Culture Clash in The Boardroom Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Culture Clash in The Boardroom Case Solution

In Chinese culture, participation in corruption is a joint business agreement, and there is no law on corruption. The Chinese president of the joint venture confused some of his beliefs with safety practices and procedures, saying the procedures are costly.However, the European company believes that these ethical norms and practices violate its culture and ethical values.

In addition, the president of the joint venture wanted to pay a commission for the sale, but this practice violated the rules of the company as a whole. In addition, the Chinese executives believe that buying safety equipment and disposing of waste produced during the products manufacturing, is a waste of time and money. All business decisions by European companies are made using innovative ideas and ideas that can increase the customer base and provide long-term competitive advantages.The conflict at the conference is to give in to Chinese business or to be loyal to the European corporate culture.

Violation of Chinese business methods may lead to legal problems in the region, where the venture capital company is located. In addition, this could lead towards negotiable inconsistencies in the German network, and the company could lose its domestic customers. On the other hand, the European company has developed a strategy of concessions that can bring in huge benefits for the Chinese market.

Situational Analysis

After the decision of Almond Chemical to execute its operations in China through a joint venture; it witnessed cultural difference in the business practices. One major concern raised when Wang mentioned that his potential client would like to receive a 1 percent commission payback on the proposed large settlement. At that time Peijin replied that the Almond’s ethics are non-negotiable.

In this case, it is observed that Wang is trying to resolve the lack in sales revenue by overpaying and compensating its clients upon the acceptance of the deal. This action could be perceived as bribery, which often includes the concepts of gift giving and is globally seen as a tactic in which it gains a business advantage. This clash of the cultural understandings and the company’s ethics have caused a dilemma regarding the company’s operations.

Facing an ethical decision, Peijin is put into a difficult position with his board members, and he is ultimately required to make a critical choice for the future. The major decision that Almond must address is its choice to adjust the company’s values for the benefit of its joint venture’s operations in China. Almond owns 51 percent stakes in the Chinese firm, and conducts its entire operations under the values it has acquired and built through the company.

A business which is started internationally can often lead to cross cultural clashes, therefore the individuals must have a good understanding skill prior to making a joint venture. It has been observed that the Multinational Corporation: Almond Chemicals has high power and scope of its partners. This can cause some of the difficult challenges for the managers in both positions to feel equality and collaborate freely, as large Multi-National Corporation sensually have the stronger vote, which often result in ethical dilemmas.

Hofstede describes the culture as an interactive common set of traits that impact a group’s response to its environment. As mentioned earlier, it is witnessed that the differences in culture has become a challenge for both the organizations. In particular, another key issue addressed in this situation is in the lack of appreciation of the cross-cultural differences and work-related values.

Peijin is working with both the Chinese representatives as well as the German partners. He must be able to discourse this situation in a notable way, by addressing the values from both the cultures, while still remaining on task with the organization’s values. Our course research indicates that 16 to 40 percent of the managers in foreign assignments usually terminate, because they are unable to adjust to the culture.

This relates to the major concern that Peijin is facing, when he expresses his feeling of being, stuck between two warring parents. This raises the debating issue for Peijin and his choice to adjust the values, on which he and Almond have been operating, or accustom to the business practices in China. The following section will examine the cultural differences between both the countries.

Uncertainty avoidance can be described as an extent to which people are uncomfortable with uncertain or ambiguous situations. It is noted that the Chinese culture has weak uncertainty avoidance as the country is less concerned with rules and conformity. It is also observed that this is a cultural difference since Germany has a high uncertainty avoidance.

At this point in the conversation;it is observed that the German partner Schulman does not speak up until the end of the board meeting. He concludes, by stating, all these issues are still open for discussion. In this conversation, it should be noted that Wang is articulating his concerns and Shulman has a high uncertainty towards the requests made by Wang, and therefore he decides to table the conversation for a later time.

According to Hofstede’s diagram, both China and Germany can be described as having long-term orientation. However, with the mention of short-term monetary gain;the push from Germany has been observed, to disregard this short-term gain, as it explicitly mentions.

It is also observed to be a major concern, because the company’s financial pro-romance is not where both the partners expected. This leaves both the counterparts with a need to focus towards finding a solution in which long-term decisions could be made to meet the vested interests as well as the needs of both the organizations.

Alternative Analysis

Alternate 1: Defined and Identified Work and Ethical Values

Constructed on the analysis complied; a clearer joint venture agreement can mitigate the issue of clashing ethics. A venture with defined and identified work and ethical values,would provide clearer definitions and roles’ description in the partnership. Work attitudes are less likely to last as long as the personal values, if they do not align with the individual.Work attitudes are collective feelings, beliefs and thoughts and therefore they last effect-son how people behave in the organization. In this case,it has been seen that the work values of Almond co. override the partner’s values in China. Therefore, the companies should have deciphered their values in the beginning by implementing a ranking system.

Alternate 2: Ethical Values Ranking

The companies should have ranked their values and agreed independently upon their most important values and ethics. This would have allowed for a collaborative understanding of both cultural perceptions and ways of operating business. It has been seen as discrepancy, as the German representatives are protective of their ethical values and are focused on the company’s integrity;whereas, the Chinese partners are focused on profits. This implementation would have allowed the companies to adopt and clarify their most important values.

Currently, Almond is in the mature organizational stage. It has built a reputation and stands by it strongly. Its partner owns a different brand and vision, and therefore it would be ideal to hire a third-party consultant to aid and guide the joint venture to be directed towards the right direction. Furthermore, if the company hired a communication professional, it would have helped in having a neutral correspondent for both the parties, and the communication professional wouldhave eased the cultural clash through dealing with and defining the consequences. He would have provided a well-rehearsed plan of action for situations like differences in cultural values and business practices. The commutation professional could have been competent in both the cultures, with an efficiency in resolving the issue with a non-biased approach.

Alternate 3: Decision Making Process

Another alternate might be related with the help of the company to compromise, which includes the engagement of both parties in a mindful decision-making process. From the Germans’ point of view; gifting between the businessmen is perceived as a bribe. This could be considered an implicit bias, but it might be difficult to realize that it could actually an unconscious bias.

By assuming; Almond has a pre-determined attitude towards their partners’ intentions. Almond should realize that this form of gifting is actually a common practice in the country and it is how they operate their business. This company should not disregard its own values but should find a solution through understanding their partners’ perspectives, in order to reach a common consensus.

Recommendations

It is recommended to the company that the understanding of work itself can revalued differently in different cultures. In the article it is implied that the individuals from China establish relationships by engaging in conversation outside their workplaces, such as, getting to know each other’s families, whereas, Europeans believe work relationships are limited to the workplaces only.

Because these two businesses and their organizations values and practices massively differ from each other’s; two perspectives are left. By establishing closer relationships through the acknowledgement of the individuals’ motives and values, which relates to the equity theory, and therefore doing so would help in finding appropriate rewards and motivations for Almond’s partners.

To conclude, with the request in compensation for the sales achieved; Almond should implement a performance tool,known as:“the balanced scorecard”. This strategic tool will allow Almond to align the company’ internal and external goals, while using additional financial metrics, as it gives an overall view of the organizations’ performance and can provide individual performance-based rewards.............

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Culture Clash in The Boardroom Harvard Case Solution & Analysis