Frankmann Automotive: Globally Promoting Diversity and Inclusion

Abstract

Frankmann Automotive (fictitious name) was a multinational corporation headquartered in Germany, with operations in both South Africa and Germany. The company had to find solutions for enhancing diversity, equal opportunities, and inclusion (DEI) to promote the attraction and retention of Science, Technology, Engineering, and Mathematics (STEM) talent. The context for this case study is thus talent retention, with a focus on DEI. June Böckmann, a diversity manager in the corporate DEI Unit, had been tasked with a global-level project to establish more inclusivity in the company’s employment practices. Thus, June held a meeting with both German and South African managers to identify the challenges and barriers experienced by women, people of color (PoC), and members of minority groups. During this meeting, a pivotal question arose: if global procedures and practices were to be found, to what extent should local considerations be accommodated? This question necessitated consideration of the differing career development needs of individuals in different contexts embedded within one multinational company. Labor practices depicted in the case are strongly related to Sustainable Development Goals (SDGs), and in particular to SDG 5 (gender equality), SDG 8 (decent work and economic growth), and SDG 10 (reduced inequalities). Piloted in a global classroom setting, this case is suited for use in either a mono-cultural or multi-cultural higher managerial educational environment, e.g., international human resource management.

Teaching Notes

1.1 Synopsis

In the global environment, organizations typically deal with employees hailing from different countries, and representing diverse groups. In this case study, several of these differences can be identified, as well as challenges linked to the differences between a developed economy (Germany) on the one hand and a developing economy (South Africa) on the other. This case study focuses on global diversity management (DM). The content suits itself to any higher managerial education program that focuses on building an understanding of DM within the convergence-divergence debate (Budhwar et al., 2016).

Frankmann Automotive is a fictional name provided as a suitable disguise (Erskine et al., 2001) to the contributing companies because the case study is based on actual diversity challenges experienced at global automotive suppliers headquartered in Germany as reported by managers.

The challenges reported in the case differed for each country and can be linked to country-specific considerations, including state support and legislative frameworks, and culture-specific considerations. At the same time, talent retention as a global consideration requires consideration of diversity at the individual level e.g., in career development.

Even though DM has been introduced in automotive companies in response to the growing importance of the SDGs, forces of inertia surface, leading to the contemporary challenges experienced. The aim of the focal meeting in the case is to analyze DM challenges within the context of a global operating environment, focusing on the parallels and differences between Germany and South Africa as a starting point.

Moreover, the company’s financial situation had recently become constrained due to pressure to find innovative solutions for future mobility and supply chain challenges. June Böckmann, a diversity manager in the German headquarters has been tasked by the head of DEI, Thomas Meyer, with analyzing the current global state of DEI and developing a framework for managing diversity within the company.

1.2 Intended Learning Outcomes

The case aims at facilitating reflections on the diversity encountered at many levels in conducting international business. This includes gender, nationality, ethnicity, culture, religion, and language, with special regard to gender equality and inclusion. Specifically, the learning objectives of the case are to:

• 1. Examine structural, societal, cultural, and interpersonal parallels and differences between different cultures that may facilitate or challenge the management of workplace diversity and inclusivity.

• 2. Evaluate DEI practices as they relate to the promotion of social sustainability considerations as reflected in the SDGs, in particular SDG 5 (gender equality), SDG 8 (decent work and economic growth), or SDG 10 (reduced inequalities).

• 3. Examine the unintended consequences of diversity and inclusivity interventions.

• 4. Formulate local and global solutions as part of a framework to promote organizational diversity and inclusivity within a multinational corporation.

• 5. Identify measures to determine the success of a diversity and inclusivity framework.

If the case study is applied in a global classroom setting (see Teaching Strategies) the following learning outcome is relevant:

• 6. Evaluate how working with others from different cultural backgrounds influences the development of intercultural skills and understanding.

1.3 Target Group

The case study is targeted at students at various levels of higher educational study in the fields of management and business education, for example, modules in International Human Management, Management of Sustainability, or Business Ethics. To promote an effective learning experience, basic knowledge of the following topics is recommended: human resource management (HRM) and issues of international business, e.g., convergence and divergence; organizational behavior and culture; equity, diversity; inclusivity in employment; biases; and relevant labor legislative frameworks.

