Carpet capital culture clash.

Helms, Marilyn M. ; Weber, Judith E.

CASE DESCRIPTION

The primary subject matter of this case concerns the issues faced in a U.S. company with a large percentage of immigrant Latino workers and the resulting interactions with their original Anglo workforce. The case is appropriate for junior and senior-level business courses. The case is designed to be taught in two class hours and is expected to require one-to-three hours of outside preparation by students.

CASE SYNOPSIS

Teaching culture to business students is important, but often challenging. The authors developed this case study to describe the cultural issues and challenges encountered between an Anglo and Latino workforce in the U.S. This case is different from traditional cases that discuss culture in a new or "foreign" environment because this case is a domestic-based cultural case. This case profiles Dalton, GA home of the world's carpet and flooring producers. The industry, struggling for labor, actively recruited an able workforce from Mexico and Latin America to augment its local, Anglo workforce. Yet after years of working side-by-side, the Americans are puzzled over the behavior of a large group of Mexican workers in their midst. Specific situations outline the various encounters and behaviors that seem puzzling to both the Anglo and Latino employees. When viewed in the cultural context of the U.S., these exhibited behaviors violate cultural and social norms as well as common business practices. The case issues become understandable when viewed within the cultural norms of each group as presented in this Teaching Note.

The Human Resources Department is unclear how to address the issue facing the company. Students are asked to consider ways to educate the employees in the cultural norms and business practices of each group to improve morale and workplace functioning. Use of this case in various undergraduate international business classes can aid students in understanding the challenges of managing employees form several cultures. The issues of cultural misunderstandings should be generalizable to similar situations with other groups of mixed nationalities. The Latino culture was chosen for this case because it became a growing issue to the community of Dalton, Georgia and was and is experienced in a number of towns in the U.S., particularly along the U.S. Mexican border, in Arizona, Texas, and New Mexico.

THE HUMAN RESOURCES MEETING

Sam Haws left the meeting with his divisional human resources directors distressed his Anglo and Latino workforce was not working together as effectively as hoped. Many of the practices of the hardworking Latino populations staffing his 23 plants still perplexed Sam and his top management staff. Sam recalled the key points of his meeting.

Lee Floyd had mentioned his Mexican workers took all the overtime he offered, never called in sick, worked hard and steady on day or night shifts, but might just disappear for weeks at a time with no warning and would reappear and expect to go right back to their old job at the same place on the carpet manufacturing line. Lee could not understand why they were leaving without giving notice to human resources or to him. Others were often tardy and didn't seem to respect the work schedule.

Sam checked his expenditures for hiring bi-lingual employees to help translate company, policies, procedures, and key documents. Why did these problems persist? His bilingual translators were U.S. citizens, many graduates of the local college, and were good at their jobs. They seemed to be extremely fluent in both Spanish and English.

Judy Haynes, from Sam's largest plant manufacturing builder-grade residential carpet, brought a handful of anonymous worker complaints to the meeting that mentioned the "nasty Mexicans" who continued to toss used toilet paper all over the plant's bathroom floors. Others complained the Mexican workers broke the line at the cafeteria, congregated in the doorway, and would not move out of the aisle ways. Even the lift truck operators, moving large rolls of carpet to awaiting trucks for shipment to customers or regional distribution centers, complained about the large groups of Latino employees in the way of the many lift trucks.

Judy noticed the Latinos rushed to the mobile check cashing services that visited the company on payday. Judy wondered why the Latinos paid the check cashing fees instead of using direct deposit to their bank account, but later learned that few Mexicans use banks and seemed suspicious of banks. The fact these groups kept cash with them or at home made them targets for frequent robberies and burglaries. Most of the Latinos used services like Western Union and other wire transfer agents to send money home to family members in Mexico and Latin America. Judy wondered if any of the money the Mexicans earned was staying in the local community.

