Wilson Ltd, a UK-based engineering firm in producing motorcycles realised that its business strategy needed to be revamped as it had loss market shares predominantly to the Japanese because of their far superior technology. Hence, change-management was much needed at Wilson in order for the company to ensure its survival and stay relevant as well as competitive to the market. As a result, Wilson Ltd had adopted the strategic alliances approach where international joint venture (IJV) was established in 2004 with Japanese counterpart, Akita International –a specialist motorcycle engineering firm in Japan, inaugurating Akita Motor Cycle Company. The new business strategy in the UK was to capitalise on the European niche market by producing and marketing highly engineered, small numbers of prestige-status motorcycles to be sold at premium prices.
Even though newly formed joint venture Akita Motor Cycle created a separate legal entity to the business, the management was dominated largely by the Anglo-Saxon minded business thinking. It was evidently clear from the case study that the top management vis-à-vis family-led oriented type business managed by Mr. Steven Wilson, Chairman of the Board and Managing Director of Wilson’s Ltd; followed by his son, Mr. Christopher as the Marketing Director and Vice President of IJV and Mr. Kyoto, Managing Director of Akita International – the only representative of Japanese firm. This eventually led to a greater control by Mr. Christopher as compared to their Japanese counterparts.
As the company grew, management faced series of problems involving cultural differences between predominantly Japanese employees and also from the typical West Midlands workforce. The mono-cultural style practised by Mr. Sendai, a highly experienced and well respected Japanese team leader was resisted by the British work colleagues. On the other hand, the Japanese workforce were also demoralised by the style of management, particularly Mr. Christopher, in handling their concerns over work conflicts in the company. This is because the management had condoned British co-workers for leaving home after five o’clock p.m. sharp while Japanese employees were still working past the hour. On one occasion, Mr. Sendai’s portrait was put on a showroom slide show causing tremendous embarrassment and being regarded as a moral attack on Mr. Sendai’s character. One problem after another, lead to a high level of tension and frustration between aggrieved workers including Mr. Christopher, Mr. Sendai, Ms. Fiona. In the end, work situation had worsened and need to be rectified expeditiously to avoid further failure.
Drawing on ideas and frameworks from the course, how would you analyse and evaluate the problems in the Akita Motorcycle joint venture?
In today’s business environment, organisations are likely to be operating at extremely complex and dynamic in nature due to globalisation facet. More and more businesses are largely conducted in foreign countries as opposed to the traditional ways of doing business. As a result, organisations may often faced with challenges in managing culturally diverse workforce or managing cultural differences per se. Akita Motorcycle Company, a joint venture between U.K motorcycle led firm and Japanese Engineering firm is not an exception either. Schneider and Barsoux (1997) clearly states that ‘in every cross-boarder alliance, there are seeds of potential cultural conflict and misunderstanding’ . Hence, cultural conflict and/or cultural misunderstanding need to be surfaced, diagnosed and effectively managed.
In order to manage the ‘conflict’, it is eminent to understand what culture is and how does cultural difference usually have an impact on business performance. Culture by definition refers to ‘systems of meaning – values, beliefs, expectation, and goals – shared by a particular group of people distinguishing them from members of other groups’ (Gooderham and Nordhaug 2003 pg 131; Schneider and Barsoux 2003, cited in Martin G. 2006). Furthermore, undermining the cultural difference can have a detrimental outcome on business performance i.e. lower sales growth or sales volume, lower return on investment / profits (financial performance), high level of dissatisfaction index among workers and customers, impact on competitive advantage index, total failure of cross boarder alliance and etc. This is supported by a study instigated by Marcoulides and Heck (1993). ‘The authors proposed a model in which organizational culture was measured using several latent variables (organizational structure, organizational values, task organization, climate, and individual values and beliefs) and organizational performance were measured using capital, market and financial indicators. The results of this study showed that all of the latent variables used to measure organizational culture had some effect on performance with workers attitudes and task organization activities being the most significant variables ’ (Marcoulides and Heck 1993 cited in Ilie L. and Gavrea C.).Therefore, there is sufficient evidence to illustrate that culture has a correlation, either positive or negative, with organisational performance.
