jueves, 18 de marzo de 2010

CHINA

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China is the third world economy, the most populous country, the fourth in extension and the fastest growing economy. In the past years China has become one of the most important actors in the world.

China has a very traditionalist culture, which has existed for about 5,000 years. There are important factors that explain why people today behave the way they do; this behavior is present in each day’s life, including how they run and how the manage organizations. The most relevant factors that explain the culture are the four threads, the eight elements and the blend. It is also important to know what common problems are behind a Chinese organization.


The four threads

1. Agrarism: Chinese culture has been pretty attached to the land; still two thirds of the population lives in rural areas cultivating crops. Their concept of the time is different; crops usually take long to grow. Chinese retain their agrarian values, which makes them a collectivist society, because their survival depends on the group cooperation.
2. Morality: Chinese are deeply oriented towards a spiritual society, but not religious. Two thousand years ago Confucius wrote a moral code that has served as the foundation for the Chinese education. It has been the basis of their conduct which is based on obedience and benevolence. Another important philosophy is that from Taoism which looks for The Path, the middle point.
3. Pictographic Language: Chinese perceive things as a whole, they don’t break thing into details as most western people do. In negotiations they won’t follow a sequence; it all belongs to the same thing.
4. Wariness of foreigners: Chinese have suffered several invasions and attacks from different countries what has led to a mistrust of foreigners; this can only be overcome after a long time in which a good relationship has grown.


The eight elements

The most important are the first and the second, which some people say that one cannot enter China without these.

1. Guanxi (personal relations): Chinese place high importance on individuals' social capital within their group of friends, relatives, and close associates.
2. Mianzi (Face, social status): In Chinese business culture, a person's reputation and social standing rest on saving face. If Westerners cause the Chinese embarrassment or loss of composure, even unintentionally, it can be disastrous for business negotiations.
3. Zhongjian Ren (The Intermediary): Business deals for Americans in China don't have a chance without the zhongjian ren, the intermediary. In China, suspicion and distrust characterize all meetings with strangers.
4. Shehui Dengji (Social Status): Casualness does not play well in a country where the Confucian values of obedience and deference to one's superiors remain strong.
5. Renji Hexie (Interpersonal Harmony): Importance of harmonious relations between business partners. Any attempt to do business without first establishing harmony is rude.
6. Zhengti Guannian (Holistic Thinking): Chinese think in terms of the whole while westerns think sequentially and individualistically, breaking up complex negotiation tasks into a series of smaller issues: price, quantity, warranty, delivery, and so forth. Chinese negotiators tend to talk about those issues all at once.
7. Jiejian (Thrift): China's long history of economic and political instability has taught its people to save their money, a practice known as jiejian. The focus on savings results, in business negotiations, in a lot of bargaining over price—usually through haggling.
8. Chiku Nailao (Endurance, Relentlessness): Chinese are famous for their work ethic. But they take diligence one step further—to endurance.

The Blend

It is said that Chinese are a blend of Maoist bureaucrat, Confucian gentleman and a Sun Tzu-like strategist.
Maoist bureaucrat because they always follow the government’s plan for doing business and operating in China needs permission from different government’s instances. The land is owned by the government.
Confucian gentleman because they are always looking to cultivate morality, benevolence and establishing good relationships. Business derives from mutual trust.
Sun Tzu-like strategist because in China it is said that “the marketplace is a battlefield”; but they perceive war different from westerns. They base war on moral law.

Even though China has been doing effort to change some of its problems, they still remain and should be considered after doing business in order to be prepared. Issues such as violation of intellectual property, internal robbery of ideas, corruption and labor instability must have a contention plan to avoid them or deal with them the best way possible.

QUESTION

the relevance of Guanxi and the existence of Chinese business networks as supporting factors to the internationalization process of Chinese companies

For Chinese and Taiwanese companies guanxi is an essential thing completely relevant even in today’s world; the central theme for Chinese companies is harmony which builds a cooperative spirit, harmony is achieved by a correct guanxi. According to I Chun Lisa Chen and Mark Easterby-Smith in their text “Is Guanxi still working, while Chinese MNCs go global? The case of Taiwanese MNCs in the UK” they say that the competitive advantage of the Chinese companies relies on the resources between firms and in their internal assets; it means that these organizations use the network approach in which cooperation and relationships are the essence. But these cooperative inter-business relationships are based on the personal trust of the major bosses it means the guanxi between them. Guanxi is also important in employment relations in which guanxi means obedience to the superior and benevolence to the subordinates. Today’s world and its globalization have made Chinese organizations to adapt and nowadays they don’t like using guanxi to recruit people. Guanxi is the mean by which Chinese companies internationalize.

