SHUI FABRICS: A CASE STUDY
Low return on investment is the main problem of Shui Fabrics as to US standards. It has stuck to 5% for three years and the Rocky River President expects 20%.
To increase the return of investment of Shui Fabrics to 20% or better.
III. ANALYSIS OF RELEVANT FACTS
1. Shui Fabrics is a 50-50 joint venture between the US textile manufacturer and the Chinese company.
Engaging in strategic alliances and partnerships is currently the most popular type of direct investment like a joint venture. The venture is to produce, dye and coat fabric for sale to both Chinese and international sportswear manufacturer.
2. Using the Global Leadership and Organizational Behavioural Effectiveness (GLOBE) Project Value Dimensions, the case presents the difference in perspective between the American and Chinese:
The American displays performance orientation whereby it places high emphasis on performance and rewards people for performance improvements and excellence. The American wants to see a better economic performance and expects higher profits, more than 20% ROI and not contented with 5% ROI. Tasked Oriented. One option taken was thinking of pulling the plug on Shui Fabrics if no improvement in the performance.
On the other hand, the Chinese exhibits humane orientation. The concern is about job creation. Three hundred jobs made pose a real contribution to the local company. The Chinese does not want to cut jobs. One thing more, the Chinese are relationship oriented.
These dimensions give managers an added tool for identifying and managing cultural differences.
This case points that the difference that is perhaps most central to the issue is perhaps performance orientation.
IV. ALTERNATIVE COURSES OF ACTION
1. Remind the Rocky...