Business Report of Lenovo Essay Example for Free

Business Report of Lenovo Essay Introduction Lenovo was found in 1984 in Beijing and it is the world’s second-largest PC vendor. According to the last official statistic, Lenovo consolidated turnover of 146.6 billion Yuan and Lenovo employs nearly 40,000 people. Lenovo is a well-known national brand in China and Lenovo is serving customers in more than 160 countries. In order to expand overseas business and access to world-class brand, Lenovo carried out an acquisition of the former IBM Personal Computing Division in 2005. IBM was founded in 1911 in the United States and it is the largest information technology and business solutions company in the world, currently has more than 30 million employees in the world, with operations in over 160 countries and regions. The problems experienced by Lenovo concerns the construction of cross-cultural teams. Most of the merger and acquisition fail in the post-merger cultural integration. Lenovo set up work teams for designing the future of IBM and developing the new view after acquisition. The results had been shown it uneasy and can lead to the failure of the Lenovo’s acquisition strategy. At the beginning of the acquisition, cultural differences had not been enough anticipated in the acquisition process. And Lenovo wants to remedy the problem as soon as possible to make IBM acquisition profitable in the next strategy. The report part of the business plan Summary This report is intended to identify, describe and propose some solutions to Lenovo to solve the problems about teams and groups in the acquisition of the IBM. This report will describe problems associated with team building, provides some possible solutions and evaluates each of these. And, this report will describe the impact of cultural differences on the establishment of work groups. Actually, Lenovo had taken some measures, but it with little success. According to the current state of Lenovo, this report will give some suggestions and solutions to overcome or avoid the conflict caused by cultural differences and set up effective cross-cultural teams. Especially, these solutions are based on literature on the issue. It concludes that it is necessary for the company to establish effective and appropriate measures to eliminate the barriers in cross-cultural teams, as absence of this may threaten the company’s long-term development. To overcome the problem, Lenovo should take the follow action for IBM survival: * Obtain the core values between Chinese employees and American employees through an internal survey. * Design an international training program for all the employees and especially for managers. * Incorporate both corporate cultures of Lenovo and IBM to create a new corporate culture. * Every cross-culture team should organise monthly meeting or weekly meeting to evaluate the progress of communications and work. * Organise some internally non-working activities to create more opportunities for the communication among employees with different cultural context. * Set up the special teams to deal with the problem caused by cultural difference in every cross-cultural team. Introduction This section of business plan will introduce the problems caused by cultural differences in cross-cultural teams and give some suggestions to overcome the problems. In the acquisition of IBM, Lenovo accepted more than 10,000 employees and it also means that Lenovo accepted a very different culture. Lenovo is not only facing the differences between western and eastern culture, but also Lenovo facing the problems of how to integrate the teams with different organisationally cultural context. In this report, the recommendations to overcome the problems in cross-cultural teams and groups are based on the literature on team building and cross-cultural team management. Body At the beginning of the acquisition of IBM, Lenovo had taken some measures. For example, in order to both sides can communicate better, the new Lenovo use the international common language English as the official language of the company. But cultural integration is a long-term process, which requires companies to devote their time and patience and the communication, compromise between both of high level, and staff in the acquisition. It must not be too hasty. Base on the fact of Lenovo, there are three aspects should be noticed and improved. Firstly, IBM has a long history and IBM has very high brand awareness. In addition to the brand, employees can get the respect for personal values ​​and a comfortable working environment can be provided for employees by the human resources services and the improvement of the system. In contrast, Lenovo has a big gap no matter the position in IT industry and the strength of themselves. If some team members uphold the cultural superiority or group superiority that their own cultural value system better than those members from other cultures or groups, their behavior maybe resulting in the failure of team building because they will be possible to take hate and boycott from other members, even lead to conflict. Because the conflicts caused by cultural differences between team members and individual differences under thus influence, analysis and identification of cultural differences is necessary. Secondly, communication is the process of exchange and transmission of information among people or groups. Because of the multi-cultural background, language and non-language barrier, people lack of understanding of each others political, economic, legal, social and cultural environment, and the understanding of the customs, values, etc. are different. They are often based on their own perspective to make an analysis and judgment on each others information, and thus the misunderstanding and conflict are often obtained. Because of these, design a multi-cultural training and hold a monthly meeting or weekly meeting