Cross-Cultural Issues Faced by the Airbus Consortium - Essay Example

The key cross-cultural issues faced by the Airbus consortium. Introduction Economic patriotism is devotion and loyalty that consumers have put on a particular good or service that has been manufactured in their country, or a good or service that originates from that country. It is practiced by persuading consumers to buy goods from their country ,its also done through increasing tariffs of goods coming in the country .This is done to ensure that the economy of that country is protected by preventing foreign investors from acquiring local companies ,and these will ensure that they control the market forces. GLOBE project is a programme that is long-term designed to operationalize, conceptualize, validate and test an integrated cross-level theory and the relationship between leadership effectiveness and societal and culture organizational. This was developed by Hofstede through a cross-cultural approach of comparing how management can be affected by the differences in cultural groupings. He conducted his extensive studies into differences in national culture; he conducted this in many multinational organizations. Hofstede through his research came up with results that produced a comparison of cultures based on five dimensions (Hofstede, 1993). These dimensions are power distance (low/high). This is the distance in hierarchy between individuals or attitudes that individuals have to authorities. Uncertainty avoidance (low/high), this the degree individuals have of tolerance for instability and uncertainty. Group versus individual orientation is the interdependence and independence, the loyalty towards a group and towards oneself. Long-term versus short-term orientation is fostering virtues relating to the present and past or virtues that relate to the future. The last dimension is the feminine versus masculine orientation; this is the importance of goals of work (advancement, earnings) in comparison with one’s personal goals (relationships, co-operation) (Browaeys & Price, 2011). Organizing and managing in the societies of the Romance languages which are close to Latin with the Roman legal systems and strong Roman Catholic churches differs with other societies with little or no Roman practices. There is a high personal approach to organizing and managing in the Latin Europe, there is a high bureaucracy developed that exists in Latin countries. Therefore, working in this countries is efficient and quicker (Robertson, 2002). GLOBE project is useful to Spain in that they stood the unstable management irrespective of the good systems of operations. Airbus could not manage Spain well since it is a country with deep Roman and catholic roots. That is why they could not co-ordinate the creation of the aircraft and they ended using different versions of software which led to loss of data during transferring. The GLOBE project is useful to France because leaders in France are always at the top. These powers not only fulfill contractual obligations but, they also preserve the position’s status. If managers moderately enacts powers, lacks a vision, or people see them as mean-minded they are categorized as little bosses. The GLOBE project is useful to France because they are supposed to accept and adapt to other peoples culture (Hofsede, 1993). Generally, it is the France’s historical role to uphold the cultural values of the universe that have made it become reluctant to adapt to several cultures. However, the term culture describes customs in relation to certain social, regional and professional categories. In the Airbus operations they are still lugging behind by using the V4 version of the software while the other countries were using the V5 version. This made it difficult to complete the aircraft in time and it actually affected the construction of the aircraft wholly. Many airlines withdrew their orders from Airbus and saw Boeing overtake it. Germanic countries reflect lower power distance compared to their fellow Europeans. It is evident in the general preference of a company where employees work in groups instead of making personal efforts. A respectful formality prevails between employees of a company operating from different responsibility areas and on different levels. German companies heavily rely on experts and expertise knowledge in order to minimize insecurity and to adapt to long-term perspectives during strategic decision making. The GLOBE project is useful to Germany in that they tried to their level best to adapt the V5 version of the software though whoever created it said they were compatible with the V4 version. They did not have a lot of knowledge about the version of the software but they still went ahead and used it. It was a failure to the Airbus because it led to slow construction of the aircraft and at the end they lost a lot of data as they were trying to transfer. Anglo is an abbreviation meaning Anglo- Saxon and it’s used in describing people that emigrated to Australia and North America and from British Isles. With the consolidation of kingdoms and various settlements the area was later known as England. It eventually became a dominant part of the large political entity known as the United Kingdom of Northern Ireland and Great Britain. The approach of management by the British strongly contrasts with the Nordic and Latin approach. Bureaucracy being the most common type of organization and being instrumental in creating the Britain’s economy a success, the