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Unformatted text preview: .“.mun..."ulna...“,1: it ,...,....~._........ -nrmmmm~¥aq-z. :-2-nv:-.-.-w-« ammr 247er f?}‘:$'91r((¥/mfr :rsar-‘i-Krl’eml/4’ aaeazmrmw-WWW m- ”a . )Spnou) are» a}, 22.6? n tfitttfififfim ,,_ ,néétiéiméflmfififitifltl PART IV Comprehensive Cases this much money for peeple to forget. What’s that about first impressions being the most important?” “Reading the brochure, I really thought that the programs for the kids sounded great. However, the first few days my kids said that the staff weren’t very interested in making them have a good time. They seemed like they were more interested in when they got off work than with making my kids have a good time. Then they had Dave. What a difference! The kids came back excited about everything they did that day. He was so energetic and interested in my kids.” “I told the front desk that they should really spray for bugs out on the terrace or get one of those bug lamps. There are so many mosquitoes out there in the evening. The staff doesn’t seem to be too inter- ested in responding though.” “We called maintenance the other day to tell them that our rooms are not fully operational 'in terms of things like showers, screens and faucets working. It’s kind of surprising to be at a resort like this without at least the basics. They said they would Send someone by today, but that was three days ago. I think I will go to one of the other managers next.” “Today I went to the beach at around 10 am. and they were already out of towels again. The beach attendant said that he would bring some back as soon as he found them. I guess he didn’t find any because it’s been three hours, although I did see him standing around at the other end of the resort talking with some friends. Do you think he ever even looked for them?” Listening to these comments, Dowd wondered which problems related to poor management relations with local staff, which related to simply poor work by the local staff, and which related to poor managing by the expatriates. One thing was sure—issues in all of these areas were beginning to affect the guests. MAKING SENSE OF IT ALL Dowd had been at the resort for just one week and the information from interviews with managers, local em- ployees, and resort guests along with personal observa- tions filled his head as he sat down to begin preparing for his meeting with Johnson the following morning. It was clear that there needed to be some changes at the resort if Johnson was going to resolve the issues con- cerning expatriate turnover, increasing guest com- plaints, and the level of tension between some of the expatriate managers and the local employees. The first wave of peak season guests, those coming for the Christmas holiday, would arrive tomorrow and stretch the resort’s resources to their limits. Dowd wondered how he could best utilize the information gathered to analyze the current situation and provide some course of action for Johnson to take that would address his concerns. Dowd sat at his table and began to organize his thoughts. Care I 6 A Firat~ Zime Expatriate 9 Experience in a Joint Venture in China. THE LONG TRIP HONLE James Randolf was traveling back to his home state of Illinois from his assignment in China for the last time. He and his wife were about three hours into the long flight when she fell asleep, her head propped up by the air- line pillow against the cabin wall. James was exhausted, This case was prepared by Dr. John Stanbury, Assistant Professor of International Business at Indiana University, Kokomo, with enormous assistance from Rina Dangarwala and John King, MBA students. It is not intended to illustrate either effective or ineffective handiing of a managerial situation.The views represented here are those of the case author and do not necessarily reflect those of the Society for Case Research.'Ihe author’s view is based on his own professional judgments. The names of the organization, and the industry in which it operates, and individuals' names and the events described in this case have been disguised to preserve anonymity. Presented to and accepted by the Society for Case Research. All rights reserved to the author and SCR. Copyright © 1997. but for the first time in many days he had the luxury of reflecting on what had just happened in their lives. He was neither angry nor bitter, but the disruption of the last few weeks was certainly unanticipated and in many ways unfortunate. He had fully expected to com- plete his three-year assignment as the highest ranking U.S. manager of his company’s joint venture (JV) near Shanghai. Now, after only 13 months, the assignment was over, and a manager from the regional office in Singa- pore held the post. Sure, the JV will survive, he thought, but how far had the relationship that he had been BUT" turing between the two partnered companies been set back? His Chinese partners were perplexed by his com- pany‘s actions and visibly affected by the departure