Culture against cohesion: Global corporate strategy and employee diversity in the UK plant of a German MNC

Abstract

Purpose
– The purpose of this paper is to highlight employee diversity at the workplace level in a MNC, and consider its impact upon management attempts to promote a global corporate culture.

Design/methodology/approach
– The investigation took the form of an ethnographic participant‐observation study, which involved interviews and archival research plus a three‐month period when the lead researcher worked on the plant's final assembly line. This provided insights into the personal and psychological issues of individuals within the workforce, and an experiential dimension to the study which is difficult to replicate in other ways.

Findings
– The management approach to cultural and diversity issues worked both for and against the development of cohesion and improved employee relations. Managers sometimes ignored the real impact of local ethnic diversity, focusing instead on inter‐management conflicts, which contributed to employee morale and communication problems. But where diversity was recognised, more success followed, in particular where the distinct history and identity of the plant was emphasised. The study also tentatively suggests that “crossvergence” may be a fruitful way of interpreting the complex determinants of employee attitudes.

Originality/value
– The paper highlights how global strategies are always mediated by local circumstances, thus strengthening the arguments for recognising the interaction between management elites and local workforces, acknowledging cultural diversity and its impact on global business, and looking beyond simplistic notions of “national culture” towards diversity within national boundaries. The key implication for managers is that the successful implementation of global corporate strategies works best not just with due acknowledgement of local workforce identities, but with positive engagement with local historical and cultural traditions.

Full text

Culture against cohesion
Global corporate strategy and employee
diversity in the UK plant of a German MNC
Fiona Moore
Royal Holloway, University of London, Egham, UK, and
Chris Rees
Kingston Business School, Kingston University, Kingston-upon-Thames, UK
Abstract
Purpose – The purpose of this paper is to highlight employee diversity at the workplace level in a
MNC, and consider its impact upon management attempts to promote a global corporate culture.
Design/methodology/approach – The investigation took the form of an ethnographic
participant-observation study, which involved interviews and archival research plus a three-month
period when the lead researcher worked on the plant’s final assembly line. This provided insights into
the personal and psychological issues of individuals within the workforce, and an experiential
dimension to the study which is difficult to replicate in other ways.
Findings – The management approach to cultural and diversity issues worked both for and against
the development of cohesion and improved employee relations. Managers sometimes ignored the real
impact of local ethnic diversity, focusing instead on inter-management conflicts, which contributed to
employee morale and communication problems. But where diversity was recognised, more success
followed, in particular where the distinct history and identity of the plant was emphasised. The study
also tentatively suggests that “crossvergence” may be a fruitful way of interpreting the complex
determinants of employee attitudes.
Originality/value – The paper highlights how global strategies are always mediated by local
circumstances, thus strengthening the arguments for recognising the interaction between
management elites and local workforces, acknowledging cultural diversity and its impact on global
business, and looking beyond simplistic notions of “national culture” towards diversity within
national boundaries. The key implication for managers is that the successful implementation of global
corporate strategies works best not just with due acknowledgement of local workforce identities, but
with positive engagement with local historical and cultural traditions.
Keywords Organizational culture, Employees, Multinational companies, United Kingdom, Germany
Paper type Research paper
Introduction
This paper is concerned with corporate strategy and employee diversity in the UK
manufacturing plant of a German multinational company (MNC) in the automobile
sector (“AutoWorks” hereafter[1]). In particular, it explores the way that employee
diversity affects and mediates attempts by management to foster a global corporate
culture.
We focus on two inter-related areas, both theoretically and empirically. First, we
refer to debates on MNCs and globalization, and argue that much of this literature
tends to obscure the role of employees at the workplace level and the way that global
strategies are always mediated by local circumstances and power relations. We thus
argue the need to recognise the importance of the interaction between management
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0142-5455.htm
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Received 19 March 2007
Revised 13 August 2007
Accepted 15 August 2007
Employee Relations
Vol. 30 No. 2, 2008
pp. 176-189
qEmerald Group Publishing Limited
0142-5455
DOI 10.1108/01425450810843357

elites and local workforces; we offer primary data to illustrate this, and we posit the
concept of “crossvergence” as useful in interpreting employee responses.
