Culture And Leadership At San

Published Date: 02 Nov 2017

Introduction

Strategic changes in the management of an organisation weather minute or massive, are necessary at some point of time. The changes could be in the marketing strategy or corporate strategy. The strategic change could be either applied in a particular department or to the whole organisation.            

               Scania Angers (SAN) is a Swedish multinational company predominantly involved in the production and marketing of trucks and buses. Trucks for the French, Iberian and Italian markets are assembled and built by the SAN plant located at Angers, France. Despite the fact that SAN is headed by an organisation from a different country with different cultural and organisational structure the production has been remarkable over the years. Also company’s plans suggest further significant growth in production in the years to come. In order to attain the ambition, leadership at SAN is focused on common values, principles and working methods. Focusing on the value chain is the key element why SAN’s managers and employees have been able to meet the needs and expectations of the customers. Despite making best efforts to maintain cultural harmony and promote growth there are some issues being encountered by the leaders at SAN.

This report analysis the key changes brought about in the management strategy of Scania Angers (SAN), France and also its impact on the organisational performance of the managers and its workers. Furthermore the report examines the effectiveness of the strategy implemented at this plant. It also provides discussion on the significant challenges enclosing the management of change in the organisation.

Culture and Leadership at SAN

Organisational change theories according to Wilson (1999) have a huge influence on business and not-for-profit companies. The author states that the scope of the impact of the popular organisational theories like the cultural change, total quality management, business process re-engineering, organisational learning and the recent theory of six sigma is very evident in the world of business because these theories are utilised by a number of companies and the results are often reported in various journals, business presses and books.

            In the case of Scania, the management employed change in the company’s culture. According to Morgan (1989), this is a form of organisational change which is both radical and important. The change process included the new mission and vision statement which redefines the organisation’s business. The new mission of Scania states that "Scania is committed to providing optimum solutions to meet customers’ needs by building profitable partnerships driven by all quality in all we do" (Scania website). This vision is a great help in identifying and developing new direct value-added services and seamless value system, cultural reorientation and success-enabling mechanisms.

The company transformed its corporate culture starting with laying lesser amount of emphasis on products, to considering the business collectively. Morgan (1989) says that the management of an organisation must view other aspects in the business that is also valuable in building a good reputation. He feels that besides customer the organisation must also pay appropriate attention to its employees, and develop and implement new strategies and approaches in management that would be beneficial to the employees as well as the whole organisation in the long run.

2.1 Teamwork

At SAN the Swedish managers implemented the Teamwork approach. According to Conger (1990) teamwork is an important feature in a wider trend of decentralised and flexible groups which promotes a culture of involvement and expression, and currently the most famous form of restructuring an organisation could have. Teamwork approach is a very effective method in developing strong communication and commitment among employees and managers. Teamwork approach has many advantages in an organisation such as will intensify the efficiency, enhance quality of service to the consumers, fewer levels of management, at the same time it raises the spirits of the employees.

2.1.2 Cluster Approach

In the new management of SAN the basic structure of work organisation is the cluster. Each such cluster in SAN is responsible for a specific part in the production of the end product. Scania determined the three factors that makes an effective cluster, these are: multi-skilled employees, their training and job enrichment process.

2.2 Ethnocentricity

In the present situation the organisational structure of SAN emerges as an ethnocentric organisation. However it is a little more complicated than it appears to be. Reason being, though the workforce i.e. employees at the lower level are trained and given equal opportunities to grow, they are not being considered for the next level. This is evident from the fact that the managerial bunch is dominated by the nationals from the parent country. This gives an impression that the working class is treated as a multi-skilled machine which is rewarded based on individual performance. The ethnocentric concern bases its operations on the assumption that tried and tested approaches to management can be extended from the country of origin to operating sites in other countries. In this orientation managers are most likely to use the home country as the reference in managing international activities.

Managers with this mind-set are to follow an international strategy of replicating home country systems, procedure and structure abroad (Gupta and Govindarajan, 2002). This mind set is likely to make extensive use of expatriates (which in the case of SAN is very true) from parent organisation to establish and manage the subsidiary operations.

2.3 Analysis based on Hofsteads Dimensions

Based on Hofstead’s (2001) theory it is observed that both the countries Sweden and France are similar when it comes to the individualism index. They are much oriented towards individual performance than teamwork. In which case the concept of cluster would be ineffective to minimise cultural difference among the workers because they know it is individual performance that is taken into consideration during the yearly review of the employee and not that of the team. Hence it would result in a highly competitive atmosphere wherein the motive changes from achieving team performance to self efficiency. This could have a drastic effect on the employees’ behaviour towards their peer.

