Cross Cultural Management of Novell Inc - Case Study Example

Cross Cultural Management: Novell’s Case November 2006 Cross Cultural Management: Novell’s Case Discuss how issues of language and communication influenced the direction of Novell’s international growth and explain how effectively you think the company managed these issues. Introduction In this ever-changing, rapidly competitive global market, more and more multinational companies (MNCs) struggle to expand and create new technologies at every opportunity that arises. And to be able to effectively operate in the global environment, the need to effectively affect language and communication among companies, customers and colleagues coming from different nationalities and cultural heritage is inevitable. The creation of a well-balanced, peaceful organisational behaviour is not enough to deal with the cultural, language and communication barrier, every global organisation also has to be familiarised in how each and every individual accustom himself with the national business context. The lack of familiarity with different communication styles, interaction patterns and language proficiency can impede both the internal and external organisational relationships, thus eventually breaking down the company on a long-term basis. In a multinational company like Novell, who specialises and caters networking operating system software, success would not have been attained if not for the global distribution of its software. Their products would not reach their end-users if Novell had not properly dealt with the language and communication barriers being put up in a multicultural setting. With these issues and concerns, the importance and significance of language and communication in a cross cultural environment can never be denied. International growth of any organisation would not have been possible given that such issues are not effectively addressed and controlled. This paper seeks to discuss how Novell was able to properly address the issues of language and communication in a multi-cultural setting, which led to the success and international growth of the company. Hopefully with Novell’s case, more and more promising companies would follow its footsteps towards success. Novell, Inc. An IT-based company based in Massachusetts, United States, Novell’s software product offerings include: eDirectory, Open Enterprise Server, SUSE Linux Enterprise Server, Netware, Linux Enterprise Desktop, GroupWise, ZENworks, Identity Manager, iChain, exteNd, SecureLogin and BorderManager (Wikipedia, 2006). The company has a net income of US$372.6 million (2005) and employs about 5,006 people (2006) all over the world. Aside from its numerous product launchings and offerings, Novell’s success can be mostly attributed to its global business plan. It markets products and customer-support through a partner and leverage model (McEntire, Derr & Meek, indicate year, p. 370). Its idea of global expansion includes maintaining only handful a number of personnel and contracts. In a specific location, the local partner or distributor is tapped to cultivate and develop a regional market area. It is in the hands of the local distributor to commission agents who will distribute and represent Novell. In any global expansion, Novell encountered language and communication barriers, most especially in their products. Most of their clients were situated in developing markets that use English as a second language or could not afford a more expensive technology. Countries like Spain, France, Italy, Germany, Korea, Japan and the like were very slow to adapt and get comfortable with the Novell software whose default language is English. To be able to actively gain regional markets, Novell devised ways and means to expand its products by offering regional languages. Through the use of multiple language options (English and other local languages), more and more local companies were able to appreciate and adopt Novell software packages. On the other hand, the company also saw the need to expand the language skills of its employees. By having bilingual or multilingual employees, the company is able to tap better relationships on its end-users. According to McEntire, et. al. (date), “Language ability is beneficial in initial communication with foreign markets and in product translation.” Aside from software packages, Novell also expanded its regional language offerings to its customer support system. The company has created a technical support system that provides 14 different languages. So once customers dial Novell’s toll free numbers, the customer support technician on the other line answers using the native language of the caller. In this scheme, end-users could appreciate Novell’s software packages even more while being able to penetrate deeply into regional markets. Cross Cultural Communication Culture plays a significant role in the success or failure of any organisation. As defined by Stoner (1995), culture is “composed of societal forces affecting the values, beliefs, and actions of a distinct group of people.” Cultural differences, particularly in terms of language and communication barriers, exist within and among nations due to the following dimensions by Hofstede (1993): power distance, individualism, masculinity/femininity, uncertainty avoidance and long-term orientation. Power distance. Referring to the “inequality among the people of a nation” (Hofstede,1993), greater power distance entails greater inequality among people within a nation or organisation. Countries with greater inequality include China, Japan, Russia, Indonesia and France. On the other hand, there is less power distance in countries like the United States, Germany and the Netherlands. In this premise, greater power distance is equivalent to greater status and authority differences between an executive and an ordinary employee. Novell understood clearly that aside from the use of local language, communication among other factors is of utmost importance in dealing with people from other nationalities. When selecting a regional distributor, Novell made sure that they could tap a local individual who speak the local and English language. Although