We wish to thank: The Dragons are:

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1 We wish to thank: Coordinator: Mrs. Annie van Wanseele The lectures of the Seminar Course assistent: Ms Maaike Dhondt Ms Zulema Belloso Contra of the Volvo cars Ghent The Dragons are: Silke Lohmann, German Mareike Plagmann, German Kristian Lyngsø Holst, Denmark Szergej Albunovics, Hungary Bjørn Van Dartel, The Netherlands Filip Laga, Belgium 1

2 Table of Contents Table of Contents Introduction General information about Volvo Production Volvo Cars in Ghent Timeline Values Safety Environment Quality Internal Organisation Teamwork Organigram How Belgian employees cope with Swedish culture Power distance Uncertainty avoidance Masculinity/femininity Measures to cope with cultural differences Recommendation and conclusion...9 2

3 1 Introduction We are students of the Intercultural Management Seminar Bridges across cultures at the Hogeschool Ghent. The idea of this seminar is to give the students personal intercultural experiences and a theoretical model to identify and cope with cultural differences. Students were to work in groups containing all participating nationalities and both sexes. Each group had to finish the seminar by writing a report and a log and to do a presentation about a local company dealing with intercultural aspects. Our group was given the task to visit the subsidiary of the Swedish company Volvo. With a Swedish company culture Volvo Cars Gent presents a real challenge for the Belgian worker. The employees had to adopt to flat organisations and to work in teams. Therefore, they have to work with procedures and structures they are not familiar with. In this report main problems caused by the difference in Belgian and Swedish culture are pointed out. 2 General information about Volvo Cars are driven by people. The guideline principle in everything we make at Volvo, and must remain, safety. This is how Asssar Gabrielsson, who in 1927 founded Volvo in Gothenborg together with Gustaf Larsson, expressed his philosophy. Almost for 75 years later there still is the same emphasis on safety of human well-being. Other main values are quality and environment. The head-office of Volvo Car Corporation is situated in Gothenburg and since 1999 Volvo Car Corporation is a part of the Ford Motor Company, the world second largest car producer in the world. FMC builds over 7,4 million vehicles a year. Volvo is part of the Premier Automotive Group together with: Jaguar, Aston Martin, Lincoln and Land Rover. The main target of this group is to become the main manufacturer in the exclusive segment with its highly demanding customers. In 2000 this group produced over 428,000 Volvo s. 2.1 Production The most important production plants can be found in Belgium, The Netherlands and Sweden. Production in the Netherlands is done by NedCar in Born, a joint-venture with Mitsubishi. From 2003/2004 onwards, Volvo will be concentrated in two Main plants in Ghent and Gothenburg, plus a few smaller plants in Sweden, South Africa, Malaysia and Thailand. Production (*) Production capacity 2004 Plant Models Numbers Models Capacity Gothenburg S80 and V70 133,400 S80 and V70 230,000 Ghent S60 and V70 122,200 S60 and successors 270,000 Born (NedCar) S40 and V40 156,000 (*) The models mentioned relate to the present range. The production figures are based on

4 2.2 Volvo Cars in Ghent Belgium assembles more than one million cars each year, this is more than Japan, Germany and the United States of America. Since 1965 Volvo set up its first car manufacturing plant outside Sweden. The choice fell on Ghent, centrally located within the then European Community, with a good and well-motivated working force. Later in 1972 they added a welding plant and a paint shop to the complex. Volvo Ghent is one of the most important pilers for Volvo and offers a job for 3,750 people. In the year 2004 the capacity of Volvo Ghent will increase from 122,200 to 270,000 cars, this extension will create another 1800 jobs. 2.3 Timeline 1966 Volvo starts its first plant outside of Sweden in Ghent A new welding plant and paintshop will complete the Ghent plant 1987 Switch from a line system to a work organisation based on teamwork For the first time a new model goes in first-time production outside of Sweden (the Volvo 850) Volvo Cars Ghent wins its first Japanese TPM award. (Total Productive Maintenance) Volvo will increase its production in the Ghent plant to 270,000 cars in order to produce the successors of the Volvo S40 and V40 which are currently manufactured in the Netherlands. During the years Volvo Cars won numerous prices for its outstanding production, management and efficiency achievements. 3 Values The world and cars change, but this does not count for the promise that the founding fathers of Volvo Assar Gabrielsen and Gustav Larson, once made. It s Volvo s goal to make their heritage and origine stronger, and at the same time to make Volvo more attractive. Therefore translating Volvo s tradition and values is a true challenge. 3.1 Safety Volvo stands for human values, combined with a modern business/culture, based on the Swedish heritage. Volvo believes that cars are driven by people, therefor safety is and should always be the main principle in their activities. Safety is definitely the value and fundamental characteristic with the largest effect on the society. Volvo is already the leader in car safety, and they still keep on developing the safety concept. 3.2 Environment Enviromental concern is a natural extension of the safety. Not only the enviroment is of huge importance to today s society, but it is also very important in building up new customer relationships and attracting a new generation of workers. 4

