Friday, January 23, 2009

Global Culture Changes

Synopsis of key issues in this case
ARPCO operates in a global environment; however, ARPCO does not have a shared culture that crosses borders. The local culture has a stronger influence on the way business is conducted than the corporate culture, which is proving to be a major challenge for ARPCO management. Due to corporate culture immaturity and undefined values, ARPCO cannot support the growth of its most talented people on a global level.

If APRCO does not address the culture crisis, legal matters are bound to evolve and corporate image will be tarnished. Ultimately, this would lead to negative impacts for APRCO’s bottom line and would significantly reduce its ability to attract and retain talented people.

What is the challenge Wollen faces in making the decision to promote Lewis? What is her responsibility to Lewis?
The challenge Wollen faces in making the decision to promote Lewis is whether she can break through the culture barriers and obtain buy-in on a plan that supports Lewis in the new position. The culture barriers are strong, as can be seen with Abbott’s resistance to accept Lewis after learning of his race. If Wollen and Lewis decide to move forward with the promotion, a well thought out plan approved from the top will be required to ensure success for Lewis and for ARPCO. Without the proper support, Lewis could fail in a job that he was well prepared to do, which would be painful to Lewis and his family.

Wollen has three major responsibilities to Lewis. First, she should make him aware of the key risks and challenges associated with the new position. Second, she should describe to Lewis her commitment and ARPCO’s commitment to support him in the new position. Third, she must follow through on her commitment to support Lewis. Ultimately, the decision to accept the opportunity or not should be made by Lewis after the risks have been clarified.

Is it always wrong to consider gender, race, and ethnicity in promotion decisions, even if the “equal” opportunity might end a manager’s career?
Gender, race, and ethnicity should never be considered in promotion decisions. The decision should be based instead on an individual’s qualifications. In this case, Lewis was intelligent, hardworking, experienced, creative, and a top performer on the fast track who was the most qualified for the new position. Therefore, Lewis should be given the option to accept the position regardless of his race.

Evidence that promotion decisions should never consider gender, race, and ethnicity can be found in the Nineteenth Century Civil Rights Act. The Nineteenth Century Civil Rights Act provides protection against employment discrimination, which includes discriminatory practices such as bias in hiring, promotion, job assignment, termination, compensation, and various types of harassment. Additionally, the courts have ruled in such cases that employers need to meet a “but for” test. In other words, the employer must prove that the same employment decision would have been made for the same reasons regardless of sex or minority status (Walker, 1992, p. 10).

Since globalization is a very real environment factor in business, what are the challenges U.S. corporations face in the changing environment?
As the environment changes to increasingly conduct business in a global framework, U.S. corporations are challenged with shaping corporate culture for the new workplace. Immigration, technology, emerging markets and economies, mergers, joint ventures, strategic alliances and foreign investment have brought all the world’s citizens to one another’s doorstep. People must now learn to communicate, work and compete with others who are not like themselves.

“Companies may be putting an emphasis on creating diverse workforces, but more minorities claim they are facing barriers to promotions once on the job” (Armour, 2001, USA According to Armour, the number of employees filing federal claims regarding discrimination in promotions based on race has nearly doubled since 1990. Further evidence includes a 1999 poll by Society for Human Resources Management, which concluded that nearly 75% of employers say that minorities face barriers to advancement.

Companies that do not provide shared cultural values will loose competitive position in the global marketplace. “A Fortune magazine survey found that CEOs cite organizational culture as their most important mechanism for attracting, motivating, and retaining talented employees, a capability they consider the single best predictor of overall organizational excellence.” (Daft, 2003, p. 94)

What are the risks associated with Lewis’ promotion?
There are a number of risks associated with Lewis’s promotions, which impact Lewis, Wollen and ARPCO. The first is that Lewis could fail in a job that he was well prepared to do, which would be painful to Lewis and his family. The second risk is that if Lewis fails then ARPCO’s corporate image could suffer. Thirdly, if Lewis fails in the new position it will be reflected in Wollen’s performance record. Finally, if his promotion is passed over, then the company is subject to a discrimination law suit and Lewis may not remain long with ARPCO.

There are many risks associated with Lewis’ promotion and each could potentially be very detrimental. The only foreseeable way for ARPCO to reduce its risk and create an environment that eliminates future risk, is to reshape the culture for conducting business in the global arena.

What are the benefits to Wollen and to the organization if Lewis is promoted?
If Lewis’ promotion is successful, then ARPCO and Wollen would realize significant benefits. For example, ARPCO would avoid legal issues and improve corporate image through increased diversity, which would enable them to attract and retain talented people. Wollen’s benefits would include recognition for developing Lewis and for moving the company’s diversity and culture a big step forward. Wollen would also gain self satisfaction with helping Lewis progress is career.

What managerial skills would you use (if you were Wollen and you did promote Lewis), to insure the optimum benefit to all the “players” in this situation?
Only one key managerial skill stands out, that would insure optimum benefit for all, and that is Human skill. The Human skill required in this case is made up of leadership, mentoring, and relationship building.

Through leadership and mentoring, both Lewis and Wollen benefit. Lewis would have the advantage of an “assistant coach” and he would have the needed level of trust and confidence to be successful. Wollen would benefit personally and professionally.

Through relationship building, both Lewis and Abbott benefit. If Wollen develops a relationship with Abbott, then she helps reduce the culture gap. A well developed relationship would also provide support for both Lewis and Abbott when issues arise.

The global business environment has presented major challenges for ARPCO. In order to retain competitive position, avoid discrimination law suits, create a diverse workforce, attract talented people, eliminate bottom line impact, retain key employees and fully leverage intellectual capital, ARPCO needs to create culture change. Unless the culture crisis is addressed, ARPCO will continue to have difficulty conducting business in the global arena.
It is recommended that a Culture Change Plan be developed. Upper management must approve and sponsor the plan. Human Resources will facilitate the program and leverage middle managers to execute the plan. A proposed plan has been created and should be used as a starting point. See Table 1 for the proposed plan.

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