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What do you think about group assignments? If you are a university student, chances are high that group assignments will accompany you throughout your academic career. The objectives are well known: e.g. developing stronger communication and time management skills, learning how to collaborate and share diverse perspectives while solving arising conflicts together as you go. However, we are not explicitly taught on how to do that. The approach is rather practical: learning by doing. In the following paragraphs I want to give you an overview about some challenges for teamwork in an international business context. Maybe it can provide you with some useful pointers as to how to navigate the group assignments you have during your studies. The goal is for you to become aware of certain dysfunctions that can arise while working in a team, so you can consciously take action to mitigate or avoid them, making you a better team player.
Multinational companies have access to a pool of experts from their global network. When there is a need to form a global team, to help the company to compete in a promising market, they can bring together team members with different cultural and functional backgrounds, experiences, and perspectives.
However, they need to be aware of several factors that can make teamwork less efficient.
Figure 1: The vicious dynamic (Neeley, 2015)
A different cultural background can mean different attitudes towards hierarchy and authority, different preferences for communication (direct vs. indirect), and conflicting norms in decision making (Brett et al., 2006). Additionally, when team members are geographically dispersed, it is more difficult to build connections and alignment, since there is less face-to-face interaction. Both can lead to miscommunication and misunderstanding, and subsequently negatively affect cooperation and trust within the team. Neeley (2015) calls this the vicious dynamic (see Figure 1). In his research he proposes a framework (see Figure 2) that helps to avert this dynamic by looking at the concept of social distance, which measures the degree of emotional connection between team members.
Figure 2: The social distance framework (Neeley, 2015)
Social distance can arise from structural factors such as location, the number of sites where team members are based and the number of employees who work at each site. If the team leader is located in the same place where the majority of the team members are or close to the company headquarters, the needs and contributions of the minority team members at other locations are often overlooked or deemed as less important, causing a perceived power imbalance. It is the responsibility of the leader to alleviate this power imbalance by actively involving every team member, encourage sensitivity, and build unity.
A definitive characteristic of global teams is that the team members have different levels of fluency in the chosen language of communication. Members who are more fluent dominate the discussions and exert more influence while the others, who are just as competent, find it difficult to contribute. This can lead to a whole lot of inefficiencies starting with demotivation, interpersonal conflicts, and not utilizing the full potential of the team. Neeley (2015) proposes 3 rules of engagement to counter this problem (see Figure 3). Fluent speakers need to dial down their dominance, while less fluent speakers should dial up their engagement. The role of the team leader is to balance the inclusion.
Figure 3: Rules of engagement (Neeley, 2015)
Communication technology can have a positive or negative effect on social distance. Which effect is rather desired depends on the purpose of the communication. Face-to-face meetings and video conferences enable the perception of body language and facial expressions, decreasing social distance. They are best to be used when the other party needs to be persuaded. Delayed communication, like E-Mails, are efficient when information needs to be shared. The lack of contextual cues in this context increases social distance.
Identity (age, gender, nationality, ethnicity, religion etc.) can determine the meaning of certain behaviors. It is crucial for all the team members to keep an open mind, learn from each other, and avoid assumptions on the meaning of behaviors. The way people give feedback may be different. Some people might be encouraged by direct criticism others may find it offensive and prefer an indirect way of feedback.
The author puts a lot of emphasis on the responsibility of the team leader to recognize and reconcile the different forces that can lead to dysfunctional teams. They have an integrative and exemplary role.
The teams you are working in during class usually have a flat hierarchy, without an assigned team leader. It is therefore helpful when all the team members are able to recognize budding problems to make their collaboration more efficient. Can you recognize yourself in the framework? Do you feel like your opinion is not taken seriously? Do you feel demotivated, because you cannot show your full potential in a group setting? Maybe you can use this framework to start a conversation. Furthermore, I would urge you to deliberately seek out diverse team members for your future group assignments, for the added challenge as well as for the added learning effect. What do you think?
Harvard Business Review
Global teams that work (Neeley, 2015) https://hbr.org/2015/10/global-teams-that-work
Managing multicultural Teams (Brett, Behfar and Kern, 2006) https://hbr.org/2006/11/managing-multicultural-teams
If you are reading this, then congratulations! As mentioned in the first blog post Start-Ups are all about not giving up on your idea! Showing courage, wanting to keep going, that’s where the amateurs drop out. If you haven’t read the first post, read it…
In December the shopping streets are always more crowded due to Christmas. This is good news for the retailers, but are Sinterklaas and Christmas really as good for our economy as we think? And what is the impact of the crisis of last years on the money spend by people in the December month and the Christmas tradition?
