Game Day – Act 7

The Cost of Cultural Misunderstanding

Mark & Team had failed. What did it cost the company?

Time and Effort
Mark & Team invested serious time and effort into the development of their project proposal, as well as into selling it internally. Many folks were involved. Not only Mark’s sales/marketing organization, but also engineering and finance. And, of course, the U.S. board and the German board, who invested valuable time to listen, deliberate and decide. Please estimate these time and effort costs.

Travel Costs
In the overall scheme of things travel costs are very minor. But they are costs and they can be calculated. Assume that Mark and four colleagues made the trip to Germany. They were there for five days: flights, hotels, transportation, meals. Please estimate those costs.

Lost Revenues
The American OEMs were clearly interested in the project. Had Mark & Co. been given a green light to develop the project, and had they teamed up with their German colleagues, there may have been a good chance that they gained interest among the German OEMs, also.

This would have been the big payoff, the sought after return-on-investment. Although this is not a detailed case study of the company, the nature of the technical innovation proposed by Mark’s team, or the market parameters, we know that the company does about 1.75 billion in Euros per year in revenues. Please estimate conservatively the potential lost revenues.

Business Relationships
The American OEMs were interested, but saw that the German board said “No.” Will the American OEMs now expect less innovation from Mark’s company? If yes, what impact will that have on their business relationship? In other words, was the business relationship damaged? Can that damage be estimated? Please give it a try.

Motivation
Mark and top people felt defeated. The U.S. board was fully supportive. But the German board rejected them. How will Mark and his top people react?

Will they be less motivated to search for new business opportunities? Will their personal work productivity decrease due to lower motivation? Will the defeat influence their desire to continue working for the company? The cost of these are all very difficult to estimate. Please give it a try, nonetheless.

Question
Did we miss anything?

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