Case Study:

When Emerson Electric opened its new manufacturing facility in Suzhou, near Shanghai, the initial aim of the facility was to be the companys showcase operation throughout East and Southwest Asia. When it opened, a US-educated Taiwanese manager, supported by a small group of American expatriates, led the initial management team. Although the operation became an early success in meeting its production quotas, cross-cultural conflicts and leadership issues began to emerge from the very beginning. These issues were centred in three principal areas: the nature of team dynamics, the focus on leadership initiatives, and divergent views of time.

The US view of team dynamics favoured team diversity, encouraging multiple viewpoints in team meetings to tease out alternative solutions to complex problems. Along with this diversity of opinions came the predictable interpersonal conflicts. Members were encouraged to confront such conflicts head-on in the hopes of leading to more creative innovative solutions. Better results, rather than the quality of personal interactions, signaled the success of the operation. For the Chinese, however, this created an uncomfortable work environment that they were not used to. To many Chinese, teams should have a single, clear, and unified vision, transmitted through a single voice established by the leader. Conflict indicated poor understanding and leadership of the situation. It was something to be avoided, for it signaled a lack of direction, and might cause someone to lose face.

In addition, these prevailing team dynamics rested on a particular approach to leadership that was more Western than Eastern. The Americans followed a largely functionalist approach to management and interpersonal relations, in which leader competence was viewed in terms of task accomplishment, which was seen as instrumental for success. By contrast, the Chinese approach to leadership was largely personalist in nature. In other words, it was the personal integrity of each manager that was deemed instrumental for the success of the new plant. The Chinese valued personal integrity in an effort to win the trust and respect of their followers, while the Americans valued job competence and expected their followers to perform well on the tasks at hand. Chinese management rested on individual commitment, often of a personal nature, whereas the Americans valued professional competence.

These different approaches to team leadership also influenced the way managers dealt with confrontation and misunderstandings. In line with the more personal Chinese approach, interpersonal exchanges among participants provided a basis for developing mutual relationships (guanxi). This, in turn, facilitated problem resolution. By contrast, the Americans often preferred the more confrontational trial-style alternatives. They emphasised company policies and rules, rather than personal interactions. They saw formal behaviour as a sign of professionalism. The Chinese saw this approach as being childish, since, in their view, norms and regulations seldom allowed for the complexity that was required to actually resolve complex issues and problems.

Finally, time perspectives also affected the quality of the interactions between the Chinese and the Americans. In particular, American managers usually favoured relatively short time horizons, since they were expatriates who saw their positions a stepping stones to further career advancement. To advance, they needed short-term recognition of results. By contrast, their Chinese counterparts, who had no goals of leaving either China or Emerson, preferred a longer-term perspective. They largely believed that results would follow from setting the proper course of events in motion. Results would then happen naturally; they did not need to be forced.

As a result of these differences, conflicts and misunderstandings continued until Emerson stepped in and largely replaced the American management team with Chinese leaders who were more attuned to local conditions. Today the Suzhou facility is a star player in the Emerson Electric network of companies. This is in no small part attributable to the wisdom of the firm in developing leadership and management practices that were compatible with, and supportive of, the local operating environment. If there is a lesson to be drawn from this example, it is that leadership style is not universal. Local cultures and conditions can have a profound influence on the success of global ventures.

Why is symbolic leadership such as that illustrated in this example common in some countries but not others?