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BUS240A Group Assignment - LaBella
No matter how successful and reputable an organisation is, there tend to be problems within the organisation. Problems will lead to dysfunction of the company, slowing down the growth and might even cause the company to end its operation. Therefore, in order to sustain an organisation, firstly, we have to find out the underlying problems in the organisation. Secondly, assess the implications of each problem. Thirdly, coming out with different ways of interventions. Lastly, create an action plan to solve the problems. Therefore, change is evitable. In this report, we will be studying on La Bella, an Italian company.
Overview of the company
La Bella is an Italian company which makes domestic lighting ranging from very expensive chandeliers and cheaper, but still relatively expensive, prestige designs. Italy always have a good reputation for the quality of its domestic products, therefore, La Bella was able to charge their products at a premium. At the same time, their products were produced in two of their factories based in Italy. Even though La Bella did not produce a budget range, it was always an option if circumstances lead them to. Like many manufacturers, La Bella faced strong competition from cheaper manufactures in Europe and China who produces cheaper products. Therefore, La Bella decided to build its own factory in Thailand so to cut production cost and produce cheaper options for their consumers.
The underlying problem of this case will be communication between the two countries and the lack of understanding of Thailand’s culture. However, apart from communication and lack of culture understanding, there were also various problems identified:
Differences in religious beliefs. Italy is strongly influenced by Christian Catholic values while 95% of the Thailand’s population is Buddhist.
La Bella wanted to have its own management team but it was unacceptable by the Thai government, therefore, the factory was staffed and managed entirely by Thais.
Lack of detail with respect to procedures and policies
Meetings were rarely held and usually occurred on an ad hoc basis without the expatriate manager’s presence.
No minutes were taken during meetings
These problems led to serious consequences which La Bella eventually sold the factory to a consortium of Thais.
Diagnosing problems are essential and is the first step to allow change to take place.
Cross Culture Analysis
Problems / Implications
Communication taken at face value without much reliance on unspoken context
Legal paperwork if important
‘Yes means Yes’
Communication relies a lot on the underlying unspoken context, which is as important as the words used
Legal paperwork is not the priority
‘Yes’ does not necessarily means ‘yes, I agree’, it might mean ‘yes, I hear you.’
The Thai workers may not like when the expatriate manager is too straightforward with his words used.
No minutes are taken during meetings
Low power distance culture:
Subordinates usually address their bosses on the first name basis
Uncomfortable with class and status differences
High power distance culture:
Subordinates will have to address their higher-ups as ‘Manager (Last name)
Comfortable with class and status differences
La Bella should create a clear line between who is the boss and who are the subordinates.
La Bella’s manager has to learn to speak formally towards people with authority in high power distance culture
High uncertainty avoidance:
Rigid and intolerant
Prefer structured situation
Resist to change
Place a premium on job security and retirement benefits
Low uncertainty avoidance:
Able to tolerate differences
Greater willingness to take risks
Less resistant to change
Lack of detail with respect to procedure and policies which La Bella prefer structured situation
Meetings were rarely scheduled
High masculinity culture:
Favour leaders that are assertive and decisive
Sharp role differentiation along gender lines with most leadership positions taken by men
High femininity culture:
Favours compassion, relationships, caring for others and job satisfaction.
Women increasingly taking up leadership positions
La Bella should respect the women more in high femininity culture
La Bella should be less results orientated, instead, focus more on work life balance
Individual achievement and freedom are highly valued
Loose social framework
Treat work very seriously and are very dedicated to the extent to make it without any flaws or errors if possible
Collective accomplishments are often sought after.
Tight social framework
La Bella should create more team building sessions between staffs
Instead of asking staff to work individually, La Bella can allow staffs to come up team projects where staffs can work together.
Force Field Analysis
Force field analysis is a useful decision marking technique. Is helps in decision making, particularly in planning and implementing change management programs in organizations. It is a powerful method of gaining a comprehensive overview of the different forces acting on a potential organizational change issue.
The driving forces explains why La Bella, the lighting company wanted to start new alternative lighting production to their current one. The restricting forces, on the other hand, are the locals of the country that are part of La Bella’s management in their new factory, who do not seem to get along with the western practices and the style of management. The presence of these two forces makes it difficult for La Bella to run a smooth management elsewhere and comprehend the reason behind these challenges posed to them.
The Johari Window is a communication model that is used to improve understanding between individuals. There are two key ideas behind the tool:
A person can build trust with others by disclosing information about oneself.
With the help of feedback from others, one can learn about themselves and come to terms with personal issues.
By using the Johari Windows, it can help to build better and more trusting relationships with one another. It will also help in solving issues and working more effectively as a group.
The Public Area quadrant represents the things that others and oneself know about. This includes things such as knowledge, skills and attitudes.
The Blind Area quadrant represents things that oneself do not know but is known by others. This includes information that you do not know or things such as incompetence where it is seen by others but not known to oneself.
The Closed Area quadrant represents the things that you know about yourself but is not known to others. This includes your history in life.
The Unknown Area quadrant represents the things that are unknown to oneself and others.
Implications of Assessments
After diagnosing the problems, we will be looking into how the problem listed above will affect the operations of LaBella.
La Bella’s expatriate manager being an Italian who is considered to be from a low-context culture faced much difficulties when communicating to his Thai staffs who are considered to be from a high-context culture.
In Thailand, where it is a high-context culture, La Bella’s manager ought to be sensitive towards his words used and the non-verbal cues. For example, ‘yes’ does not necessarily mean ‘yes, I agree’, it might mean, ‘yes, I hear you’ (Peng and Meyer, 2011). At the same time, the Thai workers may not like it when the manager to be straightforward with his words which is common in low-context culture.
