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A Global Transformation: Berlitz Corporation

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Jude Lee

on 2 July 2015

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Transcript of A Global Transformation: Berlitz Corporation

By 1890, there were 101 schools with 31 000 students worldwide.
Maxmillian Berlitz
(1852-1921)
The first Berlitz Language School opened in 1878, in Providence, RI.
Global Expansion
...in 2001,
New Ownership
Berlitz became a privately held subsidy of
Benesse
, Japan.
A Global Transformation
The Story of Berlitz
The company's founder was born in Mühringen, Germany.
He left for New York in 1870 to begin his own immigrant story.
The
Berlitz Method®
of teaching was introduced in 1880.
He began language services in:
French
German
Spanish
Italian
Russian
English
In 1882, Berlitz moved into publishing with language and travel guides.
Today, the global head office is in New Jersey representing over 550 language centers in 70 countries.
In 1888, the first Berlin school.
In 1889, London and Paris schools opened.

1n 1988, Berlitz Corporation converted to a public company.
STRUCTURAL
Hierarchically-based, divisionalized-form.
Divided into regional country zones.
Worldwide Headquarters, Princeton, New Jersey.
The change process at Berlitz can be further understood through
Bolman & Deal's (2008)

Structural
Political
Cultural
Human Resources

1. How has Berlitz responded to the challenges of organizational change?

2. Has cross-cultural acquisition affected the company's structural frames?

Berlitz Corporation is
A global acquisition strategy has been expanding the Berlitz service portfolio:
2008 Training Management Company
2008 Development Dimensions International
2009 Phoenix Associates Co., Ltd.
2011 Second Language Testing Inc.,
2011 Telelangue/World Speaking
It raises two significant questions...

It can be hypothesized:
1. The leadership philosophy operates from a position of conflicting paradigms affecting core organizational frames.


2. Its focus on global growth has overlooked components which are integral to building a holistic organizational culture.

Individual locations managed with a level of autonomy provide selected Berlitz services:
Benesse
Berlitz
Political Frames
people-oriented
long-term relations
corporate social responsibility
value and trust
outcome conscious
flexibility of service
customer oriented
high standard of quality
outcome conscious
bene (
well
) + esse (
being
)
The
Benesse
HR practices:

The

Berlitz
HR practices:
“Teamwork, people development, fairness,
and active participation in the work place"
(Benesse, 2012).

Human Resources Frames
Unpaid trainings
Pay per work unit
Selective benefit allocations
Internal recruitment
People empowerment
Organizational health
Disabled staff support
Educationsl R&D (BERD)
Next Generation Leadership programs
Promotes creative well-being with
an underlying mission of
corporate social responsibility
.
It has begun an initiative for internal staff recruitment and training.
Cultural

The Berlitz Method®
has been integral to the
Berlitz Experience
for 135 years.

Maxmillian is the face and icon of Berlitz, representing his innovative spirit.
...is its strength:
Berlitz is renown for its
award winning
advertising...
Berlitz culture
Bronze medal
at the Epica Awards, 2011
Figure 2:
Mar Wai May, C. (2011)
. London Bus.
UFO Campaign
Figure 3
: BTS United Oslo (2010) (TV advertisement). German Coast guard trainee,
Four Organizational Frames
Regional zones contain language centers positioned in key cities.

All Time Favorite Ad WPP Group
Sorrel (2013).
The
Benesse
Creed
The Tipping Point:
In 2008, Berlitz employees picketed outside the Grand Hyatt Roppongi, Japan

Benesse Elite were celebrating record profit margins
Changes

to HR Operational Frame:
Standard 30 hours contracts released pension and benefit obligations.

New contracts increased hours with no pay raise.

No board-wide pay increase since Benesse proprietorship.

Staff rejected the Japanese style performance based raises.
Figure 5:
McCrostie, J (2012). Here's the deal.
Japan Times Community.
Cultural Clash

The Japan Business Federation and Prime Minister Yasuo Fakuda called for Benesse to meet wage increases (Spiri, 2008).... further
loss of face.


Berlitz Japan and Benesse Respond
Claimed strike was illegal.
Initiated legal action against Begunto Teacher Union representatives...
Figure 6
: Budmar. P (2008)

In solidarity.
Japan Times Community.
Became the longest and most public labor dispute in Japan History (2007-2012).
Viewed as an attempt to
regain face
.
(Confucius transcript, 1971).
Staff strike action caused Berlitz Japan and parent company Benesse
to

