Shui fabrics

Describe the differences between Ray Btzell's and Chiu Wai's perspectives on Shui Fabrics' ROI in terms of the GLOBE Project value dimensions:

Both Ray Btzell and Chiu Wai have excellent intentions with regard to Shui Fabric but have a wide cultural difference from a business perspective. Ray is caught in the middle of American profitability on foreign soil and growth, opportunity and economic stimulation in the local community. With a 20 percent unemployment rate for the country, Shui Fabrics has created over 3000 jobs. Along with being a profitable company, it has a positive impact in the community. Ray’s American leadership has undermined the value of job creation in the community with the slow ROI of the market. They are basing the profitability of this foreign company on American standards. Chiu’s perspective is that of greed and exploitation and balance and fair business. His leadership is concerned that western countries are trying to take over business in their home land. “Foreign companies doing business in China are generally required to form joint ventures with Chinese companies instead of forming wholly owned subsidiaries. Entrance by foreign companies to the Chinese market is often determined by how much technology and know-how the Chinese can get from the foreign company. Many Chinese worry that foreign companies are poised to take over entire sector of the economy” (Hays,2008). In terms of the GLOBE dimensions they have power difference with leadership from both sides. Ray’s leadership wants more ROI and Chui’s leadership wants minimal market presence in the country. Rays leadership is concerned with its future orientation. They feel the short term expectations have not been met and are considering closing the factory. Schui’s leadership is concerned with societal collectivism because of the view of western culture in their country. Both parties are assertive on their objectives in regards to their stake in the company.
Explain which of these differences is most central to the issue at hand and why:

I feel the power distance is the most central issue because if one side is unwilling to relinquish some of their power it could damage business relations on multiple levels. Forcing Ray to incorporate more technology could damage relationships in the local community and be viewed as western greed in the region. This may make it difficult to do any other business in the region. Alternatively, by not allowing for financial growth could cause Shui fabrics to pull out of the region and increase the unemployment rate even further. This could be detrimental to the local community.

Develop a strategy for addressing the situation and explain how it would help appease Ray's boss back in the U.S:
The best possible solution would be to develop a subsidiary company in the US and import supplies from China. Shui would import a small group Chinese workers to supervise operations and learn the new sophisticated technology’s to expedite the ROI. The workers would act as a counterpart for Ray and ensure the same quality is being produced as it is in china..

Explain what specific benefits your new strategy has over the status quo:

Because the US is capitalist society, there would be no limits to the profit the company can generate. This will appease Ray’s management by increasing revenue and the status quo and appease the Chinese government by abiding by local government laws and creating jobs in the local community. Because of the wage difference and discounted supplies, the US could take advantage of this business relationship by importing raw material at the “ China Price”. “The “China price” refers the fact that so many goods can be made so cheaply in China that China has cornered the market on many products. For Americans this has meant a loss of factory jobs but wealth of good deals at Wal-Mart and other discount retailers. By one count 9 percent of the good exported to the United States end up in Wal-mart” (Hays, 2008).
A prosperous relationship between both countries can exist if both sides are willing to compromise. “The economic relationship between the world’s two largest economies – China and the U.S. – presents exciting new opportunities as well as daunting challenges. The U.S. and Chinese economies retain the potential for highly complementary growth and development, enhanced rather than hindered by the need for reassessment and rebalancing on both sides’ (Chair, 2013 ).

Refrences: http://csis.org/program/economics-trade-and-finance-us-china-relations http://factsanddetails.com/china.php?itemid=359&catid=9
http://factsanddetails.com/china.php?itemid=349