International Business Chapter 6 Homework GE sees China as a key market and has been selling its products there for over 20 years. Especially important to GE’s efforts are turbines that are used to generate electricity

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International Organizational Behavior 2e Chapter 6 Activities Page 1

CHAPTER 6

MANAGING DIVERSITY IN MULTICULTURAL

TEAMS AND INTERNATIONAL PARTNERSHIPS

CHAPTER ACTIVITIES

DEVELOPING YOUR INTERNATIONAL CAREER – Assessing Diversity: A Real-World

Audit in an International Firm

Purpose and Instructions

The purpose of this exercise is to give students a learning experience that demonstrates

how cultural diversity concepts and ideas play out in a real organization, as well as to

produce a 15–20 page report; and b) present its findings in class within a 15-minute

PowerPoint presentation. Your instructor will provide additional guidance on company

selection (emphasizing firms with international business or operations), report structure,

and presentation parameters:

1. Start by deciding what constitutes the criteria for effective cultural diversity

management in international organizations.

2. Select an organization that operates internationally, has international customers,

International Organizational Behavior 2e Chapter 6 Activities Page 2

4. Do primary research on the organization by visiting company facilities, touring

operations, and interviewing company officials. Collect any additional material you

5. Evaluate everything you have discovered about your target company against the

effectiveness criteria you originally established for cultural diversity. After conducting

your research, you may want to add other criteria not present on your original list. Be

alert for disconnects in sizing up your information. For example, are there

inconsistencies between what the company says it is doing to foster and take advantage

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MAKING THE CASE FOR INTERNATIONAL UNDERSTANDING – SAP’s Goal to be More

Diverse and “Less German” Produces Cross-Cultural Conflicts

Founded in 1972, SAP is Germany’s largest software company. The firm grew through the

1980s and 1990s, with most software created by tight-knit groups of developers at the

But in the late 1990s, businesses started focusing more on interconnectedness and

integration, thanks to the internet. This became a problem for SAP’s “standalone” software

model. Moreover, companies were backing away from buying pricey, complex software

SAP co-CEOs Hasso Plattner and Henning Kagermann felt that their cautious approach to

competitive threats had been holding back the firm, especially in the U.S. market. A big

injection of innovation was needed to shake up the company. But this didn’t come easy,

since Kagermann (an ex-physics professor) and Plattner (a hot-tempered tech guru) were

both known for their cautious management styles. However, they acquired a diverse chunk

While SAP was becoming less German thanks to Agassi, it was also becoming more diverse

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headquarters. Soon non-Germans occupied 50% of top executive positions at SAP. The

hope was that this injection of “newcomers” would increase diversity in SAP and quicken

the pace of innovation.

Not surprisingly, veteran German developers in Walldorf complained about being shut out

of all phases of the software development process. Others clashed with Agassi about how

SAP units in countries were modifying “their” software. Shai Agassi recalled German

developers basically stating “They don’t tell us what to do—we tell them what to build.” Of

course, this attitude was exactly what Agassi and his German superiors wanted to change.

In response, SAP made the non-German Agassi responsible for SAP’s traditional software

operations in Waldorf, as well as for all SAP product strategy—moves Agassi later

described as “punishment.”

But the German grousing continued—about the quality of the products SAP was now

turning out and that Palo Alto, rather than Walldorf, now directed company strategy. While

SAP’s co–CEOs supported Agassi’s changes and pointed out that employment in Walldorf

Eventually, SAP sponsored cultural sensitivity training to mitigate these problems. The

training sessions revealed that Indian developers preferred a great deal of attention and

supervision, while Germans would rather be left alone to do their work. Differences were

also uncovered in how feedback was delivered—differences that could be off-putting or

send inconsistent messages. For instance, Americans tended to be more effusive with their

praise—an American would be more likely to compliment a piece of work by describing it

Assignment Questions

1. What was the nature of the diversity-related conflicts that unfolded at SAP? Why did

they occur? What cultural differences might be responsible?

2. What is your assessment of the efforts that SAP made to tackle these internal conflicts?

DEVELOPING YOUR INTERNATIONAL CAREER – Developing Cultural Intelligence:

Japanese Group Decision Making

Purpose and Instructions

The purpose of this exercise is to give students the opportunity to evaluate their own level

of cultural intelligence and ability to adapt across cultures, as well as the opportunity to

experience the Japanese approach to consensual decision making. Students should

Strongly disagree

Disagree

Neutral

Agree

Strongly agree

1._____ It is easy for me to change my body language (e.g., eye contact, posture, etc.) to suit

people from a different culture.

5._____ Before interacting with people from a new culture, I ask myself what I want to

achieve.

_________ Cognitive sub-score (add items 5–8)

9.______ I am confident that I can interact well with people from different cultures.

10._____ I am certain that I can befriend people from different cultural backgrounds.

After completing the Cultural Intelligence instrument, the exercise will move to Japanese

decision making. The instructor will explain the processes of Ringi and Nemawashi before

splitting the class into groups of four to six. Groups will include leaders (Kacho) and

student managers (Bucho). The challenge for each group is to design a final exam format

Later, the whole class will generate a Ringi document that specifies the content of the

exam—it must be signed by all students in the class. Your instructor will discuss what

problems, if any, the document might cause. To conclude the exercise, the entire class will

discuss the following questions:

1. How much did your experience resemble the descriptions of Ringi and Nemawashi

provided by your instructor?

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MAKING THE CASE FOR INTERNATIONAL UNDERSTANDING – General Electric

Powers Up Joint Ventures in China

GE sees China as a key market and has been selling its products there for over 20 years.

Especially important to GE’s efforts are turbines that are used to generate electricity, since

power demand in China is rising thanks to strong economic growth. GE turbines were in

place in 2009 when China opened its largest biogas energy plant. The company also has a

wholly owned wind turbine assembly plant in China.

But, in trying to win a lucrative contract to provide power turbines to regional utilities, GE

ran into Chinese negotiators who demanded that the company hand over 100% of the

technology it used to develop cutting-edge turbines. Indeed, China’s approach in key

industries has been to grant market access to foreign multinationals if they agree to

GE decided, in this specific case, to take a middle position. In doing so, it eventually won a

$900 million contract to supply power turbines to Chinese utilities. Put simply, GE agreed

to share some of the technology needed to manufacture the most advanced turbines. As

International Organizational Behavior 2e Chapter 6 Activities Page 9

Aero-Engine Group Corp., would make some turbine blades using GE technologies in

metallurgy and combustion systems. But GE held back its most critical technologies, such as

the manufacturing processes needed to produce certain blades used in advanced turbines.

GE felt that transferring some of its technology to Chinese firms was not enough to turn

them into serious competitors in the short run because they lacked the staff expertise

needed to put it to full use. Indeed, in the telecom industry, after their joint ventures with

multinationals such as Nokia ended, Chinese companies still could not produce cutting–

Overall, GE believes it can maintain its edge in technology and still land big contracts in

China. It aims to keep developing more sophisticated turbines while potential Chinese

competitors struggle to produce older versions. The Chinese know that, for now, they must

Yet things can change quickly in China. In 2010–2011, China stepped up its emphasis on

“indigenous innovation.” In essence, utilities and other government entities were

encouraged to buy from firms that produce new technologies locally. This could eventually

plants in Belarus and India—just one more international challenge for GE to grapple with

in the future.

Assignment Questions

1. What is your assessment of GE’s future in China, especially given Chinese demands for

transferring technology? Are there ways that GE can make its case without provoking a

destructive cycle of conflict when negotiating with potential partners or the Chinese

government?