2.1.2Ignorance of sub cultures5
3.1Solutions to problems with Donaldson9
3.1.1International management studies9
3.1.3Use Waterhouse to train Donaldson10
3.1.4Increase reliance on Personal Assistants10
3.1.5Local mentor and support groups10
3.2Solutions to problems with Waterhouse11
3.2.1Seminars to teach Waterhouse11
3.2.2Send Waterhouse back to US11
3.3Solutions to problems with Loun12
3.3.1Accompany Waterhouse to seminars12
3.3.2Schedule meetings between the US
Table 1: Implementation Matrix15
The purpose of this report is to identify, evaluate, and recommend solutions to the problems identified at Argos Diesel Europe. There are three major issues at the heart of the problems of the organisation. These are culture, communication and leadership and motivation.
The cultural issues have come to a fore since the arrival of Donaldson who has struggled to come to terms with European culture. He is unable to adjust and as such he has not been as successful in transforming the European subsidiary like he had in Detroit.
Communication is also an issue which is looked at in greater detail in the body of the report. There are communication problems at many levels which shows the severity of the problem.
Leadership and motivation is the final issue evaluated in this report. Donaldson was an effective leader in the US where his reform was successful. However his approach has been far from successful in Europe and he has not been able to motivate the European workers at all.
After evaluating the above issues and looking at many different alternative solutions four recommendations have been made in order to solve the problems that exist.
Due to the high level of cultural unawareness that Donaldson possess in Europe it is advisable for him to undertake further learning in the area of cross-cultural communications. This is to be done at Robert Kennedy University.
There is a need for improved communication between the Detroit head office and the European office. Regular meetings between Loun, Waterhouse and Donaldson using tele-conferencing technology would allow for a more open flow of information and Loun would get a more accurate picture of the situation that Waterhouse and Donaldson are in.
It is important for the organisation to foster an attitude of continual learning by its employees. Waterhouse has begun to focus in how the developments in Europe will affect his career progress through the organisation. These seminars will give Waterhouse the opportunity to learn how to better handle expatriates and to become a transformational and transactional leader.
At present the organisation is not fully utilising the resources which it possess. Donaldson does not have the ability to speak to write in any European language, yet his Personal Assistant does. In order to reduce the communication problems associated with this, it is vital that Donaldson immediately utilise the skills that Frau Schweri and use them to his and the organisations benefit.
Some of the recommendations can be implemented immediately, but it will take time for Donaldson to gain a grasp on the intricacies of European culture, but with further study he could succeed in doing what he was sent from the US to do.
In the preparation of this report two assumptions have been made.
The first assumption is that communication between all parties in the organisation occurs only when described in the case study provided on which this report is based.
The word limit placed on this report does not enable a full report to be written. Much greater detail could be written in regard to the issues, alternative solutions recommendations and implementation of the recommendations had the word limit provided.
It is clear from the outset of the case that Bert Donaldson has a lack of cultural savvy and sensitivity. This means, he is unaware “of the cultural variables that affect management decisions and…is not caring about another individuals culture.”(Deresky 2000, p.104) As a result of this his leadership is tainted and a number of sub-issues become evident.
Ethnocentrism is a key sensitivity problem for Donaldson. By adopting an ethnocentric approach to management, Donaldson assumes the way he has been taught to perform a task is the best way of performing that task and is averse to listening to other ways of achieving results. This is best illustrated when Donaldson is talking to Frank Waterhouse, “I’ve tried everything…they’re just going to have to join the rest of us in the post-industrial age, learn to do things the Argos way.”
Donaldson has also failed to consider that within the confines of the European culture and even within the Swiss culture, differing sub-cultures exist. Each has levels of morals, beliefs and goals “which conform only in varying degrees to the national culture” (Deresky 2000, p.111). Therefore, members of each culture are likely to expect business to be done in the manner to which they are accustomed. For example, “…the Portuguese would have responded had he Donaldson brought the survey personally.”
