Opening Case

FAMAGUSTA, Inc. in Manila, Philippines

FAMAGUSTA, Inc. (a fictitious name) is a large, non-US-based multinational corporation (MNC) that has set up its new office in Manila. With the help of a few previous connections and more than a little good fortune, you land your first contract within a relatively short period of time. The job involves

providing professional consultation and technical support on a joint venture project with a local corporation. You will be working in the offices of

the Philippine company, scoping and designing the project, managing the implementation phase, and working with their domestic personnel to get the job done. Your contract specifies an interim review after the design phase is completed, but top management assures you that it is just a formalitythey definitely want to work with you for the whole project. You review the

facilities and rsums of both management and technical staff and everything looks fine. No problem, you tell yourself as you tackle the project

enthusiastically. At first, everything is great. You are given your own office and are told by the chief executive officer (CEO) to work directly with the executive vice president (EVP) for the division; he seems highly supportive and tells you to call on him at any time for whatever you might need. Although the working environment is relaxed by American and European standards, the staff works long hours and everyone is unfailingly polite. You soon find yourself enjoying the change of pace and the congenial aspects of the Filipino workplace. Until that is, you become aware that the project is slowly but surely falling behind schedule. Being the accountable party, you know it is up to you to address the problem. After some quiet background investigation, you pinpoint the source of the problem: the manager of a mission-critical

department who appears to be horrendously incompetent. An old lady near- ing retirement by the name of Mrs. Santos has been with the company her

entire career. The analysis shows clearly that the problem lies in her use of outdated methods and her resistance to certain innovative aspects of the project. Although your interactions with her have always been courteous, you begin to wonder if she's trying to sabotage your efforts. In an effort to attack the problem you approach the EVP to discuss the

issue. You come in well prepared for the meeting, with a hard copy docu- mentation tracing the bottleneck to Mrs. Santos's inept management. Thus,

you are a bit surprised that he doesn't seem to share your concern about the issue. Although he listens intently to what you have to say, he gives oblique answers to your questions and seems to be avoiding the issue. But you know

better than to press too hard and quickly back off. At the end of the meeting, which was much shorter than you anticipated, it is clear that he thinks

you can work around Mrs. Santos and that he does not share your concern about the problem. You doyour best to keep the project on track and keep looking the other way. However, the problems continue to pile up and get even worse over the next few weeks. Murphy seems to lurk around every corner, and every time you have to put out a fire the origin seems to lie in the same place: the inefficient department head. You have lunch with a couple of her key employees and pump them for information. Although what they tell you about operational matters confirms what you already know about inefficiency, it also becomes clear that they see no way of changing dear old Mrs. Santos's way of doing things. When asked hard questions about the project objectives and what could be done to ease the bottlenecks, they shrug their shoulders and laugh in a nervous, almost incongruous fashion. Finally, at a key staff meeting just before you must file your interim report, the issue comes to a head. The EVP is there, but primarily as an observeras the big shot ex-pat consultant, you are chairing the meeting. You present the project as it has proceeded to date, doing your best to paint a positive picture, even going out of your way to compliment some of the technical staff who have done outstanding jobs. But you feel that you can no longer avoid the hard fact that important deadlines are about to be missed. It also seems clear to you that 90 percent of the problems lie in that one particular department. When Mrs. Santos takes the floor to summarize her department's work on the project, however, she paints a glowing picture. Things are really moving along, targets are being met and exceeded, and everything is copacetic indeed. You can't believe what you are hearing! You know that everyone in the room must know that she is basically covering up, and can't help being upset in that she is downright contradicting what you have been saying and trying to bring to everyone's attention. Responding to your gut instincts and knowing for a fact that the data support your position, you take a deep breath before asking a series of hard questions that leave Mrs. Santos with very little wriggle room. She gives evasive answers, and everyone else around the table suddenly becomes quite uncomfortable. People are shifting around in their chairs and looking out of the windowsa drastic shift in mood. You immediately realize that you have made a major blunder, but it's too late to back off, so you press ahead. After her third circular and evasive answer, the EVP clears his throat rather loudly, then interrupts: "Perhaps we should move on with the meeting. These little details can be worked out later." Within a month the project has fallen completely off track, precisely as you would have predicted. However, rather than taking action to put things back on track, top management decides to rethink the whole project, including their collaboration with the outside consultant (that being you). At the recommendation of the EVP, they pull the plug entirely after the design phase. They thank you for doing such a good job on the project design, reassure you they are anxious to work with you in the future and cancel the project as it was their contractual prerogative to do. In parting, the EVP tells you: "Our staff feels that they can really carry this out on our own, and management agrees. Your work has been first-rate, but you know things can change. Call me if you ever need a reference." Note: The case is strategically placed in this chapter for the simple reason of sensitizing and exposing the readers very early on to international business with the cultural perspective in mind. A more in-depth discussion on culture will take place in Chapter 2.

Question: What do you think really happened in this case? What is

Mrs. Santos's position in the company? What issues of international busi- ness is found in this case? What do you think the consultant should have

done?