5 3.3 Quality Whoever thinks of Volvo, thinks of quality. Volvo has a very long history concerning reliability and quality, and it truly is of vital importance that the Volvo products and services satisfy the customer, and if possible even exceeds. 3.4 Internal These values can be realized much more effectively, if they are based on internal values, such as energy, passion and respect for the individual. What s more in persueing a perfect quality in each activity, Volvo trusts on a number of basic principals. Cooperation and involvement working in processes with a continuous improvement and finally follow-up and feedback. 4 Organisation 4.1 Teamwork Volvo Cars Gent is a group of people. It is enriching employees job content by giving them maximum responsibility. The result is greater involvement and a flat organisation with room for initiative, and in which everyone s contribution is respected. Teamwork is the cornerstone of the way work is organised. Small groups of 10 to 15 employees become genuinely self-managing work units, which are responsible not only for production tasks, but also for planning, monitoring and organising their work. Every team is free to take all necessary initiatives in order to carry out its work on an optimal fashion. There are no differences between the members of the group, they are equal. To reach the kind of optimal working method the whole group has to know everything about main goals of the company, which are replaced in: Q uality C ost D elivery time I mprovement S afety M oral E nvironment All members of the team are responsible for a special part like environment. Twice a year all persons of all teams who are responsible for a special task meet each other. They talk about all problems in this matter and try to improve their process. Another meeting is twice a year for the so called white-collars. They discuss the past six month, they make conclusions and plan the next six month. 5

6 4.2 Organigram Volvo Cars Gent has a very flat organisation. There are only three steps from the highest to the lowest position on the management. On the top of the company is the delegated manager. Directly below the delegated manager are the managers of the following departments: Manufacturing Engineering and Qualitycare Economy, Finance and Information Technology Human Resources and Organisation Prevention Public Relations and Communication Industrial Projects On the lowest level of the management are several departments such as welding plant, paint shop and the final assembly of the industrial projects. Detailed information is in the added organigram. 5 How Belgian employees cope with Swedish culture As explained above Volvo Ghent is a subsidiary of a Swedish company. So Belgians will have to deal both with Swedish persons but mainly with Swedish culture. To explain how this Swedish company-culture has affected the Belgian employees we use theories from the Hofstede 5-dimensional model. Data such as interviews with employees have been collected by Malin Aquilon in the Guideline "The Labyrinth of culture". The theory by Hofstede deals with culture in five dimensions. As it is the case at Volvo there are no major differences with regard to individualism/collectivism and time-orientation only the other three dimensions will be dealt with. For each of the dimensions Power Distance, Uncertainty Avoidance and Masculinity / Femininity the following table will show some aspects which identify major differences in the two cultures. Later on, it can be analysed how these possible contradictions are dealt with at Volvo, a Belgian company integrated in a Swedish culture. Power Distance Uncertainty Avoidance Belgium Subordinates expect to be ordered. Belgians work for continuous advance in hierarchy. Belgians have a certain fear of uncertain situations. What is different is dangerous. Sweden Superiors expect initiative from the employees Flat organisation pyramids. The decision-making-process is long. Greater tolerance towards divergent ideas, so 6

