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CCM

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by

Natasha Ahmed

on 22 November 2013

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Transcript of CCM

CCM
Case Study

Arnold Tanner, Western Energy Inc., and China
Hina Sajjad (15855)
PRESENTED TO:-Sir Yasir Ali Soomro
PRESENTED BY:- Natasha Ahmed (12705)
OVERVIEW
Western Energy Incorporation(WEI) conducted business in 100 countries and employed 70,000 people.

It is one of the USA's ten largest energy firm.

In 1979, China introduced an open door policy.

Lack of capital and technology restricted it to exploit the abundant coal in the Taibo mine, Shanxi province of North China.

Eight Western firms participated three from USA but Tanner won the bid due to his gunaxi(connections) with the Chinese supreme leader Deng Xiaoping.
Q1. What are the cross cultural influences does company encounter when determining how and where to conduct business in Republic of China?
Individualism/ Collectivism

Power Distance

Uncertainty Avoidance

Masculinity/Femininity

Long-short-term Orientation

Q2. What cultural factors actually affected the operations of WEI?
CULTURAL FACTORS
Masculinity Index
Class System
Religion
Language
Point Of Reference
Guanxi
Q3. Explain some cultural contrast or differences between China and USA (Political systems, Cultural norms, Legal systems? How might they impact cross cultural business operations of WEI?
POLITICAL SYSTEM
Chinese government is still very involved with business, be it directly through state-owned enterprises or indirectly through legislation.

A company would be successful if it built trust with the Chinese government.

“You have to prove yourself over the years as someone the government can rely on to do what they want you to do.”

LEGAL SYSTEM
The Chinese legal system echoes the political system in that it is still suspicious of outsiders and therefore supports its domestic businesses
BUSINESS OPERATIONS AFFECTED:-
As WEI was not able to develop local guanxi relations with local partners.

Americans made tall promises but were not able to fulfill them main reason such as scale of the mine, Chinese worker salaries, the amount of coal it cud export , it promised to export 75% of coal and market it itself in export market

Due to falling coal prices WEI started to ask for various concession from Chinese side, WEI forced China Coal Import/Export Corp to buy coal on international price and market the coal itself.

When Chinese negotiators decide to close the project government and tanner would intervene and enforce a solution.

Q4. If you were the manager of the WEI and given the responsibilities of China country operations. What would you do to adjust the management orientations?
AS A MANAGER OF WEI
Stop the accusation and support the china coal import/export cooperation to market the coal in the export market.

To negotiate the terms of what WEI Americans managers wanted and what Chinese claimed.

Producing both type of coal for foreign and local currency.

Making it clear to the Chinese that the WEI is a 50% investing partner and did not claim to fulfill the promise after feasibility study rather collaborate to create win-win situation.

Increase cooperation by helping the china coal import/export cooperation to market the coal internationally

This would be in the favor of the Chinese and the WEI.

Q5. What role does the low context culture and high context culture plays in the case study?
CHINA - HIGH CONTEXT COUNTRY
RELATIONSHIP ORIENTED

THE CHINESE ARE TEAM ORIENTED

THE CHINESE TENDS TO BELIEVE IN IMPLICIT, ORAL AND INFORMAL INFORMATION.

USA - LOW CONTEXT COUNTRY
THE WEI ARE COMPETITIVE

INDIVIDUALISTIC

Q6. What communication barriers are noticeable in the case? Give evidence from the case?
Organizational Barriers

Psychological Barriers

Different Languages

Lack of trust

High Context against Low context culture

Q7. In your opinion the negotiating style was appropriate in the cross cultural business deal between both companies?
COMPETING- as both wanted to win and defeat the other

COLLABORATIVE: Win-Win situation

The cultural differences impacted on some aspects of management in terms of


Cooperative strategies

Conflict management

Decision- making

Work Group characteristics

Motivation systems.
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