Time-based competition and multiculturalism A comparative approach to the Brazilian, Danish and Finnish furniture industries

Transcription

1 The current issue and full text archive of this journal is available at Time-based competition and multiculturalism A comparative approach to the Brazilian, Danish and Finnish furniture industries I. Tammela and Alberto G. Canen COPPE/Universidade Federal do Rio de Janeiro, Rio de Janeiro, Brazil, and Petri Helo University of Vaasa, Vaasa, Finland Time-based competition 349 Received August 2007 Revised November 2007 Accepted December 2007 Abstract Purpose The purpose of this paper is to show that time-based competition (TBC) strategies aligned to logistics and to multicultural awareness can help organisations respond appropriately and more quickly to the different needs and expectations of customers located around the globe. In a globalised market, where organisations are located in many different countries, establishing competitive advantages that result in sustainable leadership has become a goal to be reached. Design/methodology/approach TBC was studied in furniture companies in Finland, Sweden, Denmark and Brazil by conducting case studies. The research presented here is part of a larger study that focuses on TBC strategies and multiculturalism in the furniture industry. Findings Data were collected from various furniture companies located in countries targeted in this study in order to gauge the extent to which TBC in a multicultural and logistic-oriented approach has been taken on board, and how important it seems to be perceived in national contexts. Originality/value The paper presents some comparison on logistics management practices between the countries and suggests managerial implication for development and discusses about connection between cultural aspects and time based management. Keywords Furniture industry, Competitive strategy, Distribution management, Brazil, Denmark, Finland Paper type Case study 1. Introduction Commercial openings and economic activities resulting from globalisation have introduced new competitive strategies among organisations. The furniture industry is not exempt from this new world context. Market changes are affecting the entire sector and the search for quality to satisfy customers is making enterprises even more competitive. In terms of the furniture industry, the products must satisfy consumers, and meet demands for high standards related to comfort, design, innovation and technology. Such a competitive scenario, generated by the need for new products to be introduced in the market in a short time, according to the customers needs and expectations, meets the newest competitive strategy paradigm: time-based competition (Stalk and Hout, 1990). Time reduction in each phase from product creation to delivery makes companies more integrated with the customers constantly changing needs, transforming their response time in relation to innovation faster. This factor increases Management Decision Vol. 46 No. 3, 2008 pp q Emerald Group Publishing Limited DOI /

2 MD 46,3 350 competitiveness and market share. In this case, the total cycle time must be drastically reduced, which means that all business relevant activities such as manufacturing, order processing, materials acquisition and deliveries, among others, must be reassessed, in order to keep the customers satisfaction in focus. The furniture industry has been plagued by long delivery lead times and unreliable schedules (Vickery et al., 1995). It is a competitive domain and is forcing manufacturers to be in touch with their customers needs in order either to preserve or to increase their market share. Time compression seems to be a highly competitive advantage source allied to logistics and supply chain strategies and challenges, in order to place the right product at the right time to the right customer in the right quantity. In this scenario, cultural diversity has become a relevant issue for enterprise competitiveness (Canen and Canen, 1999). In a globalised world the understanding of cultural differences by organisations and managers makes them more effective and prepared to face diverse markets and situations. Multiculturalism should be understood not only as a training for competencies geared towards a multicultural market, but rather as a process of educating for a multicultural world, pointing to some implications for a multicultural approach to logistics and management education (Canen and Canen, 2001). According to Trompenaars and Woolliams (2000), different cultures have different assumptions about time. The sensibility to the cultural dimension helps the understanding of many crucial factors concerning business around the world. Multiculturalism and its influence in organisation management and competitiveness, including TBC, makes both relevant concepts in the present study, which focuses on Brazilian and Scandinavian furniture companies. As shown in Canen and Canen (2005), considering enterprises as multicultural organisations is an important step for the creation of trust in business relations, particularly bearing in mind factors such as commercial openings and the interactions of people and products in disparate cultural standings. Multicultural organisations can be understood as as those which count on culturally diverse staff and culturally oriented sensitivities in their profile (Canen and Canen, 2002). According to Canen and Canen (2005), such foresight implies comprehending not only people diversity with inner acting plural perspectives, but also commitment to the valuing of diversity. In a globalised world the understanding of cultural differences by organisations and managers makes them more effective and prepared to face the most diverse markets and situations (Canen and Canen, 2004). According to Canen and Tammela (2006, p. 37), multicultural awareness can help nations to predict and adequately respond to different obstacles related to multicultural organisations when applying strategies seeking for a sustainable competitive advantage. Based on the above, this article focuses on aspects of time-based competition, highlighting the necessary characteristics and strategies to be considered as time-based, and revealing its importance for planning the total cycle time reduction of an organisation. The study aims to show the viability of time-based competition allied to logistics strategies. Through multicultural lenses, this research tackles the peculiarities of the mentioned markets, as well as cultural differences, pointing out how they can interfere in TBC implementation by managers and organisations with respect to competitive strategy for the advancement of furniture industries in Brazil and Scandinavia.