In Akita Motorcycle Company, the two predominant cultures are generally of the Japanese and Anglo-Saxon (the typical West Midlands). In a more popular term, culture is defined by ‘how we do things around here’. Since the Japanese usually has its own way of doing things around here and so does the Anglo-Saxon, cultural difference, conflict and variations ought to exist. This is for the reason that both coming from very distinctive cultures bring with them different set of expectations, value assumptions, interaction scripts, leadership styles, verbal and nonverbal habits that influence the conflict process (Toomey). Sequentially, to recognise, understand, evaluate and diagnose the problems in Akita Motorcycle Company, it is rather vital to probe to the root of the problem itself – why cultural variation and/or exist and how successfully the management deal with the issues. In an attempt to answer this question, theories and framework on culture need to be addressed.
In the last four decades, extensive research effort had been carried out to systematically describing cultural differences. For instance, studies of cultural differences were conducted by Kluckhohn and Strodbeck (1961), Hall (1977), Hofstede (1980), Trompenaars (1993), Schwartz (1995) Trompenaars and Hampden-Turner (1997). Among those, the most widely accepted theoretical framework is the Hofstede’s (1980) four-cultural dimensions model (Thomas, 2008) namely ‘power distance, individualism vs. collectivism, uncertainty avoidance and masculinity-feminity’ . Hofstede’s cultural dimension theory and framework with supported by other research scholars’ cultural dimension will be used widely to evaluate problems in Akita Motorcycle Company.
Figure 1 as shown below is outlined from the country rankings (Japan versus U.K denotes by the Great Britain) according to Hofstede’s values. The excerpt however is taken from the table outline in Managing People and Organizations in Changing Contexts (Martin, 2006) . This table will compare the cultural dimensions between Japan and the U.K, helping to understand the existence of cultural differences conflict Akita Motorcycle Company is facing.
Country comparison Cultural Dimension
Power Distance Individualism Uncertainty Avoidance Masculinity
Japan 54 46 92 95
Great Britain 35 89 35 66
Figure 1: Cultural dimension between Japan and Great Britain according to Hofstede’s study.
Power Distance by definition indicates the extent to which society accepts the unequal distribution of power in institution or organisation (Schneider and Barsoux, 1997) . In terms of power distance, Japan scores higher, 54, in the cultural dimension index as compared to Great Britain at 35. This illustrates that Japanese culture would tend to be more respectful and value hierarchical status and power of a leader. This is true in the Akita case study whereby the Japanese workers have had high level of respect and support of Mr. Sendai for his leadership, authority and experience. U.K workforces, however, are on the contrary note whereby they would tend to value equality more than other factors. Therefore, U.K workers would treat their Japanese co-workers equally including Mr. Sendai according to their cultural values and beliefs. This in turn creates cultural conflict among the Japanese workers and U.K workers because Mr. Sendai’s position as a leader is now being under valued. For instance, the UK workforces tend to question Mr. Sendai’s management style for having work past five o’clock p.m to meet production quotas.
Individualism dimension is defined in contrast to collectivism and refers to the degree to which individuals are integrated into groups (Martin, 2006) . On the other hand, Thomas (2008) describes individualism-collectivism dimension as to the ‘extent to which one self-identity is defined according to individual characteristics or by the characteristics of the group to which individual belongs on a permanent basis, and the extent to which individual or group interests dominate.’ From the Hofstede’s cultural dimension, UK scores extremely high on individualism index with 89 meanwhile Japanese counterparts only score 46. Hence, UK has embedded individualistic culture while Japan is more of a collectivist in nature. In the Akita case study, this point is clearly demonstrated. The Japanese workers always praise for group work effort and group task achievement. Furthermore, they enjoyed long working hours, start their work routine with group morning exercise and ended the day with ceremonial work song. Meanwhile, UK workforces on the other hand are highly regarded as individualistic, high initiative on individual accomplishment or achievement and enjoy autonomy. In short, Japanese foster the concept of family and sense of togetherness while their counterpart prefers the right to private life. Cultural conflict in Akita highly to occur in the individualistic versus collectivist dimension because being in a manufacturing motorcycle industry, work are largely organised on group to meet production quota. At the production line, individual work could have been completed but the overall group production quota has not been met. The UK workers are ready to go home while the Japanese workers are still struggling to meet the quota.
