Cross-Cultural Management in Airbus Company - Case Study Example

? Cross Cultural Management Cross Cultural Management: Airbus Airbus is a company dealing with manufacturing of aircrafts. It was first established as a European consortium in 1970 (Jackson, 2004). Airbus head office is located in Toulouse. In addition, France functions out of more than one hundred and sixty international locations. They include sixteen main manufacturing and development sites in United Kingdom, France, Spain and Germany. The airbus company has three wholly owned companies in Japan, North America and China. The airbus company gets its profits from a distinctive workforce that comprises more than eighty nationalities, and the employees speak over twenty languages. The factors that keep the airbus company a leading industry in the market are the hard work done by the employees, the company’s vision and the human talent. The workforce at the airbus manufacturing company is geographically distributed in proportion to national ownership. In case of economic nationalism, the government changes private transactions amid economic actors by segregating foreigners. This led to productive efficiency decrease. This is because of the differences in ways of communication and management styles (Silverthorne, 2005). For instance, comparing the French and the Germans, the latter were better at decision making. On the other hand, the French people preferred a centralized decision. Even though the Spanish were flexible, they had an inferiority complex leading to a tendency to be unreliable and vague. The main problem arose when the airbus company was created. It was mainly headed by French and Germans. Looking from the cultural dimensions from Hofstedes, the French people liked air buses with high power distances while the Germans liked air buses with low power distances. In decision making, the Germans were interfering in serious conversations while it was disliked by the French people. This hurt the French people and created conflict between them. Due to the administration involvement in respective countries, there were delays in the cost cutting measures. This is because the state aid came to rescue their corresponding partners first. The power identification of the Germans and the French was distributed unevenly. The government was self-centered and was considering only its own motives. One of the main reasons that led to delays in launching airbus A380 for two consecutive years was the fact that complex writing design system was meant for it. There were one thousand two hundred functions used in controlling the airbus that took forty thousand connectors and ninety eight thousand wires. Fifty thousand models are encompassed in the system which needs to be synchronized in various countries. This was time consuming and complicated because the engineers were at different locations. Another problem was that the parts of the airbus were manufactured in different locations. An example is that the nose sections of the airbus were manufactured in France, the wings in Britain, and fuselages in Germany (Silverthorne, 2005). The final assemblies were done in France. It increased communication problems, first and foremost, time consumption and transportation cost. There were problems with the software used in the development as well. The engineers in Spain and Germany were using older versions of V4 of the CAD program. They used it in designing the wiring system. On the other hand, engineers from England and France used V5, which was the latest version (Voich and Stepina, 2003). This led to a lot of troubles and delays in data transferring because the data was lost when transferring files and information from one system to the other. The French engineers were familiar with the software used while the Germans, on the other hand, were not experienced. Jackson (2004) reveals that the French were considered to be individualistic because they were not concerned about the training of the related partner companies. Because there was no integration in engineering concepts, the software developed failed while being executed. When the human resource team had to urgently educate, communicate with and train the employees concerning the software issues, they were concerning themselves in responding to the legislation put in place. The legislation put was that the people putting their concerns on the labor working hours were to choose their own ways to train themselves. Because the French people are individualistic, they tended to sort out their problems first, which made them busy doing unimportant things compared to the training issues. The top managers of the airbus company were putting more effort into fighting for their senior positions in the association (Voich and Stepina, 2003). On the other hand, they lobbied for their influence. These made them influence the company with political goals rather than project goals. This showed how top managers in the company were more individualistic. Their main concerns were to retain their positions rather than to implement appropriate strategies to the company. On the other hand, they did not partake in solving the company’s problems. This led to poor decision making in the airbus company. Due to these problems, airbus A380, which was scheduled to be launched in 2006, was delayed for almost two years (Silverthorne, 2005). This delay forced various airline companies to cancel the orders made from the airbus company. The company faced two million Euros loss because they had to make extreme cuts in the workforce size and close some of its assemblies. This gave the airbus company a bad image in the current market. The airbus company invested heavily in training their employees by the assistance of the software supplier. This was to help in designing the wiring system and resolving the software issues. On the other hand, the company tried setting up intercultural sessions that could help them stimulate a warm feeling of shared understanding. By doing so, the company failed in addressing the company’s fundamentals. The managers were trying to draw attention to the areas that were common and