409-082-1 David Smith: The National Manager's International Problems With globalisation, the workforce at multinational companies comes from various countries thereby making teams, which are culturally diverse. While people are hired from various countries considering their talent and their skills, the cultural diversity within the team poses some serious problems that affect organisational progress. Many a times the very purpose for which the multicultural team was constituted - benefiting from diversity, to benefit from the experience of team members in various markets and to be able to provide culture specific customer care - is defeated. David Smith (Smith) found himself in a similar situation when he took over as the national manager of Smart Software Company (SSC). Considering the problems faced by Smith, are multicultural teams inevitable in the globalised world? What does it take to handle a multicultural team to produce effective business results? Multicultural Teams at SSC In the age of globalisation, companies and their businesses are not bound by their national boundaries. Businesses are spread across countries as a company might be headquartered in one country and the subsidiaries might be spread across various other countries. The business itself transcends boundaries as companies have projects, Joint Ventures (JVs), Mergers and Acquisitions (M&A), strategic alliances, partnerships, outsourcing and off-shoring arrangements with clients in various countries. As a result, the workforce of the company becomes heterogeneous and culturally diverse. One such example of a heterogeneous workforce was seen at SSC, an Indian company based in the South Indian city of Bangalore. This case study was written by Vandana Jayakumar and Vara Vasanthi, under the guidence of Dr. Nagendra V. Chowdary, IBSCDC. It is intended to be used as the basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. The case was written from generalised expriences. 2009, IBSCDC. No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without the permission of the copyright owner Background Reading: Chapter 1, "What is Organizational Behavior". Organizational Behavior (Stephen P. Robins, et al. ) 12" Edition409-082-1 David Smith: The National Manager's International Problems Established in June 1994, SSC was designing, developing, implementing and supporting software- systems for customers throughout India. Though, not among the leading software companies, SSC's business was profitable. In 2001, SSC decided to expand its business by entering the market of software outsourcing services. Within a short span of time, it was able to successfully complete projects for its partners from European countries. SSC's initial success in the overseas market encouraged it to explore business opportunities in the US and Australia. Due to its concerted efforts, SSC was able to win a few big projects from the US and Australian clients. By 2006, SSC became one of the leading companies in the field of software outsourcing services, handling 30 projects from clients across the globe. Having reached a significant milestone in the field of software outsourcing services, SSC wanted to make rapid progress in the field of software designing and development at the global level and become one of the top-ten Indian companies. Consequently, SSC made investments in International Projects Team (IPT) and brought in personnel from across the globe to give shape to SSC's dream. In 2006, Smith, British by nationality, joined as the national manager of SSC's software designing and development division. Smith had a rich experience of working with some of the well known global software development companies. Just before he became the national manager of SSC, he served as the national manager of one of the divisions of Solutionz Plc. (Solutionz), a leading software designing and development company of UK. He was credited with the transformation of his division at Solutionz from a loss-making division to a leader in the field of software designing and development. During his tenure at Solutionz, the company received many awards as well. Smith himself received two significant awards of "the most admired manager' and the *Catalyst' award for outstanding contribution towards the success of his organisation. With the backing of an illustrious career, Smith joined SSC and it seemed obvious that he would have no trouble in giving shape to SSC's dreams. By the time Smith joined SSC, the IPT was working on an ad hoc basis with six members in the team. Smith picked up his own team wherein he retained the two Indians - Ajit Jain (Jain) and V. Krishnamurthy (Krishnamurthy) and also recruited from outside. Smith chose people based on their prior work experience and calibre, irrespective of cultural background. His final team included seven team members - two Indians, one British, one Japanese, one American, one German and one Israeli (Exhibit I). Commenting on the makeup of his team, Smith once observed, "We are a truly global team ...we only need to prove it statistically". The constitution of a multicultural team at SSC seemed appropriate with the age of globalisation. Moreover, cross border mobility has facilitated the prevalence of multicultural teams in companies. Noticeably, SSC had hired people who were specially trained in the field of software designing and development. Further, with the customer base of SSC spread across various countries, SSC needed people having expertise in this field alongside local knowledge of their native countries. Thereby, the multicultural team would have helped SSC cater to the needs of the diverse customer base in a better manner. 