Shu Fabrics Case Study
Cecily Rodgers
Modern Management
Charles Milazzo
Oct. 28 , 2012

I. Ray Btzell vs. Chiu Wai

Shui Fabrics was a joint venture between America-based Rocky River Industries and Shanghai Fabrics. After loss of investments and obstacles were overcome, Shui fabrics began profiting after several years passed. In response to the profits, Ray Btzell and his bosses were more concerned with the performance orientation. Btzell and the American investors were concerned with gaining more than a 5% return on investment and somewhat closer to 20%. The performance orientation places high emphasis on performance and rewards people for improvements and excellence (Daft, 2010).
In the perspective of GLOBE value dimensions, China and United have different views when it comes to businesses and way of life. In the United States, Americans view performance as being indicative of success. If a company is performing well, then the business will continue to gain profits. In contrast to China’s way of thinking, the American investors were more concerned of gaining a higher return on investment because the company was more successful. China were satisfied with the 5% ROI because unemployment rate was over 20% and having a low ROI would allow more jobs to be created. Chui Wai was promoting sustainability in the company by preserving the profits they were making at that time to be set-aside for the future since there were some joint ventures still operating in the red. Also, Chui Wai valued the relationships they had developed through the joint ventures, but Paul Danvers was more concerned with pulling the plug on Shui Fabrics. It shows that the social-cultural difference or influences has played a major role to develop different views of Ray Betzell and Chiu Wai, as well as, created conflict with boss

II. The Most Central Difference
The difference most central to the issue at hand is the economic and performance orientation. The Americans see money as being a more important factor compared to how it would affect the overall way of life. All organizations have their own culture based on language and terminology, behavioral norms, dominant values, and informality/formality (Johnson, 2009). Each side of the joint venture wants to run the company in a way that is deemed important and morally right to oneself. The social context amongst both cultures is also slightly different. China has a higher context culture meaning they are more sensitive to circumstance surrounding social exchange, such as unemployment rate at over 20%. In contrast to China, North America is actually closer to being in a lower social context culture where communication is solely used to exchange facts and information. III. The Solution
In order for both sides to reach a leveled solution, each side should look at each situation and compromise on what would better benefit each sides. Managers will be most successful in foreign assignments if they are culturally flexible and can adapt easily to new situations and ways of doing things (Samson & Daft). At common ground, Shui fabrics would have to produce more profits before a higher ROI could be implemented. In order to produce the better profits, there should be some costs that are cut in various categories. As time progress, Shui fabrics would be a more profitable company and at that time Shui fabrics could afford to have a performance orientation an amount of 20% would be more understandable.
Another solution to both sides would be to implement licensing. With licensing, a corporation in one country, the licensor, makes certain resources available to companies in another country, the licensee. This would allow Shui Fabrics to produce and market the product and the licensor would still make profits. IV. The Benefits
This strategy that was suggested would allow both sides of the cultural backgrounds to find common ground and still be able to be profitable. Chui Wai does not initially have an idea of performance orientation and after proper time, they could eventually understand the benefits of using an economic approach. This approach will be better suitable for both cultures because it would essentially open both sides up to an environment that is out of the norm. However, doing things out of the norm to have a goal of success is what makes a manager flexible and able to adjust to different environments. For example, if the Btzell and Danvers decided to outsource or expand the company as another joint ventures with a different country, they would have the experience of dealing with different cultures and understanding methods and procedures towards seeking common ground.

Works Cited
Daft, R. L. (2010). Management (Ninth ed.). Mason, OH, USA: South-Western Cengage Learning.
Johnson, D. (2009). International Business: Themes and Issues in the Modern Global Economy (2nd Edition ed.). (T. a. Francis, Ed.)
Samson, D., & Daft, R. L. Management: Asia Pacific Edition (4th Edition ed.). Cengage Learning.