the company mainly provided the schemes, strategies and approaches in handling and succeeding in the business, the local distributor made sure that the human resource management is properly carried out according to their culture such as: the right approach in handling people, determining the political overtones of a particular business decision and the manner in which a particular product is sold. With the presence of a local distributor who speaks the country or area’s local language, Novell was able to easily understand the country’s culture and technical needs. Furthermore, the local subordinates can easily follow their bosses not only because they speak the same language, but as well as the fact that “communication is better and the rapport is better” (McEntire, Derr & Meek, year). This is exemplified by the case of American Novell employees, who cannot just give orders and instructions to any Chinese employee but must be agreed upon by the local Chinese regional distributor or Vice President. Individualism. Defined by Hofstede (1993) as the “extent to which people in a country prefer to act as individuals instead of group members,” the degree of competition among Asian countries is less as they are more group-oriented as compared to Western countries. On the other hand, individualism also encompasses a person’s sense of nationality or belongingness to the same country. Although it was not explicitly mentioned in the McEntire, et. al., communication and their sense of individualism reflected within Novell’s regional network during the early in the 1990s. They were able to realise the fact that assigning foreign executives in a culturally different country who have a different set of group-orientation is deemed more of a hindrance in the overall implementation of the company’s communication strategies. Novell was quick to realise the fact that they could never assign an American regional Vice President or an executive to another foreign country like Japan; the same issue goes for German Executives assigned in France, Chinese bosses assigned in the United States and vice versa. As in the case of Japanese people, their language and communication style is quite different from their European or American counterparts. The term “yes” for them means that they “understand” what the American counterpart is saying, but it does not mean that they automatically “agree” to a decision. For them, every decision is done behind closed door Japanese meetings. They communicate within themselves when making a decision. Foreign counterparts are never invited to join the decision-making procedures. This only implies that Japanese emphasise a more collective action and communication effort in every decision being made, thus avoiding individual competition and miscommunication within the organisation. After they have decided among themselves, it is only then that the Japanese would re-negotiate and come up with a final decision. As each and every one’s individualism was understood, and the manner in which communication was used to maintain their group dynamics, Novell was able to devise ways and means in selecting and training individuals, particularly those in key competent positions, who were tapped to provide technical support in three distinct regions: (1) Germany centre caters its communication system for Europe and Africa; (2) Australia centre for India, Asia, and the Pacific Islands; and the (3) United States centre for Latin America, US, and Canada. By grouping their technical support centres, although McEntire, et. al. pointed out that it was politically motivated, it would be easier and more effective to communicate in various opposing regions. Through individualism and effective communication, Novell was able to present “one face” customer service delivery (McEntire, Derr & Meek, year): The company introduced a new support concept to the software industry by bringing people from throughout Europe to Germany to provide support in 14 different languages. Toll-free lines run from various countries into Dusseldorf, Germany. When customers telephone a local toll-free line, they speak to someone in their native language. Each support centre’s sense of individualism and “love for one’s language” transpired into a more effective support Novell support system. After a customer reaches for someone in their native language, their queries are then passed onto a native support engineer. Hence, Novell is able to “provide expert technical support in languages customers from anywhere the world could understand” (McEntire, Derr & Meek, year). Masculinity/femininity. This dimension pertains to the “degree to which ‘masculine’ values prevail over ‘feminine’ values” (Hofstede, 1993). Values that denotes masculinity includes assertiveness, performance orientation, success and competitiveness. On the other hand, feminine values are those characteristics encompass close personal relationships, caring and quality of life. In communicating and dealing with different nationalities, the degree of masculinity and femininity characterises the type of society and values orientation a particular country has. The role of gender and “gender values” should not be easily spelled-out in the global marketing setting. Aside from the essence of language, the role of communication, and its relationship with gender, also affects the degree to which an organisational decision is handled and carried out. People from India and Saudi Arabia prefer to communicate with men in their business dealings as they look upon women as lower class citizens and signify as the weaker and less competitive business gender. They also deem that women should only be confined to the home due to their caring and compassion attributes. Likewise, the Japanese and Chinese people value “masculine values” over “femininity values.” These people are motivated to work through the orders and command of their superiors. The hiring of regional employees in each specific country is a giant step for Novell’s success. Although this dimension was not clearly explained or emphasised in McEntire, Derr & Meek’s article, the authors’ have somehow connoted that “tough” international people must be delegated