2409-082-1 David Smith: The National Manager's International Problems Exhibit I David Smith's International Team Name Country Designation in SSC David Smith UK National Manager Hiroshi Tanaka Japan Project Coordinator Martha Reid UK Research Analyst Ajit Jain India Application Developer Ronald Turner US Application Developer V. Krishnamurthy India Application Programmer Ramen Stavi Israel Application Programmer Laura Schultz Germany Software Tester Prepared by the author The benefits of constituting a multicultural team, however, seemed to fade as the team members had a tendency to discriminate against each other due to their cultural differences. For instance, Smith himself was lenient with Martha Reid (Reid) many a times even when she lacked in performance as both of them were from UK. Also, Krishnamurthy and Ramen Stavi (Stavi) viewed each other as competitors instead of complimenting each others' work. Thereby, building and maintaining trust amongst the team members became one of the biggest challenges for Smith, even overpowering the business issues. With mutual differences, the team found it difficult to stay well integrated, which in turn affected its productivity. As a result, the multicultural team, which was constituted to benefit SSC in the globalised world, posed several problems and challenges in front of Smith. Problems in Handling Multicultural Teams Owing to the multicultural nature of the team, Smith had to face problems from the beginning of his tenure at SSC. After initial re-organisation of the team, Smith started concentrating on the company's goal of becoming one of the top-ten Indian companies. However, in the very first team meeting, problems started cropping up. Little did he know that his highly talented, experienced and accredited team members will not be able to live up to their perceived potential. During the first team meeting, Smith welcomed all his team members quite enthusiastically. Addressing the new team members, he said, "Guys, welcome to the team. It's my pleasure to work with some of the most experienced and most talented professionals in our industry. Let our team be like a family - the SSC family - and let us all strive to make the dream of SSC a true success. I have a firm belief that with people like you adorning our team, achieving the company's goal of becoming one of the top-ten Indian companies should not be difficult." He continued his motivational and encouraging inaugural talk with the team nodding in acceptance of his words.409-082-1 David Smith: The National Manager's International Problems However, when it was the turn of the team members to speak, Smith did not experience a very encouraging response. While Jain, Reid, Krishnamurthy and Ronald Turner (Turner) seemed a little bit enthusiastic, others on the team did not say much and their response seemed cold to Smith. With this initial mixed response, Smith knew that there were challenges aplenty in heading an international team. In due course of time, Smith realised that though he tried to be very friendly with his team members, they probably felt nervous because of the fact that he was the national manager. Smith was sure that with time the team members would know him better and would not feel intimidated. Consequently, he could see the change in Jain, Reid, Krishnamurthy and Turner. But the change could not be seen in Hiroshi Tanaka (Tanaka), Stavi and Laura Schultz (Schultz). Smith became sceptical of the three and wondered if they would be able to do justice to the jobs entrusted to them. Smith started keeping a close eye on them and noticed that they were not lacking in their performance. However, their response continued to be cold even in the subsequent team meetings which perplexed Smith. Notably, the predominant language of communication within the team was english. However, while Tanaka, Stavi and Schultz could understand english, they struggled to express themselves in english. Further, as Tanaka, Stavi and Schultz could not express themselves well, they were considered to be incapable not just by Smith but also by other team members. At the same time, while Jain and Krishnamurthy were able to communicate well in english, Turner was unable to follow them many a times as their accent was different from his. Due to the linguistic problems, the team members often became frustrated and grew impatient leading to conflicts within the team. In due course of time, the fluent english speakers started dominating the team posing fresh challenges for Smith. Schultz, for instance, felt frustrated for not being allowed enough time to convey her thoughts. Thus, while all the team members were taken on board for their expertise and their experience, Smith failed to fully utilise the capabilities of non-english speaking team members. Also, due to cultural diversity, there was less interaction amongst the team members which restricted the extent to which Smith could utilise the talent of his subordinates. Further, Smith and his international team faced linguistic problems with Jain and Krishnamurthy. The two often felt comfortable discussing the issues in hindi (the national language of India) wherein others remained