Managing Human Resources in a European Context: A Case Study of EADS by Christoph Barmeyer and Ulrike Mayrhofer

QUESTION

EADS: managing human resources in a European context by Christoph Barmeyer and Ulrike Mayrhofer

The European Aeronautic Defence and Space Company (EADS) was created by a merger of the

French Aérospatiale-Matra, the German DASA and the Spanish CASA. It aimed to join the strengths of three European engineering traditions and to achieve market leadership and compete with world leaders such as Boeing. However, managing a firm with major units in three different countries requires a unifying organizational culture that integrates and respects the different national cultures.

Individuals from the three companies were selected to work on project teams outside their home country. These expatriates served important roles in facilitating the integration process. At the cultural ‘interface’, they were to mediate between different systems of meaning and action in order to achieve mutual adaptation. English was adopted as an official language to enable expatriates to effectively communicate within their team. However, expatriates also faced the challenge of integrating into another culture. Even though it was one company, the national culture where they worked was quite different. EADS considered this cultural diversity an advantage, because it stimulated creativity and favoured the dynamics of the group. In fact, expatriates had the opportunity to learn about different values, which enabled them to develop new ideas and solutions to the problems they faced.

However, it created personal challenges for the members of the teams, as they were confronted with different ways of communicating and collaborating.

Certain concepts of management, such as cooperation or leadership, had different meanings and interpretations in France and in Germany, which often led to misunderstandings. For instance, for French engineers, the notion of cooperation implies that the goal should be achieved through work on an individual basis, whereas for German engineers, the term cooperation means teamwork with the objective to obtain a common goal.

Consequently, when working in German teams, the French sometimes felt frustrated by their lack of freedom and the necessity to reach a consensus. In the same way, when working in France, Germans attempted to find a consensus and had the impression that their French partners were individualists and difficult to predict. In the same way, expatriates learned about different conceptions of leadership. For example, German expatriates discovered that their French colleagues employed more paternalistic styles and personal powers and thus favoured centralized management structures. In contrast, French expatriates were surprised that German authority was mainly oriented towards function and professional competence and that German managers and engineers often graduated from public universities (in contrast with France where most managers and engineers graduate from highly selective and prestigious French ‘grandes écoles’ like École Polytechnique and École Centrale).

Two metaphors highlight these different culturally

embedded characteristics and conceptions of cooperation and leadership. The German organization has been described as a ‘well-oiled machine’: there is a clear technical structure to the regulation of functions in terms of tasks and responsibilities, and of processes in terms of sequential flow. The organization is understood as a heterarchical structure, the functions and goals of which are achieved — detached from personalized authority — according to its own agreed rules. In contrast, the French organization is like a ‘pyramid of people’: management holds a position of authority at the top of the pyramid, with subordinate participants CHAPTER SIXTEEN PEOPLE IN THE MNE below. The organization is understood as a hierarchical structure, in which interpersonal relations develop and personalized authority figures are needed to regulate power relations. As power is concentrated at the top of the pyramid, the people below have to defend themselves by acting individually.

Human resource managers of EADS were aware that it was important to systematically explain such cultural characteristics and differences in order to avoid conflicts that are likely to arise in cross-cultural teams. The company therefore created its own corporate university for executive education, called the Corporate Business Academy (CBA), which offered intercultural training seminars and helped to prepare expatriates for their work experience abroad. EADS also developed specific processes to build a new organizational culture based on teamwork. The experiences of the expatriates and the initiatives taken to build a new corporate culture allowed EADS to successfully manage its human resources in an organization that even after several changes of shareholders retains its distinct Franco-German identity.

ANSWER

Managing Human Resources in a European Context: A Case Study of EADS by Christoph Barmeyer and Ulrike Mayrhofer

Introduction

The European Aeronautic Defence and Space Company (EADS) emerged from the merger of the French Aérospatiale-Matra, the German DASA, and the Spanish CASA. This amalgamation aimed to leverage the diverse strengths of three distinct European engineering traditions to achieve market leadership and compete globally. However, the challenge of managing a multinational company with significant units in three different countries required the establishment of a unified organizational culture that could harmoniously integrate and respect the varying national cultures.

Cultural Integration and Expatriates

EADS recognized that individuals selected for project teams outside their home country played a pivotal role in facilitating the integration process. These expatriates served as cultural mediators at the ‘interface,’ bridging different systems of meaning and action to facilitate mutual adaptation. To ensure effective communication within these teams, EADS adopted English as the official language. Nevertheless, expatriates encountered the task of immersing themselves in a foreign culture. While the company acknowledged the advantages of this cultural diversity, including enhanced creativity and group dynamics, it also presented personal challenges as team members navigated different communication and collaboration styles.

Challenges in Communication and Leadership

The convergence of personnel from different cultural backgrounds exposed disparities in fundamental management concepts such as cooperation and leadership. The French interpretation of cooperation emphasized individual effort, while the German perspective focused on teamwork for a common goal. These differences often led to misunderstandings and frustration. Similarly, varying conceptions of leadership emerged, with French colleagues favoring paternalistic styles and personal authority, and Germans valuing functional competence and professionalism. These distinctions were encapsulated in the metaphors of the ‘well-oiled machine’ for Germany and the ‘pyramid of people’ for France, highlighting their contrasting organizational structures and power dynamics.

EADS’s Strategic Initiatives

Recognizing the need to address these cultural challenges proactively, EADS established the Corporate Business Academy (CBA), an in-house corporate university for executive education. The CBA provided intercultural training seminars, equipping expatriates with the skills and knowledge needed to navigate cross-cultural interactions effectively. Additionally, the company implemented processes aimed at fostering a new organizational culture centered on teamwork, enabling smoother collaboration across diverse teams.

Conclusion

EADS’s experience in managing its human resources within a multifaceted, cross-cultural environment underscores the importance of understanding and addressing cultural differences in multinational organizations. By acknowledging the distinct characteristics of various national cultures and promoting intercultural training and teamwork, EADS successfully built a cohesive corporate culture while retaining its unique Franco-German identity. This case study exemplifies the significance of cultural integration and the role of expatriates in facilitating organizational harmony and growth within a dynamic European context.