3 2. Time-based competition The constant evolution in customers needs and expectations has led companies to search for new competitive strategies. Time-based competition (TBC) emerged as the new competitive paradigm in the nineties (Hum and Sim, 1996), as leading enterprises have been raising their awareness to the importance of time as a sustainable advantage in obtaining market leadership. The first mention of TBC is attributed to Stalk (1988), who refers to time as the maximum of competitive advantage. The above author contends that the way leading companies manage time production, new product development and innovation, sales and distribution represents the ultimate competitive source. Time can be considered a strategic weapon, just like money, productivity, quality and innovation (Stalk and Hout, 1990). Time-based competition involves compression of the time needed to perform a series of operational activities such as planning, design, product development, innovation, manufacturing, supplying, marketing and distribution according to customers needs and expectations (Abdinnour-Helm, 2000). The success pattern in TBC is due to its characteristic of supplying the customer with the most aggregated value of product or service for the least cost in the least time. According to Bozarth and Chapman (1996), the benefits and tactics attributed to TBC are very wide, including benefits to the customers (shorter time from order to delivery; greater product range; fresher product designs; improved customer support; higher-quality goods and services), and benefits to the organisation (simplified, more flexible organisations; lower development costs; shorter planning loops; simplified production control; improved manufacturability and higher efficiencies). TBC companies have many aspects in common, such as less total cycle time; less market response time; less new product development and introduction time; less order and delivery time for a product or a service; less real response time to customers needs and expectations (Stalk and Webber, 1993); non-aggregated value reduction time for the manufacturing, delivering, production, development, and other systems (Schaenzer, 2000); flexibility; production agility and fastness (Willis, 1998). Hise (1995) and Kasarda (1998) pointed out that speed and agility will be the leading factors in the coming years. Successful firms will be ones that use advanced information technology, use high speed transportation to source parts and components globally, and also minimize their inventories and provide fast and flexible responses to unique customer needs worldwide. It is important to say that lack of an efficient distribution system allied to defective logistics and supply chain management may cause a lot of damage to time-based companies. The effort to reduce time focusing on the customers needs will be wasted if the products in the supply chain are not in harmony with the organisation s needs. Logistics should be seen as a link between the market and the enterprise operational services and TBC strategies. Logistics are responsible for the planning and coordinating of all the necessary activities on behalf of the customers needs. For furniture companies, time compression is a goal to be reached. Furniture companies are known for the largest production and delivery cycle times, as mentioned by Vickery et al. (1995). Time seems to be a highly competitive advantage source allied to logistics and supply chain strategies, providing high-quality product and service, in Time-based competition 351