of their friend and colleague. Was this an error in judgment resulting from 0011‘ trols’ relative inexperience as a multinational company and a partner in international joint ventures, James wondered- CASE 16 Or, had something else caused the shift in policy which resulted in the earlier—than-planned recall of several of the corporation’s expatriates from their assignments? There had always been plans to reduce the number of ex— patriates at any particular location over time, but recent- ly the carefully planned timetables seem to have been abandoned. Next week, James had to turn in his report covering the entire work assignment. How frank should he be? What detail should he include in his report? To whom should he send copies? There had been rumors that many senior managers were being asked to take early retirement. James did not really want to retire but could hardly contain his dissatisfaction as to how things had turned out. Maybeit would be better to take the offer, if it was forthcoming, and try to find some consult- ing that would make the best use of his wide spectrum of technical and managerial experience which now included an expatriate assignment in what was considered to be one of the most difficult locations in the world. James reflected with satisfaction on his accomplish- ment of the initial primary objectives[,] which were to establish a manufacturing and marketing presence. In fact, he was quite pleased with his success at putting many things in place [that] would allow the operation to prosper. The various departments within the joint ven- ture were now cooperating and coordinating, and the re- lationships he had established were truly the evidence of this achievement. He would like to have seen the opera- tions become more efficient, however. The worklife that awaited him upon his return was a matter of considerable concern. Reports from the expa- triates who preceded him in the last few menths indicat— ed that there were no established plans to utilize their talents, and often early retirement was strongly encour- aged by management. Beyond the obligatory physical examinations and debriefings, he had been told there was little for them to do. Many of the recalled expatri— ates found themselves occupying desks in Personnel waiting for responses about potential job opportunities. He gazed at his wife, Lily, now settled into comfort- able slumber. At least she had had a pretty good experi— ence. She was born in Shanghai but left China in 1949. The country was then in the middle of a revolution, but, aside from her memory of her parents appearing ex- tremely anxious to leave, she remembered little else about the issues surrounding their emigration to the United States. Most of her perceptions about “what it was like” in China came from US. television coverage, some fact, some fiction. As the plane droned on into the night, James thought back to how this experience began. THE COMPANY Controls’ world headquarters were in Chicago, Illinois. It had operations in several countries in Europe, Asia, and South America, but, with the exception of several A First-Time Expatriate’s Experience in a Joint Venture in China maquiladoms, all of its expansion had occurred very re— cently. Its first involvement in joint ventures began only three years ago. As an in—house supplier to “Filtration, Inc.,” a huge Chicago-based international manufacturing conglomerate, specializing in the design and production of temperature control and filtration systems, it had been shielded from significant competition, and most of its product lines of various electronic control mecha— nisms had been produced in North America. Ten years ago, however, Controls became a subsidiary of Filtration, Inc. and was given a charter to pursue business beyond that transacted with its parent. At the same time, the rules for acquiring in-house business changed as well. Controls now bid for Filtration, Inc’s business against many of the world’s best producers of this equipment. The need to utilize cheaper labor and to be located clos- er to key prospective customers drove the company to expand internationally at a rate that only a few years earlier would have been completely outside its corpo- rate comfort zone. A JV in China would provide Centrols with an op— portunity to gain a foothold in this untapped market for temperature control systems. This could pave the way for a greater thrust into the expanding Chinese economy. If the .T V was successful, it could also lead to the establish— ment of plants to manufacture various products for the entire AsiafPacific market. The corporation’s involvement in the joint venture seemed less planned than its other expansion efforts. The Freezer and Cooler Controls Business Unit (one of Controls’ key business units), headquartered in Lake— land, Minnesota sent a team of four, consisting of two engineers and two representatives from the Finance and Business Planning Departments, to investigate the possi— bility of partnering with a