Essays on Challenges Faced by the Airbase Consortium Case Study

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The paper "Challenges Faced by the Airbase Consortium" is a great example of a business case study.   Globally, culture is defined as those shared motives, interpretations and/meanings, identities, values and beliefs about prime events that are as a result of widespread experiences by a people in a society and that are passed on from one generation to the next. Companies experience a challenge of cultural diversity and therefore are obliged to find ways of dealing with those challenges and at the same time, sustain their service delivery to their customers.

International companies have an array of customers from all over the world; therefore, cultural diversity is an issue that they need to observe very keenly in their designing of the products and services to be presented to the market (Gupta & Govindarajan 2000). Different companies to have their distinctive operating cultures which define the nature of their operations. The GLOBE, which is a project that majors in cross-cultural researches, has clustered a number of business cultures based on the organizational values, culture and practices. This paper is going to look at the cross-cultural challenges faced by the Airbase Consortium in relation to GLOBE’ s culture clusters and come up with the possible solutions.

These clusters include; in-group collectivism, gender egalitarianism, the distance power, orientation of the future, performance orientation, assertiveness, avoidance of the uncertainty, and the humane orientation. Lessons learned about what companies that embark on in international projects should or must do, will also be provided in this paper. Challenges Faced by the Airbase Consortium This company was founded as a European consortium in 1970 with the aim of attaining from the aircraft construction a share, a market that is known to have been US-dominated.

Initially, it was partnered by French and German but was later joined by Spain and Britain companies. This company is known to have overcome national divides, agreed on a common language and measurement set, shared developmental costs, and even joined forces to attain a market share that was greater. Al these saw the company transform its face and lead to the achievement of valid competition to the crews, airlines and passengers. The company has been successful especially after producing its first twin-engine jet, which technically is the most highly developed plane globally However, such a major development did not come unaccompanied by some challenges.

There was a reorganization of the organization for the purposes of co-ordination betterment, lower the cost of production and the lifespan of development of the planes and their release and introduction to service provision. The four partners, previously operating independently, merged their assets of plane-making in 2001, thus forming the Airbus SAS. Besides the company’ s reorganization, another challenge they faced in the introduction of the A380, twin-jet, to twin market was a delay of two years and a concomitant loss.

Both challenges left the company no option but to cut down their workforce, have some of their plants closed down and acquire aircrafts parts by outsourcing. The company suffered this kind of loss due to economic patriotism (Montgomery 2002). This was after the French president declared that absolute equilibrium was to be maintained in the Airbus restructuring so that the workforce o the company was proportionally distributed geographically among the states’ partners. This somehow compromised the efficiency in production.

This practice of economic nationalism is usually meaningful at instances where a government misrepresents economic factors of private transactors by categorizing foreigners for the sake of national interest. Airbus faced inefficiency and bad corporate governance as a result of this economic nationalism. Initially, when the company had only two partners, the twin structure was maintained even though tensions and crises flourished. Problems that came with the development of A380 however, tinted the company’ s reputation now that many partners were involved. The competition also became distorted as those companies that are supported by the government have an added advantage of access to procurement contracts and infrastructure.


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