4 MD 46,3 352 less time and according to customers needs and expectations, mainly in furniture exporting companies. As mentioned before, logistics concepts lead to many implications for logistical management, as the challenges to integrate and coordinate materials flow from a variety of suppliers, in general foreigners, located in many parts of the globe. Concerning furniture exporting companies, the question arises as to how organisations deal with the time and competitive advantage strategies among the different people and countries that take part in this complex link, especially with high-quality and design furniture. To face this changing environment, furniture industries, both Brazilians and Scandinavian, need business strategies that will drive them to a sustainable competitive advantage. Canen and Tammela (2006) present information concerning both countries, including educational data, competitiveness index, economic data and others. TBC shows up as a significant source of competitive advantage for furniture companies in a constantly changing market, but it is arguably more effective when integrated with logistics strategies and with awareness of cultural diversity, which is a concern of multiculturalism and will be discussed next. 3. Multiculturalism Logistics and supply chain management have appeared as the cutting edge for competitive advantage, integrating different organisations and people everywhere in the world. This competitive advantage can be effected if enterprise managers are conscious of cultural diversity, since understanding different business partners cultural distinctions can be one of the most important elements leading organisations to achieve success and competitiveness (Canen and Tammela, 2006). Sensitivity to the cultural dimension helps in the understanding of many crucial factors concerning business around the world. It might be essential to the comprehension and solution of the problems that occur during business negotiations. It can foster the relations between logistics and TBC partners and ensure their competitive strategies for market leadership. The cultural issues present in the various places and countries which integrate this complex business network can represent a great problem in business management. Misunderstandings of communication and trust caused by different cultures involved in the globalised market might affect customers satisfaction, logistics and TBC strategies, as well as the companies goals for competitive leadership. A multicultural perception seems to be the most valuable weapon in forecasting and working out the competitive problems affecting organisational competitiveness, particularly with regard to export furniture companies which are dealing with suppliers and customers in different countries in the world. How can these companies satisfy and attend to customers located in different countries in the world with high-quality products and services? Multiculturalism is an important issue in ensuring organisational success, because competitive strategies take into account values and traditions inherent in the different countries and people in the world. As discussed above, different cultures approach time differently (Trompenaars and Woolliams, 2000) and this can interfere in TBC strategies. The cases including Brazil and the Scandinavian countries should illustrate this point.

5 4. The Brazilian and Scandinavian furniture industries According to the Swedish Federation of Wood and Furniture Industry (TMF, 2005), the top 20 furniture producing countries account for some 87 per cent of world production. Of these, 11 countries are European, four Asian, four American and one Oceanic. Brazil, Denmark and Sweden are included in those top 20 countries. European Union (EU) furniture manufacturers are the largest furniture producers in the world as well as the largest exporters (European Commission, 2006). Brazil accounts for two thirds of the production in Latin America and is also the largest exporter in the continent (TMF, 2005). In spite of the fact that Scandinavia is composed of small countries in terms of population, its furniture industry is relatively strong compared to other European countries, with Denmark and Sweden among the top 20 furniture producers in the world (Mobilier, 2004). During the 1990s, there was an increase in the number of companies and in pan-european production units, not only within these countries but also in other European ones such as the Netherlands, Germany and France, mainly in relation to offices, kitchen and ready-to-assemble furniture. As mentioned above, Brazil is the largest producer in Latin America and its furniture enterprises are basically family businesses, traditional and mostly carried entirely by national currency. As shown in Table I, Brazil is the country with the largest number of companies and employees, but according to ABIMOVEL (Brazilian Furniture Industry Association), more than 15,500 are micro, small and medium-sized companies, which reflects the country characteristics of intensive use of labour force, low production technology and domestic production and consumption. It is interesting to note that, whilst most of Danish and Swedish production is exported, Brazilian, Finnish and Norwegian production is mainly geared towards the domestic market, as demonstrated in Table I. For Scandinavians, design is extremely significant inside the world competitive context. Its furniture industry and furnitures show this concern, and the focus lies mainly in the personal solutions concepts, high quality and technology. Scandinavian furniture industries use intensive technology and have a high level of technical competence, automation, high technology and design. Brazil, on the other hand, uses the labour force intensively and has low technology, with only a few companies namely the largest and exporting companies having automatic machines, technical competence and focus on quality and design. Denmark and Sweden are the largest exporters among the above-mentioned countries. Their major export markets are Europe, the USA and Asia. Though the major markets of Brazil, Finland and Norway are domestic, these countries are positioned in the international market as both consumers and producers. Brazil and the Scandinavian countries are aware of the importance of having sustainable competitive strategies in this globalised market. As mentioned before, to succeed in the twenty-first century companies need to establish strategies that take into account customer s needs and satisfaction in terms of products and services. TBC aligned to logistics and multicultural consciousness appears as an important factor in business leadership: Vickery et al. (1995) show concern about furniture companies related to logistical production and delivery cycle times and their relation to TBC, as well as multicultural sensitiveness, which is also pointed out by, e.g. Canen and Tammela (2006). Time-based competition 353

