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MASEEI

Assignment
(Caselet’s)

Under the supervision of Submitted By:


Ms. Deepshikha Singh Neha Thukral (A-26)
Lecturer Shreyas Sinha (A-38)
Department of Human resource Harpreet Kaur (A-46)
Juhi sharma (A-47)
Shruti Sehgal (A-50)
Bhumika Sisodia (A-52)
Pradeepthi Kilani (A-54)
CASELET – 2

What is the most effective way to set targets for my staff in 2011?

What is the most effective way to set targets for my staff for 2011? Should I do this
the first week back in January and should I offer incentives?

Targets and incentives are a great way to focus attention on the right things and
encourage the right behavior. Even if you have a June year end, it is a great time to recap
the past year or half year and recalibrate for the start of a new period. Having your people
come back and set refreshed objectives is a great way to start a new calendar year. The
most effective way to set targets is to have well defined objectives in the first place.
Start-up must satisfy the test of the multi-letter acronym SAVVY:

Specific: the objective must be specific and measurable. Every objective can be
measured by quantity, quality time or cost.
Achievable: be reasonable and make the task reachable.

Value adding: not just the daily grind - something that is makes or breaks for this year.

Very clear: no ambiguity please.

Yours: the objective is understood and owned by the employee.

Once you have SAVVY objectives you are in a position to talk incentives. Incentives
should be used where there is an opportunity to exceed expectations.
In this way they do not kick in until some agreed level of performance is achieved. Then
they are self-funding, as you have locked in a level of performance and then can fund the
incentive out of over-budget performance. Everyone is a winner.

At no stage use the term bonus, as it sets an expectation, whereas if you use “incentive” it
is always performance-linked and can be discretionary. Please do not set incentives at
such a level as they are seen as unreachable – it acts as a deterrent rather than an
incentive. You can reset the bar in future years where performance levels are consistently
met.
So the answer to your question is clear:

• Set SAVVY objectives.


• Design an incentive for your business and be reasonable.
• Start in January and set it up for your business (full year or half year).
• Be inclusive as you may be surprised what your team will be prepared to go for.

In short, start the year with a refocused and clear vision and engage your team to achieve
success.
This is a super opportunity and if you grasp it with both hands you can really set
yourself up for success. If in doubt call an advisor who can help.
ANSWERS

Q1. Importance of culture to the organization, Cultural Models, Cross-


Cultural Perspectives

Ans- Importance of culture to the organization

 It focuses attention on the human side of organizational life, and finds


significance and learning in even its most ordinary aspects.
 It clarifies the importance of creating appropriate systems of shared meaning to
help people work together toward desired outcomes.
 It requires members especially leaders, to acknowledge the impact of their
behavior on the organization's culture.
 It encourages the view that the perceived relationship between an organization
and its environment is also affected by the organization's basic assumptions.
 Organizational culture is possibly the most critical factor determining an
organization's capacity, effectiveness, and longevity.
 It also contributes significantly to the organization's brand image and brand
promise.
 Organizational Culture creates energy and momentum. The energy will permeate
the organization and create a new momentum for success.

Cross-cultural perspective
Cross-cultural perspective is the scientific study of human behavior and mental
process, including both their variability and invariance, under diverse cultural
conditions. Through expanding research methodologies to recognize cultural variance in
behavior, language and meaning, it seeks to extend, develop and
transform psychology. Central themes, such as affect, cognition, conceptions of the self,
and issues such as psychopathology, anxiety, and depression, are all re-examined in
cross-cultural psychology in an attempt to examine the universality of these concepts.
Critics have pointed to methodological flaws in cross-cultural psychological research and
claim that serious shortcomings in the theoretical and methodological basis used impede
rather than help this scientific search for universality. Cross-cultural psychology is
differentiated from Cultural Psychology. The latter is the branch of psychology that holds
that human behavior is significantly influenced by cultural differences meaning that
psychological phenomena can only be compared with each other across cultures to a very
limited extent. In contrast, Cross-Cultural psychology includes a search for possible
universals in behavior and mental processes.
Various definitions of the field include: "the scientific study of human behavior and its
transmission, taking into account the ways in which behaviors are shaped and influenced
by social and cultural forces, the empirical study of members of various cultural groups
who have had different experiences that lead to predictable and significant differences in
behavior. Culture may also be defined as "the shared way of life of a group of people.
They also outline various aims and goals of cross-cultural psychology, including a
challenge to the limited cultural perspective that may result if one only studies cultural
variables within one's own society.

