed economies informal practices are commonly accepted (Portes and Haller op. 2005). It is even stated that informal firms in developed economies, like the United States, Germany and France “are often larger than their counterparts in developing economies” (Bruton et al. 2012, 2). For instance, the developed industry nations have peripheral regions, lost suburbs and socially disadvantaged groups of people (Luhmann 1997b) that are vanishing from the screens of formal economy. Moreover, historically seen in different regions different versions of informal practices emerged. Social mechanisms like blat in countries of the former soviet area (Ledeneva 1998) can be compared to patronage and clientelism in African states (Hanke 1999) and to Guanxi in communist China (Yang 1994) as well as to other attributes of informal economy (e.g. Pfau-Effinger 2009; Pfau-Effinger and Sakac-Magdalenic 2010).

Themes and topics

For the 7th American-African-European Summer School 2013 at Chemnitz University of Technology following themes and topics could be proposed:

Culture and cultural diversity management

A lot of research in the field is done under the term culture. The exposition above, however, invites to take a more reflexive stance, i.e. reasoning why and how organizations and managers correspond to a cultural approach. The following topics could be addressed:

• The concept of national culture (e.g. Hofstede 2001) may be used as an explanation of unresolvable discrepancies and contradictions in formal and informal activities.
• A dilemma between what can be formally said and what informally can(‘t) be done (Brunsson 1993) may give a proper rational to install diversity management.
• The cultural approach helps to decrease the tensions between formal and informal institutions of the world economy.

Human resource management

Informal social structures may reduce the autonomy of organizations in the way they deploy their staff. For instance, low income jobs are often polished up by informal opportunities for promotion. The principle of meritocracy is often undermined by informal personal networks, seniority and other established ascriptions.

• Many countries put into place legal regulations that even formally counteract organizational recruiting practices. It would be worth to investigate how organizations informally react to such national recruiting demands.
• Professional careers may be influenced by the individual ability to act simultaneously in the formal and informal economy.
• HR departments also take into consideration informal expectations regarding social origin, ranking, status, and promotion of staff (Luhmann 2000; Tilly 1998).

Entrepreneurship, global leadership and innovation

While in formal organizations the bureaucratic line manager is most prevalent, informal structures can provide a more prolific ambience for charismatic leaders.

• Charismatic leaders are valued in innovation research and related to champions or promoters of innovation processes (Schon 1963; Rost 2007).
• The truly global(ized) leader could be seen as someone who has gained experience in informal economies (Osland 2012).
• Many researchers have emphasized the positive effects of informal structures and leaders for the economic development (Godfrey 2011). But there are hardly any in-depth studies showing this connection in detail.
• If informal practices supplement, support or even sabotage the formally legitimized economy, ethical issues emerge (Nwabuzor 2005).

Management accounting

The management accounting literature refers on a regular basis to the distinction informal/formal.

• The ‘normal way’ of implementing management accounting systems is to fulfill a formally pre-given set of rules as best one can. Only then, a guaranteed good functionality and at least success is guaranteed. Thus, informal hereby stands quite often for all the ‘irrational things’ that can happen during the implementation process and which should be limited. However, creativity and innovation are most likely diminished.

Schedule

Beside the insights students will gain from our summer school topic, the schedule of the AAE Summer School program is manifold. Our guests become excellent insights into studying, working, social life and the political system of Germany. Together with the accompanying guest lectures from our partner universities, the CUT Faculty of Economics and Business Administration provides the teaching staff. Courses are held mainly on CUT campus. Teaching is highly interactive and combined with group work. The theoretical work will be accompanied by an attractive social and leisure program, including a welcoming speech by the dean of the Faculty, field trips to cultural and industrial places in the region. The Summer School will be completed by a farewell party and submission of results and certificates to the participants.

The AAE Summer School is based on discourse and development of shared understandings and objectives among different continents. Over the years, the collaboration among the participating universities has been enormously enhanced towards a collective research and teaching platform.

Contact and application

For further information please contact the local organizing team at CUT:

• PD Dr. Andrea Fried, Chemnitz University of Technology and Linköping University, andrea.fried@liu.se
• Tina Obermeit, Chemnitz University of Technology, oti@hrz.tu-chemnitz.de
• Andreas Taffertshofer, Chemnitz University of Technology, ataf@hrz.tu-chemnitz.de

Students’ applications may be submitted to the respective home institution and under its local regulations.

Accordingly, students of the Chemnitz University of Technology are pleased to send their applications electronically including a letter of motivation, their current study record, and curriculum vitae to Mr. Andreas Taffertshofer (ataf@hrz.tu-chemnitz.de) until 20 May 2013.

