Case: How Leadership is postured at Saipem

   Just over a half century old, subsidiary of the Italian energy group Eni, Saipem, focuses on the petroleum industry and naturally seeks to grow itself. This is an interesting industry to focus on, because the bulk of the workforce is usually from countries other than that of the headquarters.
   Robert House initiated the Globe Study, of 62 societies, in the early 1990s to address issues such as might arise when mixing various divergent cultures; beyond seeking acknowledgments of what might be different. It also sought to determine what, if anything, might be the same. Much work along these lines stands on the shoulders of Geert Hofstede's work. Before we look at what may be the same, let's notice first what might be different; indicating potential challenges.
   Saipem’s Sustainability Case Study acknowledges countries in the area. However, in the subcontractors and local partners section, we are looking predominately at Indonesians. A quick look at Hofstede's work comparing Italians and Indonesians finds a power distance index for Italians somewhat with an average; in the mid-40s. For Indonesians, the score is even above the average for most Asian countries, clocking in at 78. This is a striking contrast, and indicative of a cultural acceptance toward inequality, vis-à-vis power structures and hierarchies for Indonesians. Further exacerbating such naturally inclined disparities finds a world ranking of 43 on the individualism index; Italy hovers around a ranking of 70, Indonesia clocks in at 14!
   Consequently, there is real and natural danger for Italians in position of power to take advantage of such natural cultural differences with their Indonesians subordinates. However, we do not see this happening; at least not as graphically as Hofstede's work might indicate.
   Saipem is seeking what is the same, and perhaps even looking to err on the side of conservatism as it seeks to establish leadership parameters. With an eye towards the long haul, Saipem has instituted human resources strategies that go above and beyond what one might think is typically offered. This includes a robust internal infrastructure with an eye towards safety and health, a very muscular fabric of corporate posture towards ethics and morality, a ready acknowledgment of the found religious values, as well as standards on pay and benefits (minimum wages and overtime, medical and maternal leaves and a traveling allowance).
   This gesture of corporate posture may be seen as ordinary in the West. However, a quick reminder of Hofstede's work, coupled with every corporation's task to increase shareholder wealth, would indicate a path that more commonly played out in years gone by. Indeed, corporations with an eye towards long-term relationships are increasingly ready to embrace that which works universally. The costs outweighed by the benefit.
   Saipem goes further, not simply looking to lift up its employees, but its local community relationships as well. It seeks to use local manufacturers, vendors and suppliers, where possible. It even goes the extra step to audit such local businesses to ensure that it is not doing business with an enterprise that might be questionable when it comes to child labor or other issues of human rights.

Hofstede, G. (2009). Geert Hofstede™ Cultural Dimensions. Retrieved from http://www.geert-hofstede.com/

House, R., Hanges, P.J., Javidan, M., Dorfman, P.W., & Gupta, V. . (2004). Culture, Leadership, and Organizations-The GLOBE Study of 62 Societies. Thousand Oaks, CA 91320: Sage Publications.

Saipem S.p.A. . (2008). Asia Pacific Saipem Sustainability Talent Case Study (case study whitepaper [pdf]). Retrieved from http://www.saipem.it/site/download.jsp?idDocument=1113&instance=2: www.saipem.it/

Questions:
1. Do you think treating foreign labor the way Saipem does is good enough or too much?
2. Insofar as we are dealing with human behavior, and other subjective considerations, how do you think you might go about creating a rubric or metric so that you can address a cost-benefit analysis? What might be some of the components that you would want to include?
3. By what methodologies do you feel you might be able to get a reliable sense of measurable satisfaction from the Indonesian laborers? What are some of the questions that you might want to ask them?
4. In the case study it seems to Saipem polices itself. There are world organizations for labor and human rights, do you think that Saipan should report to such organizations or should such organizations police companies like Saipem?