With the Hayek family controlling nearly 40 percent of The Swatch Group, how do you think the family influence impacts the type of corporate
Week four
INITIAL POSTS
Your initial posts will be due by Sunday of each week of the module. All original threads should be at least 250 words. This parameter helps to promote writing that is thorough, yet concise enough to permit other students to read all the postings. The thoughts and opinions expressed in your thread need to be substantiated by research and literature (from the textbook or outside sources). All references should be in correct APA style. While this is a formal discussion environment, you are allowed to use the first person perspective in all your posts since you will be expressing your personal opinions. All original threads should: Bring clarity to the issues being discussed. Raise new and novel (yet relevant) points. Relate issues to personal experience. Rationally defend your stated position.
The Swatch Group and Cultural Uniqueness
This activity is important because as a manager, you must be able to understand the effect of cultural differences within and across countries on your business. Different countries and societies demand cross-cultural literacy in managers.
The goal of this exercise is to demonstrate your understanding of cultural differences and how they influence business decisions. To be successful, many companies need to adapt their products and services to the local culture.
Read the case and answer the questions that follow.
The Swatch Group (swatchgroup.com) with its headquarters in Biel, Switzerland (Europe), is a manufacturer of watches and jewelry. The company was founded in 1983 by Lebanese-born Nicolas Hayek from the merging of Allgemeine Gesellschaft der Schweizerischen Uhrenindustrie and Société Suisse pour l’Industrie Horlogère. It is now the world’s biggest watchmaker.
Nicolas’s daughter, Nayla Hayek, has been chair of the board of directors of the Swatch Group since her father’s death in 2010, and she is also CEO of the luxury jeweler Harry Winston Inc., which was acquired by the Swatch Group in 2013. Georges Nicolas “Nick” Hayek Jr. has been the CEO and president of the Swatch Group since 2003. Today, the Hayek family controls nearly 40 percent of the company.
Swatch and its 37 global subsidiaries employ about 37,000 people, and the company’s revenue is about 9 billion Swiss francs (CHF), or about $9 billion in U.S. dollars. The company’s headquarters in Biel sits on the language border between French- and German-speaking parts of Switzerland and is, by design, bilingual and culturally diverse. In fact, everything that Swatch engages in is based on diversity and culture. This cultural diversity is embedded in its overall brand and global strategizing.
For example, many of the Swatch brands have become cultural icons among a strong core following of customers in the global marketplace. Some even talk about the “Swatch Revolution” that began when Nicolas Hayek founded the company. It was the combination of legendary Swiss watch making (with the Swiss being famous for watch brands such as Patek Philippe, Rolex, Jaeger-LeCoultre) and the unexpected appearance of an affordable plastic watch that turned the watch world upside down.
Suddenly, a watch was more than a way to measure time. It was a new individualized culture, a new language, and a way to speak from the heart without words. By definition, “swatch” means a sample of material or color, oftentimes referring to a small piece of fabric. It is remarkable how Swatch has been able to develop culturally unique watches while also building the fabric for a globally integrated world by its watch making.
The Swatch Group’s brands go far beyond the iconic Swatch watches, though. They also include top Swiss brands like Blancpain, Breguet, and Omega along with unique and classic products such as Balmain, Calvin Klein watches and jewelry, Certina, Flik Flak, Glashütte, Hamilton, Harry Winston, Jaquet Droz, Léon Hatot, Longines, Mido, Original, Rado, Tissot, Tourbillon, and Union Glashütte. These brands form the “art” of Swatch—a focus that is almost always emphasized upfront in the company’s annual report and something the Swatch Group nurtures in various ways, such as via its Instagram account.
On Swatch’s Instagram (instagram.com/swatch), the storyline is clear. Swatch wants you to create your own unique way of accessorizing by the use of a Swatch watch. A person can showcase his or her individualized Swatch use by tagging #MySwatch. The new line of “Skin” watches also helps users “dance with the unknown,” break down barriers, and make #YourMove with Skin. The product is minimalist in style but unique, stylish, yet culturally diverse—much like Swatch has created its cultural uniqueness for decades in the global marketplace. Swatch’s own description of its brand captures this cultural uniqueness:
“Everyone knows a Swatch when they see one. There’s clearly something that makes Swatch different from every other watch brand. What is it? The look, the colors, the plastic? The design, perhaps, or the fact that it’s Swiss made and versatile enough to be worn with almost anything. There are Swatch watches for people of all ages, and a Swatch for every occasion. But there’s more to Swatch than market coverage. Swatch is an attitude, an approach to life, a way of seeing. The sight of a Swatch excites emotion. Wearing one is a way to communicate, to speak without speaking. Heart to heart.”
The Swatch Group is not just about being culturally diverse or a company marketing products globally to customers of different cultures. In many respects the company is actually creating the values, beliefs, norms, and artifacts that form a globally unique culture worldwide. So, Swatch’s large-scale production of watches and jewelry is used to help create individually and culturally based customer uniqueness.
Sources: Corinne Gretler, “Swatch CEO Nick Hayek Sees Swiss Watch Turnaround in 2017,” Bloomberg BusinessWeek, February 2, 2017; Silke Koltrowitz, “Swatch Group Seeing Strong Demand So Far in 2017,” Reuters, March 16, 2017 (www.reuters.com/article/us-swatch-results-idUSKBN16N15B); “The Amazing Adventures of the Second Watch,” Swatch History 2017 (www.swatch.com/en_us/explore/history); “Swatch Is Challenging Google and Apple with Its Own Operating System,” Fortune, March 16, 2017.