clueless as to what was being discussed. Very often, it also led to miscommunication among the team members until it was conveyed to all the team members that the official language of communication would be english only. Another challenging situation arose before Smith when the team had to decide on the delivery date of one of the projects from an Australian client. Smith called for a team meeting to discuss this matter with his team members. Smith: "So, guys, we need to decide on the delivery date of the project. Tanaka, what is your suggestion?" Tanaka: "I think we should ideally be able to complete the project in totality in the next 3 months." Stavi: "Hiroshi, that is quite unrealistic. The ideal condition cannot be the practical condition. We will definitely need some more time to complete the project."409-082-1 David Smith: The National Manager's International Problems Tanaka was taken aback by Stavi's comments. Though what Stavi said was not wrong, Tanaka could not accept his tone of talking. They were all team members and only Smith could have spoken to him that way, Tanaka thought. He aggressively defended his statement and continued the conversation during the meeting but could not forget Stavi's comments. He started harbouring animosity for Stavi, feeling that Stavi also harboured the same for him. Tanaka started making comments against Stavi which were focused on Israel being a war-torn country and Stavi being an Israeli. The animosity between Tanaka and Stavi rose to such levels that once Stavi threatened Tanaka with physical violence. All this did not go unnoticed by Smith. He had to do something to make the team amicable again, if the team had to execute the Australian client's project. Smith was concerned with Stavi's behaviour of being arrogant with all the other members in the team as well. However, he noticed that Stavi did not have ill will towards any member in the team. He had a tendency to say anything upfront and had a confrontational style of talking with everybody, barring the specific occasions when he was quite amicable. His style, Smith thought, was just abrasive. Quite similar to the differences between Tanaka and Stavi, Smith faced problems with Jain and Turner as he had to resolve disputes between them. The two had to work in close coordination to effectively carry out the process. Jain always tried to come to the core issues by posing several questions and through elaborate discussions. He believed that elaborate discussions helped in bringing various aspects of the issue to the forefront. Thereby, his actual message had to be interpreted by the audience. Turner on the contrary believed in communicating directly what he wanted to. He believed that issues, which were explicit did not need so much discussion and could be stated upfront. However, his way of communication sometimes offended and sometimes irritated Jain and vice versa. Thus, managing these two conflicting styles posed challenges for Smith. Conflicts also arose especially at the time of decision making. As Turner favoured quick decision making, he expected the team decisions also to be taken quickly. However, Jain and Krishnamurthy favoured a good analysis of the issue before taking any decisions, even if they had to delay the decision making. One such occasion arose in April 2007 when SSC was to finalise a new project from an existing European client. The agenda of the meeting was to decide the feasibility of the project. Turner: "I believe that our new project can be given a final nod." Smith: "Ajit, do you think we can go ahead with the project?" Jain: "I think it's too soon to decide. Do we have adequate resources to honour the project? If I am correct, there's a payment issue pending with this client. Moreover, I hope all of you remember the iterations that we had to go through with this client before the final design was approved. Are we done with the preliminary research about the feasibility of the project? I guess the research itself will be time-consuming and will require a lot of investment. Therefore, we do need time to give a final yes." Turner did not agree with Jain's opinion and conveyed the same to him. Turner: "I think your doubts are significant, but I guess we have had a good track record with this client, barring the last occasion. On the basis of our past experiences, I presume there won't be hurdles in this project."409-082-1 David Smith: The National Manager's International Problems At this point, Krishnamurthy intervened and said to Turner, Krishnamurthy: "I agree with your views but it does make sense to be well-prepared before agreeing on the final terms and conditions. I think it would be wise to wait for some more time." Turner: "I do not understand the whole issue of wait and decide when we have done so many similar projects with this client and the groundwork is almost done." Krishnamurthy: "We are not waiting to do the groundwork. Every project needs individual analysis before we commit on that." Turner: "That should not take more than a month. Why are we postponing the decision? We might lose the project to our competitors!" Jain: "See, my point is that we should be confident enough before we make any commitment. Let us have a detailed research and analysis so that we are able to fill the gaps if any. Why do we want to take up this project? Will it be practical to take up this project or should the projects from our other