It would be a massive oversight if the company failed to realise the effect of a major relocation for Donaldson’s family. According to Tung (1998), “33.7% of expatriates said it took 6-12 months to adjust; while 5.2% said that they never felt completely comfortable abroad. This is evidenced by the fact that Donaldson’s wife is distressed and Donaldson’s daughter is failing school.
Donaldson is not the only one guilty of causing problems in the Zurich office. Frank Waterhouse has also added to the woes of the company.
According to Hofstede (1980) there are four value dimensions, the third of which is individualism. This looks at whether the culture is more focused on the good of the individual or the good of society. Through Hofstede’s study we see that highly individualistic countries, like the United States typically look out for themselves, with Waterhouse being no exception. Being raised with an American culture, he is continually concerned with how Donaldson could help him, or how Donaldson’s problems would reflect poorly on him, “Waterhouse had been enthusiastic. Donaldson could help him reach the top.”
Relates to the degree of masculine values – assertiveness, materialism, and a lack of concern for others. Feminine values represent a concern for others, for relationships and for quality of life. (Hofstede 1980) Coming from a masculine society (USA) Donaldson is unaware of the different value placed on activities within the work environment by his European subordinates. European workers are concerned with Donaldson working late. “He must be having problems at home. Why else would he work until midnight?” Workers in Germany would be happy with him saying what he has to and then leaving, while workers in Portugal would prefer a long lasting conversation. Uncertainty avoidance and Power Distance also come into play, as the four are interdependent and interactive.
In order for any company to be successful it relies on competent management and in order to be competent, the manager must possess effective communication skills. Furthermore, according to Samovar, Porter and Jain (1981), “Culture…is the foundation of communication. And therefore when culture varies, communication practices must also vary.” In this case, managers have failed to adapt their skills to new cultures. Again, Donaldson is not the only culprit, Bill Loun, CEO and Chairman of Argos International also has communication problems.
According to Mehrabian and Weiner (1967) the way a message is communicated rather than the content of the communication has a greater impact on the receiver. This is known as paralanguage. Within the case study we find many examples of this, but none as clear as the conversation between Waterhouse and Loun, when Loun’s voice “boomed down the phoneline”. This gives his character a sense of being unapproachable and ethnocentric (discussed in section 1.1).
Again Donaldson’s lack of cultural awareness has caused problems for him, this time based on the context of the communication. In a study conducted by Hall and Hall (1990), Switzerland is considered to have the lowest ranking communication context, closely followed by other European countries. This means that nothing is implied from the message, as everything will be clearly detailed. The higher up the context ranking you go the more information becomes implicit. With this in mind, a multiple-choice survey is likely to be inappropriate and Donaldson should not be surprised that “one of them sent back a rambling six page essay.”
2.2.3 Lack of communication between United States and Zurich Offices
It can be assumed that Bill Loun would like the Zurich office to be as efficient and effective as the office in the United States. Bartlett and Ghoshal (1989) explain, “that the more frequent the communication with the…parent organisation, the more likely it is that affiliate executives will be influenced by the parent’s practices.” However, there seems to be no communication between the United States Headquarters and Donaldson, and only very little between them and Waterhouse.
Gardner (1989) states that in order to be a good leader one must be able to inspire and influence the thinking, attitudes and behaviour of people. This is no different for managers, and from the evidence provided in the case Donaldson is not good leader. For a manager to become a strong cross-cultural leader, a number of skills need to be developed. According to Bass these skills are social perceptual skills, interpersonal competence, effective intelligence, and efficient work habits. (Deresky, 2000 p. 433) Donaldson is void of social perception skills, “I’ve tried everything… no matter what I do… someone’s always pissed off.” His interpersonal competence, while extremely effective in the US, is feeble in a European context as evidenced in the break down of interaction between himself and Jakob Hassler. This was one of many incidents that detracted from his management style and effectively ostracised him from the rest of the organisation.
Donaldson’s effective intelligence has reduced drastically since arriving in Europe. Not to say that his intellect has abridged but rather Donaldson’s knowledge is drawn largely from his experience in Detroit, and while he possessed exceptional skills in the US, he has no idea of ‘best practice’ ways of doing things in Europe. When talking about efficient work habits Donaldson is displaying those he has developed in the US. Like all the other areas he has not been able to adapt his approach so as to more suitably fit the European environment. These problems have culminated in Donaldson being an ineffective leader, and have contributed to his inability to motivate his employees.
