GLOBE Initiative: How Cross-Cultural Management Has Affected Airbus?

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Table of Contents

Introduction
Scope and Limitations
The Assessment
Conclusion
References

Introduction

Cross-cultural management became an important topic after businessmen realized the impact of globalization to their respective companies (Foster, 2012). Cross-cultural management deals with the implications of human diversity, outsourcing, multinational organizations, expatriates, and knowledge transfer on business organisations.

Businessmen could study the impact of cross-cultural management in the workplace by utilizing Hofstede’s The Five Dimensions of Culture. A global project based on Hofstede’s theoretical framework called the Global Leadership and Organizational Behaviour Effectiveness (“GLOBE”) was an attempt to understand the impact of culture on business management (Kouzes & Pozner, 2007).

The analysis contained in the following pages was an assessment of how cross-cultural management affected Airbus EADS through the insights gleaned from the GLOBE initiative.

The critical assessment of the Airbus consortium requires the identification of key cross-cultural issues faced by the enterprise. After the identification of the said cross-cultural issues, the next step is to relate those to the GLOBE project’s clusters of business cultures.

Furthermore, the assessment attempts to evaluate the usefulness of GLOBE research project in how business leaders understand the cross-cultural issues involved. The end goal would be to devise viable solutions to the problems identified in the critical assessment of the said issues (Odgers,2005). Thus, leaders would be able to learn valuable lessons when it comes to the start-up of an international project (Steger,2009).

Scope and Limitations

Before going any further, it is important to point out the scope and limitation of this assessment task. The assessment will focus on the impact of cross-cultural management on Airbus SAS, particularly when the company experienced problems in the construction of Airbus 380. In this regard, the cultural dimensions developed through the GLOBE initiative forms part of the assessment tool. However, the assessment does not include Hofstede’s criticism of GLOBE’s theoretical framework.

The assessment covers the impact of cultural dimensions to Airbus SAS as outlined in the GLOBE initiative. However, it is important to point out that the major cause of delays was brought about by miscommunication and internal problems related to European members of the consortium and not countries used by Airbus for their outsourcing needs.

The Assessment

It is interesting to note that the four members of the Airbus consortium were European countries. At the same time it is also important to note that the cultural dimensions outlined in the GLOBE project can be linked to where the countries are located. In other words most of the countries that were located in the Eastern hemisphere share the same culture as reflected in the cultural dimensions described in the GLOBE research project. The same thing can be said about the countries that were located in the Western hemisphere.

Cultural Dimensions

In order to identify the key cross-cultural issues faced by the Airbus consortium and connect it to the GLOBE project’s clusters of business cultures, it is imperative to have an overview of the cultural dimensions in the said project. The GLOBAL research team expanded on Hofstede’s five cultural dimensions and came up with nine cultural dimensions that could help identify the differences in leadership and management style of people in different parts of the world.

One of the most intriguing cultural dimensions was called the “Power Distance” (Hofstede, 2001). It was defined as the “degree to which a culture’s people are separated by power, authority, and prestige” (Javidan, Stahl,Brodbeck, & Wilderom, 2005, p.62). In layman’s terms, “power distance” was a means to measure the perception of power when it came to the interaction between two people. For example, in the United Kingdom a rank-and-file employee could communicate directly to the boss.

This particular subordinate could talk to the CEO without considering the implication of age difference and status. This type of culture does not exist in Japan. In the land of the rising sun, the boss would be offended by the lack of respect displayed by the subordinate.

The second cultural dimension featured in the GLOBE project was “In-Group Collectivism” (Hofstede, 2001). It was defined as the “degree to which a culture’s people take pride in and feel loyalty toward their families, organizations, and employers” (Javidan, Stahl, Brodbeck, & Wilderom, 2005, p. 62).

In this particular culture, great emphasis was on collective identity; emotional dependence; in-group solidarity; duties and obligations; behaviour regulation by in-group norms, family integrity, and strong in-group-out-group distinctions (Rhee, Uleman, Lee, & Roman, 1995, p.143). Loyalty and solidarity are important when it comes to the establishment of a stable organisation, however, it could also lead to stagnation and zero growth.

The third cultural dimension included in the GLOBE project was called “Institutional Collectivism” (Hofstede, 2001). It was defined as the “degree to which individuals are encouraged by institutions to be integrated into broader entities with harmony and cooperation as paramount principles at the expense of autonomy and individual freedom” (Javidan, Stahl, Brodbeck, & Wilderom, 2005, p.62). For example, in Southeast Asian countries, employees would choose harmony over confrontation.

