Case number: 723412006 Nadine Kusenbach Student-number: 2053909
A) Identify what went wrong between the two business parties:
The overall problems regarding the sudden change of production performance in the Thai factory are the different views on what the production machinery can be used for in its idle time. The German managers consider it being self-evident that it is not to be used for private use or production. Whereas, the production workers and Thai managers consider it as completely appropriate to use it on Sundays, since the machinery is completely idle then anyways. Once the German management found out about the abuse of the machinery, they forbade the workers to use it for private use. That was a completely incorrect reaction since it caused a decrease in productivity and an increase of defects.
B) Mention the cause(s) of the problem:
The cause for the difficulties appearing in the first place was the lack of communication between the expectations and rules regarding the plant between Mr. Li and the German management. Due to the rapid changes and rules, which were then implemented after the managers found out, the workers experienced a cut in income due to the loss of the personal production time on Sundays. The extra income was seen as a motivation by the Thai workers since they probably worked extra hard during the week to accomplish time off on Sundays.
C) Which cultural dimension/dimensions that we studied in quarter 4 play(s) a role here?
The dimension which plays the biggest role here is probably the differences of individualistic and collectivistic cultures. Germany is considered as being individualistic whereas Thailand can be recognized as a collectivistic culture.
D) EXPLAIN your answer to question “c”. So JUSTIFY why you think the particular dimension(s) is/are relevant in this case study USE the THEORY in your answer:
A simple indicator to use when deciding which of the two countries belongs to either collectivism or individualism is to look at some demographical facts. Thailand has a high birthrate which is an indicator for collectivism. Germany is a wealthy nation with moderate to cold climate which is a sign for it being individualistic.
Further reasons are to be found when focusing on the boss to worker relationship in this case. Mr. Li is the manager of the production plant in Thailand and knew that the factory workers were using the plant on Sundays. Due to his response given you can even assume that he gave them permission to do so. This is rather normal in a collectivistic culture since the boss represents a father figure in such societies. Mr. Li saw interest in helping the workers to increase their income since he saw them as part of the family. He defends himself towards the German manager saying that he can assure that the workers never use any of the materials just the machinery. This is due to the unquestioning loyalty he gets in return for the help and protection he gives his employees. Mr. Li leads by coaching and supporting his staff.
The German Management cannot understand this due to the individualistic norms which they are used to. Being part of an individualistic relationship in Germany, defines a employee-employer relationship by contracts, rules and your skills; a boss typically does not coach but leads the employee in the defined direction.
When the German manager confronted Mr. Li about the secret production processes it was obvious how the two ways of communication differed between the two cultures. Michaela used the direct communication style by telling Mr. Li that it was not right, whereas Mr. Li replied in indirect ways by simply shrugging his shoulders and not arguing with her but furthermore having an upset facial expression.
Furthermore, the way the German management reacted when they found out about the Sunday production process was also completely common for Individualism. The managers made a quick decision by prohibiting further Sunday production sessions. The Thai employees did not expect this kind of decision-making at all. It is more common in their culture to take time when making decisions. Also it is essential for the employees to be involved, or to at least know what is going on before the German management takes any initiative.
Once the management prohibited the personal use of the machinery it instantly had a declining productivity level and an increase of defects as its consequence; this is due to the personal relationship which was destroyed due to the “new” rule. Previously, the workers felt a personal bond with the company due to the benefits the employees had by being offered the ability to use the machinery for private productions; the kindness of the Thai managers such as Mr. Li who allowed them to do so, assisted on building such a good personal relationship with the employees. Once the relationship was destroyed by the German Management the motivation of the workers sunk dramatically which resulted into negative production developments. Even threats (which were send from the headquarters), did not help since those do not motivate nor scare collectivistic society members.
E) What should the company do to prevent such a problem from taking place again in the future?
First of all, the company’s management should definitely try to reestablish the personal relationship with the Thai workers. Since it is most important to prevent productivity and defects to develop in an even more negative direction.
Secondly, the company can do this by negotiating with the plan workers by working out mutually accepted rules. One example could be to offer the workers the possibility to rent the machinery on Sundays. In fact, the workers make profit by producing their products but also damage the machinery a little bit due to the usage of it. If the workers give the company a share of their turnover then the company can use that money towards the possible maintenance costs. However, since it is only a small amount, the workers are still going to be able to increase their income. Consequently, their loyalty and motivation towards the company and their work will rise again which will lower the defects and increase the productivity of the company overall.
In conclusion, it is very important that the German headquarters’ management understand the cultural differences between the two countries and therefore try to adapt their management strategies to the standards and morals of the Thai society. Overall, the headquarters’ management team in Germany should try to manage according to collectivism instead of individualism since it is easier to do that instead of training the workers to understand the German culture.
F) Using the dimension(s) of culture in your explanation, explain how your solution guarantees that the two opposing viewpoints will not negatively affect the functioning in the workplace in the future?
Personal relationship is the key to conducting business in collectivistic cultures. Therefore, it is of great importance that the management tries to improve their relationship on a personal level from now on.
Furthermore, the German managers need to coach and support the plant workers instead of leading them as they are used to do in Germany; the Thai workers will not see the German management team as father figures overnight, but in due time this will stimulate a mutual agreement and establish a healthy work and personal relationship.
The management needs to integrate themselves into the strong, cohesive “in-group” which the Thai workers form by giving them the feeling that they will protect them and that they are not only workers in their eyes but that there is more to it. They give them the feeling of protection by giving them the chance to earn extra income again, since it will not only nurture their entire family but also improve their overall living standard. Once they reach that point the relationship will last a lifetime in collectivistic societies. In return, the workers questionable loyalty and lack of motivation will turn into improved willingness to properly perform in their day-to-day occupation.