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
develop students’ cultural diversity assessment skills and their ability to evaluate different
levels of cultural diversity commitment across companies.
point 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.
Use the information uncovered to generate a list of follow up questions about
cultural diversity that can be put to company representatives.
4) Do primary research on the organization by visiting company facilities, touring
operations, and interviewing company officials. Collect any additional materials that
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
6) Prepare your report and presentation following the parameters noted above and
International Organizational Behavior 2e Chapter 6 Activities Page 3
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
company headquarters in Walldorf, Germany. Consequently, SAP’s software had a distinctly
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
suites every five years, turning instead to more flexible web-based software offered by
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. This didn’t come easy since
While SAP was becoming less German thanks to Mr. Agassi, it was also becoming more
diverse by hiring thousands of programmers from different parts of the world, particularly
International Organizational Behavior 2e Chapter 6 Activities Page 4
SAP’s German 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 at 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. Mr. Agassi recalled German
developers basically stating “they don’t tell us what to do – we tell them what to build.” Of
Yet Agassi took his newest assignment to heart and hired hundreds of programmers from
Silicon Valley competitors, putting some in senior positions. From California, he created a
plan to develop new products in 100 days, later dropping the target to 50 days. He
pinpointed German managers whose opposition could threaten these changes and created
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
the company. The German media then swooped in, with a national newspaper publishing
an article entitled “SAP & Globalization: March of the Americans.” A German manager noted
“it’s clear that Agassi would like to get as many functions to the U.S. as possible” while Mr.
Agassi said that SAP was simply looking for the best talent it could find.
But these efforts were apparently too little and too late for Mr. Agassi, who had become
increasingly frustrated with the conflict inside of SAP. He decided to resign. During a
subsequent interview with reporters, co-CEO Kagermann stated he would continue his
efforts to convince employees that SAP could not go back to its old Walldorf-centric ways.
When asked about Mr. Agassi’s departure, Kagermann noted “it’s not easy to manage.”
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?
International Organizational Behavior 2e Chapter 6 Activities Page 6
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 to give students the
opportunity to experience the Japanese approach to consensual decision making. Students
1 2 3 4 5
Strongly Disagree Disagree Neutral Agree Strongly Agree
1._____ It is easy for me to change my body language (e.g., eye contact, posture) to suit
people from a different culture.
_________ Behavioral Sub-score (add items 1-4)
5._____ Before interacting with people from a new culture, I ask myself what I want to
achieve.
6._____ When I encounter something unexpected while in a new culture, I use this
experience to figure out better ways to interact with other cultures in the future.
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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 the
Japanese decision-making portion of the exercise. The instructor will explain the processes
of Ringi and Nemawashi before splitting the class into groups of 4-6. Groups will include
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 Ringi 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
Some of the most important technology for GE’s wind turbines is being jointly developed
with local partner Nanjing High Speed & Accurate Gear Company (NGC). GE brought
technical prowess to the table and flew NGC managers to the U.S. for leadership
development. Yet GE’s experience in China also highlights some of the challenges
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
transfer critical technologies to Chinese companies. GE was torn. While the contract was
attractive, the Chinese technology transfer demand was a bitter pill, particularly since GE
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 power turbines.
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Shenyang Liming Aero-Engine Group Corp., would make some turbine blades using GE
technologies in metallurgy and combustion systems. But GE held back its most critical
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
hit GE hard, either precluding it from winning future contracts in China’s energy sector, or
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?