Uncertainty avoidance in Hofstede’s own words – ‘the extent to which people in a society feel threatened by uncertain and ambiguous situations and the extent to which they try to avoid these situations by providing greater career stability, establishing more formal rules, rejecting deviant ideas and behavior, and accepting the possibility of absolute truths and the attainments of expertise’ (Hofstede, 1980) . Japan tend to exhibit a high level of uncertainty avoidance with a score of 92 as opposed to UK with low level of uncertainty avoidance at 35. In the business context, Japanese managers are always seeking support or approval from the top management when it comes to decision making as they are trying to avoid risk taking and be blamed for the mistakes. Meanwhile, the UK managers tend to be more risk taking when making decision making. This can be tied back to the Akita case study as Mr. Sendai brought up the Japanese workers’ grievances over production conflict to the attention of Mr. Wilson asking for his wisdom and clear guidance hoping that the matter could be resolved.
Masculinity dimension reveals the ‘bias towards either ‘masculine’ values of assertiveness, competitiveness, and materialism or towards ‘feminine’ values of nurturing and the quality of life and relationship (Schneider and Barsoux, 1997) ’. From the masculinity dimension, Japan exhibits element of strong masculinity with a score of 95 and UK on the other hand is moderately masculine with a score of 66. In business context, country with higher masculinity index tends to have a task accomplishment management style as contrary to quality of life for instance. In the Akita case study, this notion is true as the Japanese are more concern over working long hours in order to accomplish their task. UK counterparts on the other hand, value their personal quality time over material elements.
The other cultural model that is useful to evaluate Akita’s problem is the Trompenaar’s and Hampden-Turner Dimension study which was conducted in 1997 (Martin, 2006) . Both researchers draw their ideas from sociologist and anthhropologist point of view and construct on the work of Kluckhohn and Strodbeck (1961), Parsons and Shils (1951) cited in Thomas (2008) . There are seven cultural dimensions namely universalism versus particularism; communitariarism versus individualism; neutral versus emotional; diffuse versus specific; achievement versus ascription; time orientation and environment. It is also essential to note that communitariarism versus individualism and achievement versus ascription is similar to the Hostede’s cultural dimension study namely individualism dimension and power distance dimension respectively (Martin, 2006) .
Universalism versus particularism: Universalism is a belief that what is good and can be discovered and universally applied to all context (Trompenaars and Turner, 1997) . In simplest term it means ‘there is one best way of doing things’. On the other hand, particularism stresses on the obligation of relationship. Mr. Christopher, the Vice President of Akita Motorcycle company, strongly demonstrated universalism principle. American education and American attitudes embedded from his stay in the USA highly influence his leadership style. Mr. Sendai on the other hand fosters close and family tie relationship with his subordinates.
Neutral versus emotional: In neutral culture, emotional need to be hold back and need not to be expressed freely. Breach to this rule would be seen as intolerable (Martin, 2006). On the other hand, emotional culture emphasis on this notion – emotions can be expressed freely and openly in business environment and that is right to do so. Mr. Christopher illustrates an emotional embedded culture as he punctuated his anger at Ms. Fiona’s over the showroom dispute issue.
From Hofstede’s Cultural Dimension and Trompenaar’s and Hampden-Turner Dimension study, Akita Motorcycle company’s problems can be surfaced and identified as follows:
? cultural variation / conflict problems and;
? leadership / management problems.
Therefore, these problems need to be mended and well managed to keep Akita’s survival, stay viable and continue to prosper.
How could the joint venture have been led and managed effectively? You should focus on the roles and leadership styles of the principal figures in this case study, including the British and Japanese managers and workers, especially the key people mentioned in the case.
It is a widely belief principle, in order for any nation or organisation to progress, the right person need to lead. However, to get the right person for the job is rather difficult unless in an ideal state. Moreover, the term ‘right person’ for the ‘right job’ is still much in debate today. What could jeopardize a great nation or organisation to progress is to have the right people for the wrong job or the right job for a wrong people. Akita Motorcycle company is no exception.
