Intercultural Management: Working Better Across Borders

Intercultural Management: Working Better Across Borders RPC Tedeco-Gizeh Plc

1 Introduction

Based on the visit at RPC Tedeco-Gizeh, we wrote a report about the interaction between management, organization and staff in the company. Our visit at the company lasted about 2 hours and included a tour at their factory and an interview. At the company we were talking to the Human Resource Manager who gave us a lot of useful information about the company. Before hand we decided not to ask about the company’s staff policy, profit policy and other sensitive areas. For the same reason we will not mention these areas in our report. It was necessary to draw some conclusions from the interview that might not be completely true, because they didn’t give us convincing arguments for their statements.

2 RPC Tedeco-Gizeh: the company

RPC Tedeco-Gizeh is part of the RPC Group Plc, an international concern and the market leader of rigid plastic packaging in Europe. The RPC Group Plc has 25 factories all over Europe, six of them belong to RPC Tedeco-Gizeh. Two of the factories are situated in Deventer together with the headquarters.

The company is around 30 years old. Today 155 people are employed in Deventer. The largest subsidiary is placed in France with approximately 200 employees. About 6 years ago they opened a subsidiary in Wales where 54 people are working. Before that there was only a sales office in London. In 1996 Tedeco opened a production in Hungary where 23 people are working. In all RPC Tedeco-Gizeh employs approximately 600 people. Beside factories RPC Tedeco-Gizeh has warehouses and sales offices in Germany and Poland. Tedecos largest single customers are vending machine companies. Tedeco’s products are of high quality and medium/high price among others because they are ISO-9002 certified. For the vending machine companies it is very important that the plastic cups do not have big differences in tightness, height, weight etc. Therefore Tedeco and vending machine companies have co-operated together in Research and Development.

2.1 The organisational structure

The organisational structure varies from the headquarters to the subsidiaries and from one subsidiary to another, depending on the size of the company and the national culture. RPC Tedeco-Gizeh does not make an effort to have the same company culture in all subsidiaries. In Holland the company is divided into six departments: Sales, Marketing, Purchase, Production, Human resources and RDE (Research, Development and Engineering). The organisational structure is quite traditional and can be characterised as a bureaucracy.

1 Intercultural Management: Working Better Across Borders RPC Tedeco-Gizeh Plc Another thing that interested us is the fact that the company is ISO certified. This means that they have to standardise all procedures, giving the employees less responsibility and freedom. The information flow in the company is at the same time formal and informal. Some departments in Deventer are more isolated than others and the communication will be formal there. In other departments the information flow is more informal. But still the relationship throughout the company is informal if you compare with other nations’ culture. Because the plant in Hungary is so new and also small the communication within the company is very informal and not really structured. Also the German warehouse and sales office is small but here the information flow is formal, because of the national culture. Oppositely, the French subsidiary is very large. Thinking of the national culture and the size of the company the structure is very bureaucratic and formal. The power distance is very high in France and resistance to change is very high in a situation where the employees do not feel needed in the company.

General Manager

Secretary

Sales Logistic Marketing Production Purchase R&D and E Human Res. Departm. Departm. Departm. Departm. Departm. Departm. Departm.

Hungary United K.

Hungary Poland Germany

France Germany Hungary Poland United K.

The organisational chart of RPC Tedeco-Gizeh

2 Intercultural Management: Working Better Across Borders RPC Tedeco-Gizeh Plc 3 Subsidiaries

RPC Tedeco-Gizeh has 5 subsidiaries in Hungary, Germany, United Kingdom, Poland and France. Three years ago they started up the subsidiary in Hungary after having made a market analysis of different countries in Eastern Europe. The reason for this was increasing sales and of course the huge potential Eastern Europe provides because its higher growth rates. But also the advantages of being a bigger company and desired expansion were part of the reason for investing in Eastern Europe. After the merger with Gizeh they automatically got subsidiaries in France, Germany and Poland. The British wanted a local producer of RPC Tedecon-Gizehs products, so they decided to establish a company in Wales. The sales office though is situated in London. In the near future they would like to establish a subsidiary in Sweden and Finland.

All employees in the different subsidiaries are native to their country. To start up a subsidiary in a foreign country, they needed a few people. Once the building is done, managers, operators and other technical people come to The Netherlands to talk about the strategy, the policy etc.

