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Cross-cultural
Cross-cultural challenges for challenges
a global maritime enterprise
Gary A. Lombardo
Center for Maritime Studies and United States Merchant Marine Academy, 485
Kings Point, New York, USA
Abstract
Purpose The purpose of this paper is to present a hypothetical case study which provides an
opportunity for students to conduct realistic business analysis applying subject material related to
cross-cultural issues presented in the international business, international management and
management courses.
Design/methodology/approach The hypothetical case study requires students to review and
analyze cross-cultural issues related to the appointment of the senior executive for a foreign office of a
global business enterprise. A hypothetical Chinese maritime enterprise and its publicly-traded
subsidiary are profiled. Cross-cultural considerations come into play as the senior executive for two
foreign offices must be appointed.
Findings The case reflects refinements based upon its use during the past few years. Students are
provided a realistic experiential exercise. Student feedback indicates a heightened sensitivity to
cross-cultural considerations that transcends their assigned textbook readings and traditional testing.
Research limitations/implications As with any classroom exercise, differences do exist with
real-world business practice. Students do not fully appreciate the pressures and tensions experienced
by business professionals with respect to recruiting, selecting, appointing and developing a senior
executive for a foreign office assignment.
Practical implications The case study provides an experiential exercise for students to apply
theories and concepts learned from the textbook and the instructors lectures.
Originality/value The case study offers a complex view of myriad cross-cultural considerations
inherent in an international business firm, providing value to instructors and students as it reinforces
discipline theories and concepts in a meaningful way, creating an active learning environment fostering
academic excellence.
Keywords China, National cultures, International business, Business analysis,
Cross-cultural considerations, Cross-cultural leadership
Paper type Case study
1. Case description
The primary subject matter of this case involves the appointment of the senior
executives to administer the New York City and Malmo, Sweden offices of a Chinese
state-enterprise and its publicly-traded Hong Kong subsidiary. Issues include national
cultural considerations addressing the appointment of senior executives for foreign
offices. The case study analysis is based on Hofstedes cross-cultural research and
culturally influenced leadership styles and control paradigms as well as the nationality
of prospective senior executives. The case is appropriate for undergraduate
Cross Cultural Management
This case study and teaching note are prepared by the author and do not necessarily represent Vol. 18 No. 4, 2011
the views of the United States Merchant Marine Academy, the United States Maritime pp. 485-498
q Emerald Group Publishing Limited
Administration, the United States Department of Transportation, or any other United States 1352-7606
Government agency. DOI 10.1108/13527601111179537
CCM and graduate students. The case is designed to be discussed during a one-hour class
18,4 session. The student requirement is to submit an individual (or if the instructor prefers a
group) written report and prepare a classroom presentation. It is expected to require
substantial preparation by students outside of the class sessions. A supplemental
bibliography is provided at the end of the case study to assist students to develop a
sophisticated understanding of national cultural influences on business decision making.
486 The case is designed for use in the international business, international management and
management courses.
2. Case synopsis
A Chinese state-enterprise and its publicly-traded Hong Kong subsidiary engaged in the
maritime business sector are profiled. The Hong Kong subsidiary is directed to establish
offices in New York City and Malmo, Sweden. The Hong Kong senior management team
has appointed a rising subordinate as the lead person to analyze how the firm should
proceed to fill the senior executive position for each foreign office. Students are asked to
assume the role of the subordinate to review and analyze Hofstedes cross-cultural
research, leadership styles and control paradigms to identify the appropriate nationality
of the prospective senior executive to be appointed to administer the New York City and
Malmo offices. Students are required to work either independently or in groups, at the
instructors preference, to prepare the following case deliverables:
.
a written report to the Hong Kong senior management recommending the
appropriate leadership style, control paradigm and nationality of the senior
executive for the New York and Malmo offices; and
.
an oral presentation to the class based on the written report.
3. The company
This case study presents China International Shipping (CIS), a state-enterprise engaged
in the maritime sector, and its publicly-traded subsidiary, Hong Kong International
Shipping (HKIS). HKIS has been directed to establish two regional divisions to enter the
short-sea shipping sector of merchant shipping. One regional division will be located
in New York City to direct North American short-sea shipping operations. The
other regional division will be located in Malmo, Sweden to direct Northern European
short-sea shipping operations. The following public information about the parent
enterprise and the Hong Kong subsidiary is provided for review.