1.4 Suggested readings

• Dobbin, F., & Kalev, A. (2022). Getting to diversity: What works and what doesn’t. Belknap Press.

• United Nations. (2022). The Sustainable Development Goal Report 2022. https://unstats.un.org/sdgs/report/2022/The-Sustainable-Development-Goals-Report-2022.pdf

• World Economic Forum. (2022). The Global Gender Gap Report 2022. https://www.weforum.org/publications/global-gender-gap-report-2022/

1.5 Assignment Questions

• 1. What are the structural, societal, cultural, and interpersonal parallels and differences between the German and South African cultures that may facilitate or challenge the management of workplace inclusivity at Frankmann Automotive? Identify and discuss. [Theory: Gender and diversity studies; SDGs]

• 2. Identify the overlap between June’s project and the SDGs: How does Frankmann Automotive already contribute to reaching the SDGs and where can improvements be made? [Theory: SDG, convergence-divergence in MNCs]

• 3. What alternative actions and solutions would you propose in developing a diversity and inclusivity framework for Frankmann? Consider criteria that could influence the quality of the solutions presented such as cost, acceptance by diverse employees, effectiveness, ethics. [Theory: Gender- and context-sensitive Talent Management and Career Management; Kaleidoscope Career Model; roles and responsibilities of managers]

• 4. What does it take to succeed? Identify the success factors that will ensure effective implementation of your proposed actions and solutions. Identify how these success factors will be measured. [Theory: Change Management; convergence-divergence in MNCs]

1.6 Teaching Plan

See Table 21.1.

Table 21.1 Teaching plan

1.7 Alternative Teaching Plan

See Table 21.2.

Table 21.2 Alternative Teaching Plan

Table 21.3 gives an overview of the challenges differentiated in terms of current issues and underlying, fundamental considerations. Educators may select the issues most suitable for the learning goals of their courses for deeper discussion.

Table 21.3 Case study issues (Authors’ own elaboration)

1.8 Teaching Strategies

1.8.1 General Considerations

The case study approach utilizes a potential future scenario in students’ careers in a hypothetical setting based on actual experiences. This makes it easy for students to adopt the protagonist’s role and gain insight into the practical challenges. For educators, several interlinking theoretical lenses are recommended (Fig. 21.1). The priorities given to these theories depend on the intended learning outcomes of a course.

Fig. 21.1

Theoretical framework for case study analysis (authors’ own creation)

1.8.2 Innovative Digital Teaching Approach: Global Classroom

This case study is suited for use in a global and virtual classroom setting. Utilizing the advantages of virtual technologies, this case was successfully applied for the first time during the pandemic (2022) for merging two student groups, one from South Africa and the other from Germany, with the purpose of developing or improving intercultural competencies. Wiek et al., (2013, p. 9) state that a global classroom is valuable “to prepare students for confronting sustainability challenges crossing cultural, national, and geographical boundaries.” Further, learning with cases may be applied in a flipped classroom manner, in which students meet outside of the class to work on specific objectives and outcomes. Heightened levels of decision-making and creative problem-solving are nurtured. Utilizing the virtual classroom provides students who have little to no experience of working with different cultures or traveling to different countries with exposure to people of different nationalities and cultures. This assists in developing the cultural understanding and competencies required to perform international human resource management. Eventually, this teaching format could foster the ability to work effectively in diverse teams. In addition, diverse technical skills can be acquired through the introduction of virtual whiteboards and video conferencing tools.

1.8.3 Suggested Teaching Settings for Lecturers from Different Regions

Although this educational context involves Germany and South Africa, the case as well as the methodology can be adapted for various regions, settings, and cultural groups.

The educational intervention is appropriate for a multi-cultural or mono-cultural setting, with diverse and homogenous groups, in an online or face-to-face classroom setting. If students are employed or in management positions, the case can be used as a reflective exercise, with students required to draw analogies with their own workplaces and propose strategies for DM in these contexts. Alternatively, students can interview managers tasked with employment equity, diversity, and inclusivity to determine best practices and/or current challenges, as examples.

1.9 Additional Considerations for Educators

The case consists of real-life challenges in multinational companies with all the complexity associated with managerial decision-making in different contexts. For students, this complexity may be overwhelming at first because they have to dive deep and realize that there are no immediate and clear solutions. Unintended consequences of potential measures may be overlooked at first, but through critical and facilitated reflection with their peers, the gap between theory and practice can be bridged.