Second, our focus on local circumstances highlights the need to acknowledge
cultural diversity and diffuseness and its impact on global business, and we thus also
address some of the literature in this area, arguing for the need to look beyond
simplistic notions of “national culture” and towards diversity within national
boundaries. Here we use primary data to illustrate how ignorance of cultural
complexity on the part of senior managers works against the development of
organisational cohesion, whilst recognition of it promotes more productive
employment relations.
The paper is structured in four parts. First, in the literature section, we briefly
address some of the theoretical and conceptual issues around:
.the interaction of global MNC strategies with “host country effects” and the
importance of local power and resistance;
.the role of employee diversity in mediating corporate strategies; and
.the efficacy of “crossvergence” as a way of interpreting employee responses.
Second, we outline the historical development of the UK subsidiary of AutoWorks,
emphasising the cultural diversity of the workforce and its place within the local
community. Third, in the major substantive part of the paper, we assess certain aspects
of the way the global corporate strategy – in particular the emphasis on quality and
flexibility – has been communicated to the UK workforce, consider the perceptions and
approaches of local managers to cultural issues within the plant, and illustrate how
these have worked both for and against the development of cohesion and
understanding between management and employees. Fourth, some brief conclusions
are drawn.
Literature
There is an ongoing debate about the impact of globalization upon the national
dimension. Whilst some argue that we are witnessing a “borderless world” in which
the decisions of MNCs are detached from the influence of nation states (Korten, 1995;
Ohmae, 1995; Bartlett and Ghoshal, 1998; Wolf, 2004), a more sober assessment of the
evidence suggests that national characteristics and “national effects” continue to
matter (Gray, 1998; Held et al., 1999; Hirst and Thompson, 1999; Scholte, 2003). Broadly
speaking, there are two major analytical categories which are commonly utilised to
explain the importance of the national dimension in business:
(1) cultural theories; and
(2) institutional theories.
The culturalist school (cf. Hofstede, 2001a; Trompenaars and Hampden-Turner, 1997)
sees cultural values as deep-seated and enduring, as varying systematically between
societies, and as conditioning what is deemed acceptable organizational practice. This
approach has become very popular in IHRM research, with national culture used as a
way of explaining – for instance – why MNCs of various national origins adopt
different HRM practices (e.g. Ngo et al., 1998) or the way in which MNCs adapt to host
country cultures (e.g. Tayeb, 1998). However, there remain serious concerns over the
theoretical status of culture and its relevance for organization. We do not know, for
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instance, which organizational features are shaped by culture, how are they are so
influenced, and what is the significance of culture vis-a
`-vis economic, technological and
political factors. Moreover, there is a tendency to assume cultural homogeneity within
a country, with much business strategy literature taking it for granted that national
differences can simply be expressed in cultural terms, and that the “nation” can be used
as the unit of analysis for culture. But this is highly questionable, not least because
almost all countries, but particularly large ones, are characterized by considerable
heterogeneity according to regions, social classes, minority and majority ethnic groups,
and so on.
A useful way forward, therefore, is to also consider the societal origins of cultural
differences, emphasising how management and business have different institutional
foundations across countries and regions (Powell and DiMaggio, 1991; Lane, 1989). Key
institutions are the state, the legal system, the financial system and the family. Taken
together, such institutions constitute the distinctive social and economic organization
of a country or region, and shape different “national business systems” or “varieties of
capitalism” (Hall and Soskice, 2001; Orru et al., 1997; Whitley, 2000).
Both culturalist and institutionalist perspectives are “high context” approaches
which draw our attention to the national level and the way that attempts to develop
“global” corporate strategies will inevitably lead to different outcomes in each society.
In other words convergence will always be balanced by divergence. Any global
strategy will, in the course of its diffusion and application, be internalized into the
working of existing institutional mechanisms as well as being subjected to the impact
of actors’ cultural values. In this sense, culturalist and institutionalist insights can be
integrated; as Sorge (2004) observes, institutions are “created, modified or held in place
through the mental programming of actors [...] [which itself emerges] through the
confrontation of actors with fairly stable and robust patterns” (p. 133).
Although these national-level perspectives offer a useful corrective to the populist
view of all-pervasive forces of globalization, we would argue the need to go a step
further. Whilst indicating the importance of national factors in terms of historical
traditions of class and culture, our data also highlight wide diversity within the
national setting, as well as suggesting how actors at more micro locales can draw upon
various power resources to respond differentially to corporate strategies. As such,
whatever rigour is applied to the conceptualisation of the national dimension, this level
of analysis can still obscure important processes at more micro levels. In terms of the
globalisation of HRM practices, Ferner et al. (2005) suggest that national-level analyses
tend to give “scant attention to the role of power and interests in this process” (p. 307).
