This post will consider the business communication errors made by Siemens and BenQ that surrounded the closure of the former’s mobile phone operations following its acquisition by the latter. The referenced Siemens-BenQ press releases are available here.
Critical analysis of the press releases and the messages that Siemens were trying to present to its stakeholders
Prevention of organisational crises and issues involves seeking to reduce known risks to the organisation, such as financial loss or reputational damage through pre-emptive actions and messaging (Coombs, 2007:3-4). The first press release (Siemens press release, 2005) is written in anticipation of the BenQ acquisition of Siemens’ mobile phone arm of their electronics manufacturing business.
Siemens utilises the press release to reduce fears related to the BenQ takeover by highlighting the significant competencies that the company has within the electronics industry, stressing that “BenQ intends to expand mobile devices into a core business in the future”, that “The acquisition will strengthen BenQ’s GSM mobile phones business” and that “the Taiwan-based company is also a leading vendor of consumer electronic products, such as LCD screens, notebook computers, cameras and scanners”.
The press release is utilised to reaffirm the Siemens employees that their jobs are safe, stating: “continuation of the company location in Kamp-Lintfort was an important factor in deciding on a buyer” and that they have “created good prospects for the future for our people” (Siemens press release, 2005).
This messaging will have also been utilised to reduce fears in other stakeholder groups, such as the government and wider community. The joint press release also looks to reduce the financial concerns that shareholders may have in the company by announcing that Siemens would be “[acquiring] new BenQ shares worth EUR 50 million” and “building upon BenQ as a preferred partner for end-to-end mobile communication solutions” (Siemens press release, 2005). This message could also be perceived as an effort to reaffirm their confidence that the company they have selected for the partnership is trustworthy and does not present a financial risk to the company.
Press releases 2006b, 2006c, 2006d and 2007 also represent a clear effort from Siemens to willingly disclose information that is honest, accurate (Coombs, 2015:134), effective and timely, and to be proactive in communicating to its internal and external stakeholders, reflective of the policies of the Health Information and Quality Authority (no date).
This strategy can be perceived as an effort of Siemens to highlight their commitment to ensuring the livelihoods of their stakeholders and reduce the reputational damage that they may have encountered as a result of the failure of BenQ’s takeover, an issue likely exacerbated by BenQ having the rights to operate under the Siemens brand.
Siemens’ determination to highlight that they took care to “find a viable and long-term solution for the mobile phone business” (Siemens Press Release 2005) whilst retaining operations in Germany was an important factor in deciding in favour of BenQ highlights their desire to retain positive relationships with stakeholders in their domestic market. This is an example of a company seeking to ensure their message is directed to the individuals, groups or organisations that are most critical to ongoing success (SPARC, 2006).
Siemens has presenting an image of a company that is serious about the industry and core market that they operate in, highlighting to their employees, their consumer and the government that they are committed to their role in society and to protecting the workforce.
Siemens’ press releases seek to perpetuate a brand image that presents them as a company that is intent on working in unison with the society that they operate within. Their commitment to helping the redundant workers through establishing “all the technical, personnel and organizational requisites for helping these employees as quickly and unbureaucratically as possible” (Siemens press release, 2006b) exemplifies the third tier of the four-part model of corporate social responsibility in action by going beyond their legal obligations and undertaking activities that match societal expectation. (Carroll, 1979; cited in Crane and Matten, 2010:53-55).
This commitment to helping their stakeholders can be deemed as relationship marketing, they are seeking to consolidate the strength of their brand by minimising the brand-damage of the mobile arm of their company going into administration by focusing on the relationship-centric nature of modern marketing (Buttle 1996:2) and acknowledging that any stakeholder is a potential influence market and the weakening of said relationships can have a significant impact on brand performance (Payne 1993).
The sixth Siemens press release (2007) presents the company’s efforts to retain a positive image in the eyes of the consumer-base by ensuring that they will continue to provide services to those costumers that have bought products from the now-defunct Siemens and BenQ-Siemens brands of mobile phones.
Their “long-term” commitment to delivering support services to their customers is an example of a company seeking to utilise empathetic consumer-orientated public relations as a means of creating positive attitudes towards the company with the ambition of creating a favourable environment that can facilitate future sales (Tench and Yeomans, 2006:416).
