Opening an Office in China

Based on the corporation’s stellar success in North America and Western Europe and on extensive market analyses, the Board decided to set up a “trial” dealership in China. They selected a well-regarded young executive, James McKnight, and gave him 18 months to locate a facility; secure needed permits; select/train staff; and open the dealership. He would be given resources from the home office and a consultant in the country. The consultant, Henry Cheung, had attended school in the West and had worked for the corporation before returning home. Henry had helped several other companies establish offices in China.

1. James started out by briefing Henry on corporate goals and the challenges he thought were in front of them. He said that he had identified the three key concerns. “If we can manage to resolve these critical issues, everything else will fall into place. I don’t want to get caught up in details” He described tasks to be completed in the next months: visiting potential locations, hiring, insuring delivery of stock, and so on. For each, James outlined unsettled issues and important decisions to be made as the operation progressed.

Henry listened to James as he outlined his ideas on planning. He was very distressed with what he heard. He explained, “This is not how things are done here.”

James was truly puzzled. He thought he had done a good job outlining a possible plan, providing a careful analysis, and allowing for unexpected complications. He had focused on key issues and carefully kept options open until their planning moved along.

Question: Why did they see things so differently?

2. Once the plan was put in place, James and Henry began recruiting managers. James wanted people who would bring a professionalism to their jobs. If people worked hard they would be compensated with good bonuses for their effort. James felt that a relaxed attitude would hinder their efforts. He also wanted people who would look for innovative approaches to marketing and management. He felt that new ideas are critical for success in China.

Henry listened carefully to James and was not happy with James’ approach. He explained, “This is not how we do business here.”

Again, James was surprised. He thought he had focused on traits needed for effective managers. The corporation would appreciate their work focus, and they would build the business by generating and applying new approaches.

Question: Why did they see things so differently?

3. James asked the new managers to draft guidelines for new staff. He discussed a time line for completing the drafts so that it could be reviewed before recruitment started. He asked if they thought it was reasonable. When they said, “No problem,” James felt that he would not have to monitor their work.

James emphasized the challenge they were facing and he asked each of them to bring better approaches to the group’s attention. “We need give and take to bring this business up to speed.” Finally, he told them, “If we all work hard, there is no way we can fail.”

Henry listened to James during this work session. He was very uncomfortable with James’ presentation. He explained, “We don’t conduct business that way here.”

Again, James was taken aback. He thought he had focused on the tasks at hand confirming that the time line was reasonable. And they agreed they could do it! He had worked to empower the new managers so they would contribute as partners and he assured them of success if they worked together.

Question: Why did they see things so differently?

Summary: Can you identify the cultural mismatches in each of these mini-scenarios? Can you see how these mismatches might de-rail the collaboration between James and Henry? Cultural differences in the way people think can be difficult to detect, but they can have major consequences.