against their local counterparts in Japan, China and even India as these aforementioned countries have dominant masculine values. While the authors’ failed to explain the role of women in a cross cultural setting, it is in this dimension that femininity-oriented values is deemed crucial in approaching people from countries like the Netherlands and Philippines. Communication versus feminine and masculine values is crucial in dealing with Novell’s clientele. In this aspect, it can be clearly seen that the company lacked the effective approach to solve this issue. Despite the fact that Novell is an American company who regards both men and women of equal importance, they must realize the fact that they could only effectively communicate in other countries when the issue of gender values is also taken into serious consideration. There is a need to create a framework in this aspect for effective communication strategy to work. Uncertainty avoidance. This dimension refers to the “preference of people in a country for structured rather than unstructured communication situations” (Hofstede, 1993). Structured communication situations involve clear rules, guidelines, policies and methodologies. Countries who favour these situations are more resistant to change and less flexible, as business decisions are mainly guided “by the book.” This has been clearly identified by Novell, from McEntire, Derr & Meek’s article (date, p. 379) The Germans… want everything in rules and they want everything to be clear and specific. The more rules there are, the more respect they have for you and the more willing they are to participate. Other countries that have similar situations as that of Germany include Japan and Russia. Knowing this cultural aspect allowed Novell to step back and plan more before dealing with these types of people. Being a US-based company that has more flexibility and business energy in dealing with people and business aspects, Novell was able to adjust its communication schemes and guidelines in catering to the needs its foreign distributors. The company is able to anticipate how their foreign counterparts would react to changes being dictated by their main office in the United States. Through this aspect, Novell is also able to adjust its communication patterns to the different cultural settings. Although this communication scheme is not specific to Novell, nevertheless it paved way for the company in better understanding foreign clients and counterparts. Long-term orientation. Hofstede (1993) referred long-term orientation as the “values in which people hold that emphasise the future, as opposed to short-term values, which focus on the present and the past.” Long-term values are those that involve thriftiness and persistence. On the other hand, short-term values pertain to tradition and fulfilling social obligations. Countries that value long-term orientation include China and Hong Kong, while the United States, France and Russia prefer short-term orientation. Long-term orientation is essential in communicating and constantly reminding employees on the long-term goals and aspirations of any company. Despite the fact that a large part of this aspect is embedded in one’s culture, it is no doubt that its emphasis must be made clear and properly conveyed through effective communication in order to effectively sustain the company. Based from the company’s current financial and marketing situation, it has been evident that it has somehow failed to relay and communicate the essence of sustainability within the company’s framework. Indeed, the language still exists, but the company was unsuccessful in bringing out suggestions, needs, and future goals from its local stakeholders. The clear lack of sustainable goals and aspirations of the company has somehow drifted its 1990s success from its hands. Indeed, the company has been able to introduce numerous product offerings during the last decade (Wikipedia, 2006). It has also significantly failed to connect and establish the relationship of its products with those of the long-term needs of its end-users. Aside from the intense competition against Microsoft and Apple Computers, Novell lacked the audacity to venture and utilise language and communication in fulfilling the long-term demands and prerequisites of international success. Conclusion Despite its recent performance stagnation, Novell has been able to set a global example of how a company should handle and manage cross cultural communication. Novell was able to transcend from Hofstede’s dimensions (such as power distance, individualism, and uncertainty avoidance) and was able to use language as a limiting factor for adopting its product lines. On the other hand, Novell lacked or failed to imbibe its communication and language skills in evolving out of the masculinity/femininity values, as well as the long-term orientation dimensions. Overall, Novell has passed the requirement in effectively effecting language and communication in the global market. However, it has failed to sustain its success in the early 1990s onto the needs and demands of the new decade, as based from its current performance. The road in dealing and communicating with various cultures, norms and traditions is long and rough, but is not impossible to attain. As this ever-changing global market continues to transcend into new heights, Novell still has a fighting chance in gaining back the glory which was once theirs. Bibliography Hofstede. G. (1993). “Cultural Constraints in Management Theories.” Academy of Management Executive. February 1993, p. 81-94. McEntire, M., Derr, C.B., & Meek, C. (date). Chapter 37 Case: Novell’s Global Strategy “Bytes Are Somewhat Narcotic.” Please complete proper citation. Stoner, et. al. (1995). Management 6th Edition. USA: Prentice Hall. Wikipedia: The Free Encyclopedia. (2006). Novell. Retrieved November 2006 from website: . The bibiliography is pretty thin. At this stage you cant do much more reading - but why did you not even refer to the article on language management in multi national companies that is inthe reading pack? I DO NOT HAVE ANY IDEA ABOUT THIS. MAYBE YOU COULD JUST CITE THIS PIECE FOR COMPLIANCE SAKE. Read More