Cultures that score high in this particular cultural dimension exhibit a great degree of conformity to the ideals of the group leader. On one hand the benefits of such attribute could lead to greater unity among group members.

On the other hand managers may be frustrated when it comes to the inability of the workers to voice out concerns and other problematic issues that requires confrontation, discipline, and other corrective actions. As a consequence a problem may persist for years because subordinates may have preferred harmony rather than introduce discord to the group.

The fourth cultural dimension highlighted in the GLOBAL research project was “Uncertainty Avoidance” (Hofstede, 2001). This particular dimension was defined as the “degree to which a culture’s people seek orderliness, consistency, and structure” (Javidan, Stahl, Brodbeck, & Wilderom, 2005, p. 62).

There are certain cultures wherein the people rely heavily on “social norms, rules, and procedures to alleviate unpredictability of future events” (Hoppe, 2007). This type of mindset means that leaders and management could expect consistency but on the extreme it could lead to obsolete and ineffective business strategies (Huczynski & Buchanan, 2004).

The fifth cultural dimension in GLOBE’s research project was “Future Orientation” (Hofstede, 2010). It was defined as the “degree to which a culture’s people are willing to defer immediate gratification for future benefits” (Javidan, Stahl, Brodbeck, & Wilderom, 2005, p.62). There are societies wherein the members delay gratification and instead, they invest in the future (Hoppe, 2007, p. 1). It can be argued that societies that scored high in this category are also those that experienced greater economic success.

The sixth cultural dimension that was highlighted in the GLOBAL research project was “Gender Egalitarianism” (Hofstede, 2001). It was defined as the “degree to which a culture’s people support gender equality” (Javidan, Stahl, Brodbeck, & Wilderom, 2005, p.62). There is no need to elaborate the impact of this cultural criteria, however, it must be pointed out that there many countries and various societies that do not value women as much as they value men.

Assertiveness was the seventh cultural dimension and it was defined as the” degree to which a culture’s people are assertive, confrontational, and aggressive” (Javidan, Stahl, Brodbeck, & Wilderom, 2005. p. 62). There is a no need to elaborate on this particular cultural dimension.

The eighth cultural dimension that was highlighted in the GLOBAL project was “Humane Orientation” (Hofstede, 2001). This particular cultural dimension was defined as the “degree to which a culture’s people are fair, altruistic, generous, caring, and kind toward others” (Javidan, Stahl, Brodbeck, & Wilderom, 2005, p. 62). There are societies that encourage and rewards individuals for being fair and generous towards other people (Hoppe, 2007, p.1).

The ninth cultural dimension was “Performance Orientation” (Hofstede, 2001). This particular category was defined as the degree “to which a culture’s people encourage and reward people for performance” (Javidan, Stahl, Brodbeck, & Wilderom, 2005, p.62). There is also no need to elaborate on this cultural dimension.

The Airbus Consortium

In order to appreciate the importance of cross-cultural management to the Airbus Consortium, it is critical to understand its organisational design as described in the following statements: “With its head office in Toulouse, France, Airbus operates out of over 160 international locations, including 16 main development and manufacturing sites in France, Germany, the UK, Spain and three wholly owned subsidiaries in China, Japan and North America … specialist facilities around the world include engineering centres in Beijing, Wichita, and Mobile (Airbus, 2012, p.1).

At first glance it seems that cultural conflict could explain the failure of Airbus to deliver their aircraft to their customers on time. However, upon closer examination, the root cause of the problem was miscommunication and mismanagement of resources (Heneman, 2002).

It was discovered later on that the root cause of the delay was the inability of the enterprise to design, manufacture, and assemble the complex wiring system of the aircraft. It was also discovered that engineers in Germany and Spain used an older version of the software utilised to develop the wiring system.

Furthermore, France and England used the newer version of the software. Despite the vendor’s assurance that the two older versions were compatible, there were many occasions when the employees could not access pertinent information. The inability to share and transfer knowledge contributed significantly to the delays at Airbus.

There was an impetus to look into cross-cultural issues because of the mention of China and Hong Kong. The Airbus consortium relied on Asian partners. In similar studies the conflict between Eastern and Western values are well known (Barrick & Ryan, 2003). Therefore, the comparison between two different cultures such as China and European countries was the expected course of action. However, a closer examination of evidence point to one conclusion – the problems were not caused by cultural differences.