As such, explanations for the degree of internalisation or absorbtion of global policies
by employees need to look deeper and appreciate the impact of workforce diversity and
political dynamics at the micro level. When these factors are illuminated we see that
the “hybridisation” of global corporate policy takes place on a routine basis, and that
employee responses to global strategies vary widely both between national settings
and within particular MNC subsidiaries (Belanger et al., 1999; Kristensen and Zeitlin,
2005; Morgan, 2001).
In terms of the implications for the culturalist paradigm, which remains, broadly
speaking, the dominant perspective despite recent advances in institutionalist
thinking, this suggests the need for a more nuanced view of culture and the imperative
to look beyond the simplistic notion of homogenous “national cultures”. The culturalist
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perspective tends to assess differences between countries in terms of simplistic cultural
indices that fail to take into account not only crucial differences in institutions but also
the rich variety of sub-cultures and diverse cultural identities within one national
setting, which – as we seek to illustrate here – can be crucial factors in influencing
employee attitudes. As Tomlinson (1999) notes, both nations and organizations are
more culturally diffuse than much of the literature on MNC strategy would suggest,
and diversity at the workplace level challenges any easy assumption of cultural
homogeneity within nations. As a result, “studies such as that of Hofstede, which
provide characterizations of nations as a whole, are of little use in understanding
behaviour within a given sample, due to intra-cultural variability” (Smith, 2001, p. 22).
Hofstede (2001b) has himself acknowledged as much, pointing out that “the analysis of
differences in national cultures should be complemented with a further differentiation
of regional, ethnic, occupational, and organizational sub-cultures” (p. 12).
If national factors do not provide a complete picture in terms of explaining employee
attitudes towards global corporate policies, neither do more local factors. Rather, we
need to grasp the interplay between the two. The convergence-divergence debate, in
this context, essentially revolves around whether the diversity of behaviour in
organizations across cultures is increasing, decreasing or remaining the same. The
divergence perspective would posit that an individual’s culture will determine their
values and behaviour, and that given fundamental differences in work and
management styles among different countries, management practices will thus need
to be adapted to the local environment. By contrast, proponents of the convergence
hypothesis argue that the work environment will have a strong influence on values and
behaviours, and the increasing prevalence of common technologies and education will
encourage MNCs to apply relatively identical management practices across countries;
these common business practices will in turn lead to similar managerial values, and
hence a convergence of diverse individual work values, such that MNCs become truly
global organizations.
The theory of crossvergence essentially seeks to blend these two alternative
positions and consider the dynamic interaction between culture and environment
(Ralston et al., 1997; Pearson and Entrekin, 1998; Entrekin and Chung, 2001). It argues
that there are likely to be both convergent and divergent aspects to the same
organisation, and that different parts of the organisation may lie on different points of
a continuum between convergence and divergence. It thus paints a more complex
picture of what is happening to culture under globalisation. In terms of the MNC
studied in this paper, these terms help us to address the relative impact of AutoWorks’
global management strategy (the “work environment”) vis-a
`-vis local historical and
cultural factors (the “individual’s culture”) in determining employee attitudes towards
and acceptance of management policies. We suggest that our evidence might usefully
be interpreted through the crossvergence lens, to the extent that employee attitudes are
influenced by a combination of cultural influences and organizational factors.
History and diversity at the UK plant
The UK plant has a long history within the local area, a strongly multiethnic
workforce. Whilst the management is largely Anglo-German, the workforce consists of
a combination of English workers, from a variety of ethnic backgrounds, and recent
immigrants to the UK from Eastern Europe, Africa and the Middle East. Thus both
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nationality and ethnicity are sources of identification at the plant, and ethnic and
cultural differences exist not only between managers and workers, but also between
different groups of workers.