Cultural Model
In the mid 1970's, the Dutch academic, Geert Hofstede, based his five dimensions of
culture His methodology was both unique in size as well in structure. He defined
organizational culture is an idea system that is largely shared between organizational
members. Hofstede was able to statistically distinguish cultural differences between
countries.

Hofstede classified a county's cultural attitudes as five dimensions:

• POWER DISTANCE
The extent to which power is distributed equally within a society and the degree that
society accepts this distribution. A high power distance culture prefers hierarchical
bureaucracies, strong leaders and a high regard for authority. A low power distance
culture tends to favour personal responsibility and autonomy.

• UNCERTAINTY AVOIDANCE
The degree to which individuals require set boundaries and clear structures: a high
uncertainty culture allows individuals to cope better with risk and innovation; a low
uncertainty culture emphasizes a higher level of standardisation and greater job security.
• INDIVIDUALISM versus COLLECTIVISM
The degree to which individuals base their actions on self-interest versus the interests of
the group. In an individual culture, free will is highly valued. In a collective culture,
personal needs are less important than the group's needs. This dimension influences the
role government is expected to play in markets.

• MASCULINITY versus FEMININITY


A measure of a society's goal orientation: a masculine culture emphasises status derived
from wages and position; a feminine culture emphasises human relations and quality of
life.

• TIME ORIENTATION
The degree to which a society does or does not value long-term commitments and respect
for tradition. Long-term traditions and commitments hamper institutional change.

Q2. Creating work cultures with competitive advantage

Ans- Culture is often seen as the soft side of management, as Joanna Higgins observes.
In my experience, it’s actually the hardest, because it deals with attitudes and behaviors
which all seem a bit vague but are critical to the company.
My definition of culture is “the way we do things around here”. A business often has less
of an established culture, more a set of habits developed over time. But, creating a
winning culture that can often be a real differentiator in the market place means
managing it, driving it and consistently reinforcing it.

Five questions to get you thinking and hopefully help you in creating a work culture
with competitive advantage:

• What’s our current culture? Every company has one.


Getting a clear, objective view of your current culture is a useful point to start from.
Why not get your people to describe it — pluses and minuses. You could ask your
customers, too. Which aspects are you happy or unhappy with? Get a picture of what you
need to keep, what to eliminate and what to work on.

• What do we want it to be? Establish some core values.

Great leaders shape spell out a picture of the culture they’re striving for, sometimes just a
set of guiding principles or values. The best seem to go further, though, by establishing
preferred behaviors that support these values. Core values can help provide guidelines
for acceptable and unacceptable behavior — experience shows that this also helps
manage performance more effectively. Again, getting ownership of these behaviors is a
key. Apparently, one of Enron’s published values was integrity. It’s not what you say;
it’s what you do that counts.

• What do we value? Reward staff for living your company culture.

Ever had someone in your team who achieves all their goals and hits all their targets, but
is basically a real pain because they wind others up, demotivate colleagues and upset
team members? If you measure individuals on results alone, regardless of their behavior,
then you’re asking for trouble. Successful companies reward the behavior they want as
well as results. Winning businesses celebrate their champions. They encourage,
acknowledge, support and reward those that promote and act in line with the core values.

• Do our systems and processes help or hinder? Bolt culture into the way you
measure and maintain the business.

A focus on culture should be at the core of your reward systems, feedback systems,
appraisal processes, promotion criteria, recruitment and selection processes. Do you look
for evidence of matches to your core values in prospective employees, for example?
“The problem is many companies say they are doing it, but really are only giving it lip
service and doing it incredibly badly” says Richard Reed of Innocent, the smoothie-
maker. Innocent has an array of incentives and reward mechanisms that support and
promote their core values.

• What are our leaders like as role models?

