The Validity of Cultural Model at The Airbus Way - Term Paper Example

The Airbus Way Executive Summary According to the present rapid advancement in the industry of aircraft manufacturing, Airbus can be considered as one of the major and dominant players that produces broad assortment of commercial as well as military aircrafts. The major discussion of this report was highly focused on demonstrating two types of cultural models in order to evaluate the cross-cultural differences within the working environment of Airbus. Moreover, the discussion of this report has been also focused on workforce diversity and cultural differences related issues that faced by Airbus. The paper has further disclosed the main reason underlying behind the failure of merger agreement between the European Aeronautic Defence and Space (EADS) and British Aircraft Marconi Electronic (BAE) system. Introduction The national and organisational culture has been recognised to be significantly correlated with each other as both of these cultures impose both positive along with negative impact upon the performance of different organisations. According to the present rapid development of the business environment, the modern organisations intends to focus more upon internationalisation process while making different business transactions with the intention of expanding their businesses (Park, 1997). From the perspective of Airbus and its global business operations, the organisation considerably tends to emphasise upon promoting its cultural diversity while performing business operations in the foreign countries. The organisation maintains several effective workforce diversity based programmes in excess of 100 nations with 55,000 employees. It has been viewed that the employees of the organisation shares information and connects each other from different cultural backgrounds irrespective of age, sex, race, ethnicity as well as experience and abilities. The organisation often seeks to acquire mix ideas and knowledge from different people belonging to diverse culture in order to accomplish superior competitive position over its chief business market contenders (Airbus, 2013). This paper intends to discuss about the application of two cross-cultural comparative models to Airbus in order to analyse as well as evaluate the impact of national culture issues on the organisation’s own culture. Various aspects that include the problems of cultural diversity that has created for Airbus and the identification to what extent the cultural differences may have contributed to the recent failure of the planned merger between Airbus’ parent company EADS and BAE Systems will also be discussed in the paper. Cultural Comparative Models Hofstede’s Cultural Dimension Model Hofstede’s cultural model generally involves five major dimensions that significantly portray the influences of cultural values within an organisational workplace. The dimensions have been depicted hereunder. The Power Distance Index (PDI) of Hofstede’s model refers to the measurement of inequality that exists within the culture or country. The PDI in the Hofstede’s model depicts the aspects about how community handles the existing inequalities of the people. The individuals belonging to those communities are likely to follow the regulations that are made by the hierarchical members or groups (Hofstede, n.d.). According to Individualism versus Collectivism (IDV) dimension, it has been observed that a higher level of individualism possesses significant scope for innovation and creativity that leads to enhance productivity and superior individual performance as well (SAGE Publications, 2006). The Masculinity versus Femininity (MAS) in the Hoftede’s cultural model defines the measure of male dominating culture within a specific organisation. It has been observed in the model that the higher level of masculinity within the organisational culture possesses greater degree of competition as well as success within the business market (Hofstede, n.d.). The Uncertainty Avoidance (UAI) dimension in the Hofstede’s model defines the degree of reaction of the people in terms of handling any sort of unidentified or uncertain situation. The higher score in this particular dimension refers to greater measures in terms of avoiding ambiguous conditions or situations within the workplace (Hofstede, n.d.). The dimension of Long-Term Orientation (LTO) relating to Hofstede’s model refers measuring long standing societal values as well as norms. In this context, the LTO represents the measurement of traditional beliefs along with values in order to accomplish any significant organisational objective. The low amount of LTO in the organisational culture signifies the higher opportunity for innovation as well as creativity and also ensures greater level of individualism amid the employees of an organisation. Conversely, a higher rate in the LTO indicates that there exist smaller degree of opportunity for creativity and innovation amid the workforce of an organisation (Hofstede, n.d.). According to the case study, it can be affirmed that the organisational culture possessed by Airbus has been significantly focused upon higher degree of IDV that tends to effectively distribute the roles as well as responsibilities to each employee based on their individual competences. Moreover, the members of Airbus often seeks to maintain a shared and familiar working environment where the workers are provided with number of scopes in order to interact with other individuals of different cultural backgrounds. Furthermore, it can also be stated that the organisation tends to minimise its PDI that eventually facilitates the employees to obtain the virtue of independently distributed reliable authority concerning on individual capabilities. In addition, a lower level of UAI has been further recognised within the working culture of Airbus where the managers of the organisation develops effective strategies and solutions in order to address possible issues that might hamper the working environment of Airbus at large. In relation to the case study, it has been viewed that the formation as well as the development of anti-discriminatory policies of Airbus intends to minimise the level of MAS where the management of the organisation impose equal authoritative power to each employee irrespective of