is necessary. Thirdly, a company has an acquisition of another company means an integration of two different corporate cultures. When the employees of a cross-cultural group are conscious of the different of personal cultural awareness with others, it will be cause the group lost their purpose. Based on the possibility, establish a common business concept and corporate culture is a good solution to this problem. Establish a new joint management concept and a strong culture based on the environmental requirements and the principle of the companys strategic development, so that reducing cultural conflict and that each employee’s thinking and behavior can combine with the companys operations and purpose. Adopting these recommendations and the actions in summary can make internal and external combination of the teams more closely, establish a good reputation in the international market and enhance multinational cultural adaptability. This is the ultimate goal of why Lenovo needs solve the cross-cultural issues of teams and group in the acquisition of IBM. (1077 words) Section 2 1. What the literature says â€Å"teams and groups† The importance of teams and groups for an organisation In modern society, one person’s power, information and resources are limited. Most time people need cooperate with others no matter working or others as Handy (1993) said â€Å"On average, managers spend 50% of their working day in one sort of group or other. Senior managers can spend 80%†. Although there is no clear and single definition of a teams and groups, there is a basic limited definition by Bennett (1991) â€Å"a collection of two or more people who possess a common purpose†. The formation of an organisation groups in order to achieve the purpose of work more efficiently. An organisation can produce some different kinds of groups, for example: formal and informal, LOCO, HICO, teams, etc. An organisation needs to be aware of their differences and use them as efficiently as possible. There are a lot satisfying reasons why an organisation should create work groups. For example, organising effective groups can have some uses for the distribution of work, the management and control of work, problem-solving and decision-making, information processing, information and idea collection, testing and ratifying decisions, co-ordination and liaison, increased commitment and involvement, negotiation and conflict resolution, inquest or inquiry into the past. (Handy, 1993) No matter what kind of a group there is a bottom line is â€Å"A strong group is †¦ usually more powerful than a strong individual and can have a considerable effect on organizational policy and practice.†(Thomson, 2002) This literature review will pay attention on teams mainly. In a team, everyone plays different role and they have specific function and they working with an important principle â€Å"voluntarily co-ordinate their work in order to achieve group objectives†(Bennett, 1991). Building a team People hope they can define their identity through their membership of certain groups like people belong to local political and pressure groups, for example, because they experience a shared set of values with the other people in the group which reinforces their own values. But, according to Thomson (1997), one reason why people belong to group is â€Å"social needs†. As Thomson Mabey said â€Å"some †¦ groups will be family or friendship groups, which are formed to meet a diverse range of needs such as affection, security, support, belonging or identity. Some may be committees, where members usually represent different interest groups who come together to discuss their differing perspectives on matters of interest†, people should build a team for the work that is highly complex problems, need for consensus decisions and there is uncertainty when a broad range of competences are required. A company is a big group of a lot of people working together, so the managers are responsible to build effective teams or workgroups. After collecting more individual talents, building a team has the ability to use the talents on a united effort and success is very important (Woodcock, 1979). Consequently, the managers should know how to effectively build a team. In general, the managers must have the knowledge about the five development stages (forming, storming, norming, performing and mourning) in a team or workgroup and they should have an appropriate leading method for themselves (Thomson Mabey, 1994). Of course, this is not enough for managing a team. The managers need realise everyone’s advantages and dis advantages in the team and especially the differences of their culture context. Teams and cross-cultural context In modern society, business environment developed quickly international. Different cultural members mixed in a team so that the team has powerful ability to solve complex problem. But, individuals from different cultural context must show a different behavior and values in the team. This is because the peoples cognition, thinking, needs, values, code of conduct, customs, etc. are formed in the years of life, work and education. The individual differences caused by cultural differences led to the conflict of the team in the cross-cultural context (Sun, 2012). So, how to make a cross-cultural team working effective is the main responsibility of managers. In a cross-cultural team, there is an important factor is a clear understanding of every one culture and values, and a process of acculturation. The acculturation process is a mutual exchange of cultural pattern (Olie, 1995). Related to the case of Lenovo, the best recommendation for acculturation is integration. It different with one culture dominate the others, integration is a process of acculturation (Nahavandi Malekzadeh, 1995). Interest for Lenovo In the case of Lenovo, Chinese and American must accept each other for working effectively. But the main problem in the cross-cultural groups is communication. The managers of Lenovo must make everyone in the group understands and adapt to the different culture with some training or actions. And more important is design a politic cooperatively cultural pattern. 