Mr. Christoper’s Wilson is the son of Mr. Steve Wilson, the Chairman of the Board and Managing Director of the British joint venture. Mr. Christopher then was appointed as the Director of Marketing and Vice President of the Akita Motorcycle Company either through ‘family-linked’ business oriented system or because of his qualification in the USA with some working experience in the States. Being educated abroad, he had learned the typical American ways of doing business and more ‘Americanized’ in nature – being straightforward in his attitudes, highly individualistic, stereotype and quite provincial in his attitudes towards the Japanese, his IJV counterpart. The question worth to ponder is whether he is the right man for the job?
Mr. Christopher also demonstrated a ‘laissez-fair’ leadership style. In a loose term, laissez-fair can be defined as ‘to allow events to take their own course or to let people do what they choose’ . It is evidently clear that, Mr. Wilson delegated his work through respective divisional managers i.e. Production is managed by Mr. Sendai, Ms. Fiona on Language matters while Ms. Janice incharge of the showroom. By exercising laissez-fair leadership model, maximum freedom was given to the group while the leader desires minimum control and leadership. Moreover, this kind of leadership would only give help if requested. Mr. Christopher highly exhibits this trait. In the case study discussion always commenced when issues were raised and need further discussion i.e. frustration of Japanese worker towards their U.K counterpart on working hour issues and the showroom episode involving Mr. Sendai’s slide show.
On the other hand, another key figure that is highly respected by the Japanese workers is Mr. Sendai. In general, by judging to his personal traits and characteristics, he tends to be ‘happy-go-lucky, highly qualified and experienced chief engineer, serene, Buddha-like disposition, steadfast traditional values, and sizeable physical strength. Japanese culture also regards Mr. Sendai as wise because of his age. Thirty-minute exercise routine led by Mr. Sendai normally commences before typical work-day starts, and ends the day with ceremonial work song. In general this demonstrates that he foster group-work, family oriented, father figure character. Hence, he tends to display paternalism leadership style. Thomas (2008) has described paternalistic leadership as a ‘hierarchical relationship between the leader and follower, like a parent, provides direction in both the professional and private lives of subordinates in exchange for loyalty and deference’
Being promoted to a Production Manager due to his experience, expertise and wisdom, Mr. Sendai had practiced mono-cultural Japanese management techniques in the Production factory which had largely created friction between the two cultures. The UK coworkers of which on the hourly wage scheme saw their job as per nine to five basis. Japanese workers on the other hand, tend to work beyond their normal working hours as it is embedded in their working culture. In addition, the Japanese workers are on a monthly salary basis. Being a paternalistic in nature, and coming from a highly collectivist and uncertainty avoidance culture, Mr. Sendai had escalated the problem to Mr. Christopher for guidance. The clash of leadership styles and cultural variation in nature between Mr. Sendai and Mr. Christopher left the problem unsolved, hence demoralised the Japanese workforce.
Furthermore, it is likely that when two distinctive cultures meet, cultural diversity emerges. Therefore potential culture clash might occur. This is true in the Akita case study when the two predominant cultures meet – the West Midlanders culture versus Japanese culture. Schneider and Barsoux (1997) proposed that:
‘…not only behavior, values and beliefs are different across cultures, but also that their importance to those cultures should not be underestimated. What people in one culture value or perceive as sacred (seniority or tea) maybe considered irrelevant in another culture. The trouble is that, it is difficult to recognize just what matters (and how much) to another culture-especially when we find it so hard to recognize what is important in our own’
Ms. Fiona on the other hand was hired by the management in 2005 as the Chief Language Instructor when the communication between the two cultures became difficult. She plays her part as an interpreter’s role and acts analogically as a glue to bond between the two cultures.
