Cross-Cultural Management - Airbus A380 - Case Study Example

RUNNING HEAD: Cross-Cultural Management Student Name: Name of Institution: Course: Tutor: Date of Submission: Executive Summary Cross-cultural issues played a major role in the delays of Airbus A380 introduction to the market. According to research, the company wanted to utilize the benefits of cultural diversity by sharing the construction of the Airbus among four countries. However, issues such as poor coordination, software compatibility, variations in understanding among the engineers, and cultural orientations of power distances, variations in management styles, and government need to protect their local interests are among the most vocal cultural issues in the project. This report seeks to discuss cultural management issues in the case of Airbus A380. Question One: Economic Patriotism By definition, economic patriotism refers to coordinating and promoted organizational, consumer behavior aimed at promoting, or favoring goods and services produced within a given country or in other words, a group of countries. Economic patriotism can be executed through a process of demand simulation that involves the encouragement of consumers to purchase goods and services produced within their country or through the protection of supply that involves the shedding of domestic markets from the entry of foreign firms that may result in unnecessary competition (AFP). The latter method of executing economic patriotism by protecting domestic firms from the competition of foreign firms can be achievable through application of quotas and tariffs imposed on foreign companies. In most cases, the greatest players in promoting economic patriotism through protectionism are the government and political powers. In the case of the Airbus Company for instance, economic patriotism was orchestrated by the government and led to the eventual problems faced by the company. The need to draw the workforce of the company from various countries according to the national ownership stakes saw the workforce being geographically distributed and thus far from each other. Although the diversity could be a means of improving efficiency, it failed since economic nationalism in the event where people from different countries supported their national respective rights. Additionally, the governments of various countries also made a decision to alter their private transactions to suit their thoughts and local practices in an attempt to protect their country’s economic interests. Discrimination of foreigners by other countries to protect national interests included preservation of employment and attraction of economic activity. The company’s motives in its strategy were also to attract rents abroad in a monopolistic market. The overall result was a failure of the company’s failure in its patriotic approach. This eventually damaged the company’s reputation as it conflicted with the ideas of the government. Question two: Reflection of the Company Organization One of the most outspoken causes of the delayed wiring of A380 was complex software compatibility that came with 500,000 models that was to remain in a sync situation. Despite the fact any slight mistake in the wiring could result in various technical problems, the company decided to run its operations from different countries, resulting in further complication of the wiring system (Wallace, 2006). Additionally, the communication gap between employees, especially the engineers located in Germany, England, and Spain is another major factor considered. Engineers in Germany and Spain used the older version of V4 CAD to carry out the design of the wiring while those in France and England used an updated V5 version. This is viewed as the company’s flaw of taking risks by using different versions even though the software developer claimed that the two versions were compatible, eventually resulting in loss of data. There was also the lack of training among the engineers is another factor relating to the company organization. The issue of training comes in with the fact that engineers from France were highly experienced and familiar with the use of the CAD software while those from Germany were less familiar with the use of CAD software. This implies that the company had a centralized decision that saw other engineers involved in the wiring design lacking adequate knowledge required for effective wiring design. Another important factor in the company organization that saw exaggerated delay and loss of profits is the company’s decision to build different parts of the A380 Airbus in different regions. This idea resulted in the complication of the assembling system because of lack proper communication that relate to knowledge and familiarity with the use of software. According to Davis (2007), what took place in Germany was not only technical and software issue but also execution failure related to the lack of efficient knowledge (Wallace, 2006). Question Three: Inter-Cultural Team-Building Sessions From the case, the workforce in the A380 Airbus Company came from diversified geographical backgrounds in the bid of promoting national ownership stakes. In the event of economic nationalism, various governments went against private transactions among their economic partners through discrimination of foreigners with the aim of protecting local interests. This led increased jeopardy of productive efficiency (Wallace, 2006). This is majorly due to difference in cultural matters touching on the management and conduct of communication styles. A good example could be the comparison of French and German styles where the Germans prefer collective decision-making processes as opposed to French beliefs. Likewise, the Spanish management seemed very flexible but highly affected by certain levels of inferiority complex that make them depict some tendency of being vague and thus highly unreliable. Another cultural factor taken into consideration is observable with the fact that EADS Company employed two chief executives from Germany and French to man the company operations. This was a gross mistake since there were problems realized with this move even immediately