Don't spin your wheels solving the wrong Puzzle......

General Mills Case

Defining the wrong marketing research problem is probably the single most detrimental factor to deriving sound findings.  

The marketing research road map starts by defining the problem, any mistakes at the start filter through the whole research leading to wrong findings, wasting resources and in extreme cases development of products that completely flop. 

Precise definition of the problem without management bias is imperative. 

BN a subsidiary of General Mills in France fell into the trap of defining their marketing problem as 'what the competitors are doing that we are not' after declining market share three years in a row of their cash cow product the gouter (chocolate filled cookie - a favourite after school snack for the French).

Management bias closely aligned their failures with the success of the competitors narrowly defining their marketing problem and research hence, disabling a wider view of the problem. The company decided to put more weight into their advertising to remedy their problem and to their chagrin the situation worsened. 

When a fresh pair of eyes from the head office came and looked at the research data, they realised that the product was no longer desirable, the French subsidiary had changed the ingredients to cut costs as they were directed to increase profit margins by the Americans. 

The Americans were surprised to find the product was altered and the French were surprised that the Americans were surprised, since it seemed obvious that cost cutting would change the product mix to a lower quality alternatives!

Once the problem was redefined as 'what taste do the customers favour' then a new selection was introduced reversing the decline in market share.

Common Mistake 

Decision makers often give researchers a verbal brief as they do not think it's their job to write down the problem and analyse all the factors that may have contributed to their problem and herein one of the main mistakes are made. 

When decision makers spend sufficient time writing and analysing, the market research brief becomes clearer, targeted and easier for the research team to navigate. 

The channels of communication between the research team and decision makers need to be open, honest and based on mutual cooperation in order to design the right market research survey and derive the right answers. Decision makers have to be ready to invest an abundance of time feeding the researchers information about the market, industry, products and competitor products as well as personal hunches in order for researchers to put the pieces of the right puzzle together!

Merging Subsidiaries - Is culture converging, diverging or crossverging?

Merging a subsidiary with headquarters

The theories surrounding convergence where cultures are supposedly becoming more alike due to shared technologies and economical advances, divergence where cultures are retaining their attributes regardless of external pressures and maybe changing but at a rate hardly relevant and crossvergence which demonstrates a combination of the two (Ralston 2008, p.28-29) are extremely important to an international manager trying to integrate a subsidiary closer to the headquarters.

Firstly, the organisation needs to recognise the similarities and differences between the headquarters and the subsidiary, hence analysing the cultural distance. It then needs to analyse the work values in order to conclude on the reliability of the control systems in place and finally continually monitor shifting in work values (Mead & Andrews 2009, p.418). Therefore understanding if there is a divergence, convergence or in fact crossvergence taking place can assist in formulating plans to integrate the subsidiary with headquarters. 

The headquarters will most likely need to expatriate a manager to the subsidiary if in fact it finds that the national culture is diverging and having an impact on the subsidiary’s corporate culture, one that is shifting away from headquarters values and culture. If however the analysis show a convergence, it can utilise the technologies used that assist in convergence to bring about the change needed to integrate. The crossvergence theory will enable the organisation to identify those aspects that need tweaking to fit into the headquarters culture and those that are already somewhat in tune.

In conclusion, understanding of the above concepts assists in formulating a targeted plan whereby different traits of the organisational culture need different practices to integrate the subsidiary as a whole.

Cross cultural management and theories

Due to technological advances, market liberalisation and many parts of the world embracing direct foreign investment, successful business models are bound to be replicated whilst failing models become extinct as those harbouring them will eventually be taken over, merged or closed down. Therefore ‘...business practices are converging in some respects and to some degree...’ (Mead & Andrews 2009, p. 411) however this does not necessarily translate to individual’s private life, religious beliefs and cultural norms, which are bound to fester in the workplace sometimes and require understanding from the headquarters. For example in the Islamic holy month of Ramadan were Muslims fast, it is an excepted fact that things slow down in the Arabian gulf, not much business during the daylight hours takes place, which may frustrate those in the headquarters even if there is reasonable cultural coherence at other times. Appreciation of the religious culture even if convergence in other aspects of business dealings takes place is conducive to better work harmony between the subsidiary and head office.

Crossvergence compliments different cross-cultural frameworks because it lacks definitive borders, it does not view culture as remaining static nor does it hypothesise that the whole world will eventually identify with the same traits, nor is it one dimensioned, it takes into account different aspects of external and internal influences.