References

Brunsson, N. (1993). Ideas and actions: Justification and hypocrisy as alternatives to control. Accounting, Organizations and Society, 18(6), 489-506.
Bruton, G. D., Ireland, R. D., & Ketchen, D. J. (2012). Toward a Research Agenda on the Informal Economy. Academy of Management Perspectives, 26(3), 1-11.
Drori, G. S., Meyer, J. W., & Hwang, H. (2006). Globalization and organization: World society and organizational change. Oxford, New York: Oxford University Press.
Godfrey, P. C. (2011). Toward a Theory of the Informal Economy. The Academy of Management Annals, 5(1), 231-277.
Hanke, S. (1999). Klientelismus als System: Die Reproduktion klientelistischer Netzwerke im Demokratisierungsprozess in Mali. In H.-J. Lauth & U. Liebert (Eds.), Im Schatten demokratischer Legitimität. Informelle Institutionen und politische Partizipation im interkulturellen Demokratievergleich (pp. 277-293). Opladen: Westdeutscher Verlag.
Henry, S., & Sills, S. (2006). Informal economic activity: Early thinking, conceptual shifts, continuing patterns and persistent issues – a Michigan study. Crime, Law and Social Change, 45, 263-284.
Hofstede, G. (2001). Culture’s consequences. Comparing values, behaviors, institutions, and organizations across nations (2. edition). Thousand Oaks: Sage.
Ledeneva, A. V. (1998). Russia’s economy of favours: Blat, networking, and informal exchange. Cambridge Russian, Soviet and post-Soviet studies: Vol. 102. Cambridge: Cambridge Univ. Press.
Luhmann, N. (1997a). Die Gesellschaft der Gesellschaft (1st ed.). Frankfurt am Main: Suhrkamp.
Luhmann, N. (1997b). Globalization or World society: How to conceive of modern society? International Review of Sociology, 7(1), 67-79.
Luhmann, N. (2000). Organisation und Entscheidung. Opladen: Westdeutscher Verlag.
Meyer, J. W., Drori, G. S., & Hwang, H. (2006). World Society and the Profileration of Formal Organization. In G. S. Drori, J. W. Meyer, & H. Hwang (Eds.), Globalization and organization. World society and organizational change (pp. 25-49). Oxford: Oxford University Press.
Nassehi, A. (2003). Geschlossenheit und Offenheit. Studien zur Theorie der modernen Gesellschaft (Orig.-Ausg., 1. Aufl.). Suhrkamp-Taschenbuch Wissenschaft ; 1636. Frankfurt am Main: Suhrkamp.
Nwabuzor, A. (2005). Corruption and Development: New Initiatives in Economic Openness and Strengthened Rule of Law. Journal of Business Ethics, 59(1-2), 121-138.
Osland, J. S. (2012). An Overview of the Global Leadership Literature. In M. E. Mendenhall (Ed.), Routledge global human resource management series. Global leadership. Research, practice, development (2nd ed., pp. 40-79). London: Routledge.
Pfau-Effinger, B. (2009). Varieties of Undeclared Work in European Societies. British Journal of Industrial Relations, 47(1), 79-99.
Pfau-Effinger, B., & Sakac-Magdalenic, S. (2010). Informal employment in the work-welfare arrangement of Germany. In E. Marcelli, C. C. Williams, & P. Joassart (Eds.), Informal work in developed nations (pp. 66-81). London, New York: Routledge.
Portes, A., & Haller, W. (op. 2005). The Informal Economy. In N. J. Smelser & R. Swedberg (Eds.), The Handbook of economic sociology (2nd ed., pp. 403-427). Princeton, N.J, New York: Princeton University Press; Russell Sage Foundation.
Rost, K. (2007). Promotors or Champions?: Pros and Cons of Role Specialisation for economic process. Schmalenbach Business Review, 59(4), 340-363.
Schon, D. A. (1963). Champions for Radical New Inventions. Harvard Business Review, 41(2), 77-86.
Tilly, C. (1998). Durable inequality. Berkeley: University of California Press.
Wallace, C., Haerpfer, C., & Latcheva, R. (2004). The Informal Economy in East-Central Europe 1991-1998. Retrieved from www.ihs.ac.at/publications/soc/ rs64.pdf
Williams, C. C. (2011). A Critical Evaluation of Competing Conceptualizations of Informal Employment: Some Lessons from England. Review of Social Economy, 69(2), 211-237.
Yang, M. M.-H. (1994). Gifts, favors, and banquets: The art of social relationships in China. Ithaca, N.Y: Cornell University Press.