The factory started life as a small domestic British car manufacturer in the early
1910s (Newbigging et al., 1998) and remained more or less under the same ownership
until the late 1960s. It rapidly became part of the culture of the local town, developing
its own sports teams, volunteer fire brigades, bands, amateur dramatic societies and
social clubs; children’s events and open days were also organised, and are remembered
with fondness by many local people (Bardsley and Laing, 1999). In the mid-1990s, after
nearly 30 years of financial difficulties and constantly changing ownership, the
company was sold to a German multinational manufacturing group (Scarbrough and
Terry, 1996). The takeover had not been without problems, and there had been
considerable concern about the plant’s future within the group up until about two years
before the start of this study. The historic presence of the plant on the site has given it
an intimate association with local culture, which has continued regardless of the plant’s
changes in ownership and gradual changes in the area’s ethnic makeup (Schofield and
Noble, 1993, Ward et al., 1993), and socially the plant continues to be a focus for
organised activity.
The staff of the Final Assembly Area (generally known as “associates”) fall into two
categories:
(1) those with a permanent contract; and
(2) those hired through a temporary labour agency.
The difference is largely one of rights and benefits; it is impossible to tell the difference
between the two groups in terms of appearance or duties, and there are some
temporary associates who have been working at the plant for longer than most
contract associates. While no data were available on the temporary associates, the
ethnic composition of contract employees in Assembly is slightly over two-thirds
White, with the remaining third being approximately evenly divided between
Black/Afro-Caribbean and Asian. The gender ratio is slightly over 90 per cent male.
Casual observations by the researcher suggest, however, that while the gender mix of
temporary associates was about the same as for permanent employees, there were
more Black than Asian temporary associates, and in particular more Black women
than Asian women (the researcher saw several black women on a daily basis, but no
Asian women).
According to the Equal Opportunities Commission, the British workforce as a whole
is approximately 10 per cent “non-White”, and so AutoWorks is significantly more
diverse than the statistical norm. Also, most of the “White” workforce are actually
Central or Eastern European, South American, Turkish or Kurdish, rather than British.
The single category “Black” also covers Black British, Jamaican, Haitian, North, South
and East African, and many others. The workforce is thus male-dominated and
ethnically diverse. The local area is also ethnically diverse, with large Asian and
Afro-Caribbean communities, both of which are well represented in the Final Assembly
Area. In addition, although little documentation exists, anecdotal evidence suggests
that refugees and asylum-seekers from the detention centres recently established in the
area, once their claims were formally approved, also became part of the workforce.
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Although we could obtain no statistics on their gender and ethnic composition,
anecdotal evidence and observation suggested that the plant’s management are largely
White Europeans, mostly English, with some Germans (the latter most in evidence in
senior managerial positions). Although the gender ratio among office managers
seemed more balanced, the population was still overwhelmingly male (perhaps 30 per
cent women to 70 per cent men). There was also an unspoken tension between
managers who had been with the plant since before the takeover and those who had
joined subsequently.
Management strategy and cultural diversity
The company which took over production in the mid-1990s is a German MNC which
began as a small family-owned enterprise around the turn of the twentieth century and
remained fairly specialised for the next 40 years, only developing an international
presence after the Second World War. Today, however, the company is very conscious
of its presence as a global brand, promoting the group as one with a global focus, and
one whose managers think in terms of a “global ethos”. As an aside, the company has a
widespread exchange programme in which workers and managers can go to different
plants around the world, and during the period of fieldwork more than one person
assumed that the researcher’s North American accent meant that she was on exchange
from the company’s US plant. The essence of the global corporate culture that senior
management are trying to create centres around the twin concepts of quality (in terms
of the product and the work done) and flexibility (in terms of the cars being produced
according to the individual orders of clients in a variety of styles and with a variety of
extras). We consider below some of the implications of cultural diversity for the
achievement of these ideals.
Managerial (mis)conceptions of cultural diversity
Managers’ difficulties in recognising the importance of cultural diversity led to morale
and staff retention problems, decreased productivity and a failure to address health
and safety issues. However, the same diversity had also encouraged the development
of innovative management education programmes and community-based initiatives.
The first thing any visitor to the Final Assembly Area sees is a diorama depicting
four mannequins grouped around one of the cars the factory produces, three dressed as
associates and one as a visitor. All are white; the three associates are men and the
visitor is a woman. On the opposite wall is a pair of charts depicting proper attire for
associates and visitors; again, the figures shown are both white, the associate is male
and the visitor is female. Recently, an article ran in the plant’s newsletter, describing
the diorama and urging all employees to stop by and have a look at it. The message of
this diorama is also, unintentionally, reinforced in other ways. Publicity photos, as well
as the historical images of the plant on display in the visitor centre and at the entrance
to the Final Assembly Area, also depict only white male workers, in contrast to the
actual historical realities.
