The Gandriff Corporation is a successful retail chain in the U.S. Midwest. The St. Louis–based company has had average annual growth of 17 percent over the last 10 years and would like to expand to other sections of the country. Last month, it received a very interesting offer from a group of investors from Australia. The group is willing to put up $100 million to help Gandriff set up operations Down Under. The Australian investors believe that Gandriff’s management and retailing expertise could provide it with a turnkey operation. The stores would be built to Gandriff’s specifications, and the entire operation would be run by Gandriff. The investors would receive 75 percent of all profits until they recovered their $100 million plus an annual return of 10 percent. At this point, the division of profits would become 50-50. Gandriff management likes the idea but feels there is a better chance for higher profit if it were to set up operations in Europe. The growth rate in European countries, it is felt, will be much better than that in Australia. The investors, all of whom are Australian, are sympathetic and have promised Gandriff that they will invest another $100 million in Europe, specifically England, France, and Germany, within three years if Gandriff agrees to first set up and get an Australian operation running. The U.S. firm believes this would be a wise move but is delaying a final decision because it still is concerned about the ease with which it can implement its current approach in foreign markets. In particular, the management is concerned about whether the leadership style used in the United States will be successful in Australia and in European countries. Before making a final decision, management has decided to hire a consultant specializing in leadership to look into the matter.
1. Will the leadership style used in the United States be successful in Australia, or will the Australians respond better to another?
2. If the retailer goes into Europe, in which country will it have the least problem using its U.S.-based leadership style? Why?
3. If the company goes into Europe, what changes might it have to make in accommodating its leadership approach to the local environment? Use Germany as an example.