Of course, Christmas is good for a part of our economy, however there is more behind it than people think. Retailers sell twice as much in November and December as opposed to the rest of the year, which equals approximately 30% of their yearly revenues. Every time people spend money this is good for the economy and thus Christmas is a boost for the economy. However, Christmas takes place every year and therefore it does not lead to extra revenues. It would only lead to extra revenues when we buy more than the year before. However, as currently we are still in crisis it is not expected that the revenues will increase a lot. The supermarket revenues for this year are expected to rise with 0.8% as opposed to last year.
Next to that, also part of the revenues which is earned on popular present flows to foreign countries because these goods are imported. Also it is analyzed that the value of presents received is less than the amount the buyer paid for it. This is due to the fact that not every present that is given is liked by the receiver. Research also finds that there are more products stolen in December than in any of the other months. First, it is busier in the shops and therefore the staff pays less attention. Second, there is a lot of temporary staff who are not always well trained. Third, shops have more inventory in December. This also means that a lot of value gets lost during the December month, which is not good for our economy. Therefore a lot of value gets lost during Christmas. However, even though some value gets lost for the reasons mentioned above, Christmas is still good for retailers because without Christmas retailer would sell way less.
So, Christmas is good for retailer but how does the crisis effect this? It seems that the crisis has not that much effect on the Christmas expenses of people. During Christmas people allow themselves some luxury without having to concern about money issues. Even though we are in a crisis, a lot of people still go out for dinner for Christmas and this amount is actually increasing. Another trend is that people eat more luxurious food because the supermarkets nowadays offer a lot of pre-prepared luxurious meals, for which the customer does not have to be a good cook themselves. They eat luxurious at home with their whole family more often. This can be summarized as the fact that approachable luxury is emerging nowadays.
The current trend that is seen in the expenses on presents of the customers is that they do not buy less presents, however they spend less per present. This thus means that the total amount they spend on presents is less even though they still buy the same amount of presents approximately. This is also what is noticed by retailers: they do not have less customers, however they have less revenues per article sold. Another thing that is noticed is that the revenues of online shops are increasing during Christmas time. This is due to the fact that a lot of people do not go shopping, but order their presents at one of the many online shops which are emerging and might also be cheaper than buying at a physical store. Last year online shops had 8% more revenues than the year before.
Another Dutch aspect of Christmas is the ‘Christmas box’ (kerstpakket) which is provided by the company you work for. Even though companies are saving on a lot of things, the Christmas box is not one of these. One of the reasons being that it is a way of maintaining their company relations: they chose to express their appreciation to their employees in a Christmas box. The revenues on Christmas boxes are only a bit smaller than previous years. However, another shift is seen in this market. In the past the Christmas boxes consisted of extraordinary luxurious presents. Currently, it is observed that the Christmas boxes go back to what they traditionally were: a basket of luxurious food products. People already save a lot on their food expenses and therefore they appreciate to get more luxurious products for Christmas. Still there are also companies who buy non-food presents, however this market has decreased in size.
Concluding, all the arguments mentioned before show that the crisis does have an effect on Christmas expenses, however in a different way than we might have thought. The expenses are less but do not specifically change, people still buy luxurious products for Christmas. Therefore it can still be concluded that the December month is good for the economy even though expenses are less than in the past years.
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Holidays, who doesn’t like them? Preferably you would like to get at your destination as fast and as cheap as possible. For that specific desire budget airlines are the solution. Currently the demand for these Low Cost Carriers (LCC) is extremely high. So high, that for example Ryanair, the Irish budget airline, will become Europe’s biggest airline in a few years.
Back in the days, with the introduction of LCC’s, consumers needed to get used to a different logistical process. Before, consumers went to a big hub were every airline was stationed, but with the rise of LCC’s local and military airports were being used. These so called tertiary airports are mainly placed far from the consumers’ destination city. The benefit for LCC’s using these tertiary airports is that they have relatively low airport charges and fast turnaround times such that in turn LCC’s could offer lower airfares and transport more consumers. This principle was invented in 1993 by the American budget airliner Southwest. At every airport where Southwest airlines were stationed air travel increased and airfares decreased. Aviation insiders called this the “Southwest Effect”.
The Southwest Effect is not only beneficial for the airlines’ consumers but also comes with an economic development at the local airports were the LCC’s are stationed. At every airport were budget airlines start operating, new companies settle down and make use of the industries’ attractiveness. An example is the airport near Weeze in Germany just across the border of the Netherlands. Previously, the military terrain was not open for civil airlines. Since Ryanair opened a base at Weeze airport, the military terrain transformed to a totally customer orientated airport with Shops, Hotels, shuttle buses and restaurants. Another example is the airport in Richmond, Virginia. The airport is located a hundred kilometers from Washington and is being used by Southwest Airlines. As a result Richmond became interesting for tourists and businesses travelling to Washington via Richmond. This lead to an expansion of companies offering services in and around Richmond airport. Furthermore the majority of the local airports were previously under public control because the problem is that airports have significant levels of fixed costs, and in these airports the revenues (both from aeronautical charges, retail and other sources) are not enough to cover these costs. Studies demonstrate however that the unit costs of these (smaller) airports reduce significantly as traffic reaches the threshold of 1.5 million work load units per year, and this effect continues to an upper limit of 3 millions per year. As a result, many of them have been attempting to attract LCC’s, aiming to increase revenues. With the attraction of the LCC’s local airports started to became profitable such that private investors were attracted. As a result many local airports are being privatized and started competing with the dominant airports.