on commencing the construction of A380 Airbus. Considering the cultural differences of French and German from the Hofstede's cultural dimensions, it is possible to note that the French preferred high power distance while on the other hand, the Germans valued low power distance (Sascha, 2008). This implies that the Germans keep on interfering with conversations in the bid to make decisions affecting the ego of the French in the process. The result of such differences implies the creation of conflict between the two chief executive officers. Finally, another cultural factor observed in the various countries is the government’s motive to rescue their local companies through incentives as a first priority. This implies that governments were self-centered and did not consider putting much effort in the construction of the A380 (Wallace, 2006). It is with these few reasons that the intercultural team-building sessions did not necessarily help the company in solving the problems associated with A380 construction. Question Four: Reaction the Statement ‘Cultural Diversity is the Key to Airbus’ Success’ In this case, it is evident that Airbus values its cultural diversity as the key to its success. The company boasts of its employees being drawn from more than 20 different language backgrounds and from over a hundred countries across the globe. The company also boasts of its ability to forge powerful collaborations due to its value for diversity (Airbus). This is evident with the way in which Airbus appreciates the inclusion and respect for the manner in which differences participate in the collective performance of the company. Apart from its employees being diverse, the company also conducts business all over the world despite the fact that the company’s headquarters are based in sites across Europe. Additionally, the company advocates for a commitment in targeting of women to fill almost 25% of its vacancies (Airbus). However, although the management aimed to reap the benefits that come with cultural diversity in the construction of A380 Airbus, the idea flawed and resulted in various problems in the process. The main problem presented in the case is that of the delay in bringing the Airbus A380 in the market, a delay that resulted in a loss of 2 billion euros after taking a whole two year period. Different perceptions of the project possessed by different cultures involved in the project of A380 Airbus construction and design are the main reasons for the delay (Marie-Joelle and Roger, 2008). My reaction to this factor of cultural diversity however, would be that there are no conventional methods accepted as the ‘best’ in integrating diverse cultures in situations of international consortium (Sascha, 2008). Nonetheless, a proper research on the types of cultures and dimensions of Hofstedes would help such situations in understanding power distances, long-term and short-term orientations, uncertainty avoidance, and perceptions of masculine and feminine matters. Finally, according to Marie-Joelle and Roger (2008), when considering international culture, there must be the integration of factors such as global knowledge, technological advancements, and term development. With these measures, the delay of A380 Airbus could be avoidable. Question Five: Culture Clusters The A380 Airbus design and construction was one of the most important consortiums organized by most countries that included Germany, Spain, French, and England. The developments that arose due to cultural differences in the workforce and engineers involved in the development of A 380 Airbus came from various cultural backgrounds thus affecting communication and technological aspects of engineering development (AFP). The idea behind the A380 Airbus delay in introduction to market that took two years and cost the Airbus Company 2 million euros resulted as a grand loss (Michael, 2010). There are various cultural clusters exhibited by the various countries that included Spain, Germany, French, and England included those of power distance, long-term and short-term orientations, uncertainty avoidance, and perceptions. The countries involved in the construction and dwe3velopment of A380 Airbus included the Germany, the Spain, the French, and the England. These four countries had different geographical and cultural differences that indeed jeopardized the construction and design of A380 Airbus that eventually led to the delay of A380’s introduction to the market and thus provision of service to airline customers (Wallace, 2006). Among the most profound clusters of cultures that affected the entire design and construction of A380 Airbus include power distances, long-term and short-term orientations, uncertainty avoidance, and perception among the countries involved in the A380 construction project. Conclusion Poor cultural management issues among the four countries involved in the construction of A380 are discussed in this article. Economic nationalism and government distortion of private transactions to discriminate against foreigners played a key role in affecting the effectiveness and efficiency of the A380 construction. The paper also discussed differences in decision-making approaches in the cultures of the countries involved as also being a factor considered for the delays. Generally, the case is one of the most important one in bringing about lessons of cross-cultural management. Reference List AFP. (2006, June 15). Super-jumbo problems: Airbus details A380 delay. Retrieved June 24 2013, from http://www.expatica.com/actual/article.asp?subchannel_id=25&story_id=30821 Airbus. Diversity. http://www.airbus.com/work/why-join-airbus/diversity/ Brad, K., (2006). International Marketing. Cengage Learning Marie-Joelle, B,. and Roger, P., (2008). Understanding Cross-Cultural Management, 2008. Michael, M., (2010).Why are theoretically perfect and efficient capital markets so imperfect and Diversified. Ord University Press Sascha, M., (2008). Airbus versus Boeing - Strategic Management Report. New Jersey: Willey Wallace, J. (2006, October 3). A380 delays. Retrieved June, 25 2013, from http://blog.seattlepi.nwsource.com/aerospace/archives/107302.asp Read More