Michelin Case Study: HRM & Cross-Cultural Leadership - King's College

This case study examines the challenges and opportunities presented by multicultural factors within organizations, focusing on 'Leading Across Cultures at Michelin'. It identifies issues such as stereotyping, differing perceptions of change, power structures, and variations in attitudes and behaviors that can hinder effective communication between employees and management. The analysis highlights how leaders like Chalon face difficulties in bridging the gap between national and organizational cultures. Recommendations based on Hofstede's cultural dimensions are provided to address these challenges, including improving verbal and nonverbal communication, cultural training, and fostering mutual respect. The report concludes that by addressing these issues, corporations can enhance employee productivity and achieve their goals within multicultural teams. Desklib provides access to similar case studies and resources for students.

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Human Resource Management

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Table of Contents
Introduction...............................................................................................................................2
Impact of culture on cross-cultural communication..................................................................3
Stereotyping...........................................................................................................................3
Different perception towards change....................................................................................3
Power Structure.....................................................................................................................4
Difference in attitude and behaviour.....................................................................................5
Recommendations.....................................................................................................................5
Conclusion..................................................................................................................................7
References..................................................................................................................................8

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Introduction
The objective of this essay is to analyse the case study ‘Leading across cultures at Michelin’
in order to evaluate how cultural factors facilitate or hinder cross-cultural communication.
Hofstede cultural dimensions model will be used in this report to understand how culture
can lead to miscommunication in the workplace. In this report, the case study will be used
as a reference in order to understand the problems associated with transferring of HR
practices across countries. The structure of this essay will focus on evaluating cross cultural
communication issues by linking them with the case study while supporting the arguments
with academic literatures. Lastly, recommendations will be given to address these issues
based on an evaluation of Hofstede cultural dimensions.

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Impact of culture on cross-cultural communication
Due to globalisation, the operations of companies have expanded on a global stage, and it
has become easier for them to establish their operations in foreign countries; while
expanding the operations in overseas markets, companies have to comply with various
challenges (Baker, 2012). The difference in culture is a major factor which resulted in
creating challenges for companies to manage a diverse workplace in foreign countries. The
differences in cultural factors lead to difference in opinion of the management and
employees which leads to miscommunication that hinders the productivity of the company
(Chua, 2013).
Stereotyping
One of a key cross-cultural communication challenge faced by leaders in expatriation is
stereotyping. Stereotypes are over-generalised beliefs which people have about a particular
culture or category of people. In the case of multinational companies, stereotypes lead to
conflict between employees and the management; it makes it challenging for them to
understand each other (McCann and Keaton, 2013). This argument is supported by the case
study, for example, Michelin wanted to change its strategies since it is facing several
challenges in its North American department such as declining performance and lack of
competitiveness. Chalon is a tough but fair manager who demands complete accountability
from its team and implementing a disciplined and result driven approach. He is guilty of
stereotyping because his sister-in-law is American; therefore, he assumes that he knew
about the culture enough to lead the team. He did not learn about the American culture
before leading the team and he relied on stereotypes while dealing with employees. It
makes it difficult for Chalon to build a connection with them which is crucial for them to
improve the efficiency of operations.
Different perception towards change
While managing international assignees (IAs), the corporations have to take into
consideration different factors to avoid cultural-related issues. During expatriation, there is
high rate of failure of IAs due to work adjustment, interaction adjustment and general living
adjustment (Pieterse, Caniels and Homan, 2012). The six cultural dimensions identified by

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Hofstede are good indicators of understanding the cultural differences. For example, the
European culture is heavily influenced by long term orientation; however, it is not the case
with the United States (Mitrev and Culpepper, 2012). This dimension describes how
different societies maintain a connection between their own past and the challenges which
they face in the present and future. European societies are pragmatic-oriented who have
the ability to adapt traditions along with change in conditions. This is not the case with
western countries, such as the United States, which means that they are prone to analyse
new information to determine whether it is true which shows that they are not pragmatic
(Taras, Steel and Kirkman, 2012).
The difference in these perceptions shows that the while communicating with employees,
the leaders have to consider the perception of employees. Employees in European nations
prefer to change while holding to their traditions, whereas, this is not the case with western
nations where employees prefer to question the change policies to determine their
effectiveness (Lee, Trimi and Kim, 2013). Employees did not know any personal details about
Chalon; therefore, they find it difficult to disclose their queries to him. The difference in
perspective of the leader and employees crate cross-cultural barriers in the communication
which crates challenges in achieving technological innovation in the workplace (Fatima
Oliveira, 2013). These communication barriers are present between the employees and the
HR department as well. Due to a lack of understanding of cultural factors, the HR
department cannot understand the issues faced by employees. It leads to resistance to
change which makes it difficult for the HR department to introduce change policies in the
company (Vaara et al., 2012).
Power Structure
Hofstede’s power distance index (PDI) shows that some countries have high acceptance of
hierarchical order, whereas, in other countries, people strive by equalisation of the
distribution of power. The European countries have high PDI, whereas, the US has low PDI
(Hofstede, 2018). Therefore, during expatriation, the leaders who implement similar
leadership approach without considering cultural differences find it difficult to communicate
with their employees. These challenges are present when HR practices are transferred
across countries since the current policies are not suitable to meet the demands of new

