Assignment 1: Shui Fabrics

Introduction

As explained in the Daft's Management readings, recent research by the GLOBE project extends Hofstede's assessment and offers a broader understanding for today's managers. The GLOBE (Global Leadership and Organizational behavior Effectiveness) project used data collected from 18,000 managers in 62 countries to identify nine dimensions that explain cultural differences. This paper describes the differences between Ray Betzell's and Chiu Wai's perspectives on the SHUI Fabrics' ROI in terms of the GLOBE project value dimensions. It will explain which of the differences is most central to the issue at hand and why and develops a strategy for addressing the situation. It will also explain how the strategy will appease Ray's boss back in the U.S. Lastly the specific benefits to the strategy will be laid out.

Shui Fabrics is a fabric company based in China. The company is a 50%-50% joint venture between Shanghai Fabric Ltd., a Chinese company and Rocky River Industries, a U.S. Textile manufacturer. The company produces dye and coat fabric for domestic and international sportswear markets. There are several differences between the American and Chinese views of the company. Let's discuss some of the ways the two countries differ in regards to the GLOBE project value dimensions (Daft 1991).

Answer 1

The first difference deals with the humane orientation dimension. The Chinese are concerned with job creation, because their unemployment hovers around 20 percent. With this joint venture they would be able to employ around 3,000 people, which is a real contribution to the local economy. The Americans think that they should cut employment in order to achieve higher profitability. The Americans are more concerned with bottom line and not the human capital (Daft 1991).

The second difference deals with the performance orientation dimension. Chiu Wai, Chinese deputy general manager's, believes that they are currently generating an appropriate level of return on investment (ROI) - “not too little and not too much” and is therefore satisfied with the 5 percent ROI (Daft 1991).

Ray Betzell is the American general manager; while Paul Danvers is the President of Rocky River Industries. The American management team believes that 5 percent ROI is pathetic and that expected ROI should be around 20 percent. The management team wants to see better economic performance or else they are thinking of liquidating the venture. When organization's cultures differ in an organization, these differences can cause conflicting behaviors, leading to misunderstandings and interaction problems. The cultural differences in management have led to the performance issue with Shui Fabrics. The final difference is social-cultural, the American's are more concerned with individualism, task orientation, and in their perspective relationships are less important than getting the job done. The Chinese are concerned with collectivism, are relationship oriented, and often looking out for one another. They feel that maintaining a harmonious relationship has more priority over tasks. Danvers also displays the uncertainty avoidance dimension as he indicates pulling out of China because of the low ROI over the last ten years. Sociocultural differences have a great influence ...