VIDEO



BIBLIOGRAPHY

I Chun Lisa Chen and Mark Easterby-Smith “Is Guanxi still working, while Chinese MNCs go global? The case of Taiwanese MNCs in the UK”
Images from www.istock.com

EAST ASIA

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East Asia is a region that covers eight countries: China, Japan, South Korea, North Korea, Macau, Mongolia, Hong Kong and Taiwan. The study will focus on the managerial systems of South Korea and Japanese firms since they are very representative countries from this region.

In order to understand phenomenons are affecting the organizations in those countries two concepts should be understood: convergence and divergence. Convergence states that as countries develops the management systems will converge to one model, usually based on those from developed countries. The comparative cultural approach or divergence states that there are some cultural norms that force managerial systems to match the internal environment then the culture limits the alternative strategies for the organizations of a given country.

What has occurred in Asia is that Japan, an Asian country, was able to develop its own managerial system so Asian firms can decide whether to converge to western or to non western development models for organizations.


The Japanese managerial system is very interested in market share, they tend to use aggressive pricing and search economies of scale. They use long term commitments with suppliers in order to take advantage of the close cooperation and coordination of the production process. They emphasize on building group consensus and group loyalty encouraging the participation of workers and the middle management employees. Japanese companies scan customers and competitors because they want to find the right kind of customer. Other important characteristic is that they connect product design and production.

The main entrepreneurial groups in Japan are called “Zaibatsu”; they are conglomerate of companies from diverse industries belonging to a group of people. Zaibatsus may own banks; this characteristic has created a huge gap between medium size companies that doesn’t belong to a Zaibatsu and those that does because these banks can give loans to their own companies even if they can’t afford the loans.


Korea has received a lot of influence from Japan; it was a Japanese colony for about 40 years. Managerial systems from these two countries are similar but also have differences. Koreans are more individualistic than the Japanese and this gives Korean a higher sense of freedom. Korean workers tend to change work more freely and they do not emphasize so much on group consensus and group loyalty. Managers in Korea tend to be more authoritarian and they are the ones taking the important decisions.


The main entrepreneurial groups in Korea are called “Chaebols”. They are also conglomerates of companies from diverse industries but they belong to a family and are managed by family members. The main difference between Chaebols and Zaibatsu is that the first ones can’t own banks. But there is a gap between firms belonging to Chaebols and those that don’t because the government used to give them many benefits due to their rates of exports.


Lee, Jangho, Thomas W. Roehl, & Soonkyoo Choe created a model in which they state that “ a national management system is influenced by the national culture and level of development” this means that as firms grow larger and become more internationalized they will tend to converge to a developed managerial system; in this case large and internationalized Korean firms will tend to converge to Japanese firms. They found that sometimes Korean organizations are more Japanese than the Japanese themselves because Korean companies tend to emphasize even more in market share and profit maximization. Internationalized Korean firms converge to Japanese firms even more than large Korean firms.


QUESTION

In the case of Korean and Japanese management styles, do you think they tend to converge or diverge? Are they likely to converge to each other or to other management styles

In the case of Korean and Japanese management styles they tend to converge as Korean firms grow larger and become more internationalized. The Korean management style is likely to converge to the Japanese one, and Japanese companies have their own way for doing things in international markets, that means that Japanese organizations are not converging to a western management style but creating their own. It is said that as Korean firms grow larger and become more internationalized they often are “more Japanese than the Japanese themselves” what means that Korean companies study so hard and have so strong incentives to incorporate Japanese management styles that while the Japanese move on and create new ways Korean are still doing what the Japanese did some time ago.


BIBLIOGRAPHY

Lee, Jangho, Thomas W. Roehl, & Soonkyoo Choe. 2000. What Makes Management Style Similar and Distinct Across Borders? Growth, Experience and Culture in Korean and Japanese Firms. Journal of International Business Studies


Images from http://www.istock.com/


martes, 16 de marzo de 2010


An expatriate is a person sent outside his country to work in a temporary basis. After accomplishing the job, the person will return to his position in the same company and in the same country.

