Across Organizational & Cultural Boundaries - myassignmenthelp.com

Question: Discuss about theAcross Organizational Cultural Boundaries for Learning. Answer: Six main bases for collaborative advantage The six main bases of collaborative advantage are access to resources, shared risk, efficiency, coordination and seamlessness, learning and the moral imperative. The organization collaborates to share resources when they cant accomplish their objectives with individual resources, for instance, pharmaceutical companies which require resource for production and marketing collaborate to share resources(Kozlenkova, Samaha and Palmatier 2014).Organization collaborates to share the risk of failure of a project, for instance RD projects. Organizations collaborate to gain efficiency in terms of outsourcing, operational efficiency, coordination and economies of scale, for example, public-private partnership (Bingham and O'leary 2014). Coordination and seamlessness is a part of efficiency of an organization, collaboration also promotes mutual learning of organizations. Most importantly, organizations collaborate on moral imperative to eradicate problems on national, society, industrial and org anizational levels (Foss. and Knudsen 2013). Why BenQ initially wanted to join efforts with Siemens Taiwanese companies witnessed a shrink in profit margins for contract manufacturing. In order to achieve a profitable future, the Taiwanese companies wanted to move beyond low-cost manufacturing. Taiwanese companies wanted to build their individual brand names rather than being a contract manufacturer who is almost anonymous in the marketplace. BenQ, the Taiwanese company wanted to acquire Siemens, the German company for its existing brand name which was attractive. BenQ also wanted to enhance its global presence by acquiring Siemens. The launch of the brand Ben-Q Siemens by acquisition of the mobile phone division of Siemens which was losing money proved to be advantageous for BenQ. The merger helped BenQ to become the fourth largest brand of mobile phones across the globe after Nokia, Samsung and Motorola. K.Y. Lee, the chairman of BenQ felt that he will be able to generate profits from the debt-ridden unit of mobile phone of Siemens. Lee was of the opinion that because of the glob al distribution and sales channel of BenQ it was easier for BenQ to achieve profit easily. The manufacturing facilities and economies of scale of Ben Q would also increase by choosing a complimentary partner like Siemens. BenQ initially wanted to join efforts with Siemens because the organization felt that this merger and acquisition will lead to a win-win situation for both companies as more synergy and value in the marketplace will be created by the formation of the brand name BenQ-Siemens (Cheng. and Seeger 2011). Bases for collaborative advantage of the collaboration between BenQ and Siemens The German company, Siemens was not directly paid by BenQ. The 100% stake of mobile phone division of Siemens was acquired by BenQ. Initially an amount of 250 million Euros was provided to BenQ by Siemens for funding the business, later 50 million Euros was spent by Siemens to purchase shares of BenQ which were issued newly. Siemens also incurred the loss of the unit, 1.5 million Euros loss per day. Siemens collaborated with BenQ to develop technologies for handsets. The rights of co-branding was vested to BenQ- Siemens within a tenure of 5 years and the right for the usage of the trademark of Siemens was gained by BenQ for a period of 18 months. BenQ wanted to fulfil the contract agreement of labour with the cell phone employees of Siemens. The share of Siemens was up by 3% and rose to 61.9 Euros because of the transaction (Cheng. and Seeger 2011). Ultimate outcome of the collaboration between BenQ and Siemens The collaboration of BenQ and Siemens failed ultimately. After purchasing the handset division of Siemens, the shares of BenQ dropped by 2.7 % on the Taiwan Stock Exchange. The new business division of BenQ Mobile commenced its operation in October, 2005 in Munich, Germany with 7000 employees across the globe. The handset operations of Siemens allowed BenQ to compete with leading brands, but the current prime customers of BenQ had a conflict of interests because of the collaboration between Siemens and BenQ. By September 2006, BenQ decided not to invest money in its German subsidiary to cut loss. The interests of the creditors were protected and the subsidiary filed for insolvency in Munich court. There was loss of 3000 jobs in German because of this failure. The high context culture of BenQ and the low context culture of Siemens, failed communication and difference in organizational culture resulted in this failed acquisition. The media commentators, labor leaders and politicians in Germany felt that BenQ did not have experience in marketing and lacked competence and the acquisition of Siemens by BenQ was an economic and social disaster (Cheng. and Seeger 2011). The Critical Challenges those Multicultural companies might face Multicultural companies face challenges with communication, difference in culture and diversity. The difference in culture among employees of a multicultural company results in language barriers and communication practices which are divergent in nature. Intercultural communication has two comparison points which are influential which are 1) The idea of context and 2) The value/ belief theory of culture. A multicultural company has a workforce with different cultural values, for instance, the high-context culture where people demonstrate deep involvement with one another and in a low context individualized culture where people are demonstrate little involvement with each other. Values are the foundation of culture and collective programming is influenced by values (Huxham and Vangen 2013). The people belonging to similar culture share similar patterns of feeling, thinking reacting and acting and thus a particular event is perceived in different ways by people from different cultures. Power distance, masculinity or femininity, avoidance of uncertainty, individualism or collectivism and long-term and short term orientation are different cultural dimensions founded by Hofstede. Multi-cultural companies have a diverse workforce from different countries and thus their cultural values are affected by the 5 cultural dimensions of Hofstede. Also multicultural companies have multicultural teams and have to deal with challenges of diversity-both surface level diversity like ethnicity, age, gender and deep-level diversity like differences in values, attitudes and beliefs. Also, people with different cultural background have different mode of learning and it is a challenge for multi-cultural companies (Hunt 2014). Cultural difference challenge in case of BenQ and Siemens BenQ is a company from Taiwan and Siemens is a company from German. The culture of BenQ was influenced by oriental Confucian culture whereas that of Siemens was Germanic European culture. The culture in Taiwan is more collectivist and rule-oriented and less assertive and future oriented. The culture in German is focused on contracts, agreements, individual rights and personal independence. On the index of individualism, Germans scored 67 and Taiwanese scored 17. Taiwanese society has a collectivistic culture and employees have a strong sense of organizational belonging while Germans prefer challenges, time, and freedom and are highly individualistic. The difference in culture created a gap between the German subordinates of Siemens who were highly individualistic and Taiwanese employers of BenQ who were highly collectivistic. There was turnover in executive management of Siemens. Taiwanese scored 58 and score of Germans was 35 in the scale of power distance. Germany has a strong unio n and collective tariff agreements between representatives of trade unions and employers association fix salaries of German employers. Germans separate work and private lives, they do not work on Sundays and public holidays and have six weeks of paid vacation while Taiwanese are ready to work on weekends and holidays if there is a requirement by their organization. Thus, BenQ faced the challenge of maintaining good relationship with union labor of Siemens. In the index of avoidance of uncertainty , Taiwanese ranked 69 and Germans ranked 65. Taiwanese have fear of failure and avoid risks. The electronics company of Taiwan adopts procedures of cost-cutting and after acquiring Siemens, BenQ had NT$36.7 billion loss. Business schedules in German are flexible while it is rigid in Taiwan. The production schedule, new product development and marketing plan of BenQ were delayed after acquisition of Siemens because of the difference in organizational culture. The R D of new products across BenQ and Siemens and the incompatible culture of the two companies were not integrated by BenQ and thus the company faced financial problems due to the cultural difference. BenQ was a Taiwanese company and focused on product diversification, adaptability, resilience, flexibility and innovation with an informal organizational structure whereas Siemens had a formal organizational structure with a decision-making process which was methodical. Also, there were challenges of cross- cultural communication, the Taiwanese have a subtle style of communication while communication style in German companies are assertive, the employees of BenQ could not speak German resulting in barriers of communication. The intercultural failure resulted in failed acquisition of Siemens by BenQ (Cheng. and Seeger 2011). Actions taken to minimize each of the challenges Actions were taken to minimize the challenges. BenQ managed to maintain a cordial relationship with the labor union of Siemens. Lee, the chairman of BenQ made a public apology to the