Group 3 University of Maryland Global Campus MBA 630 9047 Leading in the Multicultural Global Environment Professor Joseph Jackson March 22, 2022 Background Colossal Corporation maintains a subsidiary in Serafini that is incorporated in the state of Delaware as New Brand Design, Inc (NBD) and designs innovative electronic products for distribution. The executive board is composed of ten members from three different countries and due to conflict, the board faced communication breakdown. New Brand Design, Inc encountered an issue with an established China supplier that the VP of design has a relationship with. The China supplier intentional filled the wrong order as a strategy to prevent wastage on their end. Business Ethics The initial order was 500,000 faux leather cases; however, the shipment was 300,000 real leather and 200,000 faux leather. The China supplier was unapologetic because they believe that they were doing New Brand Design a favor. The China suppliers did not communicate with New Brand Design, Inc about the change or even attempt to propose an upgrade. The suppliers’ behavior will be examined using the theories of utilitarianism and deontology to decide whether the behavior was ethical. According to the learning resources, how an organization addresses unique situations involving ethics & customs and will impact its success in the global arena (UMGC 2022b). The deontological approach is led by the mind more so than human emotion. The concern of future consequences is nonexistent, as the main concern is to decipher whether individual rights are being respected (UMGC, 2022a). The Chinese supplier violated the rights of New Brand Design, Inc by preventing the organization from having a choice in the product that is delivered. While the products were of higher quality, it the correct order. The supplier and purchaser had an agreement that the supplier failed to fully support. Regarding utilitarianism, an ethical theory that implies that the morality of one’s behavior can be determined based on the consequences and in this case, the Chinese supplier behaved unethically (UMGC, 2022a). The situation resulted in the Chinese supplier pushing over extra supplies that would have gone to waste and New Brand Design. While the outcome is positive for the supplier, there is harm done to New Brand Design, Inc and its market in the Asia and African continent. This further affects the family members of each employee and the small businesses that planned to purchase the products for resale. In addition, the Chinese supplier has possibly ruined his business relationship. This behavior does not increase the well-being of a greater number of people but rather harms a significant population. Considering both utilitarianism and deontology, the Chinese supplier has behaved unethically. The supplier’s actions violated New Brand Design, Inc.’s right of choice and resulted in harm to each individual associated with the organization. Cultural Difference Culture refers to how and why we think and function. It encompasses all sorts of things—how we eat, play, dress, work, think, interact, and communicate (UMGC 2022c). The design Vice President had a long-term business relationship with the Chinese supplier, indicating that the supplier likely believed that upgrading the New Brand Design, Inc ’s order was a kind gesture. This thought process explains the supplier’s confusion toward the manufacturing VP’s dissatisfaction with receiving a higher quality product at a lower price. Due to the Chinese culture, it would have been in New Brand Design, Inc ’s best interest if the design VP would have contacted the supplier and explained the dilemma. People’s value systems and reasoning are based on the teachings and experiences of their culture (UMGC 2022d). Rights and wrongs then really become perceptions (UMGC 2022d). Cross-cultural understanding requires that we reorient our mind-set and, most importantly, our expectations, in order to interpret the gestures, attitudes, and statements of the people we encounter. We reorient our mind-set, but we don’t necessarily change it (UMGC 2022d). The supplier might have been understanding due to the long-term business relationship developed with the design VP. Taking Hofstede’s five dimensions into perspective, two can be applied to this situation: Power Distance (PDI) and Long-term versus short-term orientation. China has a high PDI score, indicating that their society is accepting of inequalities amongst people, which is a very different view compared to the West (UMGC 2022e). It is important for New Brand Design, Inc to understand that under Chinese culture it is more likely to have one individual in charge rather than several. The supplier may have thought that the design VP oversaw business decisions, making him less likely to respond kindly to anyone else. Individualism versus collectivism (IDV) discusses the strength of ties that individuals have with others in their community. The Chinese culture, historically influenced by Confucianism, asserts an individual’s position in relation to his social group (UMGC 2022e). Long-term orientation is associated with East Asian countries, as they prefer virtues oriented toward future reward and a sense of shame, whereas the United States can be identified as shortterm as it is more concerned with social obligations (UMGC 2022e). It is important that New Brand Design, Inc is aware of its cultural differences when working internationally. Strategic Errors The strategic errors can be pinpointed to the moment that the Chinese supplier failed to