Hofstede’s (1997) seminal work on culture is indicative of differing traits of differing cultural groups and their influence on business behaviour, whilst also noting that employees of multi-national organisations  do not need to agree on each others’ cultural traits only on their work practices Hofstede et al., (1990 p.311) recognises that common grounds in the workplace is in fact possible and essential, even if individuals’ cultural traits differ due to age, nationality beliefs and morals. 

Crossvergence allows for the cultural ambiguity of those individuals who shift between two or more cultures and whose numbers according to Hong et al. (2000 p. 709) are on the rise, these individuals cannot be viewed to affiliate with one culture alone. Some may view this switch as a vehicle for transporting different cultural traits to different groups, hence decreasing the cultural distance in some aspects of the organisational culture.

Management theories, recognise that those who come from cultures that are exposed to other cultures on regular basis are more likely to have imported some traits from the foreign culture. Arguably, the cultural traits that are exported are mostly Anglo-Saxon through the wide spread of global American organisations and brands, pop music  and TV shows, hence we can conclude that those cultures who are exposed and are open to organisations from differing parts of the world and that they possibly identify to a large extend with the American culture. This fact is further enhanced when English is being used as the functional language of many organisations, hence bringing Anglo-Saxon corporate ideologies closer to foreign cultures.

Elements to be considered when merging subsidiary 

There are many aspects of the subsidiary’s culture that need to be evaluated in order to make a decision on the most effective theoretical framework to use in order to integrate a subsidiary.

Studying Hofstede’s (1997) model and understanding the cultural distance between the subsidiary and the headquarters is important, if the subsidiary culture is individualistic then rewards to individuals who conform to the ‘new’ standards maybe accepted however if collective culture prevails then group incentives and acceptance is more prevalent.

The language used at the subsidiary may impose a barrier, hence expatriating a manger who can speak the language, yet is part of the headquarters is key to changing the practices without him being viewed as a complete outsider and hence employees maybe more accepting of his new practices, this is especially important to collectivists.

Integrating is viewed as less empowerment for the subsidiary, some may appreciate it as the subsidiary staff may want standardised practices or resent it as change is often unwelcome, unless incentives are highlighted.  Therefore the level of control the headquarters assume may need to be gradually increased in order to be accepted, a sudden upheaval will especially in a collectivist culture, where stability is important pose risk to the morale of the employees that may impact negatively on the organisation’s performance and to shareholders wealth.

In conclusion, there is no one theory to be followed, an analysis of culture and desired control level needs to take place and strategies to reach the desired outcome must be implemented.

References:

Hofstede, G. (1997) ‘Cultures and Organizations: Software of the mind’ McGraw-Hill: New York

Hofstede, G, Neuijen, B, Ohayv, D, & Sanders, G (1990), 'Measuring Organizational Cultures: A Qualitative and Quantitative Study across Twenty Cases', Administrative Science Quarterly. 35(2) pp.286-316 

Hong, Y. Morris, M. Chiu, C. & Benet-Martínez, V. (2000), 'Multicultural minds: A dynamic constructivist approach to culture and cognition', American Psychologist, 55(7), pp.709-720.

Mead, R. & Andrews, T. G. (2009) International management. 4th ed. Chichester, England: John Wiley & Sons

Ralston, D.A. (2007) ‘The crossvergence perspective: reflections and projections’, Journal of International Business Studies, 39 (1), pp. 27–40, Palgrave Macmillan [Online]. DOI:10.1057/palgrave.jibs.8400333 (Accessed: 23 December 2009).
http://dx.doi.org.ezproxy.liv.ac.uk/10.1057/palgrave.jibs.8400333

Money Is No Object - Employee Motivation Is Subjective!

Motivation is subjective!

Any economic organisation will seek to coordinate the actions of groups of people and to motivate those people to carry out certain tasks, hence motivation is a large part of a firm's ability to progress and achieve its overall objective and bottom line goals, therein lies the art & science of employee motivation!

Some multinationals (no less) have made the grave assumption that the planet is inhabited by essentially one race and culture and that we are all motivated in the same way. 
Ofcourse the seminal work of Maslow and many other motivational theorists are not to be underestimated but a deeper understanding of operating environment and culture is required by the international human resources manager.