The management of Wilson Ltd., Mr. Christopher’s exorbitant leadership, cultural conflicts, human resource issues largely had its drawbacks. Shortcomings and recommendations to best reflect these drawbacks are as follows:
? When Wilson Ltd. and Akita International determined to embark on International Joint Venture (IJV) as a strategy to add competitive advantage and value-added to Wilson Ltd. per se, the management of Wilson Ltd. had not done extensive research about their counterparts well enough. For instance, a research background on the culture, people, organisation structure, human interaction, leadership style, work norms and etc. could have given valuable information and helpful insight about the future IJV. From analysis, Wilson Ltd. expeditiously opt for IJV because the company was panicked losing their market share predominantly to the Japanese due to superior engineering technology. Hence, on board IJV seems to be the best option or strategy at that point of time. Arguably however, managing IJV successfully is often complicated and challenging. Thus, many ultimately bound to fail. Schuler et al (2004) accounts failure rate of IJV is up to 70% . For instance, Wal-Mart, a giant retailer that has been successfully dominated the USA market, on the other hand, failed in its attempt to penetrate Germany’s market. The illustration of the case study on Wal-Mart and overseas expansion is well discussed in the Managing People and Organizations in Changing Contexts (Martin 2006)
? Management also had failed to see the bigger picture vis-à-vis helicopter view and only identify language is the key to solve cultural differences issue. Language by all means is merely a small piece of a jigsaw puzzle in a bigger context. An analogy for understanding cultural differences has been pictured as ‘peeling an onion’ . The first and obvious layer is the outer layer where languages, foods, buildings, monuments. This visible layer is known as artifacts. The second layer entails espoused values such as strategies, goals, philosophies and etc. Finally, the deepest root of culture denotes by the inner most layer is the basic underlying assumptions, whereby this layer is invincible and unconscious to human perception. Feelings, thoughts and perceptions fall under this category. Therefore, in order to understand cultural difference as a whole, the management need to examine and analyse all three layers and not only visible to the eyes.
? As IJV has been successful for Wilson Ltd. and Akita International, a new identity and separate legal entity was formed namely, Akita Motorcyle Company. This was merely a new beginning and more challenges await. As the company started to grew, British marketing, public relations and financial accounting staff along sales force made up both British and Japanese nationals were brought into the company. The integration of these workers into the company were difficult since human resources issues were poorly managed. In fact, Human Resource Division was not once mentioned in the Akita’s case study. By establishing Human Resource Division, employees particularly would not be ‘left in the dark’ as clear guidance and formal policies on all Human Resource (HR) matters would be in-placed and implemented. Schuler (2004) commented further on the Managing Human Resources in IJV by stating that:
‘For individuals as well as teams, the importance of learning, sharing and transferring knowledge has implications for the competencies (knowledge, skills, abilities, personality, and habits) to perform their organizational roles. Ineffective HR policies and practices may produce a workforce that is incompetent and unmotivated, poorly matched with job requirements, inadequate socialized ad uncommitted to the IJV itself, and/or unable to manage their dual loyalties to the IJV and its parents’
? With the establishment of HR division within the Akita Motorcycle Company, gap on cultural barriers/cultural conflicts or variations can be lessened via cultural training programs, job rotation among UK and Japanese workers. Such practices can foster biculturals learning experience and enriching cultural understanding and exposure. Thomas (2008) clearly defined bicultural as an ability for workers to have dual pattern of identification towards culture, apart of their own culture, and at the same time have a tendency to ‘experience more cognitive complex cultural representations than do mono-culturals’ (Benet-Martinez, Lee et al 2006 cited in Thomas 2008) . Moreover, HR can also relook into Ms. Fiona’s roles, towards more culturally liason, so that it can be more an enriching experience for her rather solely being an interpreter.
? On the other hand, any grievances pertaining to employee relations issues such as working hour’s policy, reward system can be smoothly handled as grievances could possibly be channeled properly. Communication feedbacks on grievances must also be built to help ease the parties concerned.
? Mr. Christopher also highly need to change his views towards the Japanese, thus harnessing the understanding of different culture by way of recognizing, respecting, and continuously reconciling cultural differences. Recognizing and respecting phase occasionally tend lead towards identification of potential threats and opportunities that the culture can offer. ‘Reconciliation on cultural differences’ was the idea introduced by Trompenaars F. and Woolliams P (2006) whereby both researchers suggest that:
‘It helped to identify and define behaviors and actions that vary across the world and across companies but which all integrate differences to a higher level ~ much more significantly than compromise solutions. The approach informs managers how to guide the people side of reconciling any kind of values. It has a logic that integrates differences. It is a series of behaviors that enables effective interaction with those of contrasting value systems. It reveals a propensity to share understanding of other’s position in the expectation of reciprocity’
? In addition, Mr. Christopher’s ‘silo minded thinking’ (denotes by I-type-thinking) also need to be changed, whereby universalism principle upheld by his values likely not to be practical anymore. Instead, Mr. Christopher needs to exhibit openness and develop a broader thinking style (T-type-thinking). Mr. Christopher also needs to embrace the cultural diversity that Akita Motorcycle Company enjoys. Rather than seeing culture as a problem, cultural diversity needs to be viewed as a source of competitive advantage.
