Ray Betzell handling a general managerial post of a business partnership in the past five years between Rocky River Industries based at Ohio and Shanghai Fabric, LTD. Chai Wai, was his Deputy General manager. Together, in a joint initiative, they started out as representatives of a textile manufacturer based in the United States and another company based in China. Shui was started with the aim of producing coat fabric and dye meant for sale to international sportswear manufacturers, including Chinese market. Paul Danvers, Rocky River’s president, who happened to be Betzell’s boss, happen to have a nagging issue with the current 5% ROI the joint venture was receiving and he felt the need of it being at least at 20% ROI at that particular time. He even shows dissatisfaction further in one of his call to Ray made from US. By conversing to Betzell, he felt that it might be the ripe time to end ties with Shui. However, Chiu Wai on the hand fells that things were normal since as per his view, expectations had been met and that there was nothing to raise alarm on.
The GLOBE (Global Leadership and Organizational Behavior Effectiveness) is a research that was primarily meant to provide an in-depth assessment of the relationship between societal values, social practices and leadership effectiveness. It reports information on cultural flexible from large number of nations. The information provided, is for 62 societies around the globe. Globe outlines nine cultural dimensions and they are assertiveness, which is the degree to which individuals are assertive, aggressive and straight forward in a society; uncertainty in avoidance is the second one. Which is the extent a society member struggles to escape uncertainty by depending on social practises and norms that already practised; (3) power distance: which is the extent to which the society expects and accepts that power is unequally distributed; (4) collectivism I (institutional 432 Ralf Terlutter, Sandra Diehl and Barbara Mueller collectivism), the extent to which institutional practices in the society reward and encourage collective action and distribution of resources, as opposed to individual distribution and individual action; (5) collectivism II (in-group collectivism), the extent to which members of a society express pride, loyalty, and cohesiveness in their groups, organizations or families; (6) gender egalitarian-ism, the degree to which a society minimizes gender role differences; (7) future orientation, the degree to which members of a society engage in future-oriented behaviors such as planning, investing, and delaying gratification; (8) performance orientation; which is the extent to which excellence and performance improvement by group members is encourages and rewarded by the society.
In regard to the GLOBE project value dimensions, there arose differences between Chiu Wai’s and Ray Betzell’s Outlook on Shui Fabrics’ RIO (return of interest.). Betzell and Wai both coming from different status quo, lack a definite strategy and approach in their values and cultures are different. Coming from a developed economy where there’s great infrastructure, Ray did not fully comprehend how the Republic China works in view of the culture and also in terms of business order. Ray looks at the productivity of the present labour force interms of Betzell is looking at efficiency. Presence of proper infrastructure and developed technology is what Ray sees that would lead effectiveness of the company. This in turn brings forth greater returns and probable satisfaction from his Boss’s side. This however will bring to end of employment to some employees which Mr.Wai tries to avoid. It will be in order to point out Ray’s endeavours as short lived. For him to effectively manage the partnership, it is a prerequisite that he understands this and adapts himself.
The arising differences in this case are socioeconomic difference between the two. Chui Wai is focusing more on the social view than Ray Betzell who dwells on economic level. This is the root of their predicaments. Chui Wai concentrates on meeting corporate responsibility that are minimal, as they keep on staying afloat; he believes that the long term will be catered for.. He needs to ensure that there is no conflict between the locals and them. This will definitely stir a major problem with the government. So to avoid this, the local community must be absorbed in. When the company takes them in, it will help in improving their lives by raising their living standard. This in turn protects the image of the company. As such, the main issue is striking the balance between economic and social gain (Snell & Bateman, 2012).
Ray Betzell main outlook is deploying a strategy that ensures maximum returns. By minimizing the cost of labor and maximizing technological input, the company productivity will be on an increase note, thus maximizing the returns. As much his aim is to improve on productivity, he needs not to outlook the problems that may arise due to his decision. Conflicts may arise with the government and hence being forced to enjoy the goals on short term basis.
Such strategies will help to deal with the arising situation. By taking care of diversity in the company and ensuring its global competitiveness is active. The strategy should ensure that every stakeholder need is met rather than solving for each. Arriving at a satisfactory answer ensures that the optimal solution for the organization and stakeholders’ interests arrive at a confluence. Comparative advantage of the production activities of the company may help in achieving this (Snell & Bateman, 2012).
China having availability of raw materials and presence of cheap labour is then an important factor as compared to U.S. the best solution in the prevailing conditions is to ship the unfinished products to the United States for further processing. This is advantageous because the tariffs levied on imports are relatively low in the United States. The final products of superior quality attain competitiveness globally and much profit returns are experienced. Taking the finished products to America provides a well organised network of distribution compared to China. Achieving well behaved profit margin and ensuring the sustainability of the will definitely appease Ray’s boss back in America (Manski, 2000).
The main aim or goal of the status quo focuses on long term sustainability and growth of the company. This in turn improves the people social lives. This ensures that as a company plans to invest in a certain region, it must positively transform that society .This is done by ensuring that there are no other external profit gainers apart from the community itself. This strategy reduces the management conflict that may. It also ensure the company achieves both goals; short term by profit maximisation and sustainability which caters for the long term .This addresses social and economic needs of the surrounding community and that of the company (Manski, 2008).
Manski, C. (2000). “Identification Problems and Decisions under Ambiguity: Empirical Analysis of TreatmentResponse and Normative Analysis of Treatment Choice,” Journal of Econometrics, 95, 415–442.
Manski, C. (2008). A Diversified Treatment under Ambiguity. Evanston. Northwestern University.
Snell, S. and Bateman, T. (2012 Management: Leading & Collaborating in the Competitive World. New York: McGraw-Hill/Irwin