A Jumping-Off Place A successful, medium-sized U.S. manufacturing firm in Ohio h

Question

A Jumping-Off Place

A successful, medium-sized U.S. manufacturing firm in Ohio has decided to open a plant near Madrid, Spain. The company was attracted to this location for three reasons. First, the firm’s current licensing agreement with a German firm I scheduled to come to an end within 6 months, and the U.S. manufacturer feels that it can do a better job of building and selling heavy machinery in the European Union (EU) than the German firm. Second, the U.S. manufacturer has invested almost $300 million in R&D over the last 3 years. The result is a host of new patents and other technological breakthroughs that now make this company a worldwide leader in the production of specialized heavy equipment. Third, labor costs in Spain are lower than in most other EU countries, and the company feels that this will prove extremely helpful in its efforts to capture market share in Greater Europe.

Because this is the manufacturer’s First direct venture into the EU, it has Decided to take on a Spanish partner. The latter will provide much of the on-site support, such as local contracts, personnel hiring, legal assistance, and governmental negotiations. In turn, the U.S. manufacturer will provide the capital for renovating the manufacturing plant, the R&D technology, and the technical training. If the venture works out as planned, the partners will expand operations into Italy and use this location as a jumping-off point for tapping the Central and Eastern European markets. Additionally, because the cultures of Spain and Italy are similar, the U.S. manufacturer feels that staying within the Latin European cluster can be synergistic. Plans for later in the decade call for establishing operations in northern France, which will serve as a jumping-off point for both Northern Europe and other major EU countries, such as Germany, the Netherlands, and Belgium. However, the company first wants to establish a foothold in Spain and get the operations there working successfully; then it will look into expansion plans.

In answering the following questions refer to Hofstede’s dimensions (beginning on p. 32). Address managerial implications in your responses (e.g. selection, training, leadership, motivation, etc.).

1. In what way will the culture of Spain be different from that of the United States? How should managerial practices be designed in response to these differences?

2. If the company expands operations into Italy, will its experience in Spain be valuable or will the culture be so different that the manufacturer will have to begin anew in determining how to address cultural challenges and opportunities? Explain.

3. If the firm expands into France, will its previous experiences in Spain and Italy be valuable in helping the company address cultural challenges?

Explanation / Answer

1) individuals feel debilitated by vague circumstances and have made convictions and foundations that endeavour to maintain a strategic distance from these. Nations populated with individuals who don't care for vulnerability tend to have a high requirement for security and solid faith in specialists and their insight (Spain). On the opposite side individuals in the USA has bring down vulnerability evasion which implies that they are more eager to acknowledge the dangers related with the obscure.

2) In noting this inquiry, it is important to look at the four measurements of culture in Italy and contrast them with Spain. As far as power remove, the two nations are in a similar quadrant and have roughly a similar level of this measurement. Independence in Italy, in any case, is higher than that in Spain. On the other hand, vulnerability shirking is somewhat higher in Spain than in Italy, while manliness is substantially higher in Italy than in Spain. So, the organization will find that the way of life in these two nations is genuinely unique and should understand that what works in Spain won't really work in Italy.

3) If the organization ventures into France, its encounters in Spain will be of more an incentive than its encounters in Italy however the two encounters will be valuable. This is unmistakably found in Figures given. For each situation the social measurements of France are in an indistinguishable quadrant from those of Spain and in the first and last of these figures, France is nearer to Spain on these social measurements. Then again, Italy's way of life is additionally going to be of significant worth. This is especially obvious from given figure, where this nation is nearer to France than Spain. Generally, be that as it may, as found in Figure 4-5 and 4-6, each of the three nations are in the same social group, so the association's encounters in both Spain and Italy will be useful on the off chance that it ventures into France.

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