These solutions have been suggested to overcome the problems mentioned in the previous section.
3.1Solutions to problems with Donaldson
3.1.1International Management Studies
Send Donaldson to do an International Management Course in US or Europe with particular detail to European culture. While this will be time consuming it will help Donaldson develop an awareness of European culture and what is expected of a manager in a European context. As Stonner, Yetton, Craig and Johnston (1994) express, “…the world is too complex…to allow cultural strategies to be developed all at once…instead strategies emerge in small steps over time…through a process of adaptation or learning.” This will also help him with his handling of different sub-cultures within the European context. Undoubtedly there will be lessons on differing regions of Europe, and with the recent addition of Polish, Turkish and Russian subsidiaries this seems to be a practical option, as long as the firm can function without his presence at times.
Send Donaldson back to the US without completing his duties and replace him with a European, who would be more adept in the handling of European cultural issues. This will generate a regiocentric predisposition “causing the firm to blend its own interests with those of its subsidiaries on a regional basis.” (Hodgetts and Luthans 1997, p.217). This may alleviate the tension and frustration amongst the workers, of not having a manager that understands their needs and wants. The problem with this solution is that it contradicts the desires of the US head office to have ‘one of their own’ running Europe the ‘American’ way. Additionally this may denigrate relations with head office as they may conclude that Donaldson is not the problem, but rather the European system and its controllers are. Furthermore, another major move for Donaldson and his family may see him leave the company, with 20 percent of repatriates leaving their companies within one year of return. (Black, Gregersen and Mendenhall 1992).
3.1.3Use Waterhouse to train Donaldson
Although it is expected that Donaldson is competent in his duties, Waterhouse could assist Donaldson in making the necessary changes to his approach. Drawing upon his experience and the ways in which he was able to adapt, he would be more than capable of advising Donaldson. Unfortunately the recent acquisitions in Warsaw, Ankara and Moscow will occupy the majority of Waterhouse’s time. Furthermore, Waterhouse’s individualistic nature leads him to believe he “can’t teach cultural savvy”. Waterhouse must realise it will be difficult in the short term but it is something that is necessary. Waterhouse’s opinion is contradicted by Mendenhall, Punnett and Ricks (1995). They assert that when one goes to another culture it is possible to learn that culture.
3.1.4Increase reliance on personal assistant or liaisons
From the case it is evident that Frau Schweri, Donaldson’s assistant and Frau Lindt, Waterhouse’s assistant, possess an extensive knowledge of various cultures within Europe. “Bettina Schweri who organises Donaldson’s programs is essentially his manager. She speaks five languages fluently and writes three with style.” Donaldson must utilise these strengths to offset his lack of cultural savvy; furthermore her skills could possibly aid Donaldson’s family as a support member, as described in 3.1.5. Additionally, the use of liaisons between each country would compensate for Donaldson current weakness. However, the economic viability of this option may dissuade management from implementing such an approach.
3.1.5Local Mentor and Support Groups
In order to aid Donaldson and his family’s transition to Zurich, Argos should supply a fellow expatriate mentor. According to (Mendenhall et al. 1995) mentors can assist expatriates by clarifying performance expectations, giving advice regarding business and local culture and giving personal advice of how to survive emotionally. Support groups would be most helpful for his family who have also moved. Undoubtably, alleviating tension at home will improve his professional endeavours.
3.2Solutions to problems with Waterhouse
It is clearly seen in this case that Waterhouse’s preoccupation with his personal well being is hindering both the company and Donaldson’s progression. As similar to the view put forth by Stoner et al. (1994), in section 3.1.1, a continuous learning approach should be adopted so as to best provide effective solutions to the problems at hand. Whilst it seems that in the past Waterhouse was a motivational leader, his individualism has now distanced him from efficiently managing the European Division. To counter this he should attend management seminars with Bill Loun (Loun’s association discussed in section 3.3.1). Primarily, these seminars will cover Hofstede’s collectivism, managing expatriates and transactional and transformational leadership.