clients be our priority?" Turner: "I believe if we are fast in our decision making and meticulous execution of the project, then we will not have to prioritise projects...we can handle them all." Jain: "Don't we need to be sure about our feasibility analysis? ... Somehow I believe we should wait a while before we accept the new project." Smith found both the arguments apt in their own right. He could not pass a final verdict and concluded the team meeting by saying: "let us do some more internal discussion within our sub-teams before we give a final nod to the project by this weekend." Smith had to constantly deal with the challenge of simultaneously satisfying the quick decision makers and the not-so-quick decision makers. Thereby, on other similar occasions, when quick decisions were made, Turner was happy and Jain and Krishnamurthy felt frustrated. On the contrary, when decision making was delayed for accomplishing the analysis, Jain and Krishnamurthy were satisfied while Turner felt frustrated. There was another issue between Jain and Turner, which Smith found hard to resolve. Turner's behaviour was the same towards all the team members. However, though both Jain and Turner were working as application developers, Jain often felt offended as Turner did not treat him as a senior. Having spent almost 4 years with SSC, Jain expected Turner to treat him as per his seniority. At the same time, Turner, in particular was finding it very difficult to adjust to the Indian work culture. While, his team members were multicultural, most of the employees at SSC were Indian. Although there was no binding on any one at SSC to work beyond office hours, Indians spent many more hours in office. Many a times, Turner was forced to stay in the office because some other team member required his services. He was not averse to working late but he was not able to have a work-life balance since the time he came to SSC. Turner felt that people in India gave too much weightage to work rather than family and social life.409-082-1 David Smith: The National Manager's International Problems Significantly, one incident at SSC left Smith totally helpless and exasperated. Once, the entire team had to work on all the four Sundays of the month to be able to complete the project from a US client on time. Everybody knew that Reid visited her religious place of worship every Sunday and could not make herself available at office till 11:00 am on Sunday morning. On the last Saturday of the month, the team had a meeting in the evening wherein the work for Sunday morning was being decided. During that meeting, there was a confrontation between Schultz and Reid. Smith: "Guys, tomorrow morning we are winding off the project. Let's decide on everyone's duties so that there is no confusion and we don't waste time. We all know how difficult it had been for us to complete it in such a short span." Schultz: "David, let us decide our work for tomorrow morning excluding the work to be done by Martha. She is anyway not going to be present. We all know she will not miss her Sunday morning appointment for anything on earth." Turner: "Hey ... come on...let's get serious." Reid: "Laura, that was very rude and I object to it. I do not have to justify my absence or presence on a Sunday morning to anybody other than David. David, I am genuinely hurt and refuse to be a part of this team from this point onwards." Reid resigned in the next week and left for London. After that incident, it took a long time for Smith to make the work environment cordial again. Moreover, while Smith was the team leader and was responsible for everything that happened within the team, many a times he had to be a part of even those activities, which his team members could have accomplished without his help. For instance, due to the internal conflicts, the team members took even small issues to him to be resolved. With these, effective time management became difficult for Smith and overall performance of the team was dismal. After having completed 1 year with SSC, Smith had been able to accomplish only the delivery of some of the existing projects, which happened amidst lots of conflicts within the team. He could not initiate any innovative project at SSC, the way he had done in his earlier positions. The team also saw the exit of Schultz. According to her, she could not be a part of the team where she did not have any say at all and where humour was also taken seriously. Having faced challenges in the initial year itself, Smith had to find answers to the problems plaguing his team. While the problems seemed to be mere verbal confrontations between the team members, they had in fact impacted the team's performance. Smith, who was the star manager in his earlier positions, struggled to make his team progress. The company missed deadlines of two consecutive projects of a long-time European customer of SSC. Very much to the disgrace of Smith and SSC, the said customer severed its business ties with SSC for the subsequent projects. Smith's credibility was in question as he struggled to find what went wrong with his team. All his experience and his managerial acumen did not work with his international team. Why were there interpersonal issues among the team members? Could it be because of their diverse linguistic and cultural backgrounds? What strategies would have helped Smith achieve the ambitious goals of SSC with his international team