7
492
6
Concern
for 5 5,5
People Middle-of-the-Road Management
4
3
Authority-
2 Impoverished Compliance
Management Management
Low 1 1,1 9,1
1 2 3 4 5 6 7 8 9
Low High
Concern for Production
Key:
Country-Club Management: emphasis on people rather than work outputs.
Team Management: emphasizes employees working together to accomplish tasks.
Middle-of-the-Road Management: moderate concern for both people and production.
Impoverished Management: lack of emphasis on either people or work outputs.
Authority-Compliance Management: emphasis on operations rather than people.
Source: Prepared based upon a review of The Managerial Grid III, Robert R. Blake and
Jane S. Mouton, Houston: Gulf Publishing Company, 1979 as revised by Leadership
Figure 1.
Dilemmas-Grid Solutions, Robert R. Blake and Anne Adams McCanse, Houston: Gulf
Leadership grid
Publishing Company (1991)
in graduate business programs in the United States. During his review, he obtained a
copy of Management by Richard L. Daft and found an exhibit in the textbook a perfect
presentation for his project report to the senior management team. Jia then replicated the
information found in Exhibit 19.6 in the Daft textbook and revised the presentation
format so it would be easier for the HKIS senior managers to understand. Jias effort is
presented in Table II.
Director Jia then turned his attention to the last component of his analysis which
was the nationality of the individuals to be appointed to the New York City and Malmo
offices. He recalled one of his graduate school professors lecturing on the topic of
the benefits and drawbacks of hiring home-country, host-country and third-country
nationals for senior foreign assignments. He consulted his notes from his graduate
business studies and prepared Table III.
Director Jia used the four tables to analyze HKIS. It was obvious that the ethnicity
and nationality of the leadership of his organization was Chinese. Upon examination
he realized that the senior management followed a team management (9,9 on the
leadership grid) style and the decentralized control paradigm currently. Upon reflection,
Jia remembered that when he joined HKIS the senior management followed
an authority-compliance management (9,1 on the leadership grid) style and
Cross-cultural
Categories Bureaucratic control Decentralized control
challenges
Rules and Uses detailed rules and procedures; Limited use of rules; relies on values, group
procedures formal control systems and self-control, selection and socialization
Authority Top-down authority, formal hierarchy, Flexible authority, flat structure, expert
position power, quality control power, everyone monitors quality
inspectors 493
Job Task-related job description; Results-based job descriptions; emphasis
descriptions measurable standards define minimum on goals to be achieved
performance
Rewards Emphasis on extrinsic rewards Extrinsic and intrinsic rewards
(pay, benefits, status) (meaningful work, opportunities for
growth)
Reward Rewards given for meeting individual Rewards individual and team; emphasis on
recipients performance standards equity across employees
Employee Limited, formalized employee Broad employee participation, including
participation participation (e.g. grievance procedures) quality control, system design, and
organizational governance
Organizational Rigid organizational culture; distrust of Adaptive culture; culture recognized as
culture cultural norms as means of control means for uniting individual, team, and
organizational goals for overall control
Source: Prepared based upon a review of Management, Richard L. Daft, Eighth Edition, Mason, Ohio:
Thomson Higher Education, 2008. Daft credits Richard E. Walton, From control to commitment in the
workplace, Harvard Business Review (March-April 1985), pp. 76-84 and Don Hellriegel,
Susan E. Jackson, and John W. Slocum, Jr, Management, Eighth Edition, Cincinnati, Ohio: Table II.
South- Western, 1999, p. 663 as sources for the exhibit that appeared in his textbook Control paradigms
6. Requirement
Students, either individual or in groups at the instructors preference, will prepare a
written report to the HKIS senior management team analyzing the information found in the
case and supplemented with appropriate external research that provides a
recommendation as to the leadership styles, control paradigms and nationality of the
senior executives for the New York City and Malmo offices. The written report should
include the following information pertaining to the senior executives for both the
New York City and Malmo offices:
.
national cultural influences and the resultant impact on the organizational
culture in each office as detailed in Table IV;
.
preferred leadership style;
.
preferred management control paradigm;
.
preferred nationality; and
.
recruitment announcements.
496