- Case 2 Managing Issues After International Expansion Kelanaflyers Incorporated Is A Multi Faceted High Technology Compa 1 (175.99 KiB) Viewed 7 times
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CASE 2: MANAGING ISSUES AFTER INTERNATIONAL EXPANSION KelanaFlyers Incorporated is a multi-faceted high technology company that designs, develops, manufactures and markets a diverse range of microelectronic, and test and measurement products. Much of KelanaFlyers's success in the semiconductor market is attributed to its space-qualified and radiation-hardened products used in the aerospace industry and satellite communications. Based in Kelana Jaya, KelanaFlyers has become the independent supplier to nearly every major aerospace prime contractor around the world. However, due to the bleak economic prospects in Malaysia that has resulted in the weakened Ringgit, KelanaFlyers has had to tolerate with higher prices of its raw materials. In addition, the increased competition from the Indian aerospace sectors is also affecting its sales and eating away its profits. Mr. Zaquan, who is KelanaFlyers's CEO, spent the whole of last year scouting for potential locations and searching for clues on how to position his mid-sized company for its relocation plan into Europe. This move is aimed at securing better business within more established aerospace ecosystem to expand its current business. After a lot of deliberations, based on his analysis and inputs, Mr. Zaquan decided to start a completely new operation in Piedmont, Italy. The region has a bustling aerospace industry in Italy, with an income of over 6.1 billion €, which is mainly concentrated in the area surrounding its capital city, Turin. 5 international players - Thales Alenia Space, Alenia Aermacchi, Avio, Galileo Avionica and Microtecnica Goodrich - and a group of more than 300 SMEs populate its aerospace industry (the third largest in Europe) and record an annual turnover of about 2.6 billion €. This venture aligns with the aim of tapping into a new clientele base to enhance KelanaFlyers's market share in the industry.
A new team was formed from amongst their current middle managers in its Kelana Jaya office, all of whom are Malaysians, to make preliminary preparations for the international relocation. Adopting the polycentric approach, the company needed to tailor its operations to local customs and marketing strategies in the host country. One of the first tasks entrusted to Mr. Ziqry, the HR Manager, was hiring suitable personnel from their Malaysian office as well as conducting teleconferencing and Skype interviews for shortlisted Italian nationals who want to join them at their new office in Piedmont. Choosing the right location for their office in Piedmont became the responsibility of KelanaFlyers's Finance & Accounts manager, Ms. Zaleha. After a few more months of planning and hard work, the company managed to begin its operation in the European country. KelanaFlyers Italy now employs about 100 local staff, including a few at the managerial level. Its organizational structure is on display in Figure 1. Initial operations and market response was positive, and the new player now commands promising market share.
In this crucial introductory period, however, feedback from customers and partners indicate their dissatisfaction regarding employees' lack of ability to explain to them in detail about the different products and services they carry. Subject matter expertise is seen as lacking among the Italian sales staff, but the more competent Malaysian staff have difficulty conversing in Italian language, while a few Malaysians are even not proficient at all in English. Some also expressed their frustration over the inefficient procedures implemented at the company, many of which have resulted in delays for serving customers, approval of customer requests, processing business transactions and so on. This was traced to the difference between time considerations amongst both Malaysians and Italians. For most Italians, completing a human transaction is the best way they can invest their time as time considerations will usually be subjected to human feelings. "Why are you so angry because I came at 9:30?" Mr. Massimo (the Marketing and Sales Manager) asks his Malaysian colleague, Ms. Zaleha. "Because it says 9:00 in my diary," says Ms. Zaleha. "Then why don't you write 9:30 and then we'll both be happy?" is a logical Italian response. "The business we have to do and our close relations are so important that it is irrelevant at what time we meet. The meeting is what counts". Most Malaysians like Ms. Zaleha cannot swallow this, as it offends their sense of order, of tidiness, of planning.
Organizational Structure HR MANAGER Mr. Ziary (MAL) ASSISTANT Mr. Genarro (ITA) Figure 1: KelanaFlyers Italy ACCOUNTS & FINANCE MANAGER Ms. Zaleha (MAL) ASSISTANT Mr. Luciano (ITA) CEO Mr. Zaquan (MAL) CFO Mr. Zahir (MAL) MARKETING & SALES MANAGER Mr. Massimo (ITAL ASSITANT Ms. Zainazah (MAL) MANUFACTURING MANAGER Mr. Gianfranco (ITA) ASSISTANT Ms. Zolidia (MAL) R&D MANAGER Dr. Zulkifly (MAL) ASSISTANT Dr. Carla (ITA) In other instances, there are also comments from Malaysian staff about the lack of assimilation amongst majority of their Italian counterparts that have compromised teamwork and team spirit at the company. On the other spectrum, most male Italian staff have problems dealing with Ms. Zaleha, and would prefer to deal with her male assistant manager instead. This, indirectly, compromised on processing time as it builds on layers of communication. In addition, the R&D team, of whom are mostly Italians, often criticize their Malaysian manager for his unwillingness to engage in new and innovative technologies that can enhance their products and services. And Ms. Zolidia, who wears a niqab and abaya everyday at the production office has been an object of humor (being associated with a Star Wars character, Darth Vader, behind her back) and sometimes fear (of being a suicide bomber) by certain quarters of the Italian production operators, leading to a feeling of discomfort and uneasiness due to the supposed stereotype and discrimination. Productivity at the department is also compromised.
NIQAB Figure 2: The stereotype of Muslim women A veil that entirely covers the woman including the mouth and nose, with small opening for the eyes. MILITANT ISLAMIST ↑ STAR WARS As the company charts its way into a promising but challenging future in Italy, Mr. Zaquan has contacted you to help the company improve. Based on your OD knowledge and skills, you must help ensure KelanaFlyers can sustain and survive in the new and demanding marketplace. Your initial response was to do a research on cultural differences between Malaysia and Italy based on Hofstede's indicator of national culture.
Comparison 100 50 Figure 3: Hofstede's National Culture Power Distance Malaysia son with Italy 76 70 hadd 50 26 in comparison Individualism Masculinity 36 75 Uncertainty Avoidance Malaysia Italy 41 61 Long Term Orientation 57 30 Indulgence Answer the following questions to guide your response to Mr. Zaquan's request for consultancy: 1.Think of Mr. Zaquan's company and apply the open systems perspective to describe its operations. Describe all FIVE (5) components. (15 marks) 2. Conduct a gap analysis to diagnose the possible problems at KelanaFlyers. (10 marks) 3. What are possible OD process interventions that you may need to suggest? (5 marks) 4. What are possible OD interpersonal interventions that you can suggest? (5 marks) 5. What are possible OD team development interventions that you can suggest? (5 marks) 6. Discuss the alignment required to set KelanaFlyers on its path to high performance, success and sustainable growth. (10 marks)