This anecdote typifies the situation between managers and associates. Although the
managers interviewed did seem genuinely concerned about the associates, frequently
their beliefs and expectations regarding how diversity affected the workforce were
strongly at odds with the realities on the line, focusing on the Anglo-German nature of
the management rather than the multiethnic composition of the workforce. The result
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was that managers had difficulty in properly understanding the concerns of the
workforce. The ethnic diversity of the workforce did not seem to register with
managerial interviewees beyond a superficial level. They would frequently slip into
talking about “the English worker” when discussing the peculiarities of the workforce;
although they would acknowledge that the workforce was extremely diverse, they did
not do so spontaneously. When asked directly about diversity at the plant, responses
tended to resemble this one given by a young female British manager:
In our management level we have females, not so many females, but we have females, we
have Afro-Caribbean managers, we have English managers, we have German managers,
there’s a huge sort of diversity to work here, so I am very surprised we don’t get more issues
than we get.
The managers’ vision of the workers thus tends towards defining them as “English”
and generally harmonious, and consequently ethnic diversity at the plant is liable to be
rendered invisible. Where British managers did consider the issue of ethnic diversity, it
tended to relate to their own experiences of dealing with German colleagues and
superiors. A managerial project group formed to deal with cultural issues at the plant
concentrated for the most part on communication problems between English and
German managers (which we do not explore in detail in this particular paper), and
when asked to comment on diversity issues, managers invariably responded with some
humorous or rueful anecdote about German expatriates.
Most of the managers interviewed also either directly or indirectly expressed the
feeling that they felt “closer” to the workforce (whom, as noted above, they viewed as
“English”) than to their senior managerial colleagues, and frequently expressed a sense
of resentment and frustration against the – mainly German – senior management.
Whilst showing an awareness of diversity as multi-dimensional, they focused
primarily on their difficulties in assimilating to German business culture rather than on
the cultural diversity of the workforce, perhaps in part reflecting the fact of the
takeover being relatively recent and their consequently being preoccupied with the
ongoing process of adaptation to the new regime.
Managers certainly did not view the workforce with any sort of hostility. On the
contrary, most seemed genuinely concerned about employees, and expressed a desire
to understand “where they are coming from”; the very fact that they were prepared to
allow this study suggests that they are willing to take risks in order to identify their
weaknesses in this area. There were cases of managers going out of their way to try
and help employees, and in general they were sympathetic, albeit they frequently
expressed concerns about not being able to “connect” with them on certain issues.
Managers in general lacked awareness of diversity issues and tensions within the
workforce. As we outline below, in some cases this would not necessarily cause any
problems, whilst in others it would.
Although the working teams are multi-ethnic, people tended to sit with members of
their own ethnic group during breaks, and to form their friendships with co-ethnics
rather than co-workers. Other issues were the subject of tacit improvisation: for
example, at some point Muslim associates had set up an ad hoc prayer room in one of
the walk-in supply closets, writing an inscription on the wall in black marker pen and
keeping a stack of prayer mats on a handy chair. Issues of ethnic diversity were thus
dealt with in informal ways in the workforce, through avoiding potentially contentious
subjects and improvising around practical problems.
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Other diversity-related issues were a source of tension for some, such as the role of
women in the workplace. As well as the lack of Asian women, some male workers of
Indian origin were openly hostile to a female supervisor, arguing with her and
proceeding more slowly than they would for male supervisors. When she asked an
Indian management trainee about this, he remarked that among his own family and
co-ethnic circle of acquaintances, work in an automobile factory was seen as unsuitable
for women (although this was not true of factory work in general, as textile,
garment-producing or food-processing plants were seen as acceptable), and that he
thought the men were uncomfortable with a female presence in their team. Different
ethnic groups thus had different attitudes to gender, work and authority, which could
be a source of conflict.
Furthermore, language diversity could be a serious problem during training.
Management had recently abolished formal training programmes as “too expensive”,
forcing the workers to rely on worker-to-worker on-the-job training methods instead.
However, this meant that workers with a limited grasp of English were not given the
time, resources or explanation of their tasks necessary for them to grasp the rationale
behind their job and the way it fitted into the system. Although a test of English
formed part of the selection process, in practice only a fairly rudimentary language
ability was required. This resulted in frustration on the part of both trainer (who had
not usually been given any sort of formal instruction in how to perform this role) and
trainee, as well as in poor quality of work.
