Module 6 power point final Luxottica

The Globalization of
Virtual Teams
An Analysis of Cross Cultural and
International Issues for Virtual Teams
Michael Connery, Brandon Dickens, Barbie
Sawyer, Ebony Young

Situation Analysis
As an international corporation with holdings from the United
States to China, Luxottica possesses talented individuals
from around the world. To remain competitive in a global
environment, the company must maximize our human
resources by forming teams that combine the collective
abilities of our entire workforce.
It is important to analyze the cross cultural and international
issues for virtual teams. By doing so, we can minimize
costly delays that can result from ill-prepared virtual teams.

Social Issues for Virtual Teams
1. Political issues range from current international laws to
the political relations between countries to regime
changes that can have an impact on company operations.
2. Cultural issues range from lingual barriers to how
individuals perceive different groups other than their own.
Gender and authority expectations can create conflict
when members do not understand differing social norms
than their own.

Politics and International Laws
As a global corporation with a presence in more than 150
countries, we must be aware of the many potential political
uncertainties and international laws that affect our company
and global corporations as a whole. Expanding into new
international markets can offer a variety of new
opportunities, profits and open the door to a new talent pool,
but also contain a variety of threats, uncertainties and
change that are typically not seen in more established
markets. Issues in emerging markets must be evaluated and
it is strongly suggested that a risk assessment be conducted
prior to making an investment in the country.

Politics and International Law
International Law can be defined as rules and practices that
states and nations consider binding to themselves, which
can pose potential concerns. First, is that “law” belongs to
individual nations and internationally law only exists where
individual nations will adhere to it. Secondly, there is a lack
of international, judicial, and administrative framework or a
body of law that we can apply across nations(Org., 2015).
This is important as companies can impose significant
measures such as taxation, ownership controls, operating
restrictions or expropriation without recourse.

One of the first factors that should be discussed and
evaluated when looking at expansion into a new country
should be international human rights and if the current
regime has had a history of violating those rights; this
should cause a closer look at the government, which would
pose additional risks and challenges going forward. This
requires a working relationship with organizations such as
the United Nations and familiarity with the ethics and labor
standards that apply to specific countries (Org., 2015).

Additional,challenges, questions and considerations that
should addressed prior to international expansion:
Company Structure: Will your company be organized into
a continental group or have a central headquarters? If your
office is to have a variety of offices, how are these offices
going to organized and stay in contact with other offices,
keeping time zones and different cultures in consideration
(Hult, 2017).

Foreign laws and regulations: Major consideration of
global expansion is the understanding of the local laws and
regulations that make up the area. These items include: tax
considerations, trading laws and employment and labor
requirements. As mentioned previously, it is imperative to
recognize emerging markets that do not have defined
regulations or potential governmental corruption (Hult,
2017).

Political risks: Prior to any expansion into a new or
unknown market, a risk assessment of both the economic
and political landscape is critical. Potential changes in
government laws and regulations can have a large impact
on a business and its investment (HULT, 2017).
Environmental Issues: Recent international legislations
and proposals have put environmental issues at the
forefront of international business development (Wagner,
2016).

Economic Nationalism: With the expansion in
globalization and moving of jobs to overseas locations in
an effort to save money, economic nationalism has now
again become a hot topic that could have political and
international ramifications. Economic nationalism seeks to
limit a nation’s consumption to goods which are from the
country’s own land(s) and seeks to promote the domestic
production of those commodities for national needs
(Ebeling, 2017).

A Unified Code of Values and Ethics
To overcome difficulties regarding the differences of human
rights from country to country, Luxottica should become a
company that is globally aware. “Ethical organizations
consider issues such as human rights, labor practices, and
environmental policies” when deciding whom to do business
with (Stulz, Shumack, Calkins, 2013). Globally aware
companies avoid labor practices that mistreat workers even
if this results in some loss of profitability.

Practices of Globally Aware Companies
› Avoid business with companies with a history of ethical
misconduct or inconsistent treatment of others.
› Stick to the company’s mission statement and craft an
universal code of ethics for the entire company that
ensures equal protection for all employees.
› Communicate with all employees with a single voice in a
manner that makes them feel as if we are a single entity
greater than the sum of its parts.

Overcoming International Obstacles
› Perform a risk assessment of the economic and political
landscape prior to committing resources to a new project
(News, 2017).
› Monitor political developments and react accordingly to
reduce the risks associated with international business
(News, 2017).
› Research any laws and regulations that can impact the
production and supply chains of our businesses on a
regular basis.

Applying the Research
Retrieved from http://pestleanalysis.com/political-factors-affecting-business/ .

Protecting Against Worst Case Scenarios
International political actions such as embargos, sanctions,
or even war can be costly for businesses when it impacts
their area of operations. In the worst case scenario, we
could lose the ability to trade between critical business
partners. To prevent such an incident from drastically
impacting our operations, we can purchase political risk
insurance to offset these risks.

What is Political Risk Insurance?
Political risk insurance protects against losses caused by a
government action. These actions include unforeseen
circumstances such as sudden shifts in tariffs or the
enactment of embargos that are beyond Luxottica’s
control. This does not protect against commercial risks
that the company can exercise some level of control over.