stakeholders of German and Taiwan at Institutional Investor Conference and promises for the future was delivered in this conference. Lee also hoped to recover the financial loss and achieve healthy growth. In order to take corrective action to meet the financial crisis, Chairman Lee wanted to resign at the board meeting. Trust between BenQ and Siemens Initially trust was displayed between BenQ and Siemens in order to achieve collaborative advantage financially and operationally. Chairman Lee of BenQ retained the CEO of Siemens Joos along with 2800 R D employees in order to make a smooth transition. However, the employees of Siemens did not have trust in BenQ. The mechanism of internal communication adopted by BenQ at the beginning of the deal was not appropriate resulting in anxiety and rumors among German employees. There was miscommunication and disagreement over the new products development process and the speed of reorganization between the German management and headquarters at Taipei of BenQ. The decision of BenQ to terminate financial support for the German subsidiary was rational for Taiwanese but was severely condemned in German. The implementation plan of new business strategies for BenQ- Siemens unit was not communicated among employees in a concise and consistent manner by BenQ resulting in miscommunication and lack of trust. The employees of BenQ was not fluent in German and there was communication barrier between the companies resulting in lack of trust because the high context Taiwanese culture preferred subtle communication while the low-context Germans preferred to communicate directly. Lee did not communicate directly about the layoff of the employees of Siemens to avoid direct disagreement and thus the German employees felt deceived later on (Cheng. and Seeger 2011). The ways trust can be built and restored for a better collaboration outcome Trust can be restored for a better collaboration outcome with the help of an innovative communication model (Alguezaui and Filieri 2014). The two clashing cultures of companies during a merger and acquisition process can be integrated with the help of an open communication model. The organizational uncertainty and stress can be successfully reduced with clear communication. The anxiety and tension of employees increases due to communication gap resulting in grapevine. In culturally distant countries misinterpretation occurs of the actions and messages of the acquiring firm which are misconstrued, ambiguity can be reduced and expectations can be clarified by adopting an open communication model. Foreign language proficiency among employees can reduce the barrier in communication and build trust resulting in better collaborative outcome. The communication process should be clear and concise for a better collaborative outcome and to build trust. The communication program should be emplo yee-centered and the organizations should focus on a high level of relationship building among employees to restore a better collaborative outcome. Also, the managers of an organization should make sure that employees are not deceived by revealing accurate information. The concept of face-concern is of paramount importance to build trust, for instance, individualists try to save their own face and collectivists save the face of members of a group. In order to restore a better outcome of collaboration and build trust, the difference of the high context and low context organizational culture should be minimized. A balanced approach between individualism and collectivism, power distance and avoidance of uncertainty can result in a better outcome of collaboration. The board of directors should protect stakeholders when an organization is hit by crisis to build trust and restore collaboration. Reference Lists Alguezaui, S. and Filieri, R., 2014. A knowledge-based view of the extending enterprise for enhancing a collaborative innovation advantage.International journal of agile systems and management,7(2), pp.116-131. Bingham, L.B. and O'leary, R., 2014.Big ideas in collaborative public management. Routledge. Cao, M. and Zhang, Q., 2013. Introduction. InSupply Chain Collaboration(pp. 1-15). Springer London. Cheng, S.S. and Seeger, M.W. (2011). Cultural Differences and Communication Issues in International Mergers and Acquisitions: A Case Study of BenQ Debacle. International Journal of Business and Social Science, Vol. 2, No. 24, Special Issue December 2011. Foss, N.J. and Knudsen, C. eds., 2013.Towards a competence theory of the firm(Vol. 2). Routledge. Hunt, S.D., 2014.Marketing theory: foundations, controversy, strategy, and resource-advantage theory. Routledge. Huxham, C. and Vangen, S., 2013.Managing to collaborate: The theory and practice of collaborative advantage. Routledge. Kozlenkova, I.V., Samaha, S.A. and Palmatier, R.W., 2014. Resource-based theory in marketing.Journal of the Academy of Marketing Science,42(1), pp.1-21.