Whilst issues of linguistic and cultural diversity produced a number of practical
problems, lack of communication within the workforce also had other “unseen effects”.
For instance, although a European Works Council (EWC) had been established, and its
structure and aims prominently advertised by a large poster in the canteen, most
associates were unaware of what it was or what it did, simply ignoring the poster as
they did those on ergonomics put up by the Health and Safety Committee. And the fact
that there was little communication between teams meant that even though there were
British representatives on the EWC, people who were not on their teams would not
have been conversant with many details about it. Whilst it cannot be firmly established
that lack of awareness of the EWC was a direct consequence of cultural diversity, as
opposed to communication more generally, the concept is unfamiliar to many British
workers, as well as many originating from outside the European Union, and so in that
sense it is likely to have played a role. The parent company’s efforts at developing
European integration within the company via this mechanism certainly went largely
ignored at the UK plant level.
Many associates were similarly ignorant of the purpose of the quality-circle (kaizen)
system, regarding it as simply a time period in which the line supervisor would read
out management directives, rather than recognising that they themselves were
expected to contribute to the process. This difficulty appears to predate the takeover,
as the kaizen system was adopted by the previous owners of the company in the early
1990s and was not regarded as a success at the time. However, the parent company did
little to ameliorate the situation; indeed, the researcher saw no evidence that the new
managers had registered this problem, perhaps because there had been less difficulty
with the adoption of lean production in Germany, or perhaps because they were more
physically isolated from the workforce than in the German operations due to the
structure of the plant (namely, having the managers’ offices outside the factory itself).
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Many associates also did not feel able to bring their concerns to managers. For
example, a number were angry about the lack of formal training on the line, yet rather
than raise the issue officially they tended to employ more subversive and internal
measures, such as informing new associates about “the way it used to be” – followed
by assertions that the change is because “managers don’t care about us” – thereby
directly warning new associates against going to see the manager, or through
supplementing the two days officially given to train new associates on the job with a
longer unofficial period of up to two weeks:
They only give you two official days of training – that’s a joke. Nobody can learn one of these
jobs in two days. They have no idea what it’s like down here (Temporary Associate).
Furthermore, rather than confront management, associates were more inclined to quit
and find work elsewhere. The attrition rate at the plant had not gone unnoticed by
managers, but most either professed that they could not understand the cause, or else
developed hypotheses based on practical issues (disappointment at the lack of formal
contracts, for instance, or pay-related concerns). Whilst we cannot be precise about the
relative weight to ascribe to these different causes of turnover, the researcher’s period
of working on the production line gave her some insight into employee attitudes in this
regard. Moreover, one of the reasons for allowing that level of access was precisely
because management were unable to find satisfactory explanations for high turnover
themselves and were hoping to learn more about it from the research project.
In sum, the managers’ assumption that the workforce were largely undifferentiated,
and that the main cultural issue in the organisation was the resolution of British and
German management styles, was not only inaccurate but also contributed to problems
on a number of fronts, from morale and retention to communication and participation.
The benefits of diversity recognition
Although they might not have been fully conversant with all the cultural diversity
factors affecting the plant, managers did acknowledge that the construction of a
harmonious corporate culture to which everyone in the plant could adhere was a
priority. We briefly consider a few of the initiatives under this general aim, and the
reasons for their success or failure.
The company wanted to instil a new “global quality-based culture” at the plant,
essentially for three reasons:
(1) the German parent company had a strong international reputation for
producing a quality product, and this would encourage the UK plant workers to
feel greater solidarity with the group;
(2) to reflect the German focus on “quality” as a virtue in products in general; and
(3) to provide a deliberate break with the previous owners, whom the German
management viewed as inefficient.
This initiative was only a partial success. Managers strongly embraced this new
philosophy: when asked why they had chosen to work for this particular company,
most cited “pride in the company and the quality of the product” above all else,
whereas associates cited “high wages and congenial working atmosphere”. It was not
that the associates felt inclined to do a poor job, but that meeting quality standards was
less a matter of pride for them as it was a necessary part of the job. The product was
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not, for them, a symbol of the company, but something which they lived with on a daily
basis and with whose vagaries, failures and quirks they were intimately familiar. We
are not suggesting that workforce diversity directly explains these attitudes, but rather
that the problems we have documented concerning diversity recognition contributed to
a “manager-worker divide” that would certainly have made the achievement of any
new quality-centred corporate culture that much more difficult.