3.2.2Send Waterhouse back to the United States
Although sending Waterhouse back to the United States during the first year of his second, three year contract is a drastic measure, the company cannot afford to employ a manager who is solely devoting his time to three projects and letting the internal culture of the firm diminish. However, the impact of such a change would be detrimental, not only to the morale of the staff, but also to the relationships that have been built by Waterhouse with the other European subsidiaries.
Whilst it seems that business is running smoothly back in the United States, the Chairman and CEO, Bill Loun seems to have forgotten some basic managerial skills.
3.3.1Accompany Waterhouse to Seminars
By suggesting that Loun accompany Waterhouse to the management seminars (section 3.2.1) it will give him a chance to refresh management ideas and communication skills. By accompanying a staff member to these seminars it does not undermine his capabilities as CEO, but provide him with an opportunity to learn.
3.3.2Schedule meetings between the United States and Europe
With the advancements in modern technology, continental communication barriers have been removed. Therefore, regular meetings between Loun, Donaldson and Waterhouse can take place with ease. According to Tung (1981) expatriate failures reach levels of 20 to 40 percent, essentially because they never felt completely comfortable abroad. By ensuring communication lines are open with Donaldson, Loun will be able to make sure that he has settled properly. “These meetings will also allow each general manager to keep in touch with their associates and the overall mission and strategy of the organisation.” (Deresky 2000, p. 306)
In dealing with problems at Argos Diesel Europe a number of recommendations have been made which would assist the company in solving the issues identified earlier in the report.
It would not be possible to solve all of the problems at Argos identified by simply implementing one course of action. A number of actions need to be taken for the issues to be satisfactorily solved.
3.1.1 International Management Studies
Donaldson has struggled to come to grips with the European culture. This process is made even more difficult by the sub-cultures which exist within Europe.
In order to solve this problem Donaldson should undertake a course in cross-cultural communications, at the Robert Kennedy University located in Switzerland. This would enable Donaldson to gain a better understanding of the European way of doing business and as the university is run from an American business school perspective would provide a familiar learning environment.
3.3.2 Schedule Meetings between the United States and Europe
The introduction of regular meetings between Loun, Donaldson and Waterhouse is a vital step in improving the flow of communication between the head office in Detroit and the European subsidiary.
Currently Waterhouse is struggling to find a way to tell Loun of Donaldson’s performance in Europe. By having regularly meetings all three can discuss the progress of the changes being introduced by Donaldson.
An additional benefit is that Loun can gain a better insight into the operations of the European office and in particular Waterhouse who has been earmarked for future promotion.
Waterhouse’s preoccupation with how his own future is affected by the happenings in the office has got to the point where it is affecting the performance of the company as a whole and in particular the progress of Donaldson.
A continuous learning approach should be adopted within the organisation, with the seminars focusing on the successful management of expatriates and transformational leadership.
Loun should also attend these seminars to foster the development of the continuous learning culture.
3.1.4 Increase reliance on Personal Assistant
It has been a crucial error of judgement by Donaldson to not call on the expertise of his assistant, Frau Schweri, more often and with greater confidence.
With her extensive background knowledge of the cultural nuances which exist within continental Europe it is vital that Donaldson use her expertise when dealing with the managers in each country.
By better utilising the skills of Schweri Donaldson will be able to gain further insights into European culture and will be better able to fulfil his tasks as set by Waterhouse and head office in Detroit.
WhatMeetings between Loun, Donaldson, WaterhouseUndertakes course in cross cultural communicationSeminars – continual learningIncreased reliance on Personal Assistants
WhenRegular – either fortnightly or monthlyAs soon as practical, beginning of next semester preferableNext availableImmediate implementation
WhereOffices in Europe and USRobert Kennedy University, SwitzerlandEurope or USEurope Office
CostInitial cost would be high to install or upgrade technology to allow for videoconferencingAwaiting confirmation from the university, but of no concernBased on cost of seminar and travel costs for Waterhouse and LounPossible increase in wages to the assistants, but offset by gains made
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