Case Analysis: SAP's Plan to Globalize Hits Cultural Barriers Software Giant's Shift Irks German Engineers; U.S. Star Quits Effort (Dvorak & Abboud, 2007)
As the process of globalization accelerate, many companies had to change to follow. However, while most of the other companies chose only change in the bottom, SAP decided to change from top to bottom. The leadership team hired thousands of programmers from U.S., India and other countries. Meanwhile they assigned key projects to them. The executives also adopted English for corporate meetings and hired non-German manager, causing sudden change in climate and huge difference in cultural background, conflicts arose.
The case hit on the impact of globalization on a company. While globalization will help the company to enhance its market worldwide, it also brings the problem such as conflicts between veteran employees and new comers. In this case, I think SAP’s leadership team had done well partially.
Their first step was to evaluate the old strategy globally, where they considered themselves in the subsystem and made the decision to become less German. They announced the new strategy to the company. From the case we can see that the company had announced it properly, so that the employees understood their situation easily. Meanwhile, the executives actively replied feedback to the old employees for their doubt of job-lost caused by the changes. Besides, the leadership team also had empowered others to act on the vision, which was the globalization of SAP, with unyieldingly supports. The executives responded to the protests against globalization positively and properly, but always insisted on changing. However, these several achievements didn’t save the communication from crisis, with some many other things they failed to achieve.
When confronted with complains and misunderstanding from German workers, Aggasi always ignored or avoided communication with them. In addition, from the sentence “You don't tell us what to do -- we tell you what to build”, it can be inferred that the company failed to create good channel for employees to give feedback to the managers. The lack of free information interflow existed not only between employees and leaders, but also between different departments, where the gaps between Agassi’s Technology Department and Apotheker’s sales team can be an example. All these deficiency in free information flowing between subsystem counts for the failure of the software marketing.
In addition, Human Resource and Human Relation Theory (Zaremba, 2010, p43) suggested, “in order to motivate employees, managers would need to communicate not only information about job tasks and policies but also information that recognized workers’ accomplishments, respected their sensitivities ,and, essentially, acknowledged that they we feeling animate entities.” Yet SAP in this case, didn’t respected the sensitivities of the employees. While the workers constantly complained about their worries on lowering status in the company and unemployment, the company only responded after protests in 2001 and 2006.
What’s more, SAP failed in keeping an organizational culture which helped for creating climate with “supportiveness, credibility, confidence and trust, openness, participatory decision making and emphasis on high-performance goals (Zaremba, 2010, p156)”. While all the old workers in Europe enjoyed their slow pace culture, the new comers broke in with super-high speed working style. Yet the leadership team did nothing for this