To some its obvious, if there is a positive correlation between the hours worked and the money earned provided you like your job, then a recipe for motivation is found; the American style may work for some, mostly individualistic cultures but not for others, a hard lesson learnt by the giant Lincoln electric.

Lincoln's piecework & bonus reward system was exceptional and attracted those who were willing to work hard to earn big, hence turnover was below industry average, there was never any problem to get staff to work overtime, in fact the company had to make a rule that employees were disallowed from commencing work more than half an hour prior the start of their shift. A match made in heaven you could say!
To the company's horror in the early 1990s when it made a number of international acquisitions, this reward system didn't sit too well with the French and other nations, sick leaves were high, no willingness to work overtime and turnover was higher than industry average.
In a century of doing business, Lincoln made losses due to the failure of the acquisitions.

Lincoln would have faired well by employing a comprehensive study to truly understand what motivates employees in different countries. 

Some would rank flexibility higher than financial reward as their community requires their attendance to frequent functions and if pushed too far would rather find a different employer. 

Intrinsic rewards verses extrinsic rewards, self motivation and sense of belonging to an organisation all may play a role, motivation is essentially subjective, there is no one solution fits all across oceans! 

The $30 million mistake... Ethics in market research

Market Research 

Market research is central to filling the gaps that decision makers have with regards to marketing decisions, it allows for insight into consumers needs, demands and wants, after which, if handled correctly organisations can convert this information with sound business sense to profits.

Ethics & Brand Image

Consumers are often angry if they believe that they were manipulated, used or taken advantage of to increase organisational profits; this is even more so relevant with big multinational organisations where consumers believe that they make too much profits at the expense of the consumer anyway.

It is therefore detrimental to a brand if market research was conducted unethically, the brand that is undertaking the research or the market research company that is conducting the research on behalf of the brand can in fact harm it in the way of boycotts and bad publicity. 

Today, where word of mouth can spread easily with social media; no longer are dissatisfied consumers contained easily, therefore every brand contact they have has to be satisfactory including market research. Today a dissatisfied customers can tell of their experience on Facebook, Twitter, blogs unto 20,000 or even 200,000 people (Safko, 2012 p.7).

Ethics, Legislation & Motivation

Market research is already subject to legislation that include the respect of participants’ privacy, if organisations use information illegally, they can face hefty fines. Citi group was fined $30 million for leaking market research material to some clients giving them a heads up to trade on iPhone ahead of other investors (Macdonald, 2013) effecting their bottom line and reputation. A further concern is the age of the participant, if the market research company cannot verify the age, then they could in fact be talking to children without parental consent opening a flood gates of lawsuits. Verifying the age of participants is of extreme importance to market research (Malhotra, Birks, Wills 2012 p.31).

If the industry continuously abuse their participants’ rights the whole industry can face more and more legislation that can eventually cripple their ability to conduct effective market research.

The motivation for consumers to engage in market research can be effected if they feel that their answers are being manipulated. They may come to resent the research and tailor make answers or refuse to engage in research completely (Malhotra, Birks, Wills 2012 p.30). They may decide to withhold information if they feel that the researcher has an agenda with regards to the outcome or if they feel that that the research is likely to be used for more than its intended purpose, i.e. for marketing directly to clients. Withholding information or giving the researcher wrong information can be to the detriment of the research as the results no longer give a true picture.

The research participant can begin the process and then disengage if they feel they are not being treated fairly and given all relevant information, this would mean that the organisation spends money and resources only for them to be wasted due to unethical conduct.

An example of this is, a market research personnel who stand in a shopping mall and ask people to take a survey, telling them it would take five minutes when it actually takes thirty minutes. Many people will excuse themselves after ten minutes and say “I’m sorry, I have to go now” leaving research half empty and irrelevant to the researcher and the company. Many people who have this experience will refuse to answer questions again, therefore if the market research company is operating in a small town, this could have enormous impact on their ability to conduct future research for their clients.

Conclusion

Unethical market research effects results disallowing them from painting a true picture and insight into consumer’s thoughts and motivations. Incorrect results  can have a negative impact on marketing decisions harming bottom line.