Whilst a common reputation management objective is to reduce the amount of media coverage that the company receives, Siemens’ approach to reputation management has sort to undertake the more nuanced approach to crisis management of reducing the amount of negative coverage that they receive (Coombs, 2015:137). Siemens’ willingness to set up a €35 million aid fund for BenQ Mobile employees immediately after BenQ Mobile Germany filed for bankruptcy and hiring two job placement companies to find new employment opportunities (Siemens press release, 2006c) exemplifies their efforts to reposition the crisis from a situation that could cause significant damage to one in which they are looking to deliver a positive message to stakeholders, a message that they are supporting the staff that lost their jobs due to BenQ’s operational failures.
With profits of €3.106 billion and 475,000 employees worldwide (Siemens press release, 2006d), Siemens’ is one of the world’s largest electrical manufacturers; the limitations of the reputational damage that resulted from their fast response to the crisis that BenQ going into administration caused was arguably facilitated by their positive reputation and credibility, meaning that their message has increased believability in the eyes of the stakeholders (Coombs, 2015:154).
The events of BenQ-Siemens’ operational failure represents a PR disaster for the companies as it represents a reality change for stakeholder groups, including the customer-base and the employees. By committing to reassigning the redundant workers and committing to ensuring the warranties of the products bought by customers, Siemens’ press releases reacted to the target audience’s order of priority in order to retain confidence within the minds of these key stakeholder groups (Lewis, 2001:31-32).
Analysis of the importance of cultural context and knowledge of language to understand the correct context of messages
Humans’ communication is shaped by the science of cognitive anthropology, the manner in which human thought and human society are related (Sharifian 2014:386) and cultural understanding of the world derives from the diverse knowledge, shared realities and clustered norms that constitute the learned system of meanings within a certain society (D’Andrade, 1984). The understanding of this diverse phenomena is critical to international business communication, however, intercultural communication can often be a difficult process with mismatching expectations and understandings often representing a barrier between different cultural groups.
These differences between groups will vary in level and can include value differences and differences that derive from the application of your worldwide viewpoint to any given context. Influencers can include cultural norms, such as a group’s attitude to the displaying of emotion or even ignorance of another culture’s norms and customs (Ting-Toomey and Chung, 2012:33). These value orientations derive from the human experience and are shaped by the response to the common human problems or existential questions that all people must face. These existential questions include finding answers to what people consider valuable in their everyday lives, how their relationship with nature is managed, and what the time focus of human life is (Ting-Toomey and Chung, 2012:52).
The necessity for communication to transcend cultural barriers is identified by Ting-Toomey (1999), who highlights that the convergence towards life within an increasingly globalised society has significantly impacted upon the regularity with which an individual is likely to come into contact with people of significantly diverse cultural and ethnic backgrounds to their own.
This diversity can often lead to cultural and interpersonal misunderstandings between groups and individuals, with the potential for friction and conflict to arise from these differences. The necessity to communicate with people of a different cultural background can often be fraught with difficulties as varying behavioural, cognitive and emotional constraints can often form barriers to communication. A failure to understand and appreciate cultural differences can have significant repercussions on the ability to reach mutually acceptable outcomes on issues of shared concerns (Cohen, 1991).
Language plays a significant role in the integration of the mechanisms put in place by MNCs as they seek to internationalise their business operations and a failure to adopt a common-language can contribute to a failure to successfully implement integration-intensive operations. This is the result of the necessity to ensure the proper transfer of knowledge-based activities between different departments of complex business structures through the co-operation of the HQ and new subsidiary (Grant, 1996). The language barrier between BenQ, most of whose employees could not speak German, and Siemens played a significant role in their failure to integrate activities (Cheng and Seeger, 2012); resulting in significant cross-cultural pragmatic failures due to the receiver misinterpreting the codified message delivered by the sender (Podhovnik, 2013).
Structure and meaning is determined by the factors that the individual takes in – understanding the context of a message is critical to understanding the message in its entirety, as portions of the intended meanings are delivered through non-verbal factors that surround the written or spoken word (Hall, 1976:86-88). Whilst the two organisations were able to communicate through common languages, barriers still resulted from miscommunications resulting from explicit and implicit cultural messages (Cheng and Seeger, 2012). This is the result of Confucian languages being particularly high-context, with the physical context, such as cues playing a role in the implicit messages, whilst German is a very low-context language with a focus on elaborate spoken communication (Hall, 1976; cited in Ferraro, 2002:58).
