A Focused Exploration of Culture and Management

A Focused Exploration of Culture and Management

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A Focused Exploration of Culture and Management

Yan-Jiu-Yan-Jiu – Unprofessional or Unamerican?
Mike is having a hard time dealing with a working style that his Chinese partners refer to as yan-jiu-yan-jiu, which means "lets review and discuss." The Chinese were reluctant to install a new sewage disposal system, preferring to defer the work until adequate discussion and review had taken place. This style and pace of decision making did not register well with Mike's high performance, time is money driven personality; he had been raised in a culture where optimal efficiency depended on timely decision making. Moreover, responsibility became so diffuse that no one took initiative to really get things done. The lets review and discuss style certainly created frustrations among the aggressive, individualist Americans.
Yan-jiu-yan-jiu relates to Hofstede's dimension of uncertainty avoidance – clearly the Americans are demonstrating a strong uncertainty avoidance, while the Chinese have a weaker uncertainty avoidance. Mike is uncomfortable with the approach, lets review and discuss, because it does not provide an immediate solution to the problem at hand; he would prefer to see the issue settled through structured implementation of a remediation project, which in this case would involve a new sewage disposal system. He would like to see a formal plan of action with an appointed project manager to install the new sewage system in a cost effective way – this also reflects his individualist, internally controlled style, he wants to get things done asap. The Chinese style is to rely on stable relationships and informal networks as a source of value, so as long as the group is able to function, the new sewage system can wait, and we can continue to review and discuss. This collectivist, external control orientation has uncertainty built into it; the Chinese organization style would prefer to be less structured and formal when it comes to solving problems at the factory. Despite the fact that individual Chinese managers wanted to bring in a new sewage system, their collectivism overpowered their individual wills, and they were comfortable with putting it off indefinitely, an expression of a weaker uncertainty avoidance and a willingness to let external control dictate decision making.