The main reason for a company to use expatriate assignments is that they need a person with deep knowledge of the company´s strategy, procedures and philosophy to work in a subsidiary. What the organization expects is that this person transfer to those working in the subsidiaries new skills and knowledge, organizational learning and the completion of the proposed assignment.

It is true that a person working in the headquarters of the company is more related with the strategies and procedures, but expatriate can face problems and deal with mistakes such as:
§ A succession plan is not created so when the person accomplishes his assignment the company doesn’t have another suitable person for the job.
§ Sometimes the candidate is chosen because of his managerial and technical skills, but his adaptability is not measured, what could lead to a failure of the assignment.
§ It is important to provide a proper cross-cultural training, if not, the outcomes will take longer or may not be the expected ones.
§ The person working abroad must feel safe about his returning that he will have his position back in the company.
§ Because of problems of adaptability a person could return early or quit. 40% of expatriates return early meaning high costs for the company.

There are three levels involved in expatriate assignments:
1. Individual: An individual may feel that rejecting an expatriate assignment could be perceived as if the person is not committed to the company (powerlessness); he may also feel that he needs to go abroad just because the company asks him to do so (good corporate citizen); or he may feel that he is developing his career.
2. Company: It could use expatriate to fill a position with short term objectives or to develop competences to bring home.
3. Industry: Expatriates can build national and industry expertise and can transfer cross cultural skills.

There are three alternatives and four approaches for expatriate assignments.
Alternatives:
1. Parent Home Country (PCN): using a person from the office’s headquarters; they are very familiar with the organization and the way to do things.
2. Host Country National (HCN): using a person from the new subsidiary’s country. They know how the host country works and are very familiar with the culture.
3. Third Country National (TCN): using a person from a third country. He might be the best prepared and most suitable for the job.

Approaches:
1. Ethnocentric: The parent country is the best and its nationals are the one that know better how to work in the organization.
2. Polycentric:
3. Geocentric: using the best guy wherever he comes from.
4. Global staffing approach: it means finding a global manager who can develops well in any country in any job. It might be just a dream.
For managing expatriates and avoiding possibilities of failure it is important to have appropriate selection criteria, good preparation, proper compensation and a succession plan.

OVERSEAS EXPERIENCES

It is a personal decision to go abroad in a temporary basis. Its goals are the individual development, geographical exploration, cultural experience and career development. It is done through savings and casual earnings and for a boundary less career.
Some believe that an oversea experience has no apparent career value, but from it can result several good things such as valuable social networks, broadening perspectives, awareness of cultural differences and building confidence and independence.

QUESTION
Explain one of the causes for expatriate assignment failure and provide 3 recommendations to address it.
One of the causes for expatriate assignments is the inability to adjust to the new environment, what at the same time can be caused for several reasons such as cultural shock, the inability of the expatriate family to adjust or the impossibility to match the lifestyle they had in their home country without going into huge personal expenses.

Must people suffer in some degree of cultural shock but if the person was prepared enough to deal with differences he will be able to go overcome that shock without major consequences. The impossibility to match the lifestyle the expat and his family had in their home country is normally a matter of cash, which can be prevented from before doing a proper investigation about possible expenditures and how much does it cost for the company providing the expatriate with almost the same resources; it could be done through an evaluation of the purchasing power parity or consulting with experts in that matter. But when the problem has to do with the inability of the family to adjust is usually a bigger problem, because it does not has to do with the expat himself or with the company itself, it is a problem beyond the control of the organization but affects deeply the expatriate and his performance.

So here I propose some possible recommendations to address the inability for the family to adjust could be:

- Prepare the expat as well as his family to deal with the differences in the new culture, giving accurate information and giving them possible scenarios that can be found in the new country.
- Test the ability of the expatriate and of his family for adjusting to new environments, because there might be another person with good skills as well and less possibility of early return.

BIBLIOGRAPHY
Inkson, Kerr et al. 1999. Expatriate assignments and overseas experience – contrasting models of international human resource development. Journal of World Business. 34: 351-368.
Images from www.istock.com

lunes, 15 de marzo de 2010

MIGRANT WORKERS

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A migrant is a person who is to be engaged or has been engaged in a remunerated activity in a state of which he or she is not a national.