lose face.
High Court Decision
In 2012, it was ruled in favor of the Begunto Teacher's Union.
Benesse-Berlitz ordered to grant teachers' pay raise and bonus.
Figure 8:
Wikipedia (2012). 2007–08
Berlitz Japan strike. Reading of high court ruling.
1. The Benesse-Berlitz acquisition has experienced challenges with cross cultural acquisition.
2. The 5 year labor dispute is evidence of conflicting political positions and paradigms.
As hypothesized...
What components would contribute to more holistic organizational growth?
Leaders need to realign their mission statements to their people
HR support programs which empower members and foster a learning culture
(Bolman & Deal, 2008).
(Fullan, 2011).
Set a tone for fairness and model a redemptive purpose
(Bolman & Deal, 2008).
Organizational reforms must support more than the paper on which they are written.
The morally higher common ground may be the only level on which culturally diverse players can progress successfully.
Slow organizational changes will sustain gains in the long term
(Bolman & Deal, 2008).
Berlitz's global interdependency facilitates and supports its increased service portfolio.
Growth pains can be framed as points of learning and not as restraints bound in resentful relations.
It sets a tone for how future relations move forward within a culturally diverse landscape.
References
Bolman, L. G., & Deal, T. E. (2008).
Reframing organizations: Artistry, choice, and leadership (4th ed.)
. San Francisco, CA: Jossey-Bass.
Confucius. (1971)
Confucian Analects, the Great Learning and the Doctrine of the Mean
(J. Legge, Trans.). New York: Dover (Original work published n.d.).
Potosky, D. (2010). Goal orientation, learning self-efficacy, and climate perceptions in a post-acquisition corporate context.
Human Resource Development Quarterly, 21
(3), 273-289. doi:10.1002/hrdq.20047
Lang, L., Irby, B. J., & Brown, G. (2012). An Emergent Leadership Model Based on Confucian Virtues and East Asian Leadership Practices.
International Journal of Educational Leadership Preparation, 7
(2).
Fullan, M. (2001).
Leading in a culture of change.
San Francisco, CA: Jossey-Bass.
“When
moral authority
is in place, leaders will rely less on external controls because these norms and values substitute (for) direct supervision as followers feel duties and obligations by becoming self-managing”

(Lang, Irby & Brown, 2012, p.7).
Created by
Jude Lee
02/2014
Recent Progress
Future Directions
Figure 6. Budmar, P (2012) (photograph). In solidarity.
The Japan Times Community
. http://www.japantimes.co.jp/community/2012/09/04/issues/with-berlitz-beaten-but-not-bowed-union-fights-on/#.UulUkbTZ0_8
Figure 4. General Union (2008) (photo).
Berlitz unions submit demands to parent company Benesse
. http://berlitz.generalunion.org/news/434
Figure 5. McCrostie, J. (2012). Here’s the deal.
The Japan Times Community.
http://www.japantimes.co.jp/community/2013/01/01/issues/berlitz-union-wins-raise-bonus-in-suit-settlement/#.UulYYbTZ0_8
Figure 7. McKenzie, C (2008) (Illustration). Caffeine Cowboys.
The Japan Times Community
. http://www.japantimes.co.jp/community/2008/09/30/community/berlitz-strike-grows-despite-naysayers/#.UulZZrTZ0_8
Figure 8. Wikipedia (2012) (photo).
2007–08 Berlitz Japan strike. Reading of high court ruling
.
http://en.wikipedia.org/wiki/2007%E2%80%9308_Berlitz_Japan_strike
Figure 9. Zapiro (2011).
The Work of South African Cartoonist Zapiro
.
http://worldvoices.pen.org/blog/work-south-african-cartoonist-zapiro-0
Invested money in standby scabs "
caffeine cowboys
" instead of arbitration
Figure 4:
General Union (2008) (photo).
Figure 9. Zapiro (2011) (Illustration).
The Work of South African Cartoonist.
Figure 7
: McKenzie, C (2008) (Illustration). Caffeine cowboys
. The Japan Times.
Actions Do Not Support Its Principles of:
Trust

Fairness

Well-being

People orientation

Corporate social responsibili
ty
Figure 1
: Langues vivantes chez Berlitz [advertisement]
Figure 3. BTS United Oslo (2013). (TV commercial). German coastguard trainee.
Figure 1. Langue vivantes chez Berlitz (advertisement).
Figure 2. Mar Wai May, C. [Producer] (2011). Berlitz Language School, London Bus, UFO Campaign,
http://results.epica-awards.com/2011/2197.html
Utilization of company content.
Understanding and responding to organizations as multiple realities.
(Bolman & Deal, 2008)

Human relations
are the new “creative conduit influencing… the economic bottom line”


(Fullan, 2001).
These
changes
brought new organizational challenges.
Recommended Resources
Effective adult educators leading change in the 21st century need to nurture a
learning

culture and mindset
.

Deutschman, A. (2009).
Change or die: Could you change when change matters most?
New York, NY: Harper.
Kotter. J. P., & Schlesinger, L. A. (1979, March-April). Choosing strategies for change.
Harvard Business Review
,
57
, 106-14.
Kanter, R. M. (1985, April). Managing the human side of change.
Management Review
, pp. 52-56.
Modern Asian organizations are still shaped by the Confucian cultural tradition which respects authority and hierarchy.

If wealth and honor are obtained with disregard to underlying moral principles of rectitude and righteousness, they are false

Has this change process affected Berlitz's organizational frames?

How does Berlitz perceive its current HR and political relations?

Have they altered their approach to their own cross-cultural realities?

Within the context of adult education, it seeks further understanding
:

Spiri, J. (2008). As parent firm posts record profits, Berlitz teachers strike back.
The

Japan Times
. http://www.japantimes.co.jp/community/2008/05/06/issues/as-parent-firm-posts-record-profits-berlitz-teachers-strike-back/#.UscaDLQucXQ
(Spiri, 2008)
(Spiri, 2008).
(Spiri, 2008).
(Spiri, 2008).
Sorrell, M. (2013). Creativity in the age of the Maths Men – by Sir Martin Sorrell, CEO of WPP. The Drum.
http://www.thedrum.com/opinion/2013/09/25/creativity-age-maths-men-sir-martin-sorrell-ceo-wpp
Full transcript