The failure to understand cultural differences and react to a globalised world is a significant factor throughout the Siemens case study. Hofstede’s extensive work, devised through a survey of over 116,000 IMB employees across 40 countries, highlights the five core dimensions that distinguish national cultural differences Concerning the extent to which individuals are expected to look after themselves, the extent to which the least powerful members of society accept the power divide, the willingness of a society to avoid uncertainty, the division of roles between sexes and whether a society is focused towards the short or long-term (Edwards and Rees, 2011:35; Torrington et al 2008:79).
Whilst Germany has a low power distance and indulgence, it holds high individualism, masculinity, uncertainty avoidance and long-term orientation (Hofstede, no date), Taiwanese Confucian culture displays lower individualism and masculinity and a higher power distance, uncertainty avoidance, long-term orientation and indulgence (Hofstede, no date). It is apparent that whilst both companies committed to BenQ-Siemens being a long-term project, the aforementioned context of Taiwanese culture being predisposed to uncertainty avoidance motivated BenQ’s decision to cut costs and ultimately end operations (Cheng and Seeger, 2012:121).
BenQ’s failure to assess how the cultural differences of the two companies and their national context lead to a difficulty in transition planning manifested through a disparity between the relationship between the new Taiwanese owners and its German subsidiary, leading to difficulties surrounding the integration and implementation of BenQ’s and Siemens’ activities. The failure to introduce a divergent approach that recognised the significant organisational differences when integrating their culture with that of the new host nation (Brooks, 2009:301) played a significant role in the operational failure that resulted in Siemens’ mobile phone operations losing €500m and BenQ’s ultimate decision to file for insolvency (Cheng and Seeger, 2012).
Evaluation of how the interpretation of meaning extends beyond the written or spoken word
The Sapir-Whorf hypothesis conceptualises that how an individual thinks and the meanings that they reach are determined by the language utilised by the individual and is the foundation for modern theoretical concepts concerning how language specifics influence the conceptualisation of ideas and can influence individuals’ understandings of reality (Sharifan, 2015:26-27).
This concept highlights a significant problem that is presented to multinational corporations that undertake international mergers and acquisitions, as in the BenQ-Siemens case study, as translation from one language to another is determined by the context of how the speakers of the different languages perceive the world around them. The influence of these variables produced by contextual differences mean that complete translations of meaning projected through language may never be fully attainable (Sharifan, 2015:28).
Another important element to consider, particularly with regards to cross-cultural understanding, is the realm of mutual understanding. The concept highlights that the degree of understanding between groups is finite and can be a barrier to cross-party agreement; a particularly important consideration in scenarios where power distances are evident between senders and receivers. A failure to understand the realms of mutual understanding can lead to a situation in which conflict arises through misinterpretation of the messages provided by senders (Mcquail and Windahl, 1993:35-36).
Semiotics plays an important role in the analysis of interpreting meaning as no language alone is fully capable of delivering a neutral perspective of how events unfold as language allows for the use of figurative messaging that transcends the literal meanings that are portrayed within a message (Chandler, 2007:123-124).
For instance, whilst the idiomatic sentence “the early bird catches the worm” would make sense to a native English speaker, the figurative meaning might be lost on an individual that is a second-language English speaker. Semiotics focuses on how producers create signs and how the audiences understand said signs (Sherson, 2000); As Cheng and Seeger (2012:123) identify, Taiwanese people sometimes appear to express themselves in a “roundabout way” because they want to reduce the chance of an open and direct disagreement, a style of communication that is unfamiliar in German society. This is exemplified by the BenQ CEO refusing to confirm whether redundancies would be made. This incident also reflects different cultural attitudes to morality.
Triandis (2001:916-917) makes the observation that whilst people from individualist cultures have a propensity towards authenticity and truth-telling, collectivist cultures are more likely to lie in order to “save face”, with many cultures believing that there is a “correct way” to lie in accordance with traditional customs.
Social semiotic theory dictates that the intended meanings transcribed into a message are not frozen into a text and understood through a universal code of understanding but are susceptible to becoming interpreted in a manner that was not match the authors intentions (Hodge & Kress, 1988:12; cited in Bezemer and Jewitt, 2009:2). This is highlighted in the case study by BenQ inability to deliver messaging to the Siemens employees with sufficient clarity, which resulted in the evolution of a counterproductive rumour-mill and an inability for the company to successfully implement their top-down changes (Cheng and Seeger, 2012:123).
