A China Joint Venture Success Story (Part II)

Today I bring you the second part of “A China joint venture success story”, an anonymous guest post by somebody who has been a partner in a joint venture in the manufacturing sector in China for over ten years. Make sure you do not miss the first part. You can read it here.

 A China Joint Venture Success Story (Part II)- The Lessons I Have Learnt

Over the past 12 years of dealing with the Chinese,  I have learned three lessons which have been very useful to me.

 1. “When in China, do as the Chinese do”
The first is the BIG cross cultural issue of “when in China, do as the Chinese do”….even though it is inefficient, ineffective and sometimes humiliating for the person performing the task. It took a good 5 years for me to accept that I must only look at the result and not how it was arrived at, of any request I make; as trying to prescribe a given method invariably ended in failure and frustration for both parties.  The Chinese are particularly inclined to follow the known path and have learned, after millennia of having their heads cut off for straying from it, that it is the safe route.  This is particularly true in a JV where you really have little power to influence the day to day unless you have tremendous resources and patience to expend in imposing “your way”. We were lucky that we had been preceded (as customers) by large Japanese companies who had set up the control systems  and thoroughly trained the production  and quality staff in the making of their transformers.The  manufacturing methods therefore were already excellent when we arrived on the scene. But heaven forbid we try and change any of these methods!! So as long as the end product is good, you don’t need to know how they made it. But then lesson 2 applies.

2. Chinese culture is about form over function
The second lesson was to realize that the Chinese culture is about form over function. Probably the best example of this trait is the tradition of gift giving. If you are a frequent visitor to China you invariably end up with a trunk full of trinkets. You would expect this to stop or at least to receive different gifts when you visit the same company many times. But no, you will continue to receive the same framed Beijing Opera masks or tea sets you got last year and the year before that. No one asks you what you would like or find useful. Gift giving is a form that must be fulfilled whether the recipient likes the gift or not.   This principle of form over function applies everywhere so you must be very specific as to the end result you want or you will get what I call “ token outcomes” that meet the request but not the spirit of what you are looking for. This is particularly important to be aware of in quality control where a product can pass all the functional electrical tests you specify but no one on the line will fail the product for an obvious mechanical fault that was not on the list.  This is how Mattel gets lead in the paint used on its toys and melamine ends up in milk powder. You must make your functional expectations abundantly clear in a detailed fashion or you will get very creative surprises from people with generally the best intentions.

3. Some people will stay in the organization forever no matter how incompetent they are
You must accept that the people that are part of the organization when you start your relationship will probably be there forever no matter how incompetent they might be. Because of the Chinese habit of job changing (mainly in the younger generation), in the psyche of Chinese management, anyone who comes to work every day is worth keeping. The other reason, of course, is that many employees have some sort of political or economic connection with the company which makes them unmoveable. Their uncle may be the local tax collector or a sister is the secretary to the Chairman of the company.  My experience is coloured by that fact that our partner is an SOE and I understand that this phenomenon is particularly bad in this type of organization, but I have also seen it in private companies too. So if your engineering manager is a moron and your partner accepts that as fact, you cannot automatically expect him/her to be replaced. If you are lucky he may get a very competent assistant.

4. Listen to the “view from the other side”
A final thought is that our Head Engineer, in our home country headquarter, played a very large role in making this relationship work as he truly had a foot in each culture and understood the assumptions and frustrations each side brought to the table.  He was always able to offer me the “view from the other side”to  consider  before making up my own mind. This was invaluable as it  gave me perspective to work things out in an acceptable manner to both sides. A diplomat in your organization is a good investment when going to China.

What is your experience?

Coming soon: “A Joint Venture Success Story (Part III)- Where To Go Now?

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