Tommy Mathis was particularly disappointed about the Latino employee he had recently promoted to supervisor. Tommy initially felt having a Latino manage other Latinos would be better for morale and diversity. Jose Alvarado was, without a doubt, the best worker on the line and knew all about the machines and the production and quality processes. Yet, Jose had difficulty supervising his Latino workers. Tommy noticed the workers, Jose's former friends, were not communicating with Jose as they had before his promotion. Tommy thought Jose would be happy with the increased responsibilities and accompanying pay raise but he could not understand the change with the team members or Jose's new dissatisfaction with his job. He wondered if the workers would even consider reporting to a Hispanic female as a supervisor and questioned whether he should promote another employee, Maria Sanchez, in the near future.

Janet Manning from sales also conveyed a similar story when she moved a Latino employee into sales. Stephania Hernandez, a bright employee, was completing her business degree at Dalton State College, and was fluent in both English and Spanish. Yet Janet reported Stephania frequently helped other sales representatives meet their monthly quota before she worried about her own lagging sales. Stephania seemed confused about the various sales contests and competitions the marketing division often used to motivate the sales force. Janet even received a letter of reference from Stephania's business professor who reported Stephania to be extremely intelligent, hardworking, and in fact one of only a handful of Latino business students among the slowly growing Latino population at the college. When Janet asked more about Latino enrollment in higher education, Dr. Tubbs mentioned she was encouraged that more area Latinos were coming to the college and were studying business to move up the corporate ladder. But, Dr. Tubbs felt these students were second generation children of the initial wave of immigrants to the area and were encouraged by their first generation immigrant parents to complete their education.

Sam's head was spinning from all these and other examples from his meeting. As an entrepreneur, he had founded the carpet company, was a leader in the floorcovering industry, and knew the growth of his business depended on a large labor pool. Without sufficient labor, the entire industry might be forced to relocate abroad. While carpet, rugs, tile, and hard surface flooring production was highly automated and not labor intensive, the fact his community produced over 80 percent of the world's flooring in their industry cluster headquartered in the mountains of Northwest Georgia bothered Sam. Sam needed the Latino labor since the local workforce was too small to staff his many floorcovering mills and the mills of his competitors. His company and the industry had survived in the community only because they had been able to attract the Latino workforce to come to the area. Most Latinos loved the area and were even making their homes in Northwest Georgia and had no plans to just make money quickly and return to Mexico. In fact the community was encouraging local builders to build more affordable workforce housing for the new residents. Programs were in place in the school system to transition the children of Latinos. Businesses targeting Latinos now lined the streets of the shopping areas in town.

IMMIGRATION HISTORY

The 60-mile region around Dalton, Georgia remains home to the largest concentration of the world's flooring manufacturers (carpet, rug, tile, laminates) and has earned the title "Carpet Capital of the World." A stable, happy, large workforce is needed to manufacture the carpet and raw material inputs. The 174 carpet firms in the area employ over 50,000 people with an annual payroll of almost $2 billion. When the economic boom of the 1990's erupted, manufacturers experienced a shortage of local labor. To cope with the labor shortage and to keep the plants in the area, the manufacturers actively recruited and welcomed the immigration of the Latinos. Now approximately 22 percent of Whitfield County's 89,000 residents are Hispanic, according to the U.S. Census Bureau. In Dalton, approximately 40% of the city's 30,000 residents are Hispanic.

The manufacturing jobs pay extremely well, on average $11 per hour plus full benefits and insurance and are attractive entry-level positions. Signs in Spanish throughout the city stress the great job benefits. The key jobs of creelers, who filled spools of nylon that feed the large carpet tufting machines, lift truck operators that moved the finished products, and other plant-floor jobs are largely held by the Latino workforce. These earning capabilities are also keeping the unemployment rate of Hispanics between the ages of 25-34 relatively low, at 3%.

