Multicultural Challenges and Opportunities Facing Riordan Manufacturing: An Application of Theory
Globalization continues to be a buzzword for business today as it has been for the last several decades, and with good reason -- the pace at which the world is becoming ever more interconnected through business and economic ties has only increased as technology has continued to close the practical gaps between different peoples and regions of the world. A message that might have taken weeks or months to send around the globe a century and a half ago was steadily reduced to mere minutes through the growth of telegraph and then telephone systems; radio and then satellite technologies made communication even faster for those that had the resources to make use of such innovations. Now, with the Internet a ubiquitous feature in households throughout the developed world -- and increasingly in countries that are still developing their overall infrastructure, as well -- near-instant communication with people anywhere on the planet has become the expected norm.
This increase in communications capabilities has been met with a commensurate rise in the level of direct foreign investment. Setting up operations in a foreign country comes with a host of complications and potential problems stemming from a variety of intercultural relationships that will necessary come into play with such an operation. From government regulators to employees and management teams, foreign operations will necessitate a meshing of cultural values and perspectives so that the necessary interpersonal relationships in the company are seen as productive and mutually beneficial.
The issues that are an inherent part of foreign operations can be clearly seen in the case of Riordan Manufacturing and the establishment and growth of its operations in the Hangzhou province of China. A manufacturer of various plastic parts made from a variety of raw materials, Riordan Manufacturing has been operating one plant in Hangzhou already with a great deal of success -- so much so that a second, larger facility has been purchased, retooled, and is ready to come online. The company has yet to develop a personnel management plan for the facility or its operations in the region, however, and given the likely diversity of the individuals at the facility and the cultures they represent, this is a major stumbling block. A lack of skilled Chinese labor in the region means that Pakistani, Indian, and Korean laborers will likely be hired in the plant, making the task of culturally integrating this workplace and developing a successful personnel management plan that much more difficult due to the added diversity that will be a factor at all levels of operation.
Analysis of Alternative Solutions
Riordan Manufacturing can choose to try to instill its own culture at the Hangzhou facility and require employees and managers to conform to this culture, but this is likely to yield negative results (Hodgetts, Luthans, & Doh, 2005). Instead, the company should focus on building an effective communications strategy t ensure that cultural issues are brought to attention in an open and direct manner, facilitating change (Apollo, 2010). At the same time, concrete management plans that foster this communication and clarify expectations and roles would also be beneficial (Elashmawi, 2001).
Risk Assessment and Mitigation Techniques
A major risk that Riordan runs as a Western-owned and Western-based organization is being seen as greedy and uncooperative by managers, officials, and employees if it does not address cultural issues and differences in a proactive and understanding manner (Elashmawi, 2001). Because the company is already successful and is based in the United States, which is imagined by many to be a land of "rich millionaires," there exists a general impression that "foreigners should come to China with technology, expertise, and money and that the Chinese will provide the land, labor, and hopefully the market" (Elashmawi, 2005. p. 215). In other words, there are certain expectations regarding the attitude of Riordan and its Western managers towards other personnel managers, employees, business contacts and associates, and government officials.
Additional risks can of course be seen in each of the manager-employee relationships that can be imagined, with highly different management styles and expectations existing between Korean and Indian managers and employees, for example (Hodgetts, Luthans, & Doh, 2005). The diverse pool of employees that is expected as well as the diverse cultural backgrounds of potential managers creates a complex series of potential interpersonal difficulties and problems, making a mapping and comparison of the various relationship all but impossible. The need for clear objectives and targets in the company also necessitates a strong and consistent management plan, however, further complicating matters (Apollo, 2010).
Mitigating these risks can be accomplished fairly easily through the adoption of a proper and effective personnel management plan built on an adequate amount of foresight. Effective multicultural organizations have develop cultures that are purposefully and consciously pluralistic, meaning they do not promote the adoption of a single culture, but rather attempt to create an organizational culture where all ethnic and national cultures are supported (Parhizgar, 2002). This means managers should approach all situations with an eye towards supporting, empowering, and recognizing individual achievements and values (Parhizgar, 202). This, combined with the need for consistency in management style in order to maintain efficient operations suggests that regardless of the cultural background of the managers hired, they will need to receive abundant cultural training themselves in order to work well together and with their employees in setting and achieving goals. Developing an active management training plan as part of the personnel program is highly recommended.
Building on this framework, the optimal solution for this situation begins to emerge as one that is driven by a strong commitment to developing multicultural awareness and effective interpersonal practices at the middle level of management in the company. Empowering middle managers at the same time that middle managers learn to empower their employees carries benefits at many levels, and providing this type of training can be a highly effective way of mitigating cultural issues and their effect on operations (Apollo 2010).
There are also other areas of concern that must be addressed aside from the relationship between mid-level on site managers and the employees at the facility, of course, in order for the optimal solution to be developed. The relationship between upper management and mid-level managers is arguably the most important relationship in regards to the issues Riordan Manufacturing is facing, as it is from the top down that expectations, values, and levels and methods of cultural acceptance and accommodation will be set (Parhizgar, 2002). Thus the leaders of Riordan Manufacturing and all key stakeholders must also make themselves aware of the cultural issues being faced, and the hiring, training, and coordination of mid-level management should be conducted by a team of individuals that undergoes specialized knowledge acquisition and training themselves (Elashmawi, 2001).
There are also issues expected to arise in the area of employee interactions, as there will likely be a diverse pool of employees working in the facility at any given time. In order to build better interpersonal bonds between employees, engaging in occasional social activities outside of work could be encouraged, and there are also many team building exercises and general practices that can be utilized in order to foster closer interpersonal bonds (Halverson & Tirmizi, 2008). The more interpersonal bonding and relationships are fostered, the less cultural differences tend to matter and the more evened-out the overall organizational culture becomes (Halverson & Tirmizi, 2008). By ensuring cultural differences are mitigated and proactively handled at the employee level, management issues will also be eased and operations can be maintained.
The actual implementation of the optimal solution is truly as straightforward as the tenets and assumptions of the solution itself. Though a great deal of planning will be required, and despite the lengthy amount of time that must be taken to ensure adequate multicultural preparation and education programs are put in place at all necessary levels, the issues when dealt with at this grand level and in this multifaceted manner actually become less complex than when examining the specific issues that might arise from every intercultural interaction. That is, by developing and implementing company-wide policies, Riordan Manufacturing can simplify the process of achieving effective cultural integration (Elashmawi, 2001).
The implementation must begin with the cultural education and awareness of Riordan's executives and top-level managers, which has already begun to occur due to their existing Hangzhou facility. Increased awareness of the cultural specifics they will encounter will still be necessary in order to enable the effective assessment, hiring, and training of mid-level managers; ensuring that this takes place in a manner that accounts for cultural differences while at the same time gives an understanding as to personal willingness to adapt is necessary for the optimal solution to be achieved (Halverson & Tirmizi, 2008). After these managers have been hired, they will need to undergo certain team building exercises as well as multicultural training to ensure that these managers can function together as a team…