Case Study: Consolidated Computers
James Pruitt was ushered into the president’s office. Three months ago, he had been appointed manager of the first foreign plant of Consolidated Computers, Inc. He appeared to be the ideal person for this assignment, as a proven division manager of many talents. He was an innovator and very much interested in a foreign appointment. Now he was calling on his superior just before catching the plane for Riyadh.“I wanted to talk to you,” the president began, “about some issues you will be facing when you reach Saudi Arabia. I guess you might call what I want to say a matter or my search for a business philosophy. We have not had to experience here the new issues that you will face, and we simply do not have a set of policies and procedures to cover such matters. Perhaps out of your experience we can move in that direction in case we later establish our operations in other countries.
“I am not concerned about your encountering new principles of management. They are universal, you have developed great skill in applying them to domestic operations, and I have no doubt about your skill in applying them in a foreign environment. You will soon discover, however, that managing is different abroad precisely because the cultural environment is so different.
“I think our best position is to realize that we are going into Saudi Arabia as a guest. We each need the other at this time, but there may come a time when their political forces will require us to give up ownership of our plant. It is up to you to develop the rapport with all interested parties which will most benefit our long-run interests.
“Since all your employees will be, or soon will be, Saudi, it is vital to learn as quickly as possible something about their culture. Perhaps your best move is to perfect your skill in the use of their language and really learn to think and act as a native. I am not sure anyone from the United States can do this. You and I were raised in the folds of Western Civilization, which has very different institutions, behavioral patterns from those you will encounter in the Near East.
For instance, does one adhere to the ethical principles of the Saudi or our own? Do they have the same trust and reliance on people that we do? Will they always react as we here are accustomed? Is social responsibility thought of in the same terms? What intentions and actions on your part can be well received by your suppliers, customers, competitors, and public figures? “You know, I suppose that what is really on my mind is that we don’t really know at what point there may be a conflict in our two cultures, and when that is discovered, what choice you will make.”Questions:
1. If you were James Pruitt, how would you go about finding what the local business customs in Saudi Arabia are? What other environmental factors would you look for? How would you respond to them?
2. Suppose you found that it is customary not to lay off employees when work slackens. What would you do?
3. Suppose you found that it is normal business practice to give employees a small amount of money when they help your people to get something through a department or clear up some paperwork jams. Would you do the same thing? Why, or why not?
4. In the last paragraph, the president showed many worries about the difference in the two cultures and asked many questions. What would be your response?
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