With the Hayek family controlling nearly 40 percent of The Swatch Group, how do you think the family influence impacts the type of corporate culture in the company? What about the company’s international culture being impacted by the Hayek family?
Many of the Swatch brands have become cultural icons among a strong core following of customers in the global marketplace. Some even talk about the “Swatch Revolution” that began when Nicolas Hayek founded the company. Why do you think Swatch has such a strong cultural following?
Week Five
INITIAL POSTS
Your initial posts will be due by Sunday of each week of the module. All original threads should be at least 250 words. This parameter helps to promote writing that is thorough, yet concise enough to permit other students to read all the postings. The thoughts and opinions expressed in your thread need to be substantiated by research and literature (from the textbook or outside sources). All references should be in correct APA style. While this is a formal discussion environment, you are allowed to use the first person perspective in all your posts since you will be expressing your personal opinions. All original threads should: Bring clarity to the issues being discussed. Raise new and novel (yet relevant) points. Relate issues to personal experience. Rationally defend your stated position.
Woolworths’ Corporate Responsibility Strategy
This activity is important because as a manager, you must be able to recognize doing good as it pertains to your business. To do this, you must have an understanding of the ethical, social responsibility, and sustainability issues around the world.
The goal of this exercise is to demonstrate your understanding of the dilemmas businesses face as they pursue social responsibility initiatives. Identifying the correct course of action is a complex task that often lacks a clear direction.
Read the case and answer the questions that follow.
The Woolworths Group (woolworthsgroup.com.au) is an Australian conglomerate corporation founded in 1924. The headquarters is in Bella Vista in New South Wales. Colloquially known as “Woolies,” the company has extensive retail interests in the Oceania region, particularly in Australia and New Zealand, but it also has a foothold in India. The Woolworths Group consists of three core businesses (Woolworths Food Group, Endeavour Drinks, and Portfolio Businesses); employs more than 200,000 people; and has revenue of about 60 billion Australian dollars, or 46 billion in U.S. dollars. Across the three core businesses, Woolworths has 13 different business subsidiaries.
Integrating these 13 subsidiaries into a corporate social responsibility program is a challenge for a company with more than 200,000 employees and diverse interests. To accomplish its objective, Woolworths Group’s Corporate Responsibility Strategy 2020 identifies 20 corporate responsibility and sustainability goals that the company plans to implement by the year 2020. These goals cover a broad range of Woolworths’ stakeholders (e.g., customers, team members, suppliers, and local communities in which Woolworths operates). Woolworths’ Corporate Responsibility Strategy is based on a framework of People, Planet, and Prosperity.
The focus on People is about encouraging diversity. The target goals include striving for gender equity by targeting at least 40 percent of executive and senior manager positions to be held by women. Woolworths is also setting a goal of no salary wage gap between male and female employees of equivalent positions at all levels of the company. And rooted in Australian business, the company is embracing diversity by increasing the number of Indigenous employees in line with the company’s stated commitments under the Australian Federal Government’s Employment Parity Initiative.
The focus on the Planet includes two major initiatives. Woolworths is working toward zero food waste going to landfills. According to the U.S. Environmental Protection Agency, 20 percent of what goes into municipal landfills is food. Woolworths is also trying to reduce its carbon emissions or footprint by 10 percent. Many of our daily activities (e.g., using electricity, driving a car, or disposing of waste) cause greenhouse gas emissions. A carbon footprint is defined as the total set of greenhouse gas emissions caused by an individual, event, organization, or product, and it is expressed as a carbon dioxide equivalent. Such emissions trap heat in the atmosphere, which according to most scientists contributes to disruptive climate change.
The focus on Prosperity is founded on trusted relationships. Woolworths’ targets are to achieve a top quartile ranking in how the business engages fairly and equitably with its suppliers, as measured by independent supplier surveys. Inspiration is also built into prosperity in the form of the company implementing activities to inspire customers to consume all of Woolworths’ products in a healthy, sustainable way. The most transparent Prosperity initiative, though, is to invest the equivalent of 1 percent of total earnings in community partnerships and programs.
Woolworths’ People-Planet-Prosperity strategies drive how the company does business. The strategies state that Woolworths is committed to hard work and that its integrity is resolute. The foundation is a down-to-earth culture and family friendly values. Every aspect of Woolworths’ business exists for the purpose of making the customers’ lives simpler, easier, and better. Underpinning Woolworths’ operations is a working relationship built on mutual trust with suppliers. More than 80 percent of the company’s suppliers have been strategic partners with Woolworths for a decade or longer.
Sources: Dimitri Sotiropoulos, “Woolworths Sets Sights on Sustainability,” Inside Retail (Australia), February 14, 2017; Justin Smith, “How Woolworths Is Building Resilience in Its Food Supply Chain,” Sustainable Brands, April 11, 2016; Jason LaChappelle, “Woolworths Sees Benefits of Working with Sustainability Standards,” Iseal Alliance, September 19, 2014; “Woolworths Group’s Corporate Responsibility Strategy 2020,” https://woolworthsgroup.com.au/page/community-and-responsibility/group-responsibility.
What challenges do you think a company like Woolworths Group is facing when developing and implementing a companywide corporate social responsibility strategy that takes into account the more than 200,000 employees, diverse interests, and stakeholders?
Woolworths Group is trying to reduce its carbon emissions or footprint by 10 percent. Based on where we are as a world, is 10 percent enough of a reduction? Perhaps global warming is not real, what do you think?
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