6 MD 46,3 354 Table I. Brazil and Scandinavian furniture companies Brazil a Denmark b Finland c Norway d Sweden e No of companies 16, , No of employees 200,000 16,900 10,434 8,200 26,000 Major market 80% domestic 82% export 70% domestic 85% domestic 60% export Intensive use of technology and a high level of technical competence, automation, high technology and design Intensive use of technology and a high level of technical competence, automation, high technology and design Intensive use of technology and a high level of technical competence, automation, high technology and design Intensive use of technology and a high level of technical competence, automation, high technology and design Characteristics Very labour intensive; low technology; large amount of micro and small companies Sources: a ABIMOVEL (2006); b Danish Furniture (2006); c Statistics Finland (2004); d Norwegian Furniture Industry (2006); e Swedish Furniture Association (TMF, 2006)

7 5. Methodology In order to understand the extent to which time-based competition, logistics and multiculturalism are perceived as relevant to furniture companies, interviews in the form of questionnaires to managers were applied to a sample of them, representing a pilot stage in the research in Brazil, Denmark and Finland. In a later stage, these techniques should be applied to an extended population of the universe of companies in Brazil and Scandinavia. The questionnaire was divided into four parts. The first was related to general information about the companies, such as size, number of employees, turnover, territory operation area, sales and factory units. The second was about TBC and a number of questions concerned the companies strategies and vision of time. The third one referred to the companies understanding and awareness of multicultural aspects and cultural diversity and its importance to business competitiveness. The last part was composed of a list of open questions about strategy, planning, organisational success factors and their relations to TBC and multiculturalism. The questionnaire was applied in 18 furniture companies: five in Brazil, five in Denmark and eight in Finland. The Brazilian s companies were named by SEBRAE a Brazilian Government body that supports Brazilian micro and small business services. The Danish companies were suggested by the Institut for Afsætningsøkonomi and, in the case of Finland, by the Association of Finnish Furniture and Joinery Industries (2006). The companies listed by the mentioned associations were invited to participate in the study by personal telephone calls. The final sample consisted of those companies whose managers or CEOs agreed to the interviews. Time-based competition Results General information Some characteristics of the companies which participated in the pilot stage of the research are shown in Table II. In Brazil, most of the companies work with specialized furniture, based on the customers specifications and demand. In Denmark, the companies have both standard and specialized production. As informed by the companies, Danish furniture buyers care about design, product concept and quality, and so the production is planned in manner which adapts to the different patterns and demands of customers all over the world. Finnish companies, on the other hand, seek standardised production with high technology and the intensive use of automatic machines. The companies stated that Finnish consumers care about quality and design but mainly delivery time. Most Finnish and Danish products are sold to retailers, but there are few companies which also sell to end users. A problem perceived in this research was the difficulty of classifying the companies size across the countries. Defining the size of Brazilian companies can be a problematic issue, as shown by Tammela and Canen (2005). In Brazil, the patterns differ between government business agencies. The same was pointed out by Quit (1999) for the EU countries the production structure of European countries is heterogeneous, and the size of the companies is one of the elements that contribute to this heterogeneity. There are differences between countries according to the definition and it varies in the number of employees and turnover. According to the above author, The European

