Cultural Conflicts In Multinational Corporations: Michelin Company Case

Michelin was established in the 1800s in France. There are over 120,000 employee around the world and most 20,000 people are working in North America. In 2004, the department of North America faced some challenges includes decreasing in performance and lack of competitiveness. After evaluation, Michelin group would like to improve their strategies, so they need to find someone who can achieve this goal, Chalon is person was chosen to do this mission. About Chalon, he is a great experience in term of management in different business. In 18 years of his work, he holds senior positions in various business in six countries, he is driven by disciplined work and takes full responsibility from his team. Of course, this is why Michelin chose him as the leader of this department. However, the leading style of Chalon lead to conflict between him and his colleagues. Chalon needed to deal with issues that had a negative impact on the company's day-to-day operations to avoid further damage.

Culture conflict

The problem that Chalon suffered when working with an American colleague for the first time was due to cultural conflict. Multiculturalism can occur easily because of differences between the characteristics and behavior of members influenced by different national cultures. In this case, Chalon work and live in Europe for long time, he absorbed the European culture. Thus working with American people will be big problem, if he do not change in his leadership style. At the first few month which Chalon conduct in organisation, the American worker do not agree with any his order and his style includes put a lot of pressure and criticism directly on the subordinates. According Hofstede, Power distance is another element of corporate culture that affects the development and knowledge that a company uses. It means inequality in decentralization and energy. Low-power distances are easier for organizations to interact with, than for higher-level organizations, and are easy to integrate knowledge into appropriate organizational cultures. However, in this case, the high PD still remain in this organisation between Chalon and co-workers. For Chalon, his management approach is rarely consistent with corporate culture in North America.

To sum up, cultural differences that affect multinational corporations are the greatest challenge for organizations and leaders. Every company that manages adaptation can effectively maintain a balance in cultures and sometimes cultural differences make cultural diversity a source of advantage. High and low-PD culture, as in this case, reflects the response to common challenges about how humans should interact with each other appropriately in terms of the inevitable differences in power. Which they are in a specific context. In addition to managing the adaptation and broadening, there is also the advantage of focusing on what communicates with employees rather than what divides them.