yet-to-be-identified Chinese electronics assembly operation. The team was not given an adequate budget and was limited to a visit of one month. Not being experienced international negotiators, they were only able to identify one potential partner, a Chinese state-owned firm. They quickly realized that they did not have time to conclude negotiations, and re-. turned to HQ without having met their objective. After debriefing them upon their return to the United States, the corporation’s planners decided that the Chinese JV presented a good opportunity and sent another team to continue these negotiations. Eventually, an agreement was reached with the Chinese state-owned firm. Exhibit (216-1 shows the organizational relationships between Filtration, Inc. and its subsidiaries. HOW IT ALL BEGAN James had always been intrigued by the idea of securing an international assignment. His interest heightened on the day that Controls, Inc. announced its intentions to ex- pand the business through establishing a more interna- tional presence, worldwide. By age 51, James had worked szzzhriczzn‘ 15‘? A (hr (mnmfifimal r " {WAN-334%? 5;! g! . El : -. - "9 ti 2: n l n .4 ifiitrlfl. PART IV Comprehensive Cases in managerial positions in Engineering, Quality Control, Customer Support, and Program Management for the last 15 of his 23 years with the company, but always in posi- tions geographically based in Pauley, Illinois. He frequent— ly mentioned the idea of working on an international assignment to his superiors during performance reviews and in a variety of other settings. He did not mentally tar— get any specific country, but preferred an assignment in the Pacific Rim, due to his lifelong desire to gain an even deeper understanding of his wife’s cultural heritage. Finally, two years ago, he was able to discuss his in- terests with the corporation’s International Human Re- sources manager. During this interview he was told of the hardships of functioning as an expatriate. There could a language problem as well as difficulties caused by the re- moteness from home office. He remained interested. A year later, James was first considered for a posi- tion that required venture development in Tokyo. At one point he was even told he had been chosen for that position. With little explanation, the company instead announced the selection of a younger, more “politically” connected “fast-tracker.” When, a few months later, a discussion about the po- sition in China was first broached by Personnel, it was al- most in the context of it being a consolation prize. The position, however, appeared to be one for which James was even better suited and one which would be challeng— ing enough to “test the mettle” of any manager in the company. The assignment was to “manage a joint ven— ture manufacturing facility” located on Chongming Dao Island, about 25 miles north of Shanghai. The strategic objective of the JV was market entry into China. Soon thereafter, in mid-August of 1992, James was asked to go immediately to Lakeland to meet one-on-one with Joe Whistler, the director of the Freezer and Cooler Controls Business Unit to discuss the JV. The negotiating team was still in China in the process of “finalizing” the JV agreement with the Chongming Electro-Assembly Company, a state-owned electronic device assembly oper- ation. The corporation felt that there was a dire need to. put someone on site. Joe asked if he could leave next week! James indicated that he was interested in accepting the position and that he was willing to do whatever the corporation required of him to make it happen as soon as possible. It was understood that a formal offer for the po- sition would be processed through Personnel and commu- nicated through James’s management. When this trip didn’t materialize, James wondered if this was going to be a repeat of the Tokyo assignment. Finally, in late Septem- ber, James’s supervisor approached him and said, “if you still want it, you’ve got the prize.” ORIENTATION Filtration, Inc. has a defined set of procedures to deal with expatriate work assignment orientation. When it was determined that James was a strong candidate to go overseas, it was arranged for James and his wife to go to Chicago for orientation training. The training began with a day-long session conducted by Filtration, Inc’s Inter- national personnel function. James thought the training was exceptionally well done. Filtration, Inc. brought in experts to discuss pay, benefits, moving arrangements, and a multitude of other issues dealing with working for the corporation in an international assignment. Part of the orientation‘process was a “look—see trip,” the normal length of which was seven days. The trip was quickly arranged to begin two weeks later. The Randolfs were extremely excited. This would be Lily’s first trip back to China. They even extended the duration of the trip to ten days to do some investigation on their own time. There was a considerable mix—up in the planning of the “look-see” trip. Although