Chinese Business System
Essay Preview: Chinese Business System
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Trouble in Paradise: 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 Mikes 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 Hofstedes 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. 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 Executives strong push for a fourth acquisition clearly conflicts with Heartlands desire to restructure the companys 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 Smiths 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 Hofstedes dimensions, the Americans would be acting out their individualist, and more masculine tendencies. The individualism comes out in terms of Windlers will to challenge the Chinese plan on the basis of his own personal assessment of the situation. Masculinity is projected by Heartlands 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 somebodys job or upset the status quo government relationship.
Another way to look at the disagreement is through the framework of Hofstedes 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