Harvard Case - European Experience (A)
"European Experience (A)" Harvard business case study is written by David T.A. Wesley, Henry W. Lane. It deals with the challenges in the field of Organizational Behavior. The case study is 12 page(s) long and it was first published on : Jul 21, 2002
At Fern Fort University, we recommend a multi-pronged approach to address the challenges faced by the European subsidiary of the American company. This approach focuses on fostering a strong organizational culture, building high-performing teams, and implementing effective change management strategies.
2. Background
The case study focuses on the European subsidiary of an American company, struggling to adapt to the local market and achieve profitability. The subsidiary, led by an American manager, faces challenges in navigating the complex cultural landscape, building trust with employees, and adapting to European business practices. The employees, accustomed to a more collaborative and democratic work environment, are frustrated by the hierarchical and directive management style. This leads to low morale, poor communication, and a lack of ownership among employees.
The main protagonists are:
- John Smith: The American manager leading the European subsidiary.
- The European Employees: Facing cultural clashes and struggling to adapt to the new management style.
3. Analysis of the Case Study
This case study can be analyzed through the lens of organizational behavior, cross-cultural management, and change management.
Organizational Behavior:
- Leadership Styles: John Smith's leadership style, characterized by a directive and hierarchical approach, clashes with the European employees' expectation of a more collaborative and participative environment. This mismatch in leadership styles contributes to the existing tension and lack of trust.
- Organizational Culture: The clash between the American and European organizational cultures creates a significant barrier to integration and success. The American culture, emphasizing individual achievement and direct communication, contrasts with the European culture, which values collaboration, consensus-building, and indirect communication.
- Team Dynamics: The lack of effective communication and trust between John Smith and his team leads to poor team dynamics. This is further exacerbated by the cultural differences and the perceived lack of autonomy among employees.
Cross-Cultural Management:
- Cultural Differences: The case highlights the importance of understanding and navigating cultural differences in international business. John Smith's lack of cultural sensitivity and understanding of European business practices creates significant challenges for the subsidiary.
- Communication Styles: The differences in communication styles between American and European cultures lead to misunderstandings and misinterpretations. John Smith's direct and assertive communication style is perceived as aggressive and insensitive by the European employees.
Change Management:
- Resistance to Change: The European employees are resistant to the changes imposed by John Smith, primarily due to the cultural differences and the perception that the changes are not aligned with their needs and values.
- Lack of Ownership: The lack of employee involvement in the decision-making process leads to a lack of ownership and commitment to the changes. This further contributes to the resistance and low morale.
4. Recommendations
To address the challenges faced by the European subsidiary, we recommend the following:
1. Cultural Sensitivity Training: John Smith should undergo comprehensive cultural sensitivity training to develop a deeper understanding of European business practices, communication styles, and cultural norms.
2. Leadership Style Adaptation: John Smith needs to adapt his leadership style to be more participative and inclusive. This involves empowering employees, fostering open communication, and encouraging collaboration.
3. Building Trust and Relationships: John Smith should prioritize building trust and relationships with his employees. This can be achieved through regular communication, active listening, and demonstrating empathy and respect for their perspectives.
4. Cross-Cultural Team Building: Implementing cross-cultural team building activities can help bridge cultural divides and foster a sense of shared purpose and understanding.
5. Employee Engagement Initiatives: Implementing employee engagement initiatives, such as employee surveys, focus groups, and suggestion boxes, can provide valuable insights into employee concerns and help address them effectively.
6. Performance Management System Review: The current performance management system should be reviewed and revised to align with the European context and cultural norms. This includes incorporating feedback mechanisms, recognizing individual contributions, and promoting a culture of continuous improvement.
7. Communication Strategy: Developing a clear and effective communication strategy is crucial to ensure that information is shared effectively and transparently across all levels of the organization. This includes using multiple communication channels and adapting communication styles to suit the diverse audience.
8. Diversity and Inclusion Initiatives: Implementing diversity and inclusion initiatives can create a more welcoming and inclusive workplace for all employees. This can involve promoting diversity in hiring, leadership development programs, and creating a culture that values and respects differences.
5. Basis of Recommendations
These recommendations are based on the following principles:
- Core Competencies and Consistency with Mission: The recommendations aim to align the subsidiary's operations with the company's mission and values while respecting the local cultural context.
- External Customers and Internal Clients: The recommendations prioritize building strong relationships with both external customers and internal clients, fostering a collaborative and customer-centric environment.
- Competitors: The recommendations aim to enhance the subsidiary's competitiveness by fostering a high-performing culture, improving employee engagement, and adapting to the local market dynamics.
- Attractiveness ' Quantitative Measures: The recommendations are expected to lead to improved employee engagement, increased productivity, and ultimately, enhanced profitability for the subsidiary.
6. Conclusion
By implementing these recommendations, the European subsidiary can overcome its challenges and achieve long-term success. This requires a commitment to cultural sensitivity, effective leadership, and a focus on building a strong and inclusive organizational culture.
7. Discussion
Other alternatives not selected include:
- Replacing John Smith: While replacing John Smith might seem like a quick solution, it could lead to further disruption and instability within the subsidiary.
- Ignoring cultural differences: This approach would likely exacerbate existing tensions and hinder the subsidiary's ability to adapt to the local market.
Risks and Key Assumptions:
- Resistance to change: There is a risk of resistance from employees who are accustomed to the existing culture and practices.
- Cultural sensitivity training effectiveness: The effectiveness of cultural sensitivity training depends on John Smith's willingness to learn and adapt his behavior.
- Time and resources: Implementing these recommendations requires significant time and resources, which may not be readily available.
8. Next Steps
- Immediate Action: John Smith should initiate cultural sensitivity training and start adapting his leadership style.
- Short-Term: Implement cross-cultural team building activities and employee engagement initiatives.
- Long-Term: Review and revise the performance management system, develop a communication strategy, and implement diversity and inclusion initiatives.
By taking these steps, the European subsidiary can create a more positive and productive work environment, fostering a sense of belonging and driving towards long-term success.
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Case Description
A group of international business majors from a large Boston-area university traveled to Spain, France and Germany for a yearlong period of study and work. Some of the students described their initial impressions and reactions to living and studying in another country and functioning in another language. Topics discussed include adapting to life in Europe (including language, pace of life, personal space, smoking, local food, sexual norms, personal appearance, and government and bureaucracy), being away from family and friends during the holiday seasons, academics (including differences in learning and teaching styles), and language. The objective of the case is to help undergraduate students who will be living, studying, and working in another country to prepare for their experience. Supplement cases, The European Experience (B), product 9B02C032, discusses the students finishing their academic term and preparing for their work placement and The European Experience (C), product 9B02C033, follows the experience of one student on his co-op work assignment.
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