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As it turned out, they did not install the new sewage system until the government forced them to, which reflects their strong commitment to preserve a harmonious relationship with government officials.
One possible solution to this conflicting management style would be for Mike to communicate tactfully to a group of managers about the situation and how he felt it was time for action. As opposed to the proposal making it into a meeting agenda, Mike should have set up a meeting specifically about the sewage problem. During this group discussion he would emphasize the fact that the sewage system needed to be repaired as soon as possible because it was in violation of government mandates, putting the JV at risk of regulatory fees and unnecessary cost, thereby using external reasons as a reason. Implementation would hinge on a delicate involvement with the government to oversee and advise the company on how to improve the sewage system, again bringing in external controls.
The Fourth Acquisition: A Reluctant Partnership
The Chinese Executive's strong push for a fourth acquisition clearly conflicts with Heartland's desire to restructure the company's operations in a way that would cut cost and increase short term profit margins. Heartland would like to see quality improve and operations streamlined before the partnership takes on another struggling factory into the JV – this emphasis on qualitative improvement is not shared by Suzhou First Textile Company. The Chinese partners feel strongly compelled to acquire the other factory in order to expand operations and create new jobs, meanwhile the Americans are determined to cut costs and eliminate jobs in order to achieve their short-term financial goals and redirect their production to compete in the higher end market.
Any understanding of this problem must first address the basic question: What is business for? Clearly, to the Americans, where free enterprise and Adam Smith's model of individualist capitalism reigns supreme, business is productivity through efficient value creation and the generation of wealth through quarterly profits. For the Chinese, business is this, but it is also, more importantly, an organization sustaining enterprise that creates jobs and gives purpose to everyday life. Continuous expansion and job creation are more important than immediate profitability to the Chinese, who perceive growth as necessary to sustained vitality, and long-term prosperity. The Americans, represented most strongly by Windler, focused instead on how growth initiatives would erode profit margins. Looking at Hofstede's dimensions, the Americans would be acting out their individualist, and more masculine tendencies. The individualism comes out in terms of Windler's will to challenge the Chinese plan on the basis of his own personal assessment of the situation. Masculinity is projected by Heartland's emphasis on performance and profitability over the more feminine concerns, which are based on relationships and the overall welfare of the group. So, the Chinese are clearly looking at the JV with a more collectivist, feminine attitude, as reflected by their goals of "creating jobs and keeping government officials happy"(case text, p. 30). This emphasis on collective welfare would also help to explain why they are not as concerned with actively addressing areas where performance could be improved – this might threaten somebody's job or upset the status quo government relationship.
Another way to look at the disagreement is through the framework of Hofstede's fifth dimension – Confucian Dynamism. The Chinese view the acquisition as holding promise in the long run, reflecting an underlying cultural belief connected to the ideology of Confucianism, which espouses a long-term orientation. So, the American camp is having a hard time reconciling this long-term perspective because they lack the Confucian worldview of the Chinese, instead they view the situation from a strongly individualist "Western" perspective, where performance and profit in the near term remain paramount.
The conflicting cultural dimensions that play into this problem are deep and challenging to reconcile. In order for Mike and the Americans to feel good about the acquisition and the prevailing Chinese mode of expansion, they want to see high levels of efficiency and performance so that profitability will be ensured. The feminine and collectivist forces would not agree to deprive so many people of jobs and livelihoods for what they might see as a myopic view of success. The Chinese visualize deeper into the future, when the JV will be operating efficiently and profitably as a result of the acquisition; this forecast has credibility from the fact that they have turned around money losing factories in the past.
In order to maintain a harmonious relationship with their Chinese partners, the Americans should continue to nurture guanxi (cooperation), but they must also communicate clearly in order to convey the common goals and rewards that they share in the partnership. Mike must therefore agree to the acquisition, as long as certain key benchmarks are met. The Americans should expect very small to mediocre ROI in the short term, and the new factory would have to be completely refitted with new equipment. Thus, the acquisition could be a way to integrate Windler's leaner operations model whereby the Americans would agree to the acquisition provisionally – the new factory would be designed to utilize automated machines and new technology which would require less labor. By not radically altering the composition of the JV at factory one (before acquisition), Mike would be preserving the stability and long term employment that the Chinese want, but by integrating drastic cost cutting measures into the new factory, the American camp can ensure that quality and lean operations can be actualized in the medium term.
Mike's Personal Responsibility for the JV: A Recipe for Sleepless Nights
At the end of the day, Mike is the general manager of the American faction of the partnership, and he is burdened with the responsibility of directing the relationship towards either continued cooperation or chronic conflict. He feels strongly pulled between nurturing cooperation and agreeing to the fourth acquisition, but he also questions whether this will threaten Heartland's bottom line. The fact that he is there alone is clearly a problem – the only other close confidante is his wife, limiting the degree to which he can strategize and brainstorm for solutions. Moreover, his mission is to represent the interests of Heartland in the JV, which certainly conflicts with the cooperation, "guanxi" oriented stance of the Chinese.
Mike has been appointed to manage Heartland's interest in the JV, so clearly he is acting upon a strongly masculine impulse to protect the interests of his company; of course, the level of individualism here is strong. The inequality of the Chinese presence is enormous; they are operating collectively, so Mike is burdened with a large set of managers to contend. Also, decisions made by the Chinese are difficult to monitor because the power distance is less, and group consensus/relationship building is more important than executive leadership by a few individuals. He therefore is up against a much more diffuse and challenging organization, while the Chinese have only one person to deal with, albeit someone with perhaps more self-reliance and drive than the typical Chinese manager. Mike has a lot of responsibility to maintain the JV or risk financial losses, and as an individualist, he must remain composed under an enormous amount of pressure to make the right decision.
A possible solution for Mike's sleepless nights would be for Heartland to send over several low to mid level managers from Heartland for at least two weeks. These individuals would receive full briefings and tours of the facilities, and would be able to share new ideas on how the JV should be conducted; perhaps if costs allowed, an independent, Chinese consultant team could be utilized as well, which would allow for constructive communication that might uphold the strengths of Mike's view within a cooperative framework that honors the Suzhou Textile's plan as well. Putting all the burden on Mike creates an awkward situation when he feels like opposing the Chinese plans, so a neutral third party would help, along with a small support team from Heartland to contribute fresh ideas and strategy.
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