Erie Polymers joint venture Essay
Erie Polymers joint venture
ERIE speciality chemicals was a company which is based in Cleveland, Ohio, which moved to china due to the key support provided by them in expanding their industrial capacity relating to chemicals. In order to expand its production in China performance polymers had merged with Wuhan plastics factory to form Wuhan Erie Polymers (WEP). Stanley Wong was the manager of the team that negotiated the joint venture and soon became general manager and then chairperson of the Joint venture. Though he was very pleased with his transfer back to Gary, he wasn’t finished yet. He wanted to nominate a successor who would take the company to another level. He was a great leader as he motivated his employees in many aspects and he had also created a unique culture between the Chinese and the western practices.
Ans1) if I had to advice the organisation on who to succeed Wong then I would choose MR Henri Boulanger as he has been in the organisation for the past 16 years and he also has 24 years of work experience. Though he lacks Chinese skills he yet gets along well with his Chinese subordinates. He has also been very effective in his current position and he has also introduced certain techniques such as marketing and networking which is very important for any organisation. According to me due to his intelligence and energetic levels he would also be able to inculcate leadership and adapt certain principles in the organisation in order for it to run efficiently and smoothly.
He would follow a democratic leadership style where he will consult many employees in the organisation before taking any important decision regarding the company’s future. Certain theories relating to leadership are needed in many organizations for it to perform on a high scale. 1) Trait approach to leadership-Managers can utilize the information from the theory to evaluate their position in the organization and to assess how their position will be made stronger in the organization. This theory makes the managers realize their strengths and weaknesses and they can also get an understanding of how to develop their leadership qualities
2) Behavioral approach- this approach involves structuring the roles of the subordinates by providing them with instructions, and behaving in ways which will increase the performance of the group. Certain types of tasks are given to employees in order to meet the goals of the organization
3) Contingency approach to leadership-this theory refers to the group atmosphere and to the degree of confidence, loyalty, and attraction the followers feel about their leader. If certain favourable situations occur then there has been a positive relationship between the followers and the leader which means that the task was clearly defined and there is a clear leader position power.
Certain principles which would be inculcated by MR Boulanger in the organization such as
1) Division of work
2) Authority and responsibility
4) Unity of command
5) Unity of direction
ans2) cross cultural differences and diversity conflicts
the success of the joint venture depends upon the compatibility of the partners and this compatibility involves culture as well. Culpan (2002) suggests that each partner in the joint venture brings its own culture and if these cultures are not compatible then they will make the joint venture vulnerable. depending upon the source, it was reported that 37 and 70 percent joint ventures fail because of cross cultural differences between partners.
These joint ventures have been reported to suffer from communication, cooperation, commitment, and conflict-resolution problems caused by partners value and behaviour differences, which in turn causes interaction problems that adversely affects the joint venture performance. Moreover, value and behaviour differences between culturally distant partners influence interpretations and responses to strategic and managerial issues, compounding difficulties when making transactions and sharing information in international joint ventures (Mohr and Spekman, 1994).
There are two types of cultures that directly affect the joint venture, first one is the organizational culture and second one is the national culture. Lane and Beamish (1990) stated that the problem in IJV’s is due to the influence of the national culture on the behaviour and management system that leads to conflicts and differences in the workplace. The organizational culture plays a significant role in the flow of knowledge within the organization but at the same time it can also act like obstruction in the process (Almeida et al. 2002). The national culture evolves around societal norms consisting of values which are shared by major part of the population. Once, a system has been developed it is very hard to change and any variation in the institution does not affect the societal norms due to the deeper levels of values and beliefs. (Hofstede, 2001, p.11)
There are 3 broad categories used by the western organizations in order to manage differences in cultures when operating internationally. The first is that the organization can build a strong organizational culture internationally so that all parts of the organization, wherever they are located, share the same organizational culture. This approach assumes that the homogeneity of cultures creates the best way of managing the organization. This approach had also been criticised because in order of reproducing the culture to its simplest form the distinctiveness of the culture can be lost.
The second approach for managing differences in culture is to develop a common technical or professional culture. This approach does not try to ensure homogeneity within the work force but it rather, seeks uniformity through strong financial and planning systems. The organizational structure
dictates procedures and processes, as well as specifying the sources of expertise and decision making within the organizational hierarchy.
The third approach is to leave each culture alone, allowing each subsidiary to develop its own organizational culture, which is probably tied to the national culture with varying degrees of influence.
Hofstede (2001) came up with five dimensions of the national culture which all societies have to cope with and they used to measure cultural differences between organizations
1) power distance- the higher the power distance the more centralized and hierarchical the structure of the organization is. All organizations should increase their power distance in order to overcome any cultural barriers 2) uncertainty avoidance- organizations with high uncertainty avoidance are usually bigger in size and the loyalty is much stronger. These organizations are usually reluctant towards new technology and are more prone towards change. (Hofstede 2001)
3) Individualism and collectivism- this dimension measures the extent of the relationships an individual has towards the organization. Organizations having high IDV show individualistic and task –oriented behaviour of employees (Hofstede 2001) 4) Masculinity and femininity- organizations with high masculinity, promotes competitiveness and personal accomplishments and the managers are treated as heroes (Hofstede 2001) 5) Long vs short term orientation- if the organizations have a low LTO then importance is given to short term results. (Hofstede 2001)
On the basis of these dimensions we can easily evaluate and improve the national culture which directly influences the culture of the organizations working within that environment.
Ans 3) Evaluating a successor
Stanley Wong who was the general manager of this company wanted to find a successor who would lead this company very well in order to maximize its sales and increase their productivity.
With reference to certain concepts we can evaluate Wong’s challenge of finding a successor
1) Performance management- performance management should be seen as a collective responsibility of employees and employers to see that there is continuous improvement in the tasks, activities and jobs that are agreed upon for achieving the organizations vision, mission goals and objectives.
Mathis and Jackson (2008) suggested that certain responsibilities managers need to take into account while managing the company.
1) Setting agendas- this includes taking responsibilities and setting goals and objectives for themselves and the teams. 2) Handling relationships- managing people is about managing superiors, customers, suppliers and other external contacts 3) Management values- understands what differentiate successful and appropriate management behaviour 4) Personality qualities- developing the necessary personal and psycho-logical characteristics to be able to deal with inevitable chaos, ambiguity and stress associated with managerial jobs 5) Self- awareness- understanding ones personal style of leadership and working patterns and how this might have an impact on others.
There are also methods for management development
1) Coaching- this is relevant for particular individuals experiencing motivation or self-confidence 2) Project work- this involves working in cross cultural teams on particular projects. It provides exposure to different functions, ways of thinking and doing things, as well as providing an opportunity to learn about different parts of the organization. 3) Action learning- this approach capitalises by the fact that many people learn most effectively is by doing things. It also represents a team activity by which members are set out to define and solve a problem. 4) Secondments- this provides development for an individual through a job in another organization for a defined period. It also provides a way of broadening experience and of forcing the individual to leave their comfort zone by having to experience different way of doing things 5) Development centres- the purpose of development centres is to focus on opportunities for directly to employees might undermine their power base and again concessions might be made unwisely.
Thus there are certain concepts which are related to the challenges faced by Mr Wong in finding a successor.
Thus I would like to conclude by saying that the company might face a difficult period for a short time when Wong gets transferred. The new general manager would have to go through a challenging process in order to overcome cultural barriers and diversity conflicts in the organization. By introducing certain western management practices the company will be able to challenge on many fronts and also all the other employees will get along well with the Chinese employees and the company will run efficiently and smoothly.
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