In short, in making a change management program in Akita Motorcycle company a success, the leaders need to reflect and be ready to experience first hand change within self via the notion ‘led by example’ or ‘walk the talk’ .i.e. changing mindsets and attitudes. On the other hand, Human Resource Division also needs to play its part in order to close gap on people’s problem.
Suggest a strategy for change to take the company forward.
As pointed out earlier, businesses and organisations are becoming more diverse and complex as a result of globalisation. Hence, organisations being multicultural in nature, must deal with the impact of cultural difference, and possibly problems that could arise from it. Slightest variation in behaviour in a culture could create conflict thus could give impact on the workforce motivation and productivity . Lower productivity and motivation largely could have a direct impact on business performance. Therefore, a strategy for change needs to be implemented successfully to solve the root of the problem – cultural conflict. For instance, Akita Motorcycle Company is facing with such conflict. In order to move forward, an appropriate change strategy is needed to effectively attempt at the problem. Martin (2006) suggests two generic models that can be used to analyse and guide the strategic change management particularly deals with cultural change . The two change models are as follows:
? the Intervention Strategy Model (ISM) developed by Paton, R. and McCalman, J. (2006) and;
? the Strategic Change Process Model developed by Martin, G. and Beaumont, P. (2001)
The ISM model is a system driven and also based on a socio-technical platform (Paton & McCalman 2008) . Fundamental components of the system are the integration between the System Intervention Strategy (SIS), developed by the Open Business School (Mayon-White, 1986) and Total Project Management (TPM), a product of Glasgow Business School (Paton and Southern, 1990) . The ISM model was subdivided into three phase namely problem initialization or identification phase; evaluation and design phase; and the implementation phase.
Martin (2006) further break-up the three phase models into smaller elements that associated at different stage . The segregation model of the ISM as follows:
? Stage 1: Problem definition
a) clarifying the objectives of the change
b) capturing data and performance indicators
c) diagnosing the system’s properties
? Stage 2: The evaluation and design phase
d) analysing the system
e) determining options or solutions
f) evaluating options or solutions
? Stage 3: The implementation phase
g) implementing the chosen option or solution
h) appraisal and monitoring
During the problem definition stage, Akita Motorcycle Company must identify problems arising from the cultural conflict observed by both cultures. Then the problems with a brief background of the event could be stated for further discussion. Both cultures would then view the problems in their own perspectives and agree on the problems. The shared perception on the problems could give advantage to both culture and leads to work for a solution. The whole process to some extent is believed to be motivated by the work of Jourard S (1964), a concept on the Johari Window, working on the notion of ‘how I see things / I don’t see things’ versus ‘how they see things / they don’t see things’ (Jourard S 1964 cited in Schneider and Barsoux 1997) . Performance indicators are also need to be set up allowing the data on the problems to be collected for further analysis and evaluation.
At the evaluation and design stage, the data collected earlier can then be analysed by the organizational change specialist and perhaps come up with a possible solutions to the problems . Cultivating bi-cultural learning, cultural training program, working towards one corporate cuture (united organisation) or even engaging in conflict resolution are some examples of possible solutions that Akita can consider. These possible solutions will then be evaluated to see whether they are viable and reliable. Some useful techniques recommended by Martin (2006) to evaluate the solutions are of the scenario writing / planning; forecasting and scenario planning.
Best possible solution would then be implemented via suitable implementation strategies to achieve the goal of the organisation. These implementation strategies include pilot testing, parallel running and big bang (Paton and McCalman, 2008) . It is important to note however that not every change strategy is a success. In the Akita case for instance, the goal is to strive in resolving cultural difference and working towards achieving cultural integration. Appraisal and monitoring program also need to be built in for future review and reference.