Case Study- Shui Fabric

 Case Study: Shui Fabrics

Questions:

1. Differences in Economics, Legal-Politics, and Society would create conflicts between the two companies in culture, the way of thinking, controlling, managing, and developing. Shui Fabrics is a joint venture between Ohio-based Rocky River Industries and Shanghai Fabric Ltd., its economic environment represents the economic conditions both in the U.S. and China, and factors such as economic development and resource and product markets, and inflation, interest rates and economic growth have impacts on how business operates and how the decisions are made. China as a LDC pays more attention to the growth of the economy, but its counterpart as a developed country seeks more profits; Shui Fabrics as an international company must learn Chinese economic rules and regulations, and politics. Government officials and the general public often view foreign companies as outsiders or even intruders and are suspicious of their impact on economic independence and political sovereignty. The local government and party officials are keeping careful tabs on the enterprise, Chiu Wai is satisfied with a 5% ROI and he feels that he has done a good job for his country morally and for their side of enterprise by creating jobs for close to 3,000 people. But Ray Betzell wants a 20% ROI and has no interest in creating employment. So this is the conflict between the partners; Besides China’s culture, Ray has to understand differences in social values, and pay more attention to the social context when working in China.

The Difference in Perspective between Chinese and American using GLOBE Project dimensions:

Chinese

- Humane orientation

- Concerned about job creation

- 3000 jobs made a real contribution to the local economy

- Does not want to cut jobs

- Relationship orientated

American

- Performance orientation

- Wants to see better economic performance, higher profits

- Expect more than 20% ROI, not content with 5% ROI

- Thinking of...