Migrants must face problems such as:
§ Problems of adjustment: Migrants are seen as illegal, but they still contribute to the country’s economy.
§ In most cases, migrants don’t have the same rights that national people have.
§ Problems with the re-unification of families
§ Migrant’s children don’t have the rights for education
§ Without status, migrants are a natural target of exploitation.

To help migrants with these problems there are some conventions aiming to protect migrant’s rights. The International Migration Convention and the UN Convention on the rights of migrants are good examples. These conventions are trying to play a role in preventing and eliminating the exploitation of all migrant workers and members of their families through the whole migration process. The Committee on Migrant Workers is the one monitoring the implementation of the international rights.

The impact migrants have over the economy depends on the sector they are working. The economy on migrant workers is different depending on their distribution among economic sectors. As a consequence of economic crisis many people may decide to look for better opportunities in cities and countries with higher living standards and incomes, this means that the host cities and countries have to deal with new cultures brought by migrants, which creates sub cultures.

There are several reasons for people to migrate; there can be economic, social or political reasons.

Illegal immigration in a rising problem, and sometimes it means death for migrants. Every day is more difficult for those living in developing countries to migrate legally to developed ones; the increasing security and blockades to illegal migrants has caused them to look for more dangerous ways to enter the countries. Illegal migration is a crime, it means it can be controlled but it cannot be eliminated.

It is important not to blame migrants for the host country’s problems; migrants pay taxes and spend money and they are willing to work in those tasks most of the people don’t want to do.


VIDEO



QUESTION
¿Do you think the Points System in Canada is meant to protect the country’s sovereignity?, or ¿is it just a deliberated form of discrimination? ¿why?
I think the points system in Canada are a way of protecting their own sovereignty because they are looking for the best candidates for their country, otherwise immigration could become a problematic issue difficult to manage that threatens the national security. I don’t perceive it as deliberated discrimination because according to the points system is not based on prejudices about gender, age or race; the points system implies discrimination in the sense of knowing what best but not in the sense of basing rejection in things a person cannot change. The points system may encourage some to prepare better and then gain the possibility to make a living in the country.


BIBLIOGRAPHY
Verbeeten, David. 2007. The Past and Future of Immigration to Canada. Journal of International Migration & Integration

The Chartered Institute of Personnel and Development defines: “Managing diversity is about ensuring that all employees have the opportunity to maximize their potential and enhance their self-development and their contribution to the organization.”


Diversity is everywhere; you can find it at the marketplace, at the workplace and at the workforce; then it can´t be said that managing diversity is an exclusive topic for the Human Resource management in the organization; a really committed company towards diversity needs it to be part of its organizational culture: “Diversity is a source of competitive advantage only when it represents a deep commitment to the inherent values, beliefs, and behavioral norms of the organization” (Slater, Stanley et al “The business case for commitment to diversity” Kelley School of Businesses).


An organization may manage diversity with any of these two approaches:
1. Managing Diversity: It means believing we are all different being able to deal with those differences, maximizing each one’s potential.
2. Equal Opportunities: It means believing we are all the same; then it is necessary to enforce laws to provide equal opportunities.


It is said that managing diversity is a source of competitive advantage. A competitive advantage is build when a specific thing is difficult to imitate or substitute: “of all of the resources of the firm, the human resource is the least substitutable in the long-run.” (Slater, Stanley et al “The business case for commitment to diversity” Kelley School of Businesses).

“Human capital is a source of competitive advantage when employees either possess more competitively valuable skills or when they are better matched to the strategic needs of the firm.” (Slater, Stanley et al “The business case for commitment to diversity” Kelley School of Businesses).


Managing diversity can bring advantages in terms of:

§ Cost: workers with the best skills and abilities are selected for jobs that require these skills.
§ Resource acquisition: effective systems facilitate the acquisition and retention of valuable and rare human resources, while high quality human resources shape the human resource management system.
§ Marketing: Diverse groups can connect the company with variety of customers.
§ Creativity: As people think from really different points of view they will bring more ideas leading to innovation.
§ Problem solving: A wider range of perspectives can bring the best solution.
§ Flexibility and change management: Diversity brings faster reactions.