In addition, the implicit criticism of the previous owners sat uncomfortably with the
workforce, senior members of which were continually reminiscing about how much
more relaxed things were “in the old days”. Furthermore, the fact that the plant had
changed ownership several times historically meant that the workforce, like the local
area, had developed the attitude that the ownership of the plant was not important, so
long as it was producing cars. The fact that the plant’s current owners were strongly
associated with a particular trait – “quality products” – thus did not particularly
impinge upon them any more than that of the previous owners – “cheap products” –
had. The failure to understand the mindset of the workforce thus meant that this
initiative was a success only at the managerial level.
More successful, but not entirely so, was the establishment of a “plant uniform”.
This initially took the form of issuing bomber jackets, emblazoned with the plant’s
name and the name and rank of the staff member, to all personnel, managerial and
shop-floor (including, provided they stayed with the company long enough for the
jacket to be printed, temporary associates). The jackets were widely appreciated at all
levels, with staff members wearing them off-duty as well as at the factory, and
speaking of them with pride. Subsequently, however, assembly-line workers were also
issued with T-shirts, colour-coded by shift, and instructed to wear these at all times
when at work. This went down considerably less well; although the shirts were not
unattractive, and served to create a distinct identity within the region for the plant’s
staff in the same way that the jackets did, associates expressed mixed feelings or
denigrated them as “ugly”. There seemed to be two reasons for the lack of appreciation.
The first was that it created an obvious visible divide between managers and
workforce; rather than creating a unified identity, it further stratified the organisation.
Secondly, and more importantly, was the issue of personalisation and self-expression.
Not only were the jackets personalised while the T-shirts were uniform, but the
previous system of wearing a jacket with whatever clothing the worker wished to wear
(subject to health and safety regulations) had meant there was considerable room for
self-expression, with associates wearing shirts which expressed their personal
preferences, ethnic affiliation and/or gender identity. Rather than acknowledging the
diversity of the workforce within the plant, the initiative thus tried to impose a sense of
uniformity, and was resented.
Another moderately successful initiative was a programme aimed at building
bridges between management and workforce by allowing managers to work on the
shop floor for a week. This had the advantage of educating managers about workforce
issues, as well as opening up communication channels (managers who had participated
in the programme universally said that staff had become more open with them
subsequently). The problem was that they were never on the line for long enough to get
a sense of the unspoken issues on the line, for instance the ethnic diversity issues
discussed above. Furthermore, there were problems with securing the participation of
all managers: as one manager involved with setting up the programme said, “The ones
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who participate aren’t the ones who need to”. Associates, also, did not view the
programme as doing very much good, regarding the managers who participated
largely as a benign nuisance.
The most successful initiative was, however, one based on developing a distinct
identity for the plant within the global corporation. This took the form of local outreach
programmes (including sponsoring community projects, developing trainee
programmes, setting up guided visits for schoolchildren and other interested groups,
and donating raffle prizes to local charities), programmes aimed at promoting the
history of the plant (including displays in the visitor centre and the antechamber of the
Final Assembly Area) and developing names and slogans which reflected the plant’s
nature as a distinct entity within a larger group. Significantly, none of these actually
reflected the ethnic diversity of the plant, or its social connections with local ethnic
groups, but rather its connections with the outside community as a whole. These
initiatives not only went down well with the local community, but were appreciated at
both the managerial and the plant level, with both groups speaking with pride of the
plant’s history and association with the community. The most well-supported and
successful initiative was thus, significantly, one which acknowledged a degree of
diversity and distinct identity for the plant, and took note of its diversity (in the sense
of it having a different identity from other plants in the group due to the nature of the
outside community), rather than promoting it as part of a single, homogenous global
organisation.
Conclusions
Having presented a rich picture of the plant through a range of qualitative data we now
briefly reflect on the implications of the study for the key themes introduced earlier in
the paper, namely:
.the global/local issue and the role of local actors;
.the importance of workforce diversity; and
.the concept of crossvergence.