We have seen that the shake up in the aviation industry caused by the introduction of the LCC’s is not only beneficial for airline consumers but also for the amount of the investment on and around the local airports. So, next time you are flying with an LCC to your holiday destination sit back, relax and think of your good investment the local economy.
Further academic reading:
Campisi, D., Costa, R., & Manscuso, P. The Effects of Low Cost Airlines Growth in Italy. Modern Economy, 2010, 1, 59-67. Department of Business Engineering, University of Rome Tor Vergata, Via del Politecnico, Rome, Italy
Olipra, L., The impact of low-cost carriers on tourism development in less famous destinations
Macário, R., Viegas, J. M., & Reis, V., Impact of low cost operation in the development of airports and local economies, CESUR, Instituto Superior Técnico, Universidade Técnica de Lisboa, Portugal
Barrett, S. D., Airport competition in the deregulated European aviation market., Journal of Air Transport Management, 2000., Elsevier
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What started as a Silicon Valley trend has now concurred much of the developed world. Technology startup companies are popping out of the ground like mushrooms. What is different about a ‘new’ technology startup from normal entrepreneurial ventures is that these companies can grow big in a matter of months. By big we are talking about multi-billion dollar big. A few examples: Facebook, valued at 31 billion US and now a public company, founded in 2008. Nest, which was taken over by Google for 3.2 billion US$ was founded in 2010. Deepmind, which was taken over by Google for 400 million US$ was founded in 2011. Mailbox, taken over by Dropbox for 180 million was founded in 2012
The question remains how a technology startup can grow from 0 to a multi-billion dollar company in a few months.
It all starts with the industry these technology startup companies find themselves in. The technology industry is a highly volatile and dynamic industry in which the right piece of software can quickly and fundamentally shift the way companies do business. That is why big companies like Apple, Google and Yahoo are always on the lookout for new killer technology that helps them gain an advantage over competitors.
Secondly, there are the low barriers of entry of the software industry. Everybody can learn how to code and the only thing you need to code is a computer. This mindset was embodied by the whole DIY garage culture that started in Silicon Valley suburbs of Palo Alto and surroundings. Apple started in a garage, Facebook started in dormitory, so “why can’t I start this way?”
Lastly, there is the global reach of the Internet. Software can go viral in a matter of weeks. User bases grow exponentially and the data that comes with these users is almost as valuable as the software itself. That is why starting a technology startup company is a hot career choice at the moment.
Does this mean that everybody should just become a tech entrepreneur and expect to have earned millions by the end of 2016?
The answer to this question is a quick and easy no. Not all of the technology startup companies become success stories. Just like normal ventures, some managerial skill is definitely needed. A striking example of how a technology startup had an excellent product and still ended making a 2 million dollar loss is Everpix.
Everpix was a Silicon Valley based digital photo archiving company. It ran a beautiful service and had a loyal user base with a customer return rate of 60% a month. They received an initial seed of $500.000, but eventually went out of business because they could not reach a sustainable user base in time. They focused so much on their product design that little to no attention was spent in increasing the amount of users that subscribed to the service. In the end, when the product was finally finished, Everpix was broke. They struggled to attract new capital as Venture Capitalists did not want to fund a Series A round because of its low user base. The hard lesson Everpix learned: Money does not grow on trees and users do not fall out of the sky, even if the product is spectacular. The total price of this lesson: $2.294.818,17
Looking at it more locally, the technology startup scene has also been developing within the Netherlands. Wired reported that Amsterdam was one of the most buzz worthy technology startup hubs in the world. Amazon recently opened an development center here. In an interview with NUtech, CTO Werner Vogels spoke of an amazing pool of technical talent here in the Netherlands. We also have our own incubators/accelerators like Rockstart and Startupbootcamp. Handing out €15.000 for the first 3 months per team, providing free office space and having access to Dutch mentors means that Dutch technology startup companies have the ability to develop their talent the same way as one might have in Silicon Valley. Also noteworthy, is that Amsterdam has launched a campaign to become Europe’s number one technology startup destination, although it has to compete with London and Berlin for that crown. Some notable Dutch technology startup companies are 22tracks, LayerGloss, 3DHubs and Shapeways.
In case this blog post has inspired you to start your own company, Tilburg University offers a minor and master program in entrepreneurship and has an entrepreneurs center called Starterslift, provides various services in helping you reach your dream.. It even helps you with funding. Who knows, maybe in 2 years time you will be the next Mark Zuckerberg!