Trouble in Paradise

Reflection paper

The case study “Trouble in Paradise” by Xin K. and Pucik V. (2003) was extremely interesting and informative, contained information from different areas of management and it proved once again how the organizational cultures are different and crucial in doing international business.  

What was the most exciting for me personally – to feel throughout the case the elements of each organizational culture, USA and Chinese, which manifested themselves in vision, plans, attitude towards partners and workers, and even in the personal interests of each person in the case.

USA organizational culture is individualistic. Individualistic culture is when the culture focuses on the individual's needs and looks for happiness on an individual level before looking to the group. People are not required to be a member of a group in order to have an identity. That was seen both in Bill Windler’s request of higher ROI even even on account of job cuts and the adoption of other measures not popular for the collective and the Chinese management; and in the Mike Graves personal interests (luxury home, best private school for children, etc. that are paid by the company here) that he some time puts above the interests of the company.

Collectivism is the opposite of individualism. Collectivism occurs when people put the good of the group before themselves and focus on their role within the group rather than their own happiness. The importance in this environment is on the harmony and the connectedness of the group. In this case it is seen in the Chinese managers’ refusal to express their opinions among colleagues, Qinlin’s strive to expansion and increase of the work place, despite the fact that this will lead to decrease in returns, increase in costs and quality.

In this case, if I was the general manager of the company I would do the following:

1. I would first of all come out of the comfort zone, as a general manager, I should put interests of the company above my personal interests. I would start to become proactive rather than waiting for Chinese partners implement their own vision regarding the company, start to negotiate and strategize in highly dynamic environment.
2. I would come up with the coincidental strategy and performance objectives, which will satisfy both sides: USA and Chinese: two partners should work toward the same goal. Is it a goal for USA partners to be a national company there in China? No, because they see the China as a low cost manufacturer rather than the market. Do they need  
3. I would transform the company to market-driven and value-creation driven largely by rewarding senior managers for gains in those directions. From the observations of sociologists,Chine is adaptive to other cultures. For example, especially senior managers, are very responsive for pay-for-performance plan.
4. One of the largest costs in mane international joint ventures are the expatriate managers packages. Perhaps I could save by reducing the number of expats, first.
5. Mike can not change the organizational culture of the whole nation or the situation on Chinese market, rather he should concentrate on the things that he can change: the relationships between USA and Chinese partners and his own managerial behavior.
6. And the last, Mike should discuss with Heartland the possibility to establishing the portfolio of joint venture that would reduce the risk associated with any one partners. For example, to search for some alternative to the traditional 50/50 strategy. If Heartland Spindle is more focusing on exports and profitability, they possibly should have minority share in the venture.