References: 

Macdonald, S. (2013), 'Citi fined $30m for market research leaks', Fundweb, [online]. Available from: http://search.ebscohost.com.ezproxy.liv.ac.uk/login.aspx?direct=true&db=bth&AN=90680383&site=eds-live&scope=site (Accessed 9th January 2015)

Malhotra, N., Birks, D. & Wills, P. (2012) Marketing Research: An Applied Approach. 4th ed. Harlow: Financial Times/Prentice Hall

Safko, L. (2012) 'The Social Media Bible: Tactics, Tools and Strategies for Business Success', 3rd Edition. Hoboken: John Wiley & Sons, Inc.

What's this marketing research then, Dave?

Is Marketing Research Necessary?

James Birks who founded and managed Kiln construction for forty years has been said to have asked his grandson Dave (who wrote a marketing research book) what marketing research was all about!

This alludes to the fact the James Birks has indeed never carried out any marketing research and yet managed to manufacture products for porcelain and ceramics internationally for names such as Wedgwood, Royal Doulton & Spode.

Could this really be possible?  

Successful organisations see market research as an ongoing function of marketing research, they continuously speak to their customers, suppliers and colleagues in the business as well as those who know the macro environment surrounding the business. James Birks was renowned in doing just that.

Marketing research is there to fill in some gaps, solidify hunches and give a starting point to a problem or understanding the perceived  image of a product, they are what is happening today.

What marketing research does not do is guarantee success of a decision and does not allow for innovation much. It is hard for people to realise they would buy something if they have never seen it or even identified the need for it. 
Dyson vacuum is an example of this whereby all research showed that people are uncomfortable buying a bag-less, see-through vacuum as they didn't want people to see all the dirt collected from their homes and retailers indicated they couldn't demonstrate such a product on the shop floor. Not only was Dyson a hit but it was sold at double the price of available vacuums with no problem!

Ethics, asking the right questions and evaluating return on investment are all factors to consider and will be discussed in future rants.

Marketing research - handle with care!

If cyberspace was a planet... Social Media, LIKE IT

Embracing Social Media

Social Media is great is it not? Why are so many companies drawing up policies as long as the River Thames prohibiting their employees from engaging on their behalf?

Organisations today, or at least those worth talking about have become so concerned with their publicity on social media that they tend to scare their employees off from using it whilst bringing up the organisation's name. Those organisations are obviously oblivious to the fact that they are indeed very much on social media, but prohibiting stakeholders from protecting the organisation's interests.

Lets consider cyberspace a planet, where messages in envelopes need to be sent to earth by shooting them from some type of machine that hopes to break through the atmosphere of cyberspace and then earth after which the messages get pulled to earth by gravity.

Do we have a better chance trying to shoot a million envelopes from the same island on planet cyberspace (all while the planet is rotating) or  are we more likely to succeed trying a million envelopes from various locations on planet cyberspace? 

Employees of multinationals shoot messages out all the time whether inside the premises of the organisation, out in a bar (what do you do? I work at....) and we trust them to safeguard proprietary information and reflect a positive image of the organisation, so why are we falling behind from allowing them to do just that on planet cyberspace?

Sure, there has to be guidelines to ensure that consumers are not misled for examples employees should declare they work for a company whilst talking about it, but should these guidelines, policies and procedures be too long, too boring and too complicated? No.

We should stop shooting only from the marketing department and start shooting from the organisation as a whole.

We trust employees to behave on planet earth, we should trust them to do just that on planet cyberspace! 

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Big money makes big mistakes! Expatriation....

losing talent

It is estimated that only 10% of American multinationals bother training their staff prior to expatriation in comparison with 70% European and Japanese companies.

Some Japanese companies go as far as one year training prior to expatriation.

Expatriation has an enormous impact on employees and their family life, training to handle this change is essential to ensure employee productivity remains high. It is the job of the international human resources department to recruit and retain talented employees and expatriation causes stress large enough for employees that many end up resigning post repatriation.

Repatriation after five years of expatriation is likely to cause stress and lack of satisfaction among employees who have mastered by that point the 'way to do business' in their expat post and hence end up quitting the company within one year of returning to their home country.

Training and continuos assurance of employees by showing genuine empathy and understanding of stresses of expatriation ensures loyalty and loyalty ensures talented employees are retained.

Too many times organisations hire people with no people skills in key human resource  positions, people with no humility and understanding of an employee as a whole i.e. family situation etc into key human resources positions and then wonder what's going wrong!

Hire for humility, train for skill in human resources...

Simple? you would think...