There were many countries involved. The consortium had an agreement with the Chinese local officials. Thus, there is a tendency to evaluate the problems using the cross-cultural framework. However, the review of the root cause of the problem revealed that the four major players of the consortium caused the delays and these are all European based companies.

The use of the cultural dimensions can only be appreciated if two different cultures are compared and studied because the researchers would see the significant differences in their cultural dimensions scores (Bradord & Burke, 2005). This would suggest that people and leaders in that particular society share a different worldview (Cartwright & Cooper, 2009).

For example the Americans and the British people would consider the social norms in Japanese society as odd. But in the study of the delivery failure at Airbus, it was miscommunication and mismanagement of resources that led to the problem.

There is therefore no need to scrutinise cultural differences between these countries because these nations are part of Europe and therefore share the same Western values. It was also pointed out that Germany, France, Spain and the United Kingdom have similar scores in the GLOBAL research project. Consider the following insights:

The Germanic Europe cluster scores high on Assertiveness, Future Orientation, Performance Orientation, and Uncertainty Avoidance. It is in the mid-score range for Gender Egalitarianism, and Power Distance … The Anglo cluster scored high on Performance Orientation. It was in the midscore range for Assertiveness, Future Orientation, Gender Egalitarianism, Human Orientation, Institutional Collectivism, Power Distance and Uncertainty Avoidance (Chhoka, House, & Brodbeck, year, p. 297)

Even without utilising the result of the GLOBAL research project one can argue that the United Kingdom, France, Germany, and Spain share the same culture. Therefore, it is impossible to compare these four countries through the usual process of comparing different cultures. In other words, the delays in the delivery of the aircraft must be blamed not on cultural differences but other factors such as the integration of the supply chain management and miscommunication between top leaders (Cavaleri, 2005).

Miscommunication may have been the result of the language barrier. Although, the UK, Germany, France and Spain are located in the same continent, there four countries have different languages. Thus, it is possible that the fiasco with regards to the use of different versions of software was the direct consequence of the failure to communicate effectively (Chew, Cheng, & Petrovic-Lazarevic, 2006).

The people under the said consortium must look determine how to improve the business process (Cummings & Worley, 2009). It is possible that the creation of the consortium has created leadership problems. It has to be pointed out that Airbus started as a consortium between Germany and France.

In the said arrangement, the sharing of knowledge and resources may have been manageable. But the addition of the United Kingdom and Spain may have complicated matters to the point that it was no longer possible to manage the consortium effectively and efficiently (Elsevier,2010). Aside from the language barrier there is a need to adjust the organisational structure and look for ways to enhance communication between leaders and managers (Griffin & Stacey,2005).

Conclusion

The usual method used to study cross-cultural differences requires two contrasting cultures. Most of the time the problems are highlighted because of the significant differences between the two cultures.

The review of literature revealed that there exists major differences in culture when it comes to countries located in the Western hemisphere and compared to countries located in the Eastern hemisphere. The conflicts between East and West could be explained beyond the differences in language. There also exists a major difference in worldview.

The cultural dimensions developed by Hofstede and later expanded by the GLOBAL research project sought to highlight cultural differences. The aim was to develop strategies to deal with conflicts and other issues due to cultural differences. However, the same framework of analysis could not be used to identify and solve the problems at Airbus.

The inability to deliver the aircraft to their customers was not due to the cultural differences between the United Kingdom, Spain, Germany, and France. Even without any theoretical framework, people could easily deduce that these four countries share the same culture. In fact, the results of the GLOBAL research project revealed that countries belonging to the Anglo cluster and those belonging to the Germanic Europe cluster have similar scores.

In order to improve the efficiency of airbus when it comes to the manufacture of airplanes, there is a need to streamline their operations by improving the organisational structure. There was a time when the said consortium was led by two CEOs. One can just imagine the communication problems as well as failure in the creation of an effective strategy due to the presence of two leaders attempting to lead one consortium.

The establishment of an international business is always a challenge because of cultural differences. But in the case of the airbus fiasco the problem must not be blamed on cultural differences but other factors. There is a need to have a central command. There is a need for unity of purpose. There must be only one leader who could provide a clear direction for the company. There must be one leader that could effectively utilise every vital resource in the said consortium.

References

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Rhee, E Uleman, J Lee, H and Roman, R 1995, “Spontaneous self-descriptions and ethnic identities in individualistic and collectivistic cultures.” Journal of Personality and Social Psychology vol. 69, no.1, pp: 142-152.

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