8 MD 46,3 356 Table II. General information about the companies Brazil Denmark Finland Number of companies Furniture production Specialized furniture Specialized and standard production Mostly standard production Company size 2 micro and 3 small 1 small, 02 medium and 02 large 2 small, 2 medium and 4 large Average turnover Micro: 0.350,00 Small: 4,00 Small: 1, 00 (million e) Small: 1.5,00 Medium: 25,00 Medium: 10,00 Average employees Location of facilites Market Large: 150,00 Large: 150,00 Micro: 20 Small: 30 Small: 6 Small: 35 Medium: 130 Medium: 50 Large: 450 Large: 850 Brazil Denmark Finland and Baltic countries Mainly South-East Brazil. Only one company sells furniture in France Mainly Germany, the UK, Europe and other countries around the world. Only one company sells the most part of its production inside Denmark Mostly Finland, but there are exports to Sweden, Norway, Russia, Baltic Countries, the UK and others Commission has developed a single set of definitions of SMEs (small and medium enterprises), especially for the purposes of its various support programmes and measures, which is set out in the Commission Recommendation of 3 April 1996 concerning the definition of SMEs. The company sizes used in this study were named by their own managers and are given merely for illustration. The differences between the countries discussed above demonstrate the importance of understanding the various cultures in this study. The production is ruled by market needs, as mentioned in Table II. In Brazil the production is specialised because Brazilian customers are used to planning and outlining the furniture they want to buy and all the companies sell to end users; in Denmark it is both specialised and standard to fit into as many different markets as possible, and in Finland it is standard by reason of the customers concern about delivery time. Table III shows some logistic characteristics of the companies. In accordance with what was mentioned before and as indicated in Table II, Brazilian companies sell most of their products in the domestic market whilst Denmark focuses on exporting. There is only one Danish company that sells most of its production inside the country, but it Brazil Denmark Finland Table III. Logistic structure information Market Local Global Global Distribution Local Global Global Suppliers Local Global Global Production facilities Local Local Global

9 still exports the rest. Even though Finland s major market is domestic, the country exports furniture to neighbouring countries. Most Finnish companies in this study sell furniture abroad. Therefore, both Finnish and Danish markets are located globally, and Brazilian markets locally. Distribution denotes the markets characteristics, most Brazilian distribution being domestic and the other countries global, as shown in Table III. The same situation also applies in the case of suppliers and raw material acquisition. Denmark and Finland deal with suppliers located abroad and Brazil with domestic suppliers. As described above, logistics and supply chain management appeared as a competitive advantage, integrating different organisations and customers everywhere in the world and thus managers must be conscious of cultural diversity and understand the various business partners and customers cultural distinctions in order to attain competitiveness (Canen and Canen, 2005). An interesting point is that both Brazilian and Danish production facilities are located inside their respective countries. Many Finnish companies are installing production plants, contracting third party services or labour force in Baltic countries due to high salaries and taxes in Finland. They have sites both in Finland and abroad. According to Danish companies, they prefer to have local production inside the country, because it is better for quality control and design innovation development. Market, suppliers, distribution and sites location play an important part in logistics and TBC strategies, as well in production planning and delivery time. The companies involved in this research deal with production strategies according to their market needs and handle time and logistics in agreement to its importance and characteristics, as will be presented in the following sections. Time-based competition 357 Time-based competition As discussed before, TBC companies have in common strategies to compress total cycle time. Table IV demonstrates the importance of time for the case study companies with respect to the mentioned TBC strategies. It was requested that the interviewed companies give an importance grade to each one of the following factors related to TBC: grade 1 was awarded to the least important and grade 5 to the most important Brazil Denmark Finland Number of companies To the company To customers To orders transmission Manufacturing Supplying Innovation and NPD Distribution Information Adapting to customers new demands Identification of customers needs and expectations Responding to unpredictable failures Responding to extraordinary orders Lead-time (weeks) Table IV. Time-based competition factors importance of time grade

