Ray Betzell, the general manager of a joint venture between Rocky River Industries and Shanghai fabrics Ind., was being torn between the two companies. After many years of production Rocky River’s President Paul Danvers wasn’t satisfied with the annual return of 5%. Chui Wai, deputy general manager, believed that Shui was generating just the right level of profit not too much and not too little. Although Chui Wai believed production and profits were well, his partner didn’t agree. Paul Danvers desired an annual return of around 20% based on the amount of years in service. During a phone conversation Ray Betzell and Paul Danvers discussed the production of the company and the output of that production. The investment in the company wasn’t producing sufficient profits. Paul mentioned that greater efficiency and incorporating sophisticated technology would allow Shui to reduce its workforce substantially and in return provide a better ROI (return on investment). After stating his alternative methods, he also gave the option of terminating his contract with Shui or everyone coming to an agreement on how to generate better ROI.
1. How would you characterize the main economic, legal-political, sociocultural differences influencing the relationship between partners in Shui fabrics? What GLOBE Project dimensions would help you understand the differences in Chinese and American perspectives illustrated in the case?
The infrastructures between the two companies differ because of the fact that one company is from China and next is from the United States. China’s economic development is not the same as the United States. China is attractive for low-cost manufacturing of goods, “Management, Richard Daft, chpt 4.” In the online encyclopedia “Wikipedia” the United States have the highest income per hour worked.