request permission to upgrade the order. Upon confronting the supplier about the shipment, the manufacturing VP decided to accept the entire shipment without consulting with anyone else. It was after the shipment had been accepted that he informed the marketing VP of the 300,000 cases being out of spec, via an internal company memo. The manufacturing VP should have consulted with the members of the executive board immediately. This would have developed the possibility of the design VP coming to an understanding with the supplier. It would have also allowed the marketing VP more time to review each aspect and realize that pig skin would be frowned upon due to religious beliefs and that the advertisement material had already been documented. The most noticeable error in this case was the lack of communication amongst the leaders of the organization. Due to recent conflicts the executive board has failed to work as a team; members have placed their frustrations ahead of the company’s needs. This communication breakdown is the ultimate causation of many of New Brand Design, Inc ’s problems. If the board had an open line of communication, it could use its cultural diversity as a strength in making decisions. SWOT Analysis Internal A current strength is that New Brand Design, Inc has a presence in South Africa, in which labor is more affordable as well as having produced an innovative line of products. In reference to the company’s weaknesses, the executive board refuses to communicate due to the inability to agree. Individuals are making decisions without consultation and it is heavily affecting other sections. External New Brand Design, Inc has the opportunity utilize its diversity within the organization to strengthen its reach outside of the company. Developing a healthy understanding of each other’s cultures will build a greater sense of unity that will assist in communication and decision-making processes. Due to the current situation, the company threat is gaining a negative reputation in Africa and Asia caused by a lack of understanding of the culture. A negative reputation can lead to a drop-in sale and eventually becoming nonexistent in these locations. PESTEL Several factors should be taken into consideration when determining the course of action in addressing New Brand Design, Inc ’s current situation with the China supplier. The organization has ties with both South Africa and China; this factor has a significant influence on how the company runs its business now and in the future. There are positive qualities to these ties, however, understanding of the cultures involved with help with future business operation. New Business Design also behaved unethically by pushing over the real leather cases to Africa and Asia without taking the religious aspects into consideration. They assumed that the region preferred better quality and longer life; religious beliefs were never factored into the equation. The demographic customs and values were disregarded and therefore have created the possibility for serious tension between international partners. The company is risking their reputation rather that handling the dispute appropriately. Recommendations In order to maintain the integrity of New Brand Design’s reputation, it is recommended that the company issue a public apology to those affected by the lack of coordination in production distribution. The company should address its disrespect and disregard for the religious and cultural beliefs of the region to the African and Asia business partners. The boards cultural diversity should be used as a strength rather than a dividing factor – possibly seminars or team building exercises. The organization must address their dissatisfied business relationship with the Chinese supplier. Their unapologetic attitude could be costly long term especially when operating business in the global market. The VP of Design should be assigned the task, supervised by the CEO Managing international relations focuses primarily on the future rather than the past for the sake of subsequent relations. Regardless of who the company chooses to use as a supplier, it is best to develop a contract involving an arbitration agreement, which allows the parties to use a third-party to make final decisions in dispute resolution. Another item to incorporate in reference to the supplier would be a letter of credit which is essentially a contract between the parties involved and ensures both parties are satisfied with the transaction. References UMGC (2022a). Learning Resources: Major Ethical Perspectives. Retrieved From: https://leocontent.umgc.edu/content/scor/uncurated/mba/2218-mba630/learningresourcelist1/major-ethical-perspectives.html?ou=622435 UMGC (2022b). Learning Resources: Cross Cultural Ethical Business Decision. Retrieved From: https://leocontent.umgc.edu/content/scor/uncurated/mba/2218-mba630/learning-topiclist/cross-cultural-ethicalbusinessdecisionmaking.html?ou=622435 UMGC 2022c. Introduction to Culture and Business. Retrieved from: https://leocontent.umgc.edu/content/scor/uncurated/mba/2218-mba630/learningresourcelist1/introduction-to-cultureandbusiness.html?ou=622435 UMGC (2022d). Learning Resources: Challenges and Opportunities in International Business. Retrieved from: https://2012books.lardbucket.org/books/challenges-and-opportunities-in-internationalbusiness/s07-culture-and-business.html UMGC (2022e). Country Cultural Differences. Retrieved from: https://leocontent.umgc.edu/content/scor/uncurated/mba/2218-mba630/learning-topiclist/country-culturaldifferences.html?ou=622435