similar, rather than the differences. This was to enable them to tackle the cross cultural differences they had. The company distributed its workforce geographically as they thought the company’s productive efficiency increased. In the airbus company, economic patriotism played a vital role in the government problems relative to different countries. The workforce in this company is distributed geographically making workers to be far from each other. This will increase the company’s productive efficiency. In case of people not supporting their respective countries and rights, the government changes the private transactions done by companies so that they may protect the interests of local economies (Selmer, 1998). In addition, the government tried to solve these issues by discriminating foreigners in the name of nationwide interest. Procassini (1995) reveals that the strategic motives of the airbus company were to include national security so that they would capture rent abroad in the monopolistic market. The patriotic approach used by the company showed how the company was ineffective. This is because the approach engendered a lot of conflicts with the company’s economic efficiency that derived from the local lobbies’ protection interest. In addition, the airbus company tried to integrate all employees in the company and create a sense of togetherness among them. The economic patriotism practiced by the government and people in the various countries failed the company’s aims. The indirect damages that were caused by the economic nationalism created poor performance and inefficiency of the corporate governance (Markusen, Digiovanna and Leary, 2003). Regarding the occurrence of the damage, the reputation of the airbus company was spoiled. The government did not offer support to the company because it conflicted with the thoughts and ideas issued with the government. The measures used in cutting costs were deferred due to the fact that the government rescued companies that agreed with its terms. Competition increased between the airbus company and other companies due to the fact the companies supported by the government had a lot of privileges. The privileges included convenient access to procurement contract and infrastructure access. Due to this, the processes in the airbus company were delayed, and the production costs with loss in income increased. The airbus company suffered from the threats of other efficient companies taking over it indirectly (Linjie, 2009). The national efforts used in supporting one’s interest showed self defeats. This is because other countries reacted kindly, neutralizing the initial attempts in gaining competitive advantage. Muhammad (2009) asserts that the factors that led to delays in the airbus company were the complex wiring structure and the compatibility of the software used. The company’s digital system had more than five hundred models that needed to be stored in sync. Even though a single mistake could generate a lot of problems, the airbus company operated in various countries making the wiring system complicated (Eckley, 1991). Communication gap between the employees existed. This is because engineers from Spain and Germany used the older versions of CAD programs in designing the wiring. On the other hand, engineers from England and France used newer versions of V5 in designing the wiring (Woods, Michelle and Ashlea, 2012). The developer of the software said that both the old and the newer versions were compatible, and the airbus company should have not taken any risk in using other different software versions. Even though the software developer made claims on software compatibilities, the airbus company data was lost when files were being transferred from one system to the other. The suppliers were not involved in a combined effort to forestall problems (Muhammad, 2009) Another factor considered was lack of training among some of the company’s engineers as well as poor communication. This is reflected as the France engineers were used to the software while the engineers from Germany were not experienced in using the software. This showed that the airbus company had a centralized decision that led to lack of knowledge to other engineers. To add on this, the company built different parts of the airbus in various countries. These factors affected the assembling systems because there was no good communication that was related to awareness and the problems of the software. In Germany, for instance, technical problems related to the software did not only occur, but there were execution failures due to insufficient knowledge (Woods, Michelle and Ashlea, 2012). In addition to all the problems faced by the airbus company, it was not organized properly because it mainly relied on the software developer concerning the solutions. Lack of transparency in the organization was another crucial factor. Mostly, the company’s decisions were made in the company’s headquarter without the consent of the other branches. The national components merger that happened in 2001 integrated the company and its branches officially but not mentally. This is very evident from the fact Spain and Germany were still using version V4 of the software while England and France implemented version V5.There are various lessons learned from the airbus company problems. Currently, there are no specific ways in integrating diverse cultures found in an international combined venture (Selmer, 1998). It mainly depends on the situation at hand and the cultures involved. Proper and accurate research is supposed to be conducted before starting up an ethnically diversified company. The research should mainly focus on the cultural dimensions such as uncertainty avoidance, short term versus long terms, and power distance among others (Muhammad, 2009). This assists the company in integrating the activities it conducts and coming up with better solutions that everyone accepts. Another approach considered was the collectivist’s approach. This approach will explore the perceptions and ideas concerning every person in the company. This is because the company does not have any idea about the desires of