Yves Cantat is a 20-year electrical maintenance worker at Lafarge’s plant in France. Gone are the days when mixing cement was like making a huge cake. Now it is all computerized. The equipment and production processes have changed over his 20 years, but not many of the employees. He says, “In 20 years I have seen only two people leave.”
Lafarge is the world’s biggest cement producer and is on Fortune’s “Global 500” list, with over $15 billion in revenues from 133 cement plants in 46 countries. It traces its origins to 1833 when it was founded by the Lafarge family. The founders were committed to a form of humanism that still prevails in the company today even though the family no longer controls it. Since the end of World War II, Lafarge has had only five CEOs, and two of them have written books about the company’s culture. Now retired CEO and current board member Bertrand Col-lomb says, “Lafarge will not work in situations where we are required to deny our values and participate in practices that we abhor.” Collomb is an advocate of the “Lafarge way,” a philosophy of participative management.
The Lafarge way says in part:
- • A key responsibility for managers is to develop their people. They expose employees to challenging assignments, help them to learn from their achievements and mistakes, and support them to outperform themselves.
- • We expect our people to share their experiences and to seek those of others. Best practices derive from our ability to recognize and share our local successes, regardless of their scale.
- • Dealing with conflict is an integral and productive part of teamwork. Teamwork is not about reaching consensus on every issue. It is about each individual contributing, accepting, and seeking differences of opinion as a source of progress.
- • Effective teamwork creates an environment of trust and confidence. This is built daily through professionalism, personal commitment, shared goals, and respect for common rules.
There are three trade unions at the French plant, and despite recent strikes, things seem amicable between management and labor. As one employee said about the strike, “After all, this is France.” Many of the workers are shareholders in Lafarge. Several years ago, more than half the employees bought Lafarge stock when they were given an opportunity to buy it at a price subsidized 60 percent by the company.
Lafarge’s organization development program incorporates the principles of learning organizations. For them it means that they promote the sharing of best practices and experiences through networking, cross-functional, and international ways of working. Self renewal is part of the process where they increase the ability of all employees to adapt to new conditions, solve problems, and learn from experiences.
An important element at Lafarge is training. Managers are required to monitor the development of employees. “Our aim is to become a learning organization,” says the training manager of the cement division. Given the global nature of the company, managers are expected to speak English, with Lafarge offering language classes.
The company practices intensive communication to make sure that its worldwide businesses understand its operations. Lafarge operates a Web site for employees and publishes a monthly magazine in French and English.
Please answer the following questions as a group.
- Is Lafarge practicing System 4 Management? Provide support for your answer.
- Does “The Lafarge Way” have an influence on turnover at the organization? How so?
- Why is System 4 Management important in a constantly changing business environment?
- Do you think System 4 Management would be effective in China? Why or why not?