2. What does the literature say about different cultural contexts and its influence on teams and groups What are culture and its importance According to Hofstede(2003), culture is â€Å"the collective programming of the mind which distinguishes the members of one group or category of people from another†. It related to a group. With a large-scale research study of IBM branches around the world by Geert Hofstede, the culture is considered a compositive project. Geert Hofstede creates a new way to describe culture through five variables: power distance, individualism, masculinity/femininity, uncertainty avoidance and long-term orientation. All theories have limitations. Although this method created by Geert Hofstede is not absolutely right, it does not affect the theory of Hofstede can analyse one country’s culture as a valuable tool. Contract with the case of Lenovo, the most important effect by culture is â€Å"Currently only 25% of international mergers and acquisitions in Europe are successful. The price of failure is high. Cultural misunderstanding lead to loss of face, loss of money and, in extreme case, even loss of life† (Gibson cited in Naysmith, 2006). If managers do not pay enough attention on the culture, it possibly can cause the failure of the acquisition of IBM. Organisational culture Culture is not only exists in the countries, but also culture exists in any organisation constituted by people. Based on Handy (1993) said, â€Å"The role organisation will succeed as long as it can operate in a stable environment†. A steady cultural environment is necessary for an organization get success. At the same time, organisational culture is manageable and it can affects the approach of management, the accepted goals and customer of the society determine and influence that what managers strive for and the rule observed by managers (Stewart cited in Naysmith, 2006). So, the organisation also based on the cultural context of the country. The organisational culture can also measured by the five variables created by Hofstede.(Geert Hofstede, 2001) Influence of culture on â€Å"teams and groups† If a company formed by people comes from different cultural country, this company will own a special energy. It is a competitive advantage from a cross-cultural context. But, exerting the competitive advantage effectively is the most important challenge for the cross-cultural group. Because in a cross-cultural group the members have different working purpose and processes will be revealed. (Maznevski Peterson, 1997) The effectiveness of work group will be decreased by the ethnocentrism, stereotypes, different expectations and difference in values. And these negative emotions will produce the anxiety and misunderstanding in-group, even diminishing the workers dedication to the company and destroying the group ardor. Interenst for Lenovo Cross-border mergers and acquisitions not only include the corporate cultural differences of both sides, but also include the cultural differences between the countries of the two sides. Organise some activities or cultural training to make more opportunities for every understanding different culture can eliminate the negative affects effectively. 3. Conclusion This literature review introduces some keys briefly for understanding teams and groups in a cross-cultural context. Firstly, teams and groups are particular important for an organisation. But there are some problems should be solved in a cross-cultural group. The managers is not only should know everyone’s skill and talent, but also they should know their difference caused by different cultural context. And some actions can make a good communication between each other for understanding the differences are necessary. Secondly, based on enough knowledge to understand the importance of culture, the managers should eliminate the negative affects of cross-cultural context through some activities or training. And the most important is creating an appropriate organisational culture. It can give the cross-cultural group an approach, so the cross-cultural group can exerts the competitive advantages completely. Bibliography Bennett, R., (1991), Organisational Behavior, London: ME/Pitman, pp.145, 154. Geert Hofstede, (2001), Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations, Second Edition, Thousand Oaks CA: Sage Publications Geert Hofstede, (2003), Cultures and Organisations, Intercultural Cooperation and Its Importance for Survival, Soft ware of the Mind, London: Profile Books Ltd. Handy, C, (1993), Understanding Organisations (4th ed.), London: Penguin, pp.150-2. Maznevski, M. Peterson, M.F., (1997), Societal Values, Social Interpretation, and Multinational Teams. In C. Skromme Granrose S. Oskamp (Eds.), Cross-Cultural Work Groups, pp. 61-89, London: Sage Publications Ltd. Nahavandi, A. Malekzadeh, A.R., (1995), Acculturation in mergers and acquisitions, In Jackson (Ed.), Cross-Cultural Management, pp. 328-341, Oxford: Butterworth-Heinemann Ltd. Olie, R., (1995), Culture and integration problem in international mergers and acquisitions, In T. Jackson (Ed.), Cross-Cultural Management, pp. 308-325, Oxford: Butterworth-Heinemann Ltd. Sun Ziwen, (2012, April 13), Case analysis of the cultural integration in cross-border mergers and acquisitions of Chinese enterprises, Peoples Forum, 356(2), 7. Thomson, R., (2002), Managing people (3rd ed.), Oxford: Butterworth-Heinemann, pp.92, 95. Thomson, R. Mabey, C., (1994), Developing Human Resources, Oxford: Butterworth-Heinemann in association with the Institute of Management, pp.177. Woodcock, M., (1979), Team Development Manual, Aldershot: Gower Press Teakfield Limited, pp.177.