Also according to the study it is found that on the power – distance and uncertainty index both the Swedish and French cultures part ways. Both the countries take a different stand on it. In Swedish culture individuals would have a more relaxed approach to work whereas it’s just the opposite for their counterparts. The fact that time keeping which is vital for French is not observed as necessary by the organisation has resulted in a peer monitored work system. Mullins (2005) opines that at times it could make situations worse for an employee as he would be answerable to rest of the team which is often very tough to convince than just one single person i.e. the manager. This hence would build up peer pressure among the workers.

Leadership Style

Like every organisation, SAN’s leadership cannot be classified under one single style. It promotes sharing of responsibility, exercise of delegation and continual consultation. This is similar the one observed by Lewin’s (1939), The Democratic Style. Here the leader involves the people in the decision-making, although the process for the final decision may vary from the leader having the final say to them facilitating consensus in the group. This is made clear through the organisation’s decision to allow flexibility in the management of finances for any particular cluster. This is more relevant as the cluster consists of skilled workers, they might be able to offer solution to issues where the manager has less expertise. However by restricting them from collective bargains during the annual reviews this style is partly masked.

The leadership style reflected at SAN is that of concertive control. Barker (1993) opines concertive control to be a means of avoiding drawbacks of bureaucratic control, in which the control derived from the hierarchically based social relations and its rules which reward obedience and penalize defiance (Edwards, 1981).Here as the workforce is self-motivated and exercises self-control, it can be believed that employees enjoy their mental and physical work duties. These are the characteristics depicted by theory Y postulated by McGregor (2002) where the work process would still continue even in the absence of a manager. Most notably, Raelin (2003), in his book, Creating Leaderful Organizations, argues that, ‘in the twenty-first century organization, we need to establish communities where everyone shares the experience of serving as a leader, not sequentially, but concurrently and collectively’.

 This kind of a mixed leadership style has certainly improved the way managers communicate with their subordinates in SAN, minimizing the differences between superior-subordinate relationships, creating a comfortable environment in which subordinates can develop and use their abilities. This climate would include the sharing of decision making so that subordinates have a say in decisions that affect them.

3.1 Impact of Individualism

Schein (1968) suggests that for an organisation to be successful and to have a creative environment two factors, individualism and collectivism needs to be both high and well balanced. "Organizations need people to challenge, question, and experiment while still maintaining the culture that binds them into a social system" (Schein, 1968).

_______________________________

High | | |

| Conformity | Creative |

| | Individualism |

Socialization |_______________|_______________|

| | |

| Isolation | Rebellion |

| | |

Low |_______________|_______________|

Low Individualization High

This is the type of culture that can be observed at SAN. Knowing that both the French and Swedish cultures emphasise on individualism the organisation is trying to develop collectivism among the employees through the cluster system; which offers an opportunity to the workers to socialise and work as a team to achieve organisational goal efficiently. However upon implementation of the new approach, SAN is facing some challenges before attaining its goal.

Issues facing SAN

The challenges are mainly because of the cultural differences between the French and Swedish employees. Teamwork is not common among French firms, that’s why implementing the teamwork approach is very challenging for both nationalities working in Scania Angers Plant. Another distinguishing feature of the French people which is different from Swedish is that the French have the tendency to be inclined to rules and bureaucratic processes at work, in other words they are authoritarian. On the other hand, the Swedish are more complacent and less organised in the work place.  

Effectiveness of Leadership at SAN

Finally when it comes the effectiveness of the company’s leaders in managing the work force, the primary objective has been served i.e. SAN is witnessing positive growth year on year. On the other hand if one were to evaluate how this was achieved, what means were used to achieve it, the scenario gets slightly complicated. This can be related to the research article ‘‘Tightening the Iron Cage : Concertive Control in Self-Managing Team’ by James Barker (1993). Over time the team’s value-based interactions could have become a collective force that controlled their behaviour and instead of loosening the iron cage (Weber, 1958) of rule based rational control, it might have tightened it. The norms became formal rules with rewards and penalties. Interestingly, the workers might have wanted this system, this is apparent from the way the annual reviews are held in SAN. The team controls resemble the old system of control. It has the elements of rationalized control without the hierarchical elements. The employees would definitely experience more stress with the new system. The whole system is following Lewin's (1948) "unfreezing - moving - freezing" system. This proves that concertive control is much stronger than the bureaucratic system. And also the best system in place to overcome the cultural differences effectively but maybe not efficiently. However through their expertise the international managers have been able to tackle all sorts of issues within the organisation to help it achieve the desired goal.

Conclusion

To conclude, the entire system of concertive control where power is distributed equally among peers is well suited for performance if guided on the right path. In the case of SAN it has proved to be effective over the years. Though believed to be an effective management technique by some authors and researchers, if not controlled then power could be misused. There are also equal chances that a dominant group or bunch of people might benefit extensively while leaving others deprived. Hence it is debateable if this concept would still hold to be effective in the future.