In the case study, it stated that when the Italian expatriate manager asked for minutes of any meetings, there was little information that it was as if the meetings had never occurred. The main reason was that, in high context country like Thailand, they do not put emphasis on legal paperwork which were the minutes that the manager was looking for. While in low context country, they emphasize a lot on the written documents.
Therefore, it is important for La Bella to understand the context orientation of the country that they want to expand their business to so to prevent any misunderstandings and unhappiness while working together.
La Bella being from Italy is considered to have a lower power distance as compared to Thailand. According to Hofstede’s dimensions of culture, the power distance index of Thailand is 64 while Italy is 50 (Peng and Meyer, 2011).
Therefore, La Bella’s manager ought to understand that if they choose to work with countries with high power distance countries, like Thailand, they have to create a clear line between who is the boss and who are the subordinates. Also, La Bella’s manager has to learn to speak formally with people with authority when working in countries with high distance power.
Italy having an uncertainty avoidance index of 75 which is higher than Thailand having an uncertainty avoidance index of 64. This shows that La Bella are used to be rigid and intolerant, at the same time, they prefer structured situations as they provide a sense of security.
Therefore, in order for La Bella to work well with cultures who are lower in uncertainty avoidance, they have to learn to provide new challenges to their subordinates and at the same time, willing to accept that low uncertainty avoidance countries will change their business strategy as soon as the problem arises.
b. Force Field Analysis
The initial motive for La Bella was to start an alternative lighting product to get better sales revenue to help aids in their financial struggles. However, it did not go as planned as La Bella’s management did not have much control or say over how things were managed in Thailand. As most of the final decision was made by the local company instead of Le Bella. Communication between La Bella and Phoenix often break down or not delivered correctly resulting in delaying company production. This unprecedented step taken by La Bella made them unprepared and faces many challenges.
In spite of this, if La Bella had done more probing on their part, and how they could better managed challenges when it arises, they would prepare for it and overcome these problem. So in the future, they would able to adapt to changes and come out with solution to handle each problem.
C. Johari Windows
All consumers and Phoenix management know that La Bella produces expensive prestigious designs due to Italy good reputation for the high quality in domestic goods. However, it is known to both that La Bella will be building its own factory in Thailand and will be staffed entirely by Thais.
There were some issues surfacing during the process of Phoenix management working together with La Bella expatriate manager. Firstly, the expatriate manager felt that there was a lack of details to procedures and policies and meetings were rarely scheduled and carried out in a casual manner without the presence of him. Secondly, Phoenix management was pretty calm even after an employee’s mistake disrupted a day of production’s work.
It is known to La Bella that it had to establish a budget range as they are facing strong competition from cheaper manufacturers. In addition, La Bella was also struggling with sales drop since 2008.
It was unknown to both La Bella and Phoenix management that the failure to recognize cultural difference will impact the organisation. The initial establishment of the new factory in Thailand did not carry out as expected as the management team was staffed by Thais. Because of that, there was a difference in work behaviour and cultural values between La Bella and Phoenix management. This affected the corporation between them and there is a possibility La Bella will not want to work within the South-east Asia anymore.
Using the Johari Windows, it shows that there are misunderstanding between both parties because of cultural differences between Italy and Thailand. La Bella’s Thailand’s factory wasn’t able to sustain due to the lack of research down before setting up the factory there. LaBella should do research on the country they would like to set up the factory at and understand the culture difference before deciding on the country to have the factory at.
Open System Planning
Search conference is a method that allows the staff of an organization to get together and construct a plan to bring change into play so that the organization will be able to adapt and conform to future challenges they may face. It is a long term process that focuses on identifying the issues and coming up with solutions to overcome the challenges which will lead the organization towards the right path.
The different stages and actions taken by Le Bella can make the organization understand better and plan for the future ahead. For the opening phrase, higher management will highlight the importance of the meeting and its purpose, to make sure participating personnel knows the issues of this discussion. In order for an effective discussion to take place, everyone must be in the right state of mind and take this time to voice out or raise questions that may concern the working environment of the company. Next, each personnel will talk about all the possible topics that were missed out by the management and try to seek improvement from there. Throughout the discussion, LaBella will be able to identify the issues the company face and try to resolve it as soon as possible. For instance, before LaBella could venture into other countries to expand their business, the higher management should come up with an action plan to foresee all the possible issue that may arise and how they can tackle it before coming to a decision.
Process of Internationalisation (module 12, slide 18)
Techno Structure (Organisation Structure)
The Functional Structure
Expatriate Manager/General Manager
Finance Human Resource Sales Marketing Operations Logistics
All departments manager will report to the expatriate manager. This functional structure will be feasible when La Bella move to other country, when the organisation is considered small.
With this structure, there will be skills specialisation, it reduces duplication of scarce resources, it enhances career development for specialists, facilitates communication between departments and with the expatriate manager, department managers can easily share expertise with their subordinates and with this, the expatriate manager will have the highest authority within the organisation in the new country.
The Self-contained Organisation
Chief Executive Officer (CEO)
Chief Financial Officer VP Research
Division Manager (Asia)Division Manager (Europe)Division Manager (American)
VP Human Resource VP OperationsVP Sales and Marketing
With the self-contained organisation, the Chief Executive Officer (CEO) will have the highest authority. The chief financial officer and VP research will be independent personnel who looks after their subordinates and they need not report to the CEO. With self-contained organisation, all division managers will have to report to the CEO and the VPs from different departments will reports to their respective division manager.
The self-contained organisation will be feasible as the whole La Bella organisation is very large in size. With self-contained organisation, it values interdependence, ensures accountability and promotes delegation and increases cohesion.
References (if any) se of that, there was a difference in work behaviour and cultural values between La Bella and Phoenix management. This affected the corporation between them and there is a possibility La Bella will not want to work within the South-east Asia anymore.
Using the Johari Windows, it