In 1995, the Dalton, Georgia metropolitan statistical area had only five Mexican restaurants, one insurance agency, three grocery stores, and one bar catering to the Latino population. By 2006, there were over 278 businesses targeting the Latino customers (Jones, 2006) including meat markets, barber shops, travel agencies, furniture stores, bakeries, sporting goods, doctors and clinics, car lots, accountants, real estate offices, and banks (Dell'Orto, 2006). In fact the number of Hispanic-owned businesses was growing at three times the national average (http://www.census.gov/prod/ec02/sb0200cshisp.pdf).

Dalton is a "carpet cluster" (see http://data.isc.hbs.edu/cp/index.jsp). Dalton, Georgia was identified by Dr. Michael Porter, the Harvard Business School economist and strategists, as a "cluster" or grouped industry representing major manufacturers, suppliers, equipment vendors, and others within the supply chain for tufted carpets and flooring. Dr. Porter identified over 55,000 employees in direct employment plus some 28,000 in support industries when he studied the area in the late 1990s. In terms of production Dalton is among the world's major clusters. In Whitfield County, alone, approximately 54% of the labor force is engaged in carpet manufacturing and carpet companies are the region's largest employers. In addition 75-80% of the yarn raw materials for the industry are also produced in the state and machinery makers have been established in the area since the 1950s.

While in 1990 only about 4% of the students in Dalton's Public Schools were Spanish speaking, more than 58% of the students in 2006 are Latino, with some schools boasting 80%. Whitfield County's school system witnessed a similar increase in these numbers, where in the 200203 school year 20% of its students were Spanish speaking.

According to the 2000 Census about 25% of Whitfield County's population is Hispanic, but the dropout rates for Spanish speaking students at 67% are the highest in the whole country. The "Georgia Project" evolved as a community-based, non-profit organization to support the academic and social needs of Latino students, their families, and the citizens of Dalton, Whitfield County, and Northwest Georgia through collaboration with the University of Monterrey, the on-going professional development of teachers, and the provision of scholarships for future bilingual teachers (see http://www.georgiaproject.net/index1.html). Teachers from the wealthy, industrialized city of Monterrey, Mexico worked in the local school systems in Dalton each year to help the children of Latinos make the transition to the US culture, yet some wondered if it was working to blend the cultures.

The Georgia Project was founded by former U.S. Senator Erwin Mitchell in 1996 in response to rapid growth in numbers of Spanish-speaking students in local schools. The project aims to make cultural transition less difficult and more productive for the entire community. The Georgia Project also provides professional development opportunities for existing teachers in the Dalton-Whitfield County school systems, including Spanish-language skills. Additionally, the Georgia Project provides ESL (English as a Second Language) training to area Latino parents.

Sam also recalled a conversation with Leah May, his corporate attorney. Leah's daughter Hilary was a third grader in the local elementary system. At a recent parent-teacher meeting, Leah recalled how the Mexican parents would not look their child's teacher in the eye and seemed inattentive during the conference. Leah's daughter mentioned Jesus, a Latino boy in her class, had made the lowest scores on their spelling tests. Leah couldn't believe the parents were not concerned. She wondered if the Latinos really valued education.

Even in the outside community, the two cultures remained separate, with their own stores, services, churches, sporting, and cultural activities. The only segment overcoming diversity in the community was the restaurant trade. Anglos seemed to love the Mexican food. In fact the community joke was how the wonderful and growing selection of refried beans and fried tortilla chips also made the city of Dalton a leader in the popular weight loss surgery of gastric banding surgery perfected by a doctor formerly from Mexico.

THE BUSINESS SEMINAR

At a local seminar sponsored by the area college, Sam listened with interest to a panel of business leaders who discussed the Anglo-Latino business issues. The four Anglo panelists had been successful in recruiting Latino customers to their companies. They mentioned using a Latino consultant to assist with their marketing and targeting of new customers. A furniture salesman mentioned Latinos rely on male customers to make most of the buying decisions, which was just the opposite of furniture purchase patterns in typical American families. He mentioned Mexican's desire for different styles and the influence of their relatives in purchase decisions. He added, "They are loyal; they tend to shop in groups and will bring their children with them. They prefer to speak Spanish when discussing the furniture among themselves and their limited credit history means they typically pay in cash. Once the furniture store owner became friends with his newly hired Mexican sales representatives, attended their church, weddings, funerals, and even a weekend goat roast, his business began to grow. He mentioned the importance of hiring a bi-lingual staff and posting bilingual signs. He agreed building relationships was important and that coupons and specials had not been successful in attracting Latino customers. Since business is earned and relationships are important, ending a transaction with a Latino customer with "thank you for your business," is not appropriate but "thank you for your visit," is more appropriate, he stressed.