1.10 Case Analysis

• 1) What are the structural, societal, cultural, and interpersonal parallels and differences between the German and South African cultures that may facilitate or challenge the management of workplace inclusivity at Frankmann Automotive?

Value-based approaches to business, including Corporate Social Responsibility (CSR), incorporating stakeholder expectations, value-based leadership, and the United Nations´ SDGs form the foundation of the case and in many instances may be introduced as part of the broader study programs of participating students (Fig. 21.1). Underlying these approaches is the understanding that business education has to critically reflect and overcome the antiquated understanding that “the business of business is business” (Friedman, 1970). Today´s business challenges are complex and employees—as part of the organizational society—have high expectations e.g., concerning the SDGs. Perceived fairness and equal opportunities, as well as recognition, flexible work settings and options for individual development are just examples of what has become expected as basic requirements. This is particularly relevant in technical domains such as the automotive industry. In this industry, historically of a more homogeneous nature (white and male dominated), winning STEM talent and creating a culture in which talent from diverse background feels valued and supported requires a joint approach based on leadership and the deployment of effective HRM practices.

As a global enterprise, one particularly important consideration is the influence of cultural settings on workplace practice. For students to understand this influence, two distinct contexts are brought into focus:

Germany is a Western, developed, educated, democratic, and rich country in the global North with a GINI coefficient of 31,7 (World Bank, 2023) that currently faces demographic changes (low birth rate, and a declining, aging population) leading to low unemployment rates for all age groups. The country has begun to overcome the recent economic and humanitarian crisis as part of the European Union. In comparison to countries like the USA or South Africa, for Germany diversity is a more recent phenomenon linked to patterns of migration. Migration from non-European Union countries has gained more political attention and may help to overcome talent scarcity. The German culture is characterized by a high level of uncertainty avoidance leading to many rules and punctuality. German people are often characterized as reserved with high individualism and a focus on the nuclear family. Leadership is expected to take place at eye-level and people tend to have a long-term orientation, leading to established systems of employees’ compulsory social security institutions including old age pension.

With a high GINI coefficient of 63 (World Bank, 2023) South Africa is a developing country and member of the BRICS group, with high unemployment rates, low average levels of education, and high poverty rates (Stats SA, 2021). It is a nation of high ethnic, cultural, and religious diversity (Webber et al., 2018). Linked to all these forms of diversity are laws, norms, traditions, and customs which may or may not be incorporated into the national legislative framework and accommodated in organizational policy and practice. For example, the recognition of who constitutes “immediate family” in the event of a death, with the understanding that in some cultures a man assumes responsibility for the family of a deceased sibling. Generally, a short-term focus characterizes South African culture. Interpersonal interactions tend to be spontaneous, there is a focus on the collective (especially with the notion of Ubuntu²) and the extended family, and there is a deep respect for elders.

The case study discussion may provoke diverse opinions and ideas due to the historical journey of both countries (especially in a global classroom setting). In building their understanding students may be encouraged to do research and discuss in small groups outside the classroom.

Regarding closing the gender gap, both countries are rated among the top twenty countries in the world (World Economic Forum, 2021) yet face different challenges in relation to the representation of women, more especially in the STEM (Science, Technology, Engineering, and Math) fields (“plugging the leaky pipeline” phenomenon). These can be explored by the students and should highlight the “double bind” experienced by women in South Africa, and the shortage of STEM talent in Germany, along with other fundamental issues highlighted in Table 21.3.

• 2) Identify the overlap between June’s project and the SDGs: How does Frankmann Automotive already contribute to reaching the SDGs and where can improvements be made?

One of the social goals of Frankmann was to establish equality in terms of employment, and in this way provide employees worldwide with corresponding chances of a satisfying career, regardless of differences such as gender, age, and ethnic background. Focusing on the field of diversity and inclusion, labor practices depicted in the case are strongly related to SDG 5 (gender equality), SDG 8 (decent work and economic growth), and SDG 10 (reduced inequalities) (Fig. 21.1). The case study illustrates historical disparities and remnants of disparities anchored and nurtured in the perpetual reinforcement of values, assumptions, and beliefs related to national and organizational culture, organizational systems, policy and practices, and individual stereotyping. The SDGs provide a mandate for change on multiple levels, and for developing a holistic organizational framework focusing on equality, opportunity, and empowerment, while acknowledging the uniqueness of individuals, with the end goal of creating a normalized organizational community in which well-being and self-actualization are promoted for all. Therefore, this case is valuable for educators who aim to sensitize students to the importance of and challenges linked to social sustainability.