10 MD 46,3 358 factor for business, and grade 0 to non-applicable cases and also for not answering the question. The results presented consist of an average based on the quantitative data generated by the answers. According to Table IV, in manufacturing, the areas of supplying, distribution and responding to unpredictable failures in time are seen as very important to both countries and companies. As mentioned before, and as shown in Table III, the companies in focus have production and logistics strategies related to their markets, therefore time plays a very important role in the related TBC factors. Time is also perceived as very important to the company and customers in both Brazilian and Finnish companies. In Finland it reflects in the way the companies manage the business chain. The target for less delivery time shows that most companies have structured production planning, ruled by the intensive use of automatic machines and information technology systems. In order to suppress total cycle time, including production, sales, suppliers and distribution work are integrated into the logistics system. In Brazil, in spite of the fact that companies pointed out that time is a very important factor for them, logistics and production management is affected by the great amount of specialized furniture and customers extraordinary orders, as well a lack of high technology and skilled people. Brazilian companies emphasized that in this branch the delivery time is very high, especially for specialized furniture. Differently from Brazil and Finland, for Danish companies time is seen as more important for the production planning than for the customers or the company. The companies informed that the buyers of Danish furniture care more about design and concept than time and they are more prepared to wait to have this kind of furniture. In adapting to customers new demands and responding to extraordinary orders, as shown in Table IV, Brazilian, Danish and Finnish companies attached different grades to the importance of time. In Brazil, due to production problems that may occur and high lead-time, service and product differentiation according to the customers needs are seen as a great opportunity for the Brazilians companies and a target to be reached. In Denmark it is related to innovation and product differentiation, and all the interviewed companies stressed the importance of having new products every day designed to fit into the highest possible number of markets. In Finland time is very important to the whole cycle time system, and the companies informed in the interviews that they are not inclined to make changes nor adapt products or production according to customers wishes, and neither to accept extraordinary orders. For these companies, this could reflect negatively on production scheduling and planning, which would then cause delays and increase delivery time. Therefore, time is not seen as important to the above-mentioned strategies, as shown in Table IV. The lead-times differ in each country. In Brazil, the lack of a logistics system, as well as skilled people, and production planning knowledge combined with customers specialised and extraordinary orders, affect the whole system cycle time. The consequence of this is that the furniture average lead-time for the end-users is about four to five weeks, which is the highest amongst the countries compared. In Denmark, most of the companies work both with standard and specialized furniture production. This is due to the fact that the production is planned to adapt to different kinds of furniture and shapes, and in some cases they have to use craftsmen.

11 Therefore, the average lead-time is about three to five weeks. According to the interviewees, the focus lies in the product concept and design, and they plan the production so as to have flexibility. In Finland, even though the companies have standard production, the manufacturing is flexible and can offer a large range of products and choices for customers, with an average lead-time of about one to two weeks. For them time is very important for most of the TBC factors presented in Table IV, and this reflects in their business lead-time, which is the smallest one. As described above, the companies strategies reflect the way they deal with time and the way they feel about their market needs. As shown in Table III, the logistics vary in local and global markets. According to Canen and Canen (2004), in a globalised world the understanding of cultural differences by organisations and managers make them more effective and prepared to face diverse markets and situations around the world. The next section will therefore describe the companies understanding and awareness of multicultural aspects and cultural diversity and its importance for business competitiveness. Time-based competition 359 Multicultural aspects In Brazil, as in Denmark and Finland, most of the companies reported that they did not know what multiculturalism comprises and had never touched upon this subject before. After some explanation about it, the companies said that it is important to have a better understanding of different markets. Danish and Finnish companies think that Scandinavians are quite similar in product and service requests. They believe that there are no differences in consumers needs and expectations among these countries. They also assume there are no big contrasts between Scandinavians and other European countries with respect to furniture consumption demand. Brazilians, on the other hand, feel that consumers do vary among different regions or social classes inside the country, which indicates that they are aware of the importance of multiculturalism for furniture exporting companies in Brazil. Both in Denmark and Finland, the companies noticed and reported that any differences that may exist between countries are basically in wood and paint colours. The above-mentioned countries may think that Europeans and Scandinavians are quite similar in taste; however, companies design products and services according to their markets and customers, which gives evidence of their concern in understanding cultural differences. Finnish companies are aware that cultural aspects may create barriers in business relationships. As mentioned before, many of them have sites in other countries as well as suppliers abroad. They described a lot of cases of communication misunderstanding, problems with the delivery time of goods and quality problems. Danish companies also reported that dealing with suppliers located in different countries can also be problematic. Their meaning of time can be different from the Scandinavians, which can be a relevant issue for production planning with respect to raw materials lead-time. In Brazil, the awareness lies in the fact that the companies recognise different cultures inside the country and how these differences can affect the furniture demand.