their socio-economic or any cultural divergence. Furthermore, the working culture in the Airbus also comply with the low level of LTO that considers equal facilitation for its employees in terms of providing compensation or other promotional attributes. Therefore, it can be stated that the working culture of Airbus considerably attempts to provide equal traits for its individual employees emphasising on their capability and productivity by a considerable level (OBSA, 2012). Trompenaars & Hampden’s Model of Cultural Differences The seven cultural dimensions of Trompenaars and Hampden’s model have been discussed hereunder. Universalism versus Particularism: The dimension emphasises upon clearly defining the culture concerning the relationship versus rule, wherein the people following universalistic culture primarily complies with the universal standards. However, the people of particularistic culture believe that responding to a situation may alter on the basis of what has been happening in the moment (Gutterman, n.d.). Relating to the case study, it can be affirmed that Airbus follows universalism culture as it values the ideas of the workforce belonging to diverse cultural backgrounds. Individualism versus Collectivism: The dimension differentiates the value of the societies based upon the interest level of the individual and groups. The groups in individualism culture strongly believe in personal attainment as well as in freedom. Conversely, the people of collectivism culture believe that a group plays a decisive part and is more vital as compared to an individual (Adler, 2002). According to the case study, Airbus has been recognised to adopt individualism culture as it largely promotes its workforce to advance their individual talents. Specific versus Diffuse: This dimension defines the differences of peoples or communities based upon the aspect about how they deal with the other individuals. The people of specific-oriented societies are likely to keep separate their personal and professional lives. However, the people of diffuse-oriented communities believe that better interrelation with others is quite important for fulfilling business targets (Gutterman, n.d.). In accordance with the case study, it can be affirmed that Airbus prioritises diffuse-oriented communities as it strongly believes that better interrelation with the employees by managing workforce diversity can support it to attain desired business targets. Neutral versus Emotional: The dimension defines the way of showing emotions while dealing with other members within the same society. The neutral societies are not openly revealed and usually hide their emotions to others. However, emotional societies tend to show their sentiments and feelings (Gutterman, n.d.). With regard to the case study, it can be stated that Airbus belongs to neutral society as it does not reveal its emotions to the employees. Sequential versus Synchronic: This dimension of cultural differences can also be regarded as time orientation aspect that differentiates the communities on the basis of o performing a single work or several tasks at the identical time. In this regard, the members in the sequential culture intend to perform one task at a particular time and pursue the schedule and working plan in a strict manner. In contrast, the individuals of synchronic culture are more flexible to perform different roles at the same time (Johann, 2008). In relation to the case study, Airbus belongs to a synchronic culture as it depends upon industrial cooperation as well as partnerships with different chief companies. Achievement versus ascription: This particular dimension significantly differentiates society on the basis of how do people distribute position and authority. People of achievement-oriented societies involve following the culture of respecting others on the basis of their adequacy, knowledge, superior performance or their previous achievements. However, the members of ascription-oriented society value the status that is derived from wealth, societal position, age and other comparable factors (Gutterman, n.d.). According to the case study, Airbus considers achievement based culture or society as it shares the common values as well as the behavioural attitudes of the employees. Internal versus External Control: The dimension differentiates society on the basis of individual beliefs about exerting control upon their business environment. The members in the internal control culture possess mechanistic view and strongly believe that the complexities in the environment can be controlled by the individuals who possess adequate knowledge about any concerned matter. In contrast, the members external control oriented society tends to follow the working environment rather than taking any sort of initiative to attain business goals (Gutterman, n.d.). Relating to the case study, it can be stated that Airbus follows the approach of internal control as it strongly believe that by managing the significant concern of workplace diversity, it can control any complex business or working situation. Problems Concerning Cultural Diversity Created for Airbus According to the recent trend of global organisations, it can be observed that workplace diversity is regarded as one of the major concerns for the organisations in order to enhance their productivity. However, the practice of managing diversity within an organisation can further identified to be a challenging factor for different organisations that depends mostly upon the ability of the leaders or management of the organisation (Rosado, 2006). As per the present workplace scenario, the aircraft manufacturing industry can be recognised to be rapidly expanding in different geographical locations (Eckel & Grossman, 2005). With regard to identify the problem that cultural diversity has created for Airbus, it has been viewed that the company had faced the issue relating to workforce diversity while performing manufacturing operations that were being controlled by its two chief executives from France and Germany possessing different cultural backgrounds. According to the cultural dimension model of Hofstede, it has been identified that the cultural differences with respect to PDI between the executives was the major problem that created by cultural diversity to Airbus. From the perspective