Shui Fabrics: A Case Analysis of a Global Problem Essay
Shui Fabrics is a joint venture business between an American Company, Rocky River Industries and Shanghai Fabric Ltd. from China. The partnership began 10 years ago with the goal of producing dye and coat fabric to sell to china and international sportswear manufactures (Daft, 2012. ) The general manager in China was very pleased with the company’s progress in terms of production, affecting the local economy and the right amount of profit (Daft, 2012. ).
On the other hand, the American side of the partnership wasn’t as pleased recognizing a 5 percent annual return on investment (ROI) (Daft, 2012.) The American leadership believed that a higher ROI should be realized after acknowledging some of the challenges that are involved operating in China (Daft, 2012. ) This paper will explore the Shui Fabrics Case Study and its implications on managing in a global environment. PROBLEM Ray Betzell, the general manager of a joint venture between Rocky River Industries and Shanghai Fabrics Ltd. , was being torn between the two companies. After many years of production Rocky River’s President Paul Danvers wasn’t satisfied with the annual return of 5% (Daft, 2012.).
Chui Wai, deputy general manager, believed that Shui was generating just the right level of profit not too much and not too little (Daft, 2012. ) Although Chui Wai believed production and profits were well, his partner didn’t agree. Paul Danvers desired an annual return of around 20% based on the amount of years in service (Daft, 2012. ) Based on their differing perceptions on how well the company was performing, made the American group think about other possible options. The differing ways that they looked at the problems are Individualism and Collectivism.
Individualism reflects a value for a loosely knit social framework in which individuals are expected to take care of themselves (Daft, 2012, p107. ) Collectivism means a preference for a tightly knit social framework in which individuals look after one another and organizations protect their members’ interests (Daft, 2012, p. 107. ). A joint venture is a partnership between companies formed for a specific undertaking. (Boone and Kurtz, 2011) The Shui Fabrics partnership was created to supply products to international sportswear manufacturers.
In Shui Fabric’s case, the joint venture was established in two different countries, the United States and China. While globalization is increasingly popular, it requires an understanding of cultural differences that may exist between two nations. In this case, one set of managers come from an open market and capitalistic economy perspective (U. S. ) while the other operates in a communistic culture. Global Leadership and Organizational Behavior Effectiveness (GLOBE) Project offers a broader understanding for today’s managers.
Assertiveness, future orientation, gender differentiation, performance orientation, and humane orientation are value dimensions identified by GLOBE (Daft, 2012. ) These dimensions give managers an added tool for identifying and managing cultural differences. Social values influence organizational functioning and management styles (Daft, 2012, p. 106. ) Both the U. S. and China encourages the management characteristic of assertiveness. Each society is considered very tough and competitive. Shui Fabrics should consider some options that will be beneficial to both the company and its labor force.
First, the organization should utilize the strong labor force present by improving the efficiency of the people by providing training (Heizer & Render, 2006. ) Workers must be proficient enough in performing their specific tasks. Secondly, enhance the technical skills of those in the support groups to improve the productivity of the production line (Heizer & Render, 2006. ) Maximization of the organizational resources can be obtained. Lastly, improve the hiring system. This means putting the right person in the right job (Heizer & Render, 2006.) The delegation of workloads will be efficient and effective.
Providing feedback on the plant and production activities periodically will give the president an idea of how the company is doing continuously. Mr. Betzell should look at the options available to maximize on the location of the organization in order to maximize revenue (Heizer & Render, 2006. ) Preserving what the organization has already achieved and looking toward what else can be done is how the organization can move forward to accomplish its goal.