Another seminar panelist mentioned the various and growing number of media outlets broadcasting or distributing printed media in Spanish in the area and their low costs, making them helpful in targeting Latino customers. Other points were the culture's love of soccer and the potential marketing tie-ins to this popular sport. An accountant with a growing Latino customer base agreed most Latinos follow a code of honor and can make handshake business deals without all the paperwork and lawyers an Anglo customer might require. He also mentioned few Latino customers used voice mail and other technologies. An audience member was concerned no Latino customers visited his popular Italian restaurant. A Latino participant mentioned more marketing to Latinos would help along with a bi-lingual menu and more information or descriptions about the unfamiliar pasta items as part of the menu. An office manager from a medical practice wondered whether he needed to add a website for his Latino customers. A media expert mentioned that while the current generation just arriving may be less inclined to use the Internet for information, their children, studying in the local school system, were more than comfortable with technology. For attracting this next generation of clients, the expert agreed on-line information was indeed needed.

The Latino moderator of the panel and founder of one of the local Latino newspapers and radio stations mentioned the differences he had seen in his ten years living in the area. He mentioned a popular ad for local dairy products with a tag line, "holy cow." The literal Spanish language translation of the sign conveyed a cow was holy or religious and confused Latino customers. Using an English version directly to create an advertisement for the Hispanic market should be avoided, he stressed. It is preferable to discuss the main points with a Latino marketing consultant and allow them to start from scratch to create an appropriate message. He also mentioned avoiding culturally sensitive messages and products, noting that not all cultures have the same humor or the same product and service needs. While the Latino culture has pets, dogs are not an integral part of the family as they are to the Anglo culture. Thus a new pet grooming business may not be frequented by Hispanic customers. He even clarified some of the confusing terms and defined Hispanic as referring to people who speak the Spanish language while Latin or Latino referred to people descending from Latin countries in Europe like Italy, France and Spain. The terms, often used interchangeably, cause problems when a person is named a nationality, for example, being from Spain or within Latin America and this nationality is not correct.

On his drive home from the seminar, Sam passed the second Wal-Mart Super Center that opened in 2004. It seemed positioned for the Anglo clients where the old superstore on the south side of town had signage and announcements in Spanish, a taxi stand out front, and numerous products targeted to Latinos.

Sam wondered what he could do to blend the cultures at work. What should he do to address the human resources issues at his plant? What role should the Anglo workforce play in the needed changes? He realized too most of the citizens of the region were culturally naive about other countries and cultures, even when they were side-by-side in the same small town.

ASSIGNMENT QUESTIONS:

1. List examples of cultural misunderstandings you have encountered. Why did they exist?

2. Research the history and culture of Mexico. Assess the probable reasons for the unusual behaviors Sam Haws' human resources directors observed.

3. Gather facts on the number of Hispanics in America. What trends to the data predict?

4. Develop proposals to effectively deal with the various situations presented. Assume the role of the HR director as your plan your implementation. What programs would you develop for Latinos? What programs would you recommend for your Anglo workforce? Include an implementation plan and time-frame for this cultural change.

5. Is the Mexican workforce in Dalton, Georgia a diaspora (or a homogeneous ethnic minority group of migrant origins residing and acting in a host country but maintaining strong sentimental and material links with their countries of origin or homeland, typically maintaining both their own language and culture)?

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Marilyn M. Helms, Dalton State College

Judith E. Weber, Dalton State College