7 Masculinity/Femininity The performance of the best is the norm. There are rewards in form of wealth or status for the successful achiever innovations are stimulated more easily Everyone is expected to be modest. Status is not so important to show success. Justice, competition between colleagues and performance is emphasized at work Equality, solidarity and work environment quality is emphasized at work Power distance The most significant problem regarding Power Distance is the contradiction between Belgians need for possible advancement in hierarchy and the Swedish low organisational structure which does not allow this. This statement is underlined by the annual questionnaire which deals with employees' satisfaction. This problem is as good as impossible to deal with as self managed teams and flat Swedish organisations doesn't leave room for much advancement. On the other hand the very independent job as member of a team has not given problems of serious kind although Belgians usually like to be given exact orders. This seams to be because of very wide range of training programs. 5.2 Uncertainty avoidance Regarding the uncertainty avoidance the slow decision-making-process has to be considered the major problem. Belgians consider it very important to take quick decisions and to hold on to these decisions. Meanwhile Swedish people prefer to keep the freedom to act in every way. This especially results in a problem when a Swedish manager comes to Ghent because his employees there would expect quick and stable decisions from him. As experienced so far no bigger problems were encountered at Volvo considering new ideas and innovations. Product innovations take place only in Sweden as Ghent is only a production facility. But employees got the opportunity to make proposals with the aim of optimising the production process. 5.3 Masculinity/femininity Employees expect rewards in form of wealth or status for the successful achiever. But this struggles against Swedish feminine values that expects modesty. The company has dealt with this by implementing reward systems. furthermore the open-minded behaviour of the Swedish persons they got to know. Inspired the Belgian employees for whom competition between colleagues earlier had bin a natural thing. 7

8 5.4 Measures to cope with cultural differences As it is obvious as a result of the previous chapters, there are some areas within the cultural differences that do not result in major problems. For example the implementation of teamwork-structure has been successful. On the other hand there are matters that cause serious conflicts. In some cases it is also possible that both nations take advantage from the cultural differences. For instance there can be a synergy concerning the uncertainty avoidance. In Sweden it is easier to develop new ideas while Belgium is more a kind of realisation culture. So in this case there can be worked together efficiently. Volvo has realized the necessity to deal with cultural differences between the Swedish mother company and the Belgian subsidiary. To avoid problems a special seminar was developed to familiarize people who are to get in contact with the other culture with the principle ideas of this culture. Furthermore interviews with the employees are run twice a year. Once a year employees fill out questionnaires concerning their satisfaction. So the company gets a continuous feedback on the satisfaction and opinions of its workforce. The recent development indicates that in the future an Americanisation of the companyculture will take place. As this process is just starting and the actual contradiction is merely to be seen between Belgian and Swedish culture, the American culture will not be dealt with in detail in this report. 8

9 6 Recommendation and conclusion Volvo Cars Gent is a modern manufacturer of quality cars located in Belgium. With a working force of 3700 workers, the company obviously faces great challenges in organising the production. Moreover, the company culture is highly influenced by the mother company in Sweden. Unlike the typical Belgium company culture, the organisational structure if flat and the employees work in teams. The teams are supported by training programs and the companies attempt to adopt Swedish culture within the employees have to be considered as successful. Annual questionnaires revealed that there is strong dissatisfaction due to the poor promotion possibilities in this flat organisational system. As Volvo has been taken over by the Ford Motor Company they have inherited a new company culture. Small changes in procedures have already been made by introducing specific procedures where decisions earlier were taken on a basis of values. Volvo seems to fight against this american culture and is determined to keep its Swedish way of doing things. But American company culture or at least parts of it might be the answer to some of the cultural problems Volvo faces today. Compaired to Swedish culture American culture seems to lay closer to the Belgian one in terms of power distance, masculinity and femininity, uncertainty avoidance. Futhermore American cultur scores higher on induvialism and can as such help to solve problems on that matter. On the whole it seems that Volvo already is dealing very well with cultural issues because they are taking a lot of efforts to introduce these matters to their employees. Of course, they should put the same effort in investigations on American culture. Doing this they will be able to maintain their successful position in the future. 9

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