What does Political Risk Insurance Cover?
› Confiscation, expropriation, or nationalization.
› Currency non-transfer or inconvertibility.
› Political violence (including war and terrorism).
› Sovereign payment default.
› Wrongful calling of on-demand bonds and guarantees.
› Non-payment for project lenders.
› Insurance for exporters and importers.
List retrieved from http://www.aig.com/business/insurance/political-risk .

Barriers of Culture on Virtual Teams
› Language barriers.
› Loyalty to FTF group over the needs of the entire team.
› Social norms of “group politics” and what is polite/rude.
› Gender roles and differing opinions regarding
power/authority roles.
› Conflict. Cultures respond to conflict differently (avoidant
vs confrontational).

Social Norms of Group Politics
Politeness is not an innate characteristic—it is a personal
characteristic that we must exercise. This is highly
important when it comes to working with partners in other
countries with other beliefs. For example, in Turkey
thumbs up would be considered rude. In America it means
good job. So through educating ourselves on the beliefs of
others, we can lessen our chance of social conflict.

Language Barriers
Our company is global and with that comes barriers that
makes production difficult. This is due to the different
languages that are within our organization. To help with
these language barriers there are things that are put in
place. Other than learning new languages, a translator can
also be used.

Gender and Power/Authority Roles
In some organizations, you can see these role differences
based on less female leaders; however, in our case, these
roles are taken by both men and women. We have women
leaders such as Alessandra Senici (Group Corporate
Communications and Investor Relations Director for Europe
and Rest of the World) and Michela Broglia (Group Public
Relations Manager- International Media Relations for
Europe Middle East, Africa, North America, Canada and
LATAM) that play a major part of our success.

Cultural Conflict
With different groups comes unique beliefs that can clash
with one another over time. It is important for any leader
to be sensitive to the needs of all members on a virtual
team. Trust cannot be built upon a pattern of disrespect.
Unfortunately, many individuals fail to notice patterns of
disrespect when dealing with cultures that tend to be
naturally avoidant such as Japan where harmony is
preferred over conflict.

Developing Bonds in Virtual Teams
Luxottica is a international eye care and eyewear business
that maintains branches globally. Some of these include
Milan, Hong Kong, Brazil, and Los Angeles. The success
of the company depends on building productive virtual
teams and eliminating communication barriers. This allows
Luxottica to increase sales and production across the
world. In doing so we create an environment that is
conducive for building our customer relations and products.
With the proper training, management, and understanding
of cultural solutions, virtual teams can ensure the goals of
Luxottica are met and exceeded.

› Encourage members to meet and share about themselves
to develop mutual understanding within the group.
› Require training for all team members to create an
understanding of different cultures and language barriers.
› Leader should research the cultural norms for each group
and use this information when addressing team members.

› Have leader take an active role in maintaining/encouraging
open lines of communication between the different groups.
› Provide clear and concise direction and instructions
towards shared goals along with support and
encouragement.
› Confirm shared goals and instructions are clear by sending
emails, internal messaging,phone and a dedicated chat
room.

› Create an environment of respect and understanding for
each other and cultural differences.
› Ensure all team members understand what is expected of
them with clear and concise instructions and timeline.
› Set up quarterly face to face meetings to prevent
communication barriers and build relationships within the
team. If budget allows.
› Address conflict to prevent feelings of animosity between
groups from building over time.

The cultural solutions listed above can be helpful in
creating an encouraging and a productive team
environment to accomplish the shared goals of Luxottica
and alleviate the challenges created by cultural differences.
If possible, meeting face to face will build relationships
within the team and help team members to understand the
different cultures of each team member. Also, eliminating
communication barriers will ensure better team building.

Cultural training is an opportunity to ensure team members
are educated and understand the different cultures within
the virtual team. Approaching the opportunities of cultural
solutions, management can alleviate some of the
challenges of cultural diversity and ensure team members
are trained and understand the common goal of Luxottica
to increase productivity and sales.

Question and Answer
Thank you for attending our presentation. The floor is now
available to any questions from attendees.

References
Ebeling, R. M. (2017, January 30). The Economic Nationalism of
Donald Trump. Retrieved from http://www.fff.org/explore-
freedom/article/economic-nationalism-donald-trump/
FM. (2015, November 1). International Business and Politics.
Retrieved from http://internationalrelations.org/international-business-
and-politics/
News, H. (2017, January 6). 11 Biggest Challenges of International
Business in 2017 . Retrieved from
http://www.hult.edu/news/international-business-challenges/#political-
risks

References
PESTLEanalysis Contributor . (2015, February 24). Political Factors
Affecting Business. Retrieved from http://pestleanalysis.com/political-
factors-affecting-business/
MacLachlan , M. (2010, June 3). Working across Cultures: the
Challenges of Virtual Communication. Retrieved from
https://www.communicaid.com/cross-cultural-training/blog/working-
across-cultures-the-challenges-of-virtual-communication/
Wagner, D. (2000, April). The Impact of Political Change and How To
Protect Your Business Against It . Retrieved from
https://www.irmi.com/articles/expert-commentary/the-impact-of-
political-change-and-how-to-protect-your-business-against-it

References
Wagner, D., & Disparte, D. (2016, May 2). The Rise of Economic
Nationalism. Retrieved from
http://www.rmmagazine.com/2016/05/02/the-rise-of-economic-
nationalism/
YaelZofi. (2017). Cultural Diversity Training for Working Across
Cultures Part 2. Retrieved from http://www.yaelzofi.com/cultural-
diversity-training-02-2/

Module 6 power point final Luxottica

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