4 Communication

4.1 Communication between HQ and subsidiaries

Despite of the distance between the headquarters and the subsidiaries they have a very good communication. The general manager visits the headquarters on a monthly basis. In this meeting they deal with possible problems, improving the policy, developing new products and so on. The daily communication happens by means of telephone, fax, and e-mail. As English is the company language next to German the language doesn’t evoke difficulties whereas the culture does. Differences in culture often cause confusing situations or misunderstandings.

4.2 Decision making process

At first we have to say that the department in Deventer is kind of like the “Headquarters” for all the subsidiaries across Europe. The international management of RPC Tedeco-Gizeh is more or less centralised in Deventer and has international responsibility. They have the overall management but there are also local management teams and staffs.

3 Intercultural Management: Working Better Across Borders RPC Tedeco-Gizeh Plc Only the departments in France and the United Kingdom got a work manager of their own, what means that they can make certain decisions of their own up to a certain level/maximum costs.

5 Workforce

As RPC Tedecon Gizeh is an international company, they have to work a lot with foreigners. In the Headquarters in Deventer the general sales manager is German. He’s the boss of all the sales managers in the subsidiaries. Now he’s the only foreigner working in the administration. There used to be some Turkish, Belgian and Italian employees in the administration as well. As far as the workers are concerned most of them have a Turkish origin of which most have the Dutch nationality by now. Also other nationalities are represented.

This company is very flexible concerning its employees as long as it doesn’t overstep all limits. Every employee is of equal importance and they are willing to make some positive exceptions for other cultures. E.g. they take into account that the Ramadan is very important for the Turkish, so they are allowed to pray during the day and to eat after sunset. The reason for this is because they are really concerned about their employees. If they don’t respect the Turkish religion the employees could get weak and will not be able to work properly.

6 Human Resource efforts

We have been talking to the Human Resource Manager of RPC Tedeco Gizeh. She co- ordinates everything about the Human Resource concerning the department in Deventer but also the departments in Poland, Germany and still a bit for Hungary. The departments in the UK and France have their own Personnel or Human Resource Department. We asked her about the efforts they make concerning the Human Resource Management, in Deventer and at their subsidiaries in foreign countries. The most important thing she answered was that RPC Tedeco-Gizeh wants their employees to feel that they are part of the company and important to the company. RPC Tedeco-Gizeh thinks they can achieve this by paying the employees enough salary not to go to the competitor but normally Tedeco does not change the rate of the wages. RPC Tedeco-Gizeh also offers their employees to take place within the production staff. For example, not every employee wants to work at the same machine all their lives, but would like to change places once in a while.

4 Intercultural Management: Working Better Across Borders RPC Tedeco-Gizeh Plc Some employees also get the possibility to take a course to just add something to their function, or for increasing their possibility to get a promotion. RPC Tedeco-Gizeh always has to take notice of the culture they are in. For example in the UK money and status are things which Tedeco could use to motivate their employees more than with a vacation, or something like that. When unemployment rates are increasing, it is less difficult for RPC Tedeco-Gizeh to keep their employees. If it is the other way around RPC Tedeco-Gizeh has got to change their motivation efforts.

7 Recommendations

RPC Tedeco-Gizeh does not plan to change anything in the organisational structure, because they feel everything is working quite well. We think that it is very risky to take this approach. Unfortunately their situation depends a lot on external factors, like unemployment rate, raw material prices etc. The raw material covers over 50% of the cost of producing a plastic cup. If prices are rising they will not be able to sell so much cups because people will substitute plastic cups with real cups. In 1995 Tedeco experienced this kind of situation in which the production was halted. But even more important is the unemployment rate for Tedeco. If Tedeco does not learn to motivate and thereby keep their employees, they will be in serious problems when the unemployment rate changes. They have to do more to be prepared for these kinds of different situations.

An advice from us to RPC Tedeco-Gizeh is that they always have to keep an eye out for problems and also listen very carefully to the difficulties that the employees have got.

8 Conclusion

In the last paragraph we will try to give an advice to RPC Tedeco-Gizeh about what kind of changes or adjustments we think that they have to make in the future. As the Human Resource Manager told us there is not one single thing she could think of that has to change instantly. It’s an advantage for RPC Tedeco-Gizeh that they are owned by RPC which has a clear and well-organised structure. If RPC Tedeco-Gizeh wants to do something they always have to get permission from RPC “Headquarters”.