every person. The approach goes on in knowing the beliefs and ideas of every person that are considered to be helpful in achieving the desired objectives and goals. This may lead to a lot of problems, but at some time everyone has known each other. This helped the employees do what they knew and what they did not know. The other strategy used was diffuse relationships. The employees of the company need to be considered as members of a particular organization or group. They need to take part in decision making processes (Suneja, 2000). This assists the employees in building a rapport among themselves that explores the beliefs and ideas of everyone. The relationships of every employee help in finding out how the efficient company is and what steps are needed to be taken while tackling cross cultural issues. Teambuilding needs to be put into place in order to bring togetherness which increases the company’s efficiency. The other strategy is equality. If the diverse cultures are integrated within an international company, equality is supposed to be there in order to enhance knowledge, technological advancement and team development. The airbus company failed because Spain and Germany had version V4s of CAD programme while England and France had version V5 which was new (Hambleton, Merenda and Spielberger, 2005). Within a company, proper standardization is supposed to be embraced. Companies embarking on international projects such as the airbus company should have operative management of change in their plans, processes and development tips. Some rules may be used by the airbus company to ensure that effective change of management has been implemented. Handling organizational change will be helpful and successful if the principles are applied by the airbus company. In case the same approach is used, achieving the changes in management will be more fruitful. Changes in the management entail good planning and sensitive execution (Procassini, 1995). In addition, consulting with the persons affected by the changes will assist. A problem may arise when people are forced to change. This change is supposed to be realistic, measurable and achievable. Before a company starts a change in its organization, it should know what is to be achieved in the changes to take place, the people affected by the change and their reactions, and how the changes should be put in place to be realizable. The changes implemented need to be managed and well understood so that people can cope with them effectively (Suneja, 2000). On the other hand, the organization’s manager needs to check that the individuals affected by the change have agreed and understood the necessity for change. The manager is supposed to use face to face communication in handling sensitive aspects in change management of an organization (Silverthorne, 2005). The companies need to know that the executives and managers of the organization need to manage change in a way every employee can cope with. When organizations are implementing new ideas, difficulties always arise. Involvement, communication and participation are the vital factors. Implementing and using workshops will help a company in developing collective consideration, policies, methods, ideas, systems and approaches. Conducting surveys among the employees will help the company in repairing damage and reducing mistrust among the employees. The companies should embark on training their managers and facilitating capability among them. The managers are essential in the change process, and their core duty is to facilitate and enable the changes. The leadership and management style used in a company is more vital than the policies and processes used. Another lesson that an international company can learn is that support from individuals within the system should be involved (Procassini, 1995). In conclusion, the company needs to know where it should be in the future, and it should know its goals, plan its developmental goals and enhance good communication, facilitation and involvement from other individuals who are not members of the company. Companies embarking on international projects should build up partnerships with other organizations. This will help the companies engage themselves in joint projects and dialogues leading to revenue increase. Partnership will assist in giving different views on how a certain project should be carried out and how its credibility can be insured. This will lead to sharing of ideas among the employees of the two companies that have merged (Suneja, 2000). References Jackson, T., 2004. Management and Change in Africa: A Cross-Cultural Perspective, New York: Routledge. Silverthorne, C.P., 2005. Organizational Psychology in Cross-Cultural Perspective, New York: New York University Press. Voich, D., and Stepina, L., 2003. Cross-Cultural Analysis of Values and Political Economy Issues, Westport: Praeger Publishers. Muhammad, J., 2009. Self-Employment and Quality of Work and Nonwork Life: A Study in Cross-Cultural Management, Journal of Small Business and Enterpreneurship, 22(4). Selmer, J., 1998. International Management in China: Cross-Cultural Issues, London: Routledge. Woods, P., Michelle, B., and Ashlea, T., 2012. Cross Cultural Management Performance Elements in the Expatriate Context, International Journal of Business Research, 12 (3). Linjie, C., 2009. Cultural Ecology in the Cross-Cultural Management Research: A Procedural Analysis Model, European Journal of Management, 9(3). Suneja, V., 2000. Understanding Business: A Multidimentional Approach to the Market Economy, London: Routledge. Markusen, A., Digiovanna, S., and Leary, M., 2003. From Defense to Development? International Perspectives on Realizing the Peace Dividend, New York: Routledge. Eckley, R. S., 1991. Global Competition in Capital Goods: An American Perspective, New York: Routledge. Procassini, A., 1995. Competitors in Alliance: Industry Associations, Global Rivalries, and Business-Government Relations, Westport: Quorum. Hambleton, R.K., Merenda, P. F., and Spielberger, C., D., 2005. Adapting Educational and Psychological Test for Cross-Cultural Assessment, New Jersey: Mahwah. Read More