This article will examine a case study written by Wu and Lee (2014) titled From OEM Supplier to a Global Leader. The case study examines how an original equipment manufacturer (OEM) company, Giant, transformed to become a global leader in the bicycle manufacturing industry.

The company was initially founded as an equipment supplier that heavily relies on foreign orders from Schwinn, a leading bicycle company in the US. The company acknowledges the threat that if another company from another country can have a cost advantage, then its buyers will most likely churn. Hence, Giant spent considerable funds on research and development to manufacturing its own bicycle product under its own brand.

Within the span of two decades, the company transformed from an OEM supplier that heavily relies on orders from large bicycle companies to become one of the largest bicycle manufacturers in the world. The company successfully shift its strategic view, from a cost-oriented focus to a marketing and consumer-oriented focus.

Developing a Cross-cultural Team

From the case of Giant, we can see that knowledge transfer from foreign sources can help foster an understanding of a foreign culture. Initially, Giant learned bicycle manufacturing from Japan, before it started accepting orders from the US. These orders were not only involving the transfer of knowledge but also exposure to a cross-cultural reality. Caligiuri and Lundby (2015) referred to this as a cross-cultural experiential opportunity, which is any work experience that occurs in a multicultural context.

The cross-cultural experiences lead to the development of cross-cultural competencies which will help the company in developing and sustaining its global strategy. Global strategy is typically referred to as the strategic attempts to match internal strengths with the opportunities and challenges found in an environment that crosses international borders (Zamborsky, 2016). With these competencies, Giant did not only succeed in analyzing the global market dynamics but also succeed in developing a workforce that can effectively perform across cultural boundaries.

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Management Challenges in Projects that Cross Cultural Boundaries

Oertig & Buergi (2006) reported three key challenges that were faced by project managers that lead a cross-cultural team:  

  1. Leadership challenge,
  2. Challenges in communication and,
  3. Challenges in developing trust.

Diversity can raise the possibility of marginalization and poor communication among staff, both of which can cripple overall performance (Davidson, 2021). However, research has also demonstrated that diverse teams perform 87% better in decision-making tasks than homogeneous teams (Stahl, 2021). The major challenge for managers is to maximize the benefits of diversity while minimizing any potential problems that may arise.

Project managers should utilize suitable leadership and communication styles so that they can develop trust among their employees. This is how Giant managed to form the bicycle industry alliance.  The alliance not only lead to the improvement in the quality of Taiwan’s bicycles but also result in an effective cross-cultural workforce. Therefore, Taiwan’s bicycle market can have a competitive edge compared to the low-cost bicycles from other developing nations.

From OEM Supplier to a Global Leader: Strategies to Address These Challenges

The strategies can be formulated to address the three key challenges above. Oertig & Buergi (2006) emphasized the strategy in the selection of leaders, the facilitation of face-to-face communication, and proper investment in cross-cultural training. As globalization becomes a norm, project managers are required to have the skill to manage culturally diverse teams consisting of people from a wide variety of backgrounds (Torrington et al., 2020). The ability to manage a cross-cultural team will become the main criterion in choosing a project leader.

Aside from the selection of leaders, companies will also have to deal with potential issues in communication. Studies show that facilitating more face-to-face communication between project staff leads to better relationship building that may affect performance. It will ultimately help in developing trust.

Investment in cross-cultural training can be another strategy that can help address the challenges. Training is crucial for new members of diverse project teams to assist in mitigating potential mistrust, promote faster team fusion, and create a more effective collaboration (Oertig & Buergi, 2006). The investment can also become evidence of the company’s commitment to developing a cross-cultural team.

References

Caligiuri, P., & Lundby, K. (2015). Developing cross-cultural competencies through global teams. Leading global teams: Translating multidisciplinary science to practice, 123-139. http://ereserves.unl.edu/contents/mngt811/y15.pdf#page=141

Davidson, P. (2021, December 16). Challenges in Human Resource Management and How to Overcome Them. Spiceworks 1. https://www.spiceworks.com/hr/engagement-retention/articles/challenges-in-human-resource-management-and-how-to-manage-them/

Oertig, M., & Buergi, T. (2006). The challenges of managing cross‐cultural virtual project teams. Team Performance Management: An International Journal, 12(1/2), 23-30. https://www.academia.edu/download/51505911/44667558.pdf

Stahl, A. (2021, December 17). 3 Benefits Of Diversity In The Workplace. Forbes. https://www.forbes.com/sites/ashleystahl/2021/12/17/3-benefits-of-diversity-in-the-workplace/?sh=44661ad322ed

Torrington, D., Hall, L., Taylor, S., & Atkinson, C. (2020). Human Resource Management. Pearson.

Wu, W., & Lee, Y. (2014). From OEM supplier to a global leading company. Journal of Business Case Studies, 10(3), 225-230. https://drive.google.com/file/d/1YKzagIqg9fBP9QHzUZ9jpaJ0yPrakKZe/view?usp=share_link

Zamborsky, P. (2016). International business and global strategy. Bookboon.com https://bookboon.com/en/international-business-and-global-strategy-ebook?mediaType=ebook

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