Cross Cultural Management Case Study
The Shanghai Michelin Warrior
Cross Cultural Management Case Study
Shanghai Michelin Warrior refers to a Chinese-based tire manufacturer. The company was established through a joint venture between Michelin and Shanghai Tire and Rubber Group Ltd from France and China respectively. The year 2008 was one of the most difficult years for the company after it recorded huge losses since the company its inception. The firm failed in the sector despite having it compete against the other players in the market through its tire manufacturing.
The company’s plant manager reported that the members of the workforce lacked trust in the firm’s management. As a result, the staff lacked morale and were unable to be disciplined when completing their tasks within the workplace. According to Lane and Maznevskski (2019), building trust between the members of the team is an effective consideration since it reduces the potential for conflict development as a result of conflict development.
Additionally, it is evident that the establishment of the joint venture resulted in the creation of a culturally diverse workforce. This is founded on the fact that the new venture was primary composed of workers with a French and Chinese background. Looking at the functionality of the team, it is evident that a lack of cohesiveness was evident primarily driven by the variance in culture among the people. Arguably, communication was a problem, as the employees could not understand each other’s language.
Accountability was also an issue experienced within the workplace. Despite the fact that the workers were required to work in shifts, a dilution of responsibilities became a common factor. Arguably, the members of the workforce could not be held accountable in the events whereby something went wrong in the workplace.
The establishment of the joint venture resulted in the inclusion of 2,000 workers from Shanghai Corporation. Out of this figure, 700 were known to be those of a low performance. This contributed towards the general reduction in the performance of the firm. This is founded on the fact that the company had promised the people that it would not fire any of them. The firm’s performance appraisal was also inefficient which contributed towards the lack of motivation exhibited by the employees. There was a need for the firm to make its performance appraisal. However, Michelin did not consider this as an effective move to be implemented.
Change in Organizational Culture
Change in the culture of the organization is considered as one of the fundamental factors that should be considered to address the challenges experienced within the firm. The culture of the firm will provide a guide for employees regarding how they are required to execute their activities while in the workplace. Organization culture outlines the norms, believes and values which the employees are required to abide by as a standard (Lane & Maznevskski, 2019). The joint venture which resulted to the establishment of Shanghai Michelin Warrior shows that the firm was established through a blend of the culture from two firms. As a result, the staff members experienced difficulties in understanding what was required of them due to the varying culture. Notably, the members of the workforce were required to work in a culture that was different from that of their own as recorded by their previous workplace setting. With this challenge, understanding the corporate culture proved to be a factor of concern. The alteration experienced in the corporate culture negatively influenced the employee’s performance since the unclear culture hindered the employees from effectively performing while in the workplace. Theory X provides a depiction of the fact that workers should be psychologically comfortable to ensure that they can be motivated to perform better while in the workplace.
The Use of Technology
The changes in technology during the establishment of the joint venture is considered as a primary factor which also contributed to the challenge being experienced by the firm. The case study relays that the management continually pressured Mr. Ballarin to implement the use of Management System of Daily Production (MDP). It is evident that Mr. Ballarin was not in favor of the implementation of the technology based on the fact that most of the staff were unaware of how to manipulate the technology. Therefore, implementing the use of the technology would negatively influence the performance of the members of the workforce.
However, it is evident that the use of technology in the workplace is an effective consideration which boosts employee’s performance. Therefore, it is recommended that the management should allocate its efforts towards training the employees about how to effectively use the MDP technology for desirable outcome. When the workers are trained about how to use the technology, chances are higher that they will feel comfortable using it in the workplace. The use of technology in the workplace will be effective in boosting the production capabilities of the workers, thus increasing the production capabilities of the employees as well as the firm’s performance.
Transforming the Firm’s Incentive System
The formation of the joint venture resulted in a transformation of the firm’s incentive system due to a change of its leadership. The previous employee incentive program included a situation whereby the members of the workforce were provided with targets which they were required to attain despite them being high. The high targets functioned as a source of motivation for the people to put in an extra effort so that they could be compensated for their extra performance. However, it is evident that the members of the workforce were discouraged by the high targets which most of them considered as difficult to meet.
Providing the staff with desirable compensation packages defined by bonuses for their extra work is considered an effective move which can encourage the staff to put in an extra effort in their work. Therefore, it is recommended that the management should include more benefits for the employees as a source of motivation. When the members of the workforce are motivated, chances are higher that they will put in an extra effort to ensure that they meet their set targets in the workplace. The outcome of an improved employee motivation involves an enhancement of the general performance of the firm.
The firm’s Quality Management System
The decline in sales recorded by the joint venture in 2008 is accrued to the failure of the firm’s quality management system. Therefore, it is recommended that a change should be implemented within the firm’s quality management system to ensure that production challenges no longer be a concern. It is evident that the company had to halt its production as a result to rejections. However, with a system change, it is evident that the employees with focus on improving on its productivity rates as well as the general performance of the members of the workforce.
To overcome the cultural difference issue, it is recommended that the members of the workforce should be educated about how to interact effectively with the members of the workforce despite their variance in culture. The training will be effective in assisting the members of the workforce in recognizing their personal beliefs, values and standards and how it differs from others. Such training will be effective in ensuring that the staff members recognize cultural differences by understanding the fact that different cultures will vary based on their values and beliefs. Recognizing these differences will make it easier for the members of the workforce to overcome their communication barriers to ensure that they are more comfortable working in teams.
It is fact that communication proved to be a barrier within the team. The fact that the members of the company originated from different cultural backgrounds understanding each other’s language proved to be a factor of concern. However, when the employees are educated on the effective means of communication despite their cultural differences, it is evident that the cultural challenges will be overcome. Notably, global leaders have a responsibility of ensuring this consideration by ensuring that the staff interact easily with each other despite their cultural variances (Lane & Maznevskski, 2019). Furthermore, the leaders have a responsibility of ensuring that they can supervise employees from varied nationalities to ensure a successful outcome.
The employees should also be educated on the aspect of mindful communication. This will be desirable in ensuring that the staff value differences and learn to respect the variance in communication. This is considered an effective move since it eliminates the potential of conflict development in the workplace.
Lane, H. W. & Maznevskski, M. (2019). International Management Behavior. Cambridge University Press. DOI: 10.1017/9781108637152