There are also some other potential benefits for the organization when managing diversity, such as having a more satisfied workforce feeling they are treated fairly; higher stock prices because of the perception about management practices; lower litigation expenses because of bad publicity; all resulting in a higher company performance .


But managing diversity is not always about benefits and advantages; it presents some challenges that need to be treated in order to maximize those benefits. As people tend to feel more attracted towards those who are similar, diversity can increase the costs of communication making it less frequent and effective, diversity may also lead to emotional conflicts decreasing the group’s cohesiveness and incentives for cooperation which results in a higher employee turnover. Stereotypes also present a challenge because they are used to make decisions about particular individuals what can lead to unfair decision making.


When diversity is part of the organization conflict will always appear; the company must be prepared for it, assuring itself to take advantage of it because conflict in certain scenarios can be a positive thing.


“The costs of diversity are more likely to outweigh the benefits when diversity is seen as a program, rather than as an organizational commitment that will produce superior business results.” (Slater, Stanley et al “The business case for commitment to diversity” Kelley School of Businesses).


QUESTION


1. Is diversity management at IBM a source of competitive advantage? Why?
Diversity management at IBM is definitively a source of competitive advantage because by encouraging diversity within the organization IBM created ways to appeal to a broader set of employees and customers and by seeking those ways effectively IBM has seen good bottom line results. As Lou Gerstner says “We made diversity a market-based issue....It's about understanding our markets, which are diverse and multicultural.”


2. Does the IBM case reflects a strong organizational commitment to diversity? Why?
IBM case is a clear reflect of organizational commitment to diversity because they stated diversity as a strategic goal for the company. They created a new approach of calling attention to differences, with the hope of learning from them and making improvements to the business. IBM also encouraged employees to respond with specific suggestions for how to make IBM a more inclusive environment.


BIBLIOGRAPHY

Slater, Stanley F., Weigand, Robert A., Zweilein, Thomas J., 2008. “ The business case for commitment to diversity”. Business Horizons 51: 201-209.

Thomas, David A., 2004. “Diversity as Strategy”, Harvard Business Review, September 2004, 98-108.

Image from www.gettyimages.com

According to LEADER (Local Employees Acting on Diversity, Equality and Race) diversity “consists of visible and non-visible factors, which include personal characteristics such as background, culture, personality and work-style in addition to the characteristics that are protected under discrimination legislation in terms of race, disability, gender, religion and belief, sexual orientation and age.”

In order to understand how diverse a group is, it is necessary to keep in mind what makes us similar and what makes us different within the group. But it is very important to notice that a well understanding of diversity comes from exploring more than obvious differences because it might be just the tip of the iceberg. Really important things are hidden.

Diversity is composed by three dimensions:
1. Visible: such as age, gender, physical attributes, ethnicity
2. Invisible: education, skills, religion, political views, work experience
3. Core: personality, sexual orientation, work style, personal truths.

The concept of diversity becomes important because it means acceptance and respect, accepting that every individual is unique, but not every person accepts diversity, when it happens it is called discrimination.

United Nations says: "Discriminatory behaviors take many forms, but they all involve some form of exclusion or rejection.”. Discriminatory laws exist in many countries in order to prevent it and to provide equal opportunities; issues such as gender, disabilities, religion, race and sexual orientation are the most common ones.

To avoid discrimination and understand diversity one must have certain competences, which include flexibility, vision, tolerance, cultural consciousness, and cultural self-awareness, among others.

Diversity brings the ability to operate in a variety of situations; it also can create a productive environment because every single talent is fully recognized and utilized.
VIDEO
Is an ironic video, what could happen if one does not understand diversity...

QUESTION
¿Do you think the entry and integration of new members to the European Union are processes that promote diversity? or, on the contrary, ¿strive to homogenize the European Society?
It promotes diversity. The laws in the EU regarding the free movement of citizens across the member states are creating a new phenomenon that has been called “the creation of new minorities” in different countries, this is happening while the EU and different member states are trying to deal with the old minorities located in certain regions for a longer period of time.

The entry and integration processes introduced by the EU are processes that strive to protect the different interest of these minorities and promote diversity in the region by ensuring the continuity of the unique characteristics of these groups such as language and values.

