Question

Case 2.2 Long-term development plans of a German multinational in the USA A German firm had developed its activities in the electrical industry in the USA for two years and the Chief Executive Officer (CEO) Peter Hansen was happy with their current performance: market share for important products had increased significantly and progress was better than expected. The number of employees had increased, including quite a few local American managers in high-level management positions - a situation which was rather unusual for a subsidiary of a German multinational in its early stage of development. The CEO's goal from the beginning was to avoid an ethnocentric approach to the American activities of his firm and to take a polycentric approach that supported recruitment of local managers. One of these US local managers was John Miller, the marketing director of the company. During the last two years, he had been thoroughly prepared for his job. The company had sent him to various high-level training programs at top business schools and had provided him with a long-term career plan, which included short-term vertical career advancement. While Peter Hansen wanted to support the development of an American manage- ment style, he nevertheless tried to transfer some HR practices which are highly valued in Germany -particularly investing in training and taking a long-term intraorganizational career perspective. While some US firms took this approach, these ideas were not as widely accepted in the USA as in Germany. However, Peter Hansen assumed that these policies would be valued by the new US employees of the firm and would provide an important incen-tive for employee retention. One morning, Peter Hansen was shocked to learn that John Miller was about to quit his job. A competitor had offered John a challenging position - in large part because he had systematically built up his knowledge and experience base, supported by his German employer. How can you interpret Peter Hansen's surprise from a cultural point of view? Discussion Questions: 1Relate the described situation to one of the cultural dimensions identified by Hofstede. Can you explain Peter Hansen's surprise using this theory? 2HOW does this situation compare to comparable situations in your home country? What are the limits of a cultural explanation?

Answer 1

Answer 1:

After going through the given situation it can be identified that it relates to Individualism Versus Collectivism cultural dimension. As identified by Hofstede, in collectivism people are loyal to the group they belong and take responsibilities of their action. Peter Hansen was building a collectivist organization and was providing managers long term career in the organization and was expecting loyalty in return. However, in case of John Miller, individualism can be observed, where he laid more emphasis on his own growth rather than his organization, he did not consider his workplace as core family. This why when Peter learned about John’s decision to leave the organization and join other group he was shocked.

Answer 2:

This situation is comparable to situations in my home country as even in my home country, better opportunity will let employees switch their jobs. They will not be loyal to one particular organization and will lay more emphasis on individual growth. The limits of cultural explanation are till that extent where people can justify their actions as their culture. Such acts are not justified by culture.