This is a critical issue. Lots of business leaders say the right things, but don’t do them. In
organizations that drive this stuff, it’s the leaders who are great role models. They make
the core values visible and talk about them at every opportunity. They recognize that
their people judge them not by what they say, but by what they do, and crucially, what
they are seen to do. So, how can you get started in addressing the issue of culture in your
organization? Why not start with putting these questions on the agenda of your next
management or team meeting to get the ball rolling.

Q3. Your group is required to illustrate as to why do recommendations


fail to be implemented?

Ans- Pay-for-performance plans so reliably unsuccessful, if not counterproductive


because of the following Reasons:

• Control. People with more power usually set the goals, establish the criteria, and
generally set about trying to change the behavior of those down below. If merit
pay feels manipulative and patronizing, that's probably because it is. Moreover,
the fact that these programs usually operate at the level of school personnel
means, as Maurice Holt has pointed out, that the whole enterprise "conveniently
moves accountability away from politicians and administrators, who invent and
control the system, to those who actually do the work."

• Strained relationships. In its most destructive form, merit pay is set up as a


competition, where the point is to best one's colleagues. No wonder just such a
proposal, in Norristown, Pa., was unanimously opposed by teachers and
ultimately abandoned. Even those teachers likely to receive a bonus realized that
everyone loses—especially the students—when educators are set against one
another in a race for artificially scarce rewards.

But pay- for-performance programs don't have to be explicitly competitive in


order to undermine collegial relationships. If I end up getting a bonus and you
don't, our interactions are likely to be adversely affected, particularly if you think
of yourself as a pretty darned good teacher.

Some argue that monetary rewards are less harmful if they're offered to, and made
contingent on the performance of, an entire school. But if a school misses out on a
bonus, what often ensues is an ugly search for individuals on whom to pin the
blame. Also, you can count on seeing less useful collaboration among schools,
especially if an incentive program is based on their relative standing. Why would
one faculty share ideas with another when the goal is to make sure that students in
other schools don't do as well as yours? Merit pay based on rankings is about
victory, not about excellence. In any case, bribing groups doesn't make any more
sense than bribing individuals.

• Reasons and motives. The premise of merit pay, and indeed of all rewards, is
that people could be doing a better job but for some reason have decided to wait
until it's bribed out of them. This is as insulting as it is inaccurate. Dangling a
reward in front of teachers or principals—"Here's what you'll get if things
somehow improve"— does nothing to address the complex, systemic factors that
are actually responsible for educational deficiencies. Pay-for-performance is an
outgrowth of behaviorism, which is focused on individual organisms, not systems
—and, true to its name, looks only at behaviors, not at reasons and motives and
the people who have them.

Even if they wouldn't mind larger paychecks, teachers are typically not all that
money-driven. They keep telling us in surveys that the magical moment when a
student suddenly understands is more important to them than another few bucks.
And, as noted above, they're becoming disenchanted these days less because of
salary issues than because they don't enjoy being controlled by accountability
systems. Equally controlling pay-for-performance plans are based more on
neoclassical economic dogma than on an understanding of how things look from
a teacher's perspective.

Most of all, merit pay fails to recognize that there are different kinds of
motivation. Doing something because you enjoy it for its own sake is utterly
unlike doing something to get money or recognition. In fact, researchers have
demonstrated repeatedly that the use of such extrinsic inducements often reduces
intrinsic motivation. The more that people are rewarded, the more they tend to
lose interest in whatever they had to do to get the reward. If bonuses and the like
can "motivate" some educators, it's only in an extrinsic sense, and often at the
cost of undermining their passion for teaching.

For example, a recent study of a merit-pay plan that covered all employees at a
northeastern college found that intrinsic motivation declined as a direct result of
the plan's adoption, particularly for some of the school's "most valued employees
—those who were highly motivated intrinsically before the program was
implemented." The more the plan did what it was intended to do—raise people's
extrinsic motivation by getting them to see how their performance would affect
their salaries—the less pleasure they came to take in their work. The plan was
abandoned after one year.

That study didn't even take account of how resentful and demoralized people may
become when they don't get the bonus they're expecting. For all these reasons, I
tell Fortune 500 executives (or at least those foolish enough to ask me) that the
best formula for compensation is this: Pay people well, pay them fairly, and then
do everything possible to help them forget about money. All pay-for-performance
plans, of course, violate that last precept.