An example of the efforts done by the EU to protect the diversity and integration through the whole territory is the creation of the European Monitoring Centre on Racism and Xenophobia that is in charge of look after the citizen and human rights of the migrants and that they integrate easily to their new country. Another example is the way schools are teaching the kids of the migrant workers the language of their home country.

It is easy to imagine how in an integration process as the one being done in the European Union the outcome will be the homogenization of the population but as we have seen the EU is doing what it’s in their power to protect and ensure the rich diversity of all the different cultures that coexist within its borders.
BIBLIOGRAPHY
Toggenburg, Gabriel N. 2005. “Who is managing ethnic and cultural diversity in the European Condominium? The moments of entry, integration and preservation”. Journal of Common Market Studies

National Culture


It is the combination of some aspects that identifies a group of people. Those aspects are passed on from generation to generation and include things such as values; goals; religion; body language; custom; social structure and attitudes toward time, work and cultural change, among others. These shared aspects result in common codes of conduct and behavior.

It could be said that culture has two main functions:
1. Help members identify themselves and,
2. Differentiate the group from others.

But when analyzing a national culture it is very important to keep in mind it is comprised by some subcultures, that even belonging to the same “big culture” they have differences among them; those differences are very important to analyze because can lead to great success or big failures.

A single person can be part of different subcultures at the same time; the combination is what shapes his behavior, which doesn’t crash with national culture, they go along.


Organizational Culture

Organizational culture certainly has to do with national culture; it is almost a rule that the second one will have great influence in the first one. It is so true that even Hofstede says that some managers confuse both cultures and try to change it; but then he states: “You cannot turn around a national culture”.

Organizational culture in simple words could be defined as “the way we do things around here”; it provides guidance to behaviors, influences, decision making and if it is carried in a proper way it can win the hearts and minds of the employees.

As for national culture, organizational culture has two main functions:
1. Internal Integration and,
2. External adaptation

But since organizational culture is the whole set of norms, assumptions and practices people inside an organization adopt over time, it means that an organizational cultures take time to develop. Culture becomes then a matter of deep believing.

If it is a matter of deep believing, then it is not completely correct talking about changing corporate culture; even though much people believe to have the correct recipe for doing so. Changing corporate culture is not necessarily the best option; sometimes it turns out better changing something else than culture itself. It means using your own culture to do the changes that need to be made; then you won’t go against company’s core believes.

Thanks to globalization and changing environments; organizations are facing major modifications which affect corporate culture.

First, culture matters a lot when crossing borders;
second globalization, says Hofstede, “you need people who make slow decisions, who think before they act, who don't immediately voice any opinions, who are prepared to go against established practice.";
third, trying to change corporate culture to make changes means going against nature; change needs to happen and if it works out then it can became culture; the process does not work backwards.
The fourth and last issue is that the challenge of contemporary managers may not be establishing a corporate culture, but to help each subculture inside the organization to maximize their own strengths in order to contribute to the whole company.


QUESTION

Do you think there is a corporate culture in every organization?

I believe there is a corporate culture in every organization; every company has its own way for doing things which characterizes it and differentiates it from other companies. But I also think that the corporate culture such as we knew it is changing and adapting itself to fit in a globalized world because now we can’t pretend to find a company with rigid values and an unbreakable way for doing things, as globalization reaches more countries and people and as behaviors change it is necessary that companies go in the same direction. With higher turnover rates and more national cultures interacting it becomes more difficult to establish values and norms, but it does not mean that an organization lacks those elements because I think that when a company is created it “born” with its own unique characteristics, it own and special culture, which can vary with time but remains the same in essence.
Assuming there is a corporate culture in every organization I think it can’t be modified because when it reaches the status of culture it means that every single person in the organization has interiorized the values and ways; trying to change those means switching things that are deep inside. If a company changes its corporate culture it is very possible to create a situation in which the employees get confused and go in different directions from the ones the company wanted. A strong organizational culture may lead to the failure of processes that require deep organizational change, if a company wants to merge with another and both of them have strong cultures there is a high chance of failure, but if a company has a stronger culture the most possible outcome is that it will eliminate the other’s company way of doing things.


BIBLIOGRAPHY

Millman, Gregory J. . 2007. "Corporate Culture: more myth than reality? ." The Free Library 23:44-47. Millman, Gregory J. (2007, July 1)
Images from www.gettyimages.com