With globalization, companies have been forced to expand across borders. As a result, they have to check the validity of their management theories and tools when applied to various cultural contexts. Laurent Rannaz, president of Caterpillar France, shares with us his DBA findings on the subject of deploying lean tools. The study was carried out thanks to data collected from 80 Caterpillar factories in 17 countries from 2006 to 2010.
What were your research goals and how was the study carried out?
In the current global context, my goal was to analyze the deployment of lean production tools in each country in order to understand the impact of local culture on these processes. The goal of the study was not to help companies decide in which countries they should set up shop, but rather to help them understand which management principles could help mitigate cultural differences. The study analyzed Caterpillar Production System (CPS) scores for each factory in relation to cultural factors. I used Hofstede’s six national cultural dimensions (Power Distance (PDI), Individualism (IDV), Masculinity (MAS), Uncertainty Avoidance (UAI), Long Term Orientation (LTO) and Indulgence Versus Restraint (IVR)).
The study results indicated a clear correlation between Hofstede's dimensions and the evolution of CPS scores. The results demonstrate that countries with high PDI and LTO as well as those with low IDV and IVR can expect better adoption of lean management tools. No influence was noted in terms of MAS and UAI. In addition, the study highlights a positive correlation between industrialization levels and lean-tool adoption.
Can you share with us some concrete examples?
For example, France is average in terms of the four indexes (PDI, LTO, IDV and IVR). In Grenoble, Caterpillar France’s headquarters, we implemented new production systems with a little bit of difficulty, but we believed in the change and all ended well. In the USA, and other anglo-saxon countries, an individualistic culture orientation can make it more difficult to implement production systems. In contrast, Japan and China are able to strongly mobilize everyone to implement shared objectives, which encourages the implementation of production systems.
In Russia, China and Mexico, PDI is highest. So this study helps evaluate the various difficulties you might encounter in relation to a country’s cultural characteristics. You can evaluate each situation tool by tool and country by country to predict reactions and challenges that might arise when implementing a production system.
How did this study contribute to Caterpillar’s development?
The results of this study supported pathways to improve efficiency within the company. Pilot study findings were presented at strategy meetings and shared with the Senior Vice President in charge of CPS. An executive summary of the findings was shared with company stakeholders, including managing directors worldwide. A seminar was organized to exchange ideas with corporate lean team in charge of production system scores deployment. The study provided concrete evidence to support the implementation of potential changes in manuals for production system scores.
Read the thesis summary