the Personnel Department in Pauley wanted to arrange the entire trip, Controls’ Asia-Pacific regional office in Singapore insisted it was better for them to handle it locally. The Randolfs were supposed to have a rental car available upon arrival but discovered that no arrangements had been made, and so they were forced to secure their own car. Their itinerary indicated that they had reservations at the Shanghai Inn, but they soon discovered that no reservations had been made there either. In Shanghai they went sightseeing on their own for three days. Afterward, they were scheduled for seven days of official activities. They spent the following two days with an on-site consultant, who was on retainer from the JV, and who showed the potential expatriates around the city. Her tour consisted of what she per— ceived a typical American might most like to see. The wife of an expatriate herself, the consultant didn’t speak Shanghainese or any other Chinese dialects. Travel CASE 16 with her was somewhat of a nightmare. As opposed to discussing the planned locations with the Chinese driver at the beginning of a day, she directed the trip one step at a time. She would show the driver a card on which was written the address of the next location and say “[G]o here now.” This approach caused considerable delays due to the inefficiencies of [traversing] the city numer- ous times and touring in a disorderly sequence. They were shown American-style shopping, American—style restaurants, and potential living accommodations. The Randolfs were told that leasing a good apartment com- monly required a “kickback.” After visiting the JV ’s factory near Shanghai they trav- eled to the regional headquarters, Controls Asia-Pacific, in Singapore to participate in an extensive orientation workshop. Again, the topics included compensation poli- cies and other matters of interest to potential expatriates, this time from the perspective of Controls, Inc. James and Lily both noted a significant contrast in dealings with the regional Controls, Inc. personnel staff as opposed to the “first rate” Filtration, Inc. International Human Re- sources people. The former was by far a less polished and informed operation. Even as they departed Singapore for the United States, they were still unsure that the move was right for them. They spent the next several days re- flecting on the trip and discussing their decision. They were discouraged by the lack of maintenance apparent in the factory, which was clearly inferior to US. standards. Things were dirty, and little effort was expended on envi- ronmental controls. The days seemed awfully gray. How- ever, they had quickly become enamored with the Shanghai people and this became a key factor in their ul- timate decision to accept the position. As the result of their interactions with the Chinese partners and Shang- hai area residents, James and Lily truly felt the promise of exciting, new, deep, long-lasting relationships. Once they were firmly committed to the assignment, they attended a two—day orientation on living and work- ing in China.This was provided by Prudential Relocation Services Inc. in Boulder, Colorado, and was tailored to the A First-Time Expatriate’s Experience in a Joint Venture in China needs and desires of the participants. Optional curriculum tracks included: the history, culture, political climate, busi- ness climate, and the people of the region. James focused his training on a business—related curriculum which was taught by professors from a local university. Additionally, whenever an expatriate returned from China to the home office on home leave, James was given an opportunity to interface with him. Exhibit C16-2 summarizes the key characteristics of Chinese culture and management. Between November (1992) and January (1993), James worked an exhausting schedule, alternating two-week pe- riods in Pauley and at the JV in China, where lodging and meals were provided in a hotel. During this time, his wife, Lily, remained in Lakewood preparing for their perma- nent relocation to China. Also, Filtration, Inc. held sched- uled, intensive Mandarin language courses in Chicago, which James planned to attend, but due to his work sched- ule he was unable to take advantage of the opportunity. Fi— nally, in January, James attended the language school for a week. Fortunately, he and Lily already spoke some Can- tonese, another Chinese dialect. After James was finally on-site full-time in February, he hired a language tutor to supplement this training. The orientation procedure con- cluded with a checklist of things that James and Controls were to accomplish after the commencement of his on-site assignment.While all of these checklist items were eventu- ally accomplished, priorities on the job didn’t allow them to be completed in a very timely manner. WORKPLACE ORIENTATIONS Mandarin, China’s official language, was spoken at the factory. In regions where Mandarin is no...
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