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employees (Mohr, Young and Burgess, 2012). The HR managers find it difficult to hire and
retain employees since they did not prefer hierarchical order. Chalon did not consider that
American employees prefer equalisation of power rather than hierarchical order which
creates conflict in the workplace.
Difference in attitude and behaviour
People from different cultures have different attitudes and behaviours which creates
challenges for IAs while managing a diverse team. The difference in attitude and behaviour
creates challenges for leaders in expatriation which makes it difficult for them to lead in an
effective manner (Nelson and Guerra, 2014). For example, the key challenges faced by
Chalon while working with American colleagues is caused due to multicultural differences in
the group members based on their charter and behaviours which are influenced by
difference in national culture and organisational culture. Hofstede provided that national
culture plays a crucial role in differentiating one human group for another and it is
influenced due to difference in customs, language, values and beliefs; for instance,
Americans dare to challenge their leaders, whereas, Asians have respect for them (Crowne,
2013).
Chalon is an outstanding leader; however, his leadership style is heavily influenced by
European culture elements which are not suitable for managing American employees. In the
beginning, colleagues disagreed with the leadership approach of Chalon because he directly
criticised his subordination and push them to work hard. Chalon was not ready to share his
personal information with subordinates, and he did not like their intrusiveness. Although
Chalon tried to walk around the office and communicate with colleagues, however, their
reaction was cold and distant. Due to cultural differences, Chalon is not able to
communicate freely with his colleagues because he is used to French culture in which the
leaders did not engage with employees as much as compared to the American culture.
Recommendations
Effective connection between national culture and organisational culture is important to
maximise process gains and minimise process losses which is crucial for the success of the
enterprise (Vaara et al., 2012). Chalon should try to understand subordinations and their

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viewpoints to respect them which will promote mutual trust and confidence between the
employees and the management. This can be achieved by improving both verbal and
nonverbal communication in the company. Hofstede cultural dimensions should be
considered by companies while managing operations in different countries. For example,
the uncertainty avoidance rate is high in European countries as compared to the US which
means that the employees in European nations did not accept change effectively and they
prefer to hold on their traditions (Hofstede, 2018). On the other hand, Americans accept
new notions and change policies, and they are willing to try new ideas by accepting change.
Leaders should consider with these factors to understand their employees’ perceptions
while implanting policies. They should also implement communication policies while
considering these factors. For example, the employees in European nations prefer to
implement change policies through hierarchical order, whereas, American employees prefer
to engage in the process themselves by contributing their ideas in the change process
(Minkov and Hofstede, 2012). Chalon’s leadership style is heavily influenced by the
European culture; therefore, he should focus on changing its approach to American culture
to meet the demands of the North American department of Michelin. Along with national
culture, Chalon should focus on improving the organisational culture which will assist the
company in addressing its challenges by improving the productivity of employees.

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Conclusion
Based on the above observations, it can be concluded that multicultural factors resulted in
creating challenges and opportunities for businesses. Many factors such as stereotyping,
different perception towards change, power structure and difference in attitude and
behaviour creates miscommunication between employees and the management which
makes it difficult for them to understand each other. Chalon is facing similar issues because
he is not able to fill the gap which exists between national culture and organisational
culture. The case study highlighted how these challenges make it difficult for leaders to work
effectively with a multicultural team. Various recommendations are included in this report
based on Hofstede cultural dimensions which can address these challenges such as
improvement of verbal and nonverbal communication, culture training, mutual respect and
others which can assist the corporations in achieving their goals and reaching the
multicultural team’s full potential.

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References
Baker, W. (2012) From cultural awareness to intercultural awareness: Culture in ELT. ELT
journal, 66(1), pp.62-70.
Chua, R.Y. (2013) The costs of ambient cultural disharmony: Indirect intercultural conflicts in
social environment undermine creativity. Academy of Management Journal, 56(6), pp.1545-
1577.
Crowne, K.A. (2013) Cultural exposure, emotional intelligence, and cultural intelligence: An
exploratory study. International Journal of Cross Cultural Management, 13(1), pp.5-22.
Fatima Oliveira, M.D. (2013) Multicultural environments and their challenges to crisis
communication. The Journal of Business Communication (1973), 50(3), pp.253-277.
Hofstede. (2018) Country Comparison. [Online] Available at: https://www.hofstede-
insights.com/country-comparison/france,the-usa/ [Accessed 11/01/2019].
Lee, S.G., Trimi, S. and Kim, C. (2013) The impact of cultural differences on technology
adoption. Journal of World Business, 48(1), pp.20-29.
McCann, R.M. and Keaton, S.A. (2013) A cross cultural investigation of age stereotypes and
communication perceptions of older and younger workers in the USA and
Thailand. Educational Gerontology, 39(5), pp.326-341.
Minkov, M. and Hofstede, G. (2012) Hofstede’s fifth dimension: New evidence from the
World Values Survey. Journal of cross-cultural psychology, 43(1), pp.3-14.
Mitrev, S. and Culpepper, R. (2012) Expatriation in Europe: factors and insights. The Journal
of International Management Studies, 7(1), pp.158-167.
Mohr, D.C., Young, G.J. and Burgess, Jr, J.F. (2012) Employee turnover and operational
performance: The moderating effect of group‐oriented organisational culture. Human
Resource Management Journal, 22(2), pp.216-233.
Nelson, S.W. and Guerra, P.L. (2014) Educator beliefs and cultural knowledge: Implications
for school improvement efforts. Educational Administration Quarterly, 50(1), pp.67-95.

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Pieterse, J.H., Caniels, M.C. and Homan, T. (2012) Professional discourses and resistance to
change. Journal of Organizational Change Management, 25(6), pp.798-818.
Taras, V., Steel, P. and Kirkman, B.L. (2012) Improving national cultural indices using a
longitudinal meta-analysis of Hofstede's dimensions. Journal of World Business, 47(3),
pp.329-341.
Vaara, E., Sarala, R., Stahl, G.K. and Björkman, I. (2012) The impact of organizational and
national cultural differences on social conflict and knowledge transfer in international
acquisitions. Journal of Management Studies, 49(1), pp.1-27.