First, in the literature on MNC strategy there is frequent reference to the so-called
global/local tension, whereby the global strategies of companies come up against and
interact with national/local factors, whether these be predominantly cultural or
institutional. The dominant view is one of economic globalization increasingly
undermining the importance of national cultures. Our findings contribute to the more
rigorous body of evidence which highlights the continued significance of the
local/national context and supports the arguments for a more refined and complex
approach to the study of national culture. The impact of workforce diversity on the
way the company operated indicates that the dominant Hofstedian conception of
national culture – as a uniform, single influence on company operations – needs
considerable revision.
Second, and relatedly, we have argued that in studying MNCs there is a need to
bring ordinary employees back into the picture. Much of the literature on international
HR strategies is restricted to a consideration of senior managers and the so-called
“global elite”, with insufficient attention given to employees in more subordinate
positions. Research needs to consider the role of, and interaction between, managerial
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elites and local workforces if it is to better illuminate the nature and impact of global
corporate strategies in actual workplaces.
Our data show how these interactions and relationships can materially affect
acceptance and diffusion of corporate policy. While managers were aware of workforce
diversity to some extent, they were also strongly wedded to the notion of developing a
global organisational culture, to the point where they sometimes ignored the real
impact of local ethnic diversity. Managers tended to focus very much on
Anglo-German issues, and inter-management conflicts, not defining diversity in
terms of workforce differences and multi-ethnicity. These “mis-perceptions” impacted
on morale and retention, with linguistic and communication problems remaining
unaddressed and employees feeling unable to voice their concerns. A dominant
influence on employee attitudes and values was thus frequently ignored. Yet where
diversity was recognised, more success followed, with managers cementing stronger
connections with associates and the focus on the plant’s distinct history and identity
within the group solidifying a sense of corporate pride and attachment among the
workforce.
Third, the fact that employee attitudes were influenced both by global corporate
culture and also by local historical and cultural factors, as well as by a variety of
factors on other levels, suggests that crossvergence may be a fruitful way of examining
the determinants of employee perceptions of corporate strategies. There is certainly a
need to grasp the complex interplay between macro-level national factors, meso-level
corporate strategies, and features of the micro-level “work environment” such as
organisational sub-cultures and local identities.
Whilst crossvergence would apply even in the absence of cultural diversity among
the workforce, in this particular case we have argued that this was a key issue at the
local level. Employees were influenced by corporate attempts to foster a commitment to
quality and flexibility, and certainly responded to initiatives in this respect, yet their
acceptance of this rhetoric was clearly tempered and constrained by adherence to more
local identities, both in terms of ethnic and national identity, as well as allegiances to
the previous management regime. Crossvergence highlights the balance between these
factors in explaining employee reactions. Given that relatively few studies have been
done which utilise the concept, we would suggest that it merits further exploration.
The primary implication for further research is that we need a more critical take on
the concepts of “national culture” and “host country effects”, through more detailed
studies of the mediating influence of local cultural diversity on MNC strategies. The
major implication for managers is that the successful implementation of global
corporate strategies will work best not just with due acknowledgement of local
workforce identities, but with positive engagement with local historical and cultural
traditions to foster greater employee commitment and organisational cohesion. The
focus should be less on pursuing the chimera of global corporate convergence and more
on developing ways of recognising, and working with, employee diversity.
Note
1. While we use a pseudonym for the company involved, the nature of our research site means
that it cannot be totally disguised; we are thus taking great care to disguise the identities of
our interviewees and contacts within this site.
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About the authors
Fiona Moore is an industrial anthropologist who uses ethnographic research techniques to
investigate issues relating to identity, globisation and cross-cultural management. Her
publications include articles for the International Journal of Human Resource Management and
Management International Review, and the monograph Transnational Business Cultures: Life
and Work in the Multinational Corporation. She is the corresponding author and can be contacted
at: fionamoore@rhul.ac.uk
Chris Rees is a sociologist whose research interests focus on international and comparative
employment relations, and social and organisational theory. He is currently studying the transfer
of employment policies within MNCs in China, the impact of “employee engagement” on
management control and employment conflict, and the employment relations and HR
implications of cross-border MNC mergers. He is co-author, with Tony Edwards, of International
Human Resource Management: Globalization, National Systems and Multinational Companies.
He has published in numerous academic journals, including the European Journal of Industrial
Relations,Organizational Studies,Employee Relations,Work Employment & Society,Personnel
Review and the Spanish Journal of Sociology.
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