handling of it by the British is very pragmatic. In comparison, to many other European countries Britain is actually reluctant in investing in training for the long term. The nature of its economy for the liberal market, where their goal is profit maximization is relatively a short time (Hofstede, 2006). The GLOBE project is useful to them because they focus on short term orientation. Economic patriotism severely affected Airbus, although they put in place strategies to ensure that the company would not be invaded by foreigners by ensuring that they were economic patriotic and promoted nationalism, where they ensured that the market was monopolistic, they were trying to protect the local laws and the government as a whole not knowing that it would only benefit political leaders who are trying to be reelected ,they did not put in mind the economic efficiency, by so doing they conflicted with the market forces. They should have considered balancing between the situation that would arise in any market force for instance the technological factor and also the issue of employment. Economic nationalism was not an appropriate move on the part of Airbus because it was inefficient and lead to poor governance in the company because they did not want to involve other members in their governorship of the company where their parent company was headed by two executives from French and Germany (Hoecklin, 1995). This was not efficient as the heads of the company ruined the company’s reputation due to their leadership skills which lead to Boeing taking the place of Airbus. The merger was supposed to bring business to the components of Airbus SAS but instead it brought about failure since there was no cooperation between the countries and it seems like the two heads reached a deadlock and they could decide which version they had to use while building the aircraft. The two countries that were heading the parent company could not determine what to use since the digital design must be matched with the computer designers and if they do not in sync then there would be a mishap in the plane. Secondly the merger was supposed to create more opportunities for the airline but instead their minds did not meet to agree were the plane would be created, for instance different sections of the aircraft were built in different countries and therefore even the engineers did not know who was creating what as it can be seen in the article nose sections were built in France, fulsages in Germany, wings in Great Britain and tails in Spain, this showed clearly how the organization system was disorganized because even the assembling of the aircraft was to be done in France meaning they had to transport the parts to France which meant time wasting and even the resources of the company because if they were organized they would have thought of one country that would carry out all the work to avoid even the delays that were resulting from all these chaos or these organization structure. These delays also ended up costing the company because some of the airlines that had requested for the aircraft that is the A380 withdraw their request as the delay went for 2 years. The other issue on wiring of the aircraft that reflected the bad organization structure of Airbus was the software compatibility issue that arose were by when incorporating the fuselage section which was done in France they experienced a complication because the engineers in Germany and Spain used a different version of software from that which was used by France and England (Hofstede & Hofstede, 2005). The first two countries used an older version that is V4 version while the latter companies used a newer version that is the V5 version, although the maker of the software said that the two versions would be compatible a lot of data was lost in the process meaning that the way the parts were modified they did not get to be incorporated the same way. Lastly although, the Germans were using the software they did not have much knowledge of it as well as the French people. These meant that even during the incorporation of the wires there was a problem. These problems arose because of lack of cooperation and integration between the two parent companies. Airbus has diversified in different countries where they have gone ahead to build subsidiaries in China and Japan among other countries. This has enhanced intercultural team building and also brought different people of different countries together. Although, the airbus has done this in an effort to improve their economy it has proved to be inefficient because there is cooperation between the parent companies which are chaired by Germany and France, who did not meet in mind and they did not decide where they would build the aircraft and lead to the delays which made them lose their contracts which in turn lead to loses. The diversity was a great idea as they opened opportunities for employment as many people were invited in the creation of A380 aircraft (Davis, 2007). Although, these was the case the problem came where the engineers from Japan and Germany did not communicate with each other to discuss the kind of software they were going to us because if there was communication the lost data that was lost during the in syncing the software would have happened and the parts would have been compatible although built from different countries. The multicultural is a team of multifunctional team which has engineers, supplies and manufactures these teams were created in order to deliver