12 MD 46,3 360 Open questions As described above, the companies seek strategies according to the needs of their markets and this reflects in the way they focus on time as well as on their organisational competitiveness, Table V highlights some questions about organisation strategies according to the open questions on the questionnaire. According to Table V, the common organisational success factors for the companies are found in quality, costs (in Brazil referred to as price), a large range of products and choices for customers and design. Innovation was pointed out only by Danish and Finnish companies and product differentiation by Brazilian companies. As discussed before, time, in terms of company and customers, is relevant only to the Brazilian and Finnish companies. In Brazil, production employs a bigger labour force and hand-crafted work, non-skilled workers and low technology, as seen on Table I. This has the consequence that Brazilian production planning systems are not as specialised as in the other featured countries. In order to be competitive, Brazilian companies have to care about their customer systems, their service and product differentiation, and in many cases the customers participate in the product development, which forces the companies to operate a make to order manufacturing system. The same occurs in Finland and in Denmark. The focus of Finnish companies is the fastest possible delivery time and so the production strategies show this concern with intensive use of machines, IT and integration with suppliers and distributors. Danish companies, however, are more oriented to the product design, concept and innovation which reflects their concern with production flexibility and adaptation to specialised and designed furniture. In both cases, the companies manufacturing strategies can be made to comply with an order or to stock. Danish and Finnish companies believe that there are few differences between Scandinavians and Europeans and there is no reason to think about cultural Table V. Some strategy questions Factors for organisation success Strategies according to the production system Manufacturing strategies How customers cultural diversity affects TBC Brazil Denmark Finland Customers assistance; quality; time; product differentiation; designers and architects partnership and price Production planning systems and logistics Make to order In new product/service development, market demand and manufacturing time Product concept and design; innovation; offer a large range of products and choices for the customers; quality and costs Use of automatic machines; production planning systems; flexibility and logistics Time; quality; production efficiency; costs; offer a large range of products and choices for the customers; design and innovation Intensive use of automatic machines; production planning systems; flexibility; use of logistics systems as well as IT Make to order or to stock Make to order or to stock In delivery of raw material; market demand and product development In manufacturing time; production planning; delivery of raw material and market demand

13 differences in terms of furniture production or development, which highlights the reason underlying the difficulties the interviewees had in answering the questions about multiculturalism, when these were expressly stated. However, as discussed before, cultural diversity is revealed in their analysis of TBC factors affecting the furniture industry, confirming the ideas of authors such as Trompenaars and Wooliams (2000) and Canen and Canen (1999, 2004, 2005). 7. Conclusions This article argues that TBC strategies aligned to logistics and multicultural awareness can help organisations achieve a proper and fast response to customers needs and demands located around the globe, representing a competitive strategy for furniture companies in globalised markets. As discussed above, the companies establish strategies according to the needs of their markets and this reflects in the way they focus on time. Table VI summarizes some managerial comparisons and concerns among the different companies in this research. Brazilians companies are aware that they have to be competitive to export and find a position in the world market. As mentioned before, they know that time is very important for the business as well as for customers, and it is important for competitiveness. As shown in Table VI, there are certain limitations to the companies being time-based, such as lack of IT use, problems with the logistics system, low level technology, intensive use of labour force, non-skilled workers, and lack of proper production systems, all of which reflect in the companies high lead-times. On the other hand, these structural problems make them more integrated with their customers and market, and they can develop the product according to their customers needs. This indicates that they are aware of the importance of multiculturalism for furniture companies in Brazil. With respect to time, only Danish companies seem not to perceive it as an important strategy for the company or customers. They have a structured logistical system and their production is planned according to the needs of the market; however, market information is not important to their companies, as indicated in Table VI. Time-based competition 361 Brazil Denmark Finland Information Lack of IT use Lack of IT use Intensive IT use technology (IT) Market information High Medium High Logistics system Problems with suppliers and distribution Coordination with suppliers and distribution Coordination with suppliers and distribution Manufacturing Product Time as strategy to the company Intensive use of labour force Automatic machines and craftsmanship work Intensive use of automatic machines According to the According to the According to the customers needs customers needs customers needs Very important Not so important Very important Table VI. Some managerial comparisons