The case study indicates that the MNC has already implemented several global and local strategies to implement the SDG. However, the forces of inertia slow down the transformation and the barriers are hard to comprehend. Educators may use the metaphor of “front-stage and backstage” from neo-institutionalism (Fig. 21.1) to facilitate understanding of these challenges in the German and South African contexts.

• 3) What alternative actions and solutions would you propose in developing a diversity and inclusivity framework for Frankmann? Consider criteria that could influence the quality of the solutions presented such as cost, acceptance by diverse employees, effectiveness, and ethics.

As a transnational company, Frankmann is organized like a network its management strategy includes operations being highly decentralized, with the South African operation free to make employment and other HR-related decisions with very loose control from German corporate headquarters. However, there is an expectation of adhering to global best practices, including addressing SDGs, and as such DEI interventions suitable for this transnational environment are sought (Fig. 21.1).

The inclusion of gender issues underlines the complex and ongoing challenges that women face in terms of traditional stereotypes and role expectations (Böhmer & Schinnenburg, 2016). This is a further focus of the case (Fig. 21.1). The “glass slipper” metaphor illustrates how occupational identity is shaped (Ashcraft, 2013) with some roles being perceived as a natural fit for people with a certain background, ethnicity, and gender but as challenging for others. This provides evidence that the potential of female talent is still not equally considered in talent management practices that appear to be gender (and race/ethnicity) neutral on the surface.

Gender- and context-sensitive talent management has become highly relevant for organizations. Therefore, one aspect to be analyzed in the theoretical setting of the case is talent management, with special regard to the “leaky pipeline” of female talent (Böhmer & Schinnenburg, 2018). A further part of the theoretical framework is therefore Mainiero and Sullivan’s (2005) Kaleidoscope Career Model, which explains the different priorities of male and female professionals when taking career decisions over their lifetime. The model describes how women shape their career goals by using existing opportunities, much like the pattern of a kaleidoscope which shifts when it is rotated. This explains why women may mostly prioritize a balance of family and work in the middle of their career, while for the majority of men, being challenged at work remains an important priority over their career path, and career decisions are taken more individually. These insights may be combined with useful strategies in DM (Dobbin & Kalev, 2022) (Fig. 21.1). Career considerations may be further nuanced with cultural/ethnic stereotypes and hence the need to view them within a broader cultural context. This points to the interlinked nature of the theoretical model provided in Fig. 21.1 and the need to adopt an integrated approach to DM.

• 4) What does it take to succeed? Identify the success factors that will ensure effective implementation of your proposed actions and solutions. Identify how these success factors will be measured.

The convergence-divergence debate provides a theoretical background to discuss this question (Fig. 21.1). The case shows that organizations must take the socio-cultural business context into account in finding solutions to promote diversity and equity. National business systems, culture, and different institutional settings play a role in determining employees’ values, behaviors, and expectations, and this has an influence on country-specific HRM practices (e.g., Budhwar et al., 2016). Regarding the two national contexts presented in the case study, the differing legislative and policy frameworks related to parental leave may help educators to underline the importance of this aspect. To give students additional insights into the role of institutions as legitimate social structures, for example, the establishment of the transformation committee in the South African subsidiary, (neo)-institutionalist theory may serve as a useful framework.

Current leadership research incorporates a discussion of concepts that support the resilience and well-being of employees in volatile business environments. This theoretical lens (Fig. 21.1) may be helpful in courses that explore leadership, leadership concepts, and the role of leaders in contemporary organizations and is strongly associated with the SDG requirement to develop diverse talent.

Success factors that will demonstrate that the proposed actions and solutions have been effectively implemented may be enhanced talent retention among previously underrepresented groups in leadership positions; raising their quotas in traditional male-held positions, or enhanced return to work quotas during and after parental leave. On the one hand, these quantitative metrics indicate a trend within a single country. On the other hand, global comparisons might allow a better balance regarding localization and globalization of DEI measures.