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Net Manager Crisis Discussion

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The Net Manager crisis in Bangalore is a good example of how geographical distance and cultural
differences can affect a firm’s global research and development strategy, reduce its efficiency and
productivity. It could hurt its image and reputation as a high quality competent company.
Siemens’ management made some mistakes in their R&D strategy. Completing a Hofstede
research would have shown the distance gap and differences between the two cultures. This
powerful framework for cross-cultural communications, shows the effects of a society’s culture
on the values of its members, and how these values relate to the behaviour and life style. Engineers
at Bangalore were not ready for complex projects. We can observe the issues of
miscommunications, coordination and cultural difference that surfaced during the ADMOSS
project development which was released 1 year late to the customer and was a major cause of
embarrassment. Siemens management should have contemplated on this scenario and reassessed
its ICN global R&D strategy. There were many issues including Indian’ understanding of fault
testing, and troubleshooting. It also took three to four months to get Indians up to speed and at
least one year to get full productivity, and two years to reach Siemens technology level. Obviously
there is a big gap which was not addressed by management. The cost savings received from
cheaper and high skilled labor in India was offset by the additional coordination costs, high
employee turnover, and late project delivery to major customers, refer to Exhibit 10. It comes as
no surprize that Net Manager project ended up with over 700 faults hidden at various points along
some 600,000 line of computer programming codes. Management’s response should have come
earlier in the process. So what options management have now to react to the Net-Manager Crisis?
I don’t think at this stage they can withdraw from India with all that infrastructure in place and
take it somewhere else. This should have been thought about and completed prior to the start of
the project. Here are some options:

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The Net Manager crisis in Bangalore is a good example of how geographical distance and cultural differences can affect a firm’s global research and development strategy, reduce its efficiency and productivity. It could hurt its image and reputation as a high quality competent company. Siemens’ management made some mistakes in their R&D strategy. Completing a Hofstede research would have shown the distance gap and differences between the two cultures. This powerful framework for cross-cultural communications, shows the effects of a society’s culture on the values of its members, and how t ...
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