14 MD 46,3 362 Danish companies stated that they produce furniture according to their customers needs and that they care about innovation, but there is a contrast between these. Time and market information are essential to logistics, TBC and multiculturalism. In order to be competitive it is vital to know the market and understand the customers needs and expectations in order to effect sustainable leadership. For Finnish companies, on the other hand, time is very important to their customers, so they use it as a company strategy, and as an essential strategy resource. Production, the logistics system and information technology are intensively used in all parts of the business chain. Although the Finnish companies stated that they also think that Scandinavians and Europeans are quite similar in product and service requests, they nevertheless use market information to plan all the business and products according to their customers needs. In terms of TBC strategies, it seems that Finnish companies are the most time-based oriented ones. Brazil, as mentioned above, has various structural problems that affect the companies performance with respect to TBC. Danish companies, on the other hand, do not focus on time as an organisational strategy. The countries and companies involved in this research have different business strategies according to their different markets and customers. Although both Finnish and Danish companies feel that there are no differences between Scandinavian and European consumers, they nevertheless have different strategies related to those markets. The furniture industry is a competitive domain and it is forcing manufacturers to be in touch with their customers needs in order either to preserve or to increase their market share. TBC allied to logistics and supply chain strategies can be seen as a competitive strategy, but it will work only if companies are integrated and are aware of their customers needs and expectations. Therefore, cultural diversity has become a relevant issue for enterprise competitiveness. In a globalised world the understanding of cultural differences by organisations and managers will make them more effective and prepared to face diverse markets and situations. References Abdinnour-Helm, S. (2000), Time-based competition through better customer service, Production and Inventory Management Journal, Vol. 41 No. 1, pp Associação Brasileira das Indústrias do Mobiliário (ABIMOVEL) (2006), Panorama do Setor Moveleiro do Brasil, Abimovel julho, São Paulo, p. 3. Association of Finnish Furniture and Joinery Industries (2006), available at: www. puusepanteollisuus.fi (accessed 25 November 2006). Bozarth, C. and Chapman, S. (1996), A contingency view of time-based competition for manufacturers, International Journal of Operations & Production Management, Vol. 16 No. 6, pp Canen, A.G. and Canen, A. (1999), Logistics and cultural diversity: hand in hand for organisational success, Cross Cultural Management, Vol. 6 No. 1, pp Canen, A.G. and Canen, A. (2001), Looking at multiculturalism in international logistics: an experiment in a higher education institution, The International Journal of Educational Management, Vol. 15 No. 3, pp

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16 MD 46,3 364 TMF Swedish Federation of Wood and Furniture Industry (2006), OH-presentation, available at: ¼ 1&directory ¼ 588& document ¼ 2104, (accessed 30 November 2006). Trompenaars, F. and Woolliams, P. (2000), When Two Worlds Collide, Trompenaars Hampden-Turner (HTH) Intercultural Management Consulting, Amsterdam, pp. 1-19, available at: WorldsCollide.pdf (accessed 20 March 2007). Vickery, S.K., Dröge, C.L.M., Yeomans, J.M. and Markland, R.E. (1995), Time-based competition in the furniture industry, Production and Inventory Management Journal, Vol. 36 No. 4, pp Willis, T.H. (1998), Operational competitive requirements for the twenty-first century, Industrial Management & Data Systems, Vol. 2, pp Corresponding author Petri Helo can be contacted at: To purchase reprints of this article please Or visit our web site for further details:

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