OPS FPX 5620 Assessment 2 Analyzing Cultural, Legal, and Ethical Concerns for a Global Supply Chain OPS-FPX5620 Supply Chain Foundations and Management
This presentation aims to assess the company’s current standing and its global expansion strategies, particularly focusing on China. The topics covered include cultural, legal, and ethical considerations vital for successful business operations. China offers numerous opportunities for foreign investment, tapping into a largely untapped market. However, this potential comes with its own set of challenges. This presentation will examine these issues and suggest practical solutions to help the company thrive. After every key focus area, an analysis of its implications for the company will be provided, leading to a final conclusion.
Global Expansion Situation
Opportunities
The global market, especially China, offers significant opportunities. Since China opened its markets in the 1970s, it has emerged as a vast, untapped consumer base (Galvin, 2017). As economists predict, China is expected to be a leading supplier of goods, services, and raw materials by 2050 due to its low labor and production costs (Majaski, 2020). These predictions are already coming true, with China now being one of the fastest-growing markets, transitioning from agrarian-based growth to a more consumption-driven and innovative economy. Sectors with the most potential include energy, technology, engineering, healthcare, and finance (STARTUPoverseas, n.d.).
Challenges
While the Chinese market offers great potential, it presents significant challenges that Mainland Tools must overcome to succeed. China maintains strict regulations to protect its domestic companies, often at the expense of foreign entities. Furthermore, protecting intellectual property remains a challenge due to insufficient enforcement of these regulations. However, with the recent introduction of the Foreign Direct Investment (FDI) laws in 2020, there is an emphasis on equal treatment of foreign companies and enhanced protection of intellectual property (Zhou, 2019).
Another challenge involves cultural differences and the language barrier, which may affect daily operations. There is also concern about the availability of skilled labor. Although labor might seem plentiful, the skill level of workers may not align with the company’s expectations. It will be essential to place the right personnel in the appropriate roles to ensure the company’s success in China.
Cultural Concerns
Building Relationships
China’s business practices are deeply rooted in tradition, with a strong emphasis on relationships. Unlike the Western practice of separating business from personal life, Chinese business culture intertwines the two. Companies take time to foster personal connections between staff, suppliers, and customers. These relationships are built on trust and loyalty, which are vital for long-term partnerships [CITATION Tam19 \l 1033].
Analysis and Recommendations
Though the process of building relationships may seem slow, it can lead to more stable and beneficial partnerships over time. Strong relationships with suppliers can offer better pricing and discounts, while retaining employees longer will reduce costs associated with training new hires. Mainland Tools has an advantage through its acquisition by Thompson Tools, which helps build trust with local suppliers and customers. Strengthening internal relationships through team-building activities can also improve communication and efficiency.
The Concept of “Face”
In Chinese culture, “face” represents a person’s reputation and social standing. Maintaining face is critical to building relationships and successful business interactions. Employees and managers often avoid direct disagreements to preserve each other’s face, which can pose challenges in addressing issues openly. Miscommunications may also arise as Chinese employees, self-conscious about their English skills, might choose silence to avoid embarrassment [CITATION Teo11 \l 1033].
Analysis and Recommendations
To address this cultural nuance, businesses must foster open communication without risking the loss of face. Monthly one-on-one meetings or anonymous feedback boxes can provide employees with a safe environment to share their thoughts. Additionally, offering clear work instructions can reduce the need for employees to ask potentially uncomfortable questions. This approach will create a culture of transparency and collaboration, ultimately improving productivity.