Case the Chinese for decades. As such

Case Study 5

James W. Becker

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MGMT 427- Embry Riddle World-Wide

 

 

 

 

 

 

 

 

 

 

 

 

Case Study 5

 

                The Boeing Company was founded in 1916, and is currently the
largest aerospace company in the world (Boeing, 2016).  Its mission statement is, “People working
together as a global enterprise for aerospace industry leadership” (Boeing,
2016).  The Boeing Company has been responsible
for significant technological achievements during the 20th century,
and is looking for opportunities to expand its global presence in the 21st
century. 

Boeing has a large
industrial supplier-base outside of the continental United States, but has
traditionally kept all of its heavy manufacturing and operations located in the
country.  Recently, the company has shown
interest in expanding its manufacturing base to China (Thompson, 2015).  This is bold move, for the traditionally
all-American firm, the company’s organization culture will have to adjust to
make this a successful venture. 

                The
Boeing Company is facing increased pressure to reduce its operating costs, in
response to increasingly difficult market demands, and its main competitor
–Airbus, receiving state-funding from European Union nations.  The Boeing Company is looking to China to
establish a low cost manufacturing operation, and could potentially invest
hundreds of millions in capital to construct a plant in-country.  China was the logical choice, as over 95% of
its exports are industrial manufacturing, and its top exporting nation is The
United States.  China’s low cost, highly
skilled workforce, presents The Boeing Company an opportunity to expand their
manufacturing capability at a lower cost. 

                The
Boeing Company has a distinct organizational culture, which mirror traditional
thought regarding typical American behavior.  
Culturally the company promotes, collectivism, flexibility, and holistic
thinking, however, this message does not permeate well into the members of the
organization.  As most employees are
typical Westerners, specifically Americans, they are individualistic thought,
have a direct communication manner, and are relatively inflexible.  (Ferraro
& Briody, 2013)

China, however, holds very
different views on these cultural aspects. 
Chinese culture, focuses on collectivism, and has an indirect manner of
communication. This poses a potential conflict area during negotiations between
the two partners for a new Boeing manufacturing plant in the area.  (Ferraro
& Briody, 2013)

The Boeing Company has a
very talented pool of employees from many different areas of the world.  Even though this is their first major
internal manufacturing effort with China, the company has been doing business
with the Chinese for decades.  As such
their negotiation team for this effort should leverage lessons learned in past
negotiations, and use cultural education to ensure this venture is amenable to
both parties. 

Aviation in general is a
very technical field, and negotiation contracts in that field require a level
of expertise in engineering, manufacturing, litigation, and operations.  The negotiation team should bring an expert
from each of these areas into the process, however, the lead negotiator should
be an expert in the Chinese culture, with the ability to fluently speak
Mandarin.   There is a potential conflict
point, if a group of hyper-intelligent engineers from an informal culture, with
direct communications skills, gather around with similarly intelligent
individuals from a formal culture, with an indirect communication style. 

            The lead negotiator, corral the
Boeing group, and instruct all members of the team to focus on listening,
instead of speaking.   That is not to say
the engineering, manufacturing, and operations members should be stifled during
the negotiation process, as all of them are vital to its success.  (Ferraro
& Briody, 2013) The team should display a quiet professionalism during the exchange, and
allow the lead negotiator to bring them into a discussion, in-lieu of talking
over the conversation. 

            As this contract will be beneficial
to the Chinese and The Boeing Company, there is mutual interest in a successful
negotiation, and through proper understanding of each other’s culture the
process can be leveraged to benefit both parties. 

 

           

 

 

 

 

 

 

 

References

Boeing. (2016). Boeing: Vision. Retrieved
from www.boeing.com/principles/vision.page
 
Ferraro, G. P., & Briody,
E. K. (2013). The cultural dimension of global business. Boston:
Pearson.
Thompson, L. (2015). Boeing to build its first
offshore plane factory in china as ex-im bank withers. Retrieved from
Forbes:
http://www.forbes.com/site/lorenthompson/2015/09/23/Boeing-to-build-its-first-offshore-plane-factory-in-china-as-ex-im-bank-withers/#7452d0fe5252
 

 

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