Case Study 1

When a contract is not a contract …………?

This summer I had the good fortune and opportunity to interview the Managing Director of a medium-sized foreign-owned subsidiary firm, Jupiter Ltd (name changed) that manufactures conveyor belting in China for coal mines. With factories located in Shanghai, sales offices in the north and northwest of China and 300 personnel, this subsidiary company boasts an annual turnover of RMB 400 million for its Chinese operations

Type of customers

Most of its customers are coal mining companies in inner Mongolia, ShanXi, Anhui and Shantong, which belong to state-owned enterprises. With more than 100 competitors in this segment of the worldwide conveyor belting manufacturing industry, Jupiter has positioned itself successfully as a boutique supplier of high technology and precision engineering solutions customized to the safety needs of demanding work conditions.

Management Team

As Managing Director, Ben (name changed), himself an overseas Chinese, leads a small management team of well-educated professionals: a Director of Operations, a Technical Director, a Finance Director, a Sales Director and a Marketing Director. His management philosophy is one of delegation and empowerment, trust his people to do what's required without too much control but do spot checks from time to time.

Staff Empowerment

Ben says his main challenge dealing with Chinese personnel is getting them to exercise personal initiative when things go wrong instead of sticking by the instructions in the manual. He sees the need to promote a culture where 'it's okay to make mistakes' without fear of repercussions. He wants to encourage his staff to be creative in seeking out solutions and not be afraid to be take risks.

The meaning of a contract

Ben related to me that Jupiter once signed a contract with a state-owned customer to sell goods and services for a total sum of RMB 40 million (USD 6.5 million) over a year's duration. The terms of the contract were rather vague but Jupiter management thought it would be possible to work out things along the way. As it turned out, the customer did not make any purchases at all during the entire year. A post-mortem analysis suggested that for the customer, the contract merely signaled the intention of having a business relationship with Jupiter and it was up to Jupiter to develop and build the relationship to such an extent that the customer was ready to purchase.The company would then be considered to have reached the stage where it was ripe for real negotiations to take place. Clearly Jupiter management had not sufficiently informed themselves about Chinese business culture to accurately 'decode' the situation they were in.

Questions to consider:

  1. Why would the Chinese sign an ambiguous contract like this? What is the benefit for them? Do they do this with competing suppliers too so they can play off one supplier against another?

  3. Why would Jupiter agree to signing a vague contract that doesn’t lay out precisely in black and white what equipment or service package the client  would order, and within a specified timeframe? Are they feeling simply forced to do what others are doing? When in China (or Rome), do as the Chinese (Romans) do?

Case Study 2

Building trust and accountability in European-Asian teams

A European-based engineering design firm excels at making prototypes of electronic tools used in various industries across its wide base of global customers. The firm has established  offices and production plants in a low-cost manufacturing base in Asia where the prototypes are then sent for mass production. Thus the firm ensures a seamless “bridge to mass-production volume” for its customers, reducing risk and providing high quality and reliability of supply

Although many of the project managers and engineers have made several trips to their Asian base to meet their Asian counterparts, difficulties of communication have risen, causing project delays and lack of timely access to supplies, information and looming problems. There is a critical need for better collaboration between the teams.

The company needs to adopt a proactive approach to managing and averting problems that arise with production. One of the project managers commented: “There is the issue of lack of ownership and commitment within the overseas team” which we need to address.

Analysis of problems

What to do :

Case Study 3

Cross-cultural communication challenge

I'm not getting the information I need from my cross-cultural team.

A senior mgr with a successful track record in the US, finds himself at odds with a new multicultural team when working on a new product launch. Despite best efforts to keep everyone informed of key project deadlines, several members of the team do not respond to requests for information in a timely manner. Nor do they offer critical information in the weekly meetings. As a result of this behavior, the team has missed a deadline for a critical phase of the project in the launch timeline.

What should I be doing differently to encourage more open sharing of information and convince everybody that it is important to give me information at the right time?

Competency in cross-cultural communication skills directly influences your Success

Multicultural work is complex and not all cultures have a similar concept of what constitutes effective communication. Mutual understanding and common agreement in cross-cultural settings is a unique challenge. The simplest of words understood across cultures in a common language may carry different meanings that can cause misunderstandings and reduce trust. A lot of the difficulties caused by cross-culturally clashes are the result of failure by some or all parties involved to recognize and account for differences in culturally-based communication styles.

Case Study 4

An Intercultural Mindset

“I am leading a culturally diverse team. I have noticed that there are real differences in approaches to work, especially in planning, teamwork, decision-making, problem solving, and the role of interpersonal relationships. This has taken me quite by surprise and I am troubled that our team has not been very successful in reaching its goals. I must be missing something here.
Can I learn to understand and appreciate differences, and even use those to contribute to the creativity of our team?”

Despite the best of intentions, we are always seen through the cultural filters of others and they may not understand where we are coming from.

Lack of intercultural sensitivity in our interactions with people from other cultures can lead to feelings of emotional vulnerability and threat as well as anger and frustration. By exploring our own values and beliefs, and seeking to understand those of other cultural groups, we can reduce much of the stress of working cross-culturally. A posture of openness, acceptance, and non-judgment towards cultural difference can be thought of as an "Intercultural Mindset." We can develop an Intercultural Mindset by learning about the values and orientations of others and shifting into their perspective temporarily. Individuals and organizations that seek to be successful in global work must consciously cultivate and value an Intercultural Mindset. This will promote constructive relationships and innovative business solutions

How cultural frameworks help you to understand general cultural contrasts

Each culture is built on certain core values – which are preferences for certain states of affairs or ways of being over others. You can identify a culture's core values by considering how that culture relates to a number of key variables that have been identified by anthropologists and cross-culturalists. These variables relate to fundamental perceptions of effective communication, use of time, power distance in organizations, the role of individuals and the group, and other areas that especially impact workplace behavior. Properly understood they can add to the creativity and synergy of cross-cultural groups.

Consider for instance, the example below which demonstrates how people from cultures that value High or Low Context Communication Styles would differ in their behavior at a meeting.

High-context cultures are those in which a lot of meaning is derived from the surrounding situation than from what is said explicitly. People from such cultures may have various language use patterns (be very talkative or mostly silent) but they share a reliance on "reading between the lines" to communicate the real meaning. In contrast, people from low-context cultures rely more on explicit statements to convey meaning. Such people may also be either talkative or relatively silent but they will usually look to whatever is actually said for the real meaning. On this general continuum, people with European roots tend to be low-context as compared to more high-context Japanese and other Asians.

Misunderstandings along the high/low context continuum are quite common. Americans may wait for the Japanese to request something explicitly before they deliver it, leaving the Japanese to wonder (silently) at American insensitivity and obtuseness. Japanese, on the other hand, may create relational confusion by reading unintended meaning into American behavior. In the face of confusion, Americans are likely to become more direct and explicit, which may lead Japanese to become more indirect and circumspect, thus creating a spiral of increasingly incompetent exchanges



Christina Kwok

CH-5432 Neuenhof, Switzerland

+ 41 (0)56 406 1803

+ 41 (0)79 308 423

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