Cross-Cultural perspectives
on managing diversity
By:
David Pickering
Huang,DeJing(Kevin)
Roy Tanuwidjaja
Norito Kobayashi
Luisa
China
CHINA OVERVIEW
President: Hu Jintao (Since 2003)
Location: Eastern Asian with area 3.7 million square
miles.
Major cities: Beijing (Capital), Shanghai, Tianjin,
Guangzhou, ect………………
Sources: (China Daily)
CHINA OVERVIEW
Population: 1.3 Billion (July 2004)
Languages: Mandarin (Official), and many local
dialects.
Ethnic Groups: Han Chinese (92%).
Religion: Officially atheist;Taoist, Buddhist, Muslim(1-2 %),
Christian(3-4 %).
Sources: (Asia Pulse; Dow Jones Newswire).
CHINA REAL GDP GROWTH
source: (Financial Times)
9.20%
9.00%
8.80%
8.60%
8.40%
8.20%
8.00%
7.80%
7.60%
Series1
2004Real GDP
Growth Rate
2003 Real GDP
Growth Rate
CHINA EXPORTS AND IMPORTS
CHINA EXPORT: $ 529.3 billion( 2004).
CHINA IMPORT: $ 505.8 billion( 2004).
Sources: (Financial Times)
CULTURAL DEFFERECES
Decision Making:
A. Western-Fast decision making; quickly gathered
and processed information.
B. Chinese-Deliberate longer; Want to be included.
Sources: (China Daily)
CULTURAL DIFFERENCES
“YES” MEANS “NO”
A. Chinese-Don’t like say “No” in a business setting nor
admit don’t understanding something.
B. Western-Encouraged to express.
Sources: (China Daily)
CONNECTION
Relationships-with vendors, suppliers,
central government.
Both outside and inside relationships
building.
PERSONAL STYLE
Chinese-Don’t challenge the instructor.
Western-Encourages to questions, hand
on training.
Lose face
Hofstede Theory
Country
Power
Uncertainty Individualism
Masculinity
China
78
36
15
50
U.S.
40
46
91
62
Hofstede Theory (cont’d)
Long term orientation vs short term
orientation
Nike’s international staffing
Nike uses Regiocentric approach.
The strategic decision made at the region
level.
Each region has its own VP.
WWW.NIKE.COM
Nike’s global Area Division
U.S
Headquarter
Production
Human
Resource
Marketing
Asia Pacific
Region
Americas
Region
EMEA
Region
Finance
NIKE
US-7 Subsidiaries.
OTHER COUNTRIES-34 Subsidiaries.
Employees-25,000(none of them are represented by
unions).
Distribution-21 centers around globe, 23,000 retail
accounts.
Sources: (Securities and exchange commission).
NIKE
Athletic Footwear-Largest seller in the
world.
China-36% manufactured in China.
Revenue-120 foreign countries account for
53%.
Nike’s Subsidiaries
Grew from “single product, single
market””multiple brands, multiple markets”
Subsidiaries:
Net Revenue by Global Region
(US $,millions)
United States
EMEA
Asia Pacific
Americas
Other
Total
FY 04
4793.7
3834.4
1613.4
624.8
1386.8
12253.1
FY 03
4658.4
3241.7
1349.2
527.0
920.7
10697.0
Total net rev. increased 15%
FY 02
4669.6
2696.5
1134.9
568.1
823.9
9893.0
Net Revenue in U.S.
FY’04 : $4.8billion (39% of Nike revenue)
Increase 2.9%Net Revenue in US Region
US $, millions
4800
4750
4700
4650
4600
4550
FY 04
FY 03
Fiscal Year
FY 02
China’s attraction:
Emerging economies
Cheap labor costs
Stable currency
Bountiful raw materials
Sources:http://www.fortune.com/fortune/subs/print/0,15935,375164,00.
Nike approaches China
Moved most production into China in mid
1980s
More than workshop
Set challenge: to change China’s culture
Open the China market
Phase I:Getting Swoosh recognized
-Donated equipment and sponsor high school
basketball game
-Bring NBA player-Michael Jordan to visit
-Target middle class: seeks Western culture
Phase II:Bring in Black culture-Hip Hop
-Encourage rap-style trash talk
Phase III:Challenge Confucian-style
-Fragrant possibilities of higher-quality shoes
Nike’s success in China
Sales through 1990s increase 60% a year
Biggest seller of athletic shoes
Example: Zhang Han
-20 years old art student in Beijing
-Owns over 60 pairs of Nikes shoes costing $6,000(RMB)
Western goods mean “status” to Chinese
consumer
Nike did not enter China selling usefulness, but
selling status
Grew 66% in revenue in the past year
Nike Case
LeBron James in Chamber of Fear
Nike Case
Corporate Transparency in oversea factories
- Contracting through unbiased audits
Nike Case
Computer hacking: Stickman copy right
lawsuits
Expatriates in China
CEO’s and top executives
Senior and middle managers
Costs and Benefits
Nike IHRM in China
Production staff
Production management personnel
Corporate manager
Home Country Nationals
Establishments
Employee profile
Pay compensation