complete aircraft parts without any fault. This approach was created to enhance and improve continuous productivity and embraces a new aspect of design, this system was also meant to delegate responsibility and clearing channels of communication (Hickson & Pugh, 2001). This is not what happened when it came to the building of the A380 aircraft where they built different section of the aircraft in different countries but they were not compatible as the line of communication was not clear and therefore causing delays and losing important data by building the section with different version of software. Therefore, the economic motive of Airbus was growth and to diversify its operations in many other countries expansion of its operations to increase its specialty because it would be operating with people of different origins. Airbus recognizes that the cultural diversity is key to its success. It recognizes that they are people who build, design, support and sell the aircrafts, in the company lies core human visions, hard work and talents that keep the company at the best position in the industry. 35 years ago it began as a joining of forces but today it has grown to a global network, more than 55,000 people from over 80 different nationalities are working for Airbus. Having such a cultural diversity is the reason for the success of Airbus, employees joining Airbus recognize that they will be part of truly international organization with operations in Spain, Great Britain, Germany and France. It values National roots where a number of different mixes in cultures that share know-how and experience and develop expertise together in an environment that is stimulating (Ronen & Schenkar, 1985). At Airbus diversity is all about more than nationality where women are being employed in large numbers. The aircraft career has been seen as the male role traditionally and other roles such as engineering. To ensure this the company ensures that in all its graduate recruits 20 per cent are women (Hillmert, 2002). This helps growth of diversity since women have proven talents and good working in all their operations. The economic motive of Airbus was the attraction of economic growth on a certain area or preservation of employment. Strategic motives are inclusive of national security or the attempts so as to capture rents abroad in the monopolistic markets (Haris & Moran, 1996). Airbus has diversified its operations in many other countries expansion of its operations to increase its specialty because it would be operating with people of different origins. Its head office being in Toulouse, France the Airbus has its operations in over 160 locations internationally, which includes 16 main manufacturing and development sites in Germany, the UK, Spain, France and three fully owned subsidiaries in Japan, North America and China. Airbus has more specialist facilities all round the world which include; centers’ of engineering in Wichita, Mobile and Beijing. Fast response centres’ for spares in Frankfurt, Singapore, Beijing, Hamburg and Washington, a joint venture centre of engineering in Moscow, State-of-the –art centres of training in Hamburg, Toulouse, Beijing and Miami and 130 service officers at the field where key customers are located (Boisot,1993). These entire centres have been created as a motive to grow economically. As much as they diversified it was not of great help as it leads the Airbus to go out of business and leave the Boeing to take advantage of lack of organization. The parent companies were to blame for the challenges that were being faced by the Airbus SAS. When these cultures are so many, it’s natural to try and establish an order that gives room for the clustering of these cultures in order of their similarities. Doing this enables those that involve in multicultural operations to get a perspective, being a general one of differences and similarities. The results of the GLOBE project have been used in creating the nine dimensions. Religion, ethnicity, geography and language are considered as relevant factors since they are work-related values and attitudes. Economic similarities and historical developments also play a key role in clustering. The elements of Airbus reflected in clustering are that Airbus consortium was very diverse, it expanded to many countries of different cultures and it combined all these cultures to its productivity. Airbus had a good vision by combining its operations in different countries only that there was no co-ordination which led to its failure (Chhokar, Brodbeck & House 2008). In conclusion, cross culture is important in the daily running of a business. Airbus consortium had a very good strategy in sources its operations in different countries by ensuring that they opened a factory that created a specific item in its manufacturing of the aircraft. However this did not work out according to the plan because of different cultures and they way those countries operated. Some countries were ahead with technology while others lagged behind which meant that with poor co-ordination they would not come up with anything meaningful. References Browaeys, J, Marie & Price, R. (2011). Understanding Cross-Cultural Management. Harlow, England Boisot, M.H. (1993) ‘Spain: the revolution from outside: Spanish management and the challenges of modernization’, in Hickson, D.J. 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Researchers’ minds versus respondents’ minds’, Journal of International Business Studies, 37: 882–896. Read More