of PDI relating to Hofstede's model, the people of France possess higher degree of PDI than the Germans. Therefore, according to the case study, in terms of decision-making process, the German executive of the manufacturing unit of Airbus intended to ignore the French executive. Moreover, both of the executives possessed dissimilar individualism aspect that further caused the major reason for Airbus to get affected in the production of one of its passenger aircrafts named A380. Excluding the dissimilar cultural traits of German and French executives, the organisation has also faced the problem relating to technological issues. With this concern, the aeronautic engineers of German and Spain in the Airbus manufacturing units employed V4 versions of application programmes that were configured with older version of ‘Computer Aided Design’ (CAD), whereas the other engineers were using newer version of CAD programme. Therefore, the overall operational process of the organisation used to consume more time in terms of transferring data from one system to another. Due to this type of dissimilarities of utilising different application programme in the manufacturing units of Airbus, the company had to lose a significant portion of profit for a certain time period (The Brampton Board of Trade, 2010). Failure Merger Planned Between Airbus’ Parent Company EADS and BAE System The European Aeronautic Defence & Space (EADS) and British Aircraft Marconi Electronic (BAE) have been recently decided to withdraw their merger plan because of certain political objections. According to the present political circumstances in the UK, Germany and France, it has been witnessed that the nations significantly focus to overcome their political hindrance with each other. This can be recognised as the major cause of failure of merger between EADS and BAE in the global aircraft industry (BBC, 2012). It has been viewed that the workforce of BAE are usually influenced by the UK government in order to uphold a familiar relationship with the US Department of Defence. In this regard, the government of Germany strongly refused the merger agreement as the working culture maintained by the German employees is quite different than the French employees. Due to this reason of disagreement linked with the merger plan, the market share of BAE and EADS have been noted to consecutively fell down by 2% and 3% in London Stock market. Therefore, it can be affirmed that the issue concerning cross-cultural differences is one of the major obstacles that faced by the French and German workers in terms of various operational related activities. Moreover, the inequalities in terms of distributing power authorization can also be recognised as a reason where the German and French employees were not adequately tied up in the operational process. The proposed merger agreement between EADS and BAE did not succeed because of the ongoing cultural dissimilarities amid the employees of France and Germany that extensively imposed an adverse impact upon the manufacturing units of Airbus (WHNT, 2013). Conclusion and Recommendations In accordance with the case study of Airbus, it has been observed that the management of the organisation failed to adequately measure as well as evaluate the vital concern of workforce diversity. Moreover, the distribution of power authorization was also not properly maintained wherein the French employees of the organisation were not able to preserve a strong alliance with Germans and other employees belonging to different cultures. As per the overall discussion of the case study of Airbus, it can be recommended that managing cultural dissimilarities as well as workforce diversity can be one of the crucial factors for Airbus in order to successfully perform its business operations particularly in complex situations. With this concern, the management of the organisation must need to possess adequate managing and directing skills in order to deal with certain cross-national and workforce diversity issues. Furthermore, the management team of the organisation must focus on enhancing communication skills amid different levels of employees that might facilitate the organisation to mitigate such type of issues and also to attain superior competitive position as well as long-term sustainability in the aircraft manufacturing industry. References Adler., 2002. Cross-national Cultural Differences. Trompenaars’ Cultural Diversity in Business (1997). 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[Online] Available at: http://alangutterman.typepad.com/files/cms---trompenaars-seven-dimensions.pdf [Accessed January 15, 2013]. Hofstede, No Date. National Culture. Dimensions. [Online] Available at: http://geert-hofstede.com/dimensions.html/ [Accessed January 15, 2013]. Johann, R., 2008. Cross-Cultural Management. GRIN Verlag. OBSA, 2012. Social Practice. Airbus People. [Online] Available at: http://www.obsa.org/Lists/Documentacion/Attachments/144/Part_III_Social_EN.pdf [Accessed January 16, 2013]. Park, S. H., 1997. The Effect of National Culture, Organisational complimentarity, and Economic Motivation on Joint Venture Dissolution. Academy of Management Journal, Vol. 40, No. 2, pp. 279-307. Rosado, C., 2006. What Do We Mean By “Managing Diversity”? Managing Diversity. [Online] Available at: http://www.edchange.org/multicultural/papers/rosado_managing_diversity.pdf [Accessed January 16, 2013]. SAGE Publications, 2006. Chapter 7: Dimensions of Culture. Individualism Versus Collectivism. [Online] Available at: http://www.sagepub.com/upm-data/11711_Chapter7.pdf [Accessed January 15, 2013]. The Brampton Board of Trade, 2010. Workplace Diversity: An Employer’s Guide for Business Advantage. Introduction. [Online] Available at: http://www.skillswithoutborders.com/files/2.pdf [Accessed January 16, 2013]. WHNT, 2013. BAE Systems – EADS Merger Collapses. News. [Online] Available at: http://whnt.com/2012/10/11/bae-systems-eads-merger-collapses/ [Accessed January 16, 2013]. Bibliography Babel Language and Cross Cultural Training, No Date. Seven Dimensions of Culture. Babel Monthly Newsletter. [Online] Available at: http://www.babelgroup.co.uk/uimages/File/babel_the_7_dimensions_of_culture.pdf [Accessed January 16, 2013]. Jackson, S. E., 1992. Diversity in the Workplace: Human Resources Initiatives. Guilford Press. Read More