Paralinguistic cues can play a significant role in the meaning that is imparted through a message, with elements of communication including posture, speech rate, tone of voice and facial expressions all having the potential to signal a difference in intent from the messenger (Gumperz and Hymes, 1972:179). These cues are displayed through the open verbal aggression and confrontational communication styles that are more tolerated within German society than in other cultures (Cheng and Seeger, 2012:123).
The concept of proxemics is another aspect of communication that extends meaning to that of something beyond simply the written or spoken word. This understanding of interactional behaviour between people in communication relates to the manner in which people exhibit behaviours, such as adapting their physical proximity to an individual, in accordance with their social standing or the expected social norms surrounding any given situation. Elements of proxemics include mirroring behaviours or performing reciprocal acts in social conventions, such as participation in a dance (Gumperz and Hymes, 1972:388:389).
This is exemplified by the relative cultural attitudes displayed by Germanic and Egyptian societies. Whilst the formality of the handshake is a highly important social structure that facilitates a clear physical boundary between the two parties, physical interaction is a more common communication device within Egyptian culture (Brookes, 2009:290).
A review of the effectiveness of different languages on policies employed by multinational companies
The narrative of any given discourse can be heavily influenced by the individual’s understanding of the world around them, which is influenced through meanings developed through everyday life (Fairclough, 2006:19) and a lack of foreign language proficiency among the people involved in the transfer of capabilities during international mergers can severely impact upon the quality of cross-cultural communication and can result in increased operational costs (Grant, 1996).
The BenQ acquisition of Siemens is an example of a corporation of one triadic economic bloc (East Asia) investing into a company founded in another (Europe) (Fairclough, 2006:15) and its failure to implement adequate internal communication policies that could reduce the anxieties felt by the German employees. The ineffective utilisation of different languages by BenQ when implementing organisational policies for Siemens’ mobile operations ultimately lead to an increased employee stress, absenteeism, and turnover among the employees and decreases their job satisfaction, commitment, and intentions to remain (Cheng and Seeger, 2012:121-122).
The failure to implement effective internal communication policies can often culminate in a failure to respond to employee needs and can heavily impact upon the ability to meet organisational goals and objectives (Joseph, 1996); as is demonstrated by this case study.
Variations of understanding of meaning that result from differences in language, cultural traditions management styles and backgrounds are leading causes for miscommunication across MNCs (Hall, 1976). In the case of the BenQ acquisition of Siemens, this manifested itself through a failure to communicate the policy changes in a consistent and concise manner (Cheng and Seeger, 2012).
BenQ also had to face issues that result from the distance between the Taiwan-based HQ and German subsidiary and the failure of their communication activities will have provided a barrier for their ability to integrate and co-ordinate activities for internal knowledge movement through the various communication channels amongst their newly acquired teams (Fletcher-Chen, 2015).
Inadequate mastery of the chosen corporate language, often English in this scenario, can result in employees not having access to information distributed in the official language of the company, leading to inefficiencies in operational activities (Charles, 2006:273).
The employees of BenQ and Siemens often utilised English as the lingua franca for performing business activities (Cheng and Seeger, 2012).
Whilst utilisation of a corporate lingua franca as a shared language to bridge language differences for communication is a common tool for multinational corporations, the choice of language may have an impact on communication and ability to transfer knowledge (Fletcher-Chen, 2015).
As each language has distinctive codes and contexts that determine the interpretation of the meanings incorporated in the message (Hall, 1976), utilisation of a lingua franca approach to cross-cultural communication can still result in miscommunication between different factions of a multinational corporation.
MNCs, such as BenQ and Siemens, should also consider the increasing academic acknowledgement towards the “multilingual reality” of the modern European business context. The multilingual reality is the belief that internal communication processes in MNCs are typified by linguistic diversity; English, the common lingua franca, is not as widely spoken in many organisations as top management might anticipate and it is therefore important that MNCs identify the multilingual nature of the workplace in order to ensure that inefficient procedural processes are avoided when developing internal corporate processes.
Failure to do so can lead to issues regarding cohesion and integration of activities and lead to the ultimate fragmentation within the organisation (Fredriksson et al, 2006).
This blog post is an exert from an essay on the topic of Contemporary Business Communications in a Globalised World.
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