• Measurement issues. Despite what is widely assumed by economists and


behaviorists, some things are more than the sum of their parts, and some things
can't be reduced to numbers. It's an illusion to think we can specify and quantify
all the components of good teaching and learning, much less establish criteria for
receiving a bonus that will eliminate the perception of arbitrariness. No less an
authority than the statistician-cum-quality-guru W. Edwards Deming reminded us
that "the most important things we need to manage can't be measured."

It's possible to evaluate the quality of teaching, but it's not possible to reach
consensus on a valid and reliable way to pin down the meaning of success,
particularly when dollars hang in the balance. What's more, evaluation may
eclipse other goals. After merit-pay plans take effect, administrators often visit
classrooms more to judge teachers than to offer them feedback for the purpose of
improvement.

All these concerns apply even when technicians struggle to find good criteria for
allocating merit pay. But the problems are multiplied when the criteria are
dubious, such as raising student test scores. These tests, as I and others have
argued elsewhere, tend to measure what matters least. They reflect children's
backgrounds more than the quality of a given teacher or school. Moreover, merit
pay based on those scores is not only unfair but damaging, if it accelerates the
exodus of teachers from troubled schools where they're most needed.

Q4. What is the consultant’s role and what skills are required?

Ans- The Compensation Consultant is responsible for designing and administering


in-house compensation programs. A compensation consultant is a professional whose
role within a company is to implement and monitor employee compensation
programs. They keep records, manage projects, work to improve payroll policy and
liaise with administrative and human resources staff. To become one, you'll need to
acquire a wide range of business skills through college and professional training.
Core Roles & responsibilities include:

• Conducting market analyses


• Making salary grade recommendations that balance internal equity and external
competitiveness
• Developing job descriptions
• Designing base pay programs
• Conducting job evaluation analyses, including evaluating the FLSA status of
various positions
• Developing and delivering presentations to management level staff
• Designing, administering and participating in compensation surveys
• Assisting the Compensation Team with the year-end merit increase process
• Running various reports in our Ceridian HRIS system and conducting analyses
of the data.

The Compensation Consultant role requires strong computer skills with advanced
knowledge of Microsoft Excel and he must possess strong analytical skills and
the ability to work as part of team and on multiple assignments simultaneously.

Q5. How can organizations create conditions for engaging people?

Ans- Organizations must align their compensation and reward systems with performance,
for when they do, they will increase productivity and achieve sustainable growth. It helps
organizations develop effective strategies that:

1. Reflect an employee's performance and contributions


2. Improve employee and customer engagement
3. Increase productivity
4. Focus employees on clear, objective, and measurable outcomes
5. Link to the organization's strategic direction and business goals
6. Reward employees who achieve results

The Significance of compensation in the overall operation and success of a law firm can
be summarized as follows:
1) Compensation is one of the most significant factors and one over which you as
members of your firm have a great amount of control;

2) Other important factors include: being in the "right" field of law for the time,
geographic location, and having the flexibility to adjust firm size for general economic
conditions.

The objectives and benefits of a proper compensation system can be summarized as


follows:

1) Promotes harmony among the partners because they feel they are fairly compensated
relative to each other;

2) Minimizes dissatisfaction with compensation and departure of valuable partners;

3) Is attractive to capable senior associates so that they wish to become partners in your
firm;

4) Provides an incentive for productive partners to stay with your firm to normal
retirement age.

Partner compensation is affected by more than just a firm's specific compensation system
for its partners. These factors include:

1) General economic conditions and government regulation;

2) Specific economic trends affecting the legal profession;

3) Trends in advancement to partnership and establishment of partner "classes";


4) Retirement obligations of the firm.

CASELET – 3

I'm looking to source a product from China. Do you have any tips for me?

I'm looking to source a product from China. Do you have any tips of suggestions on
the best way to go about doing this?

This is a good question. Finding a good supplier who can provide exactly the sort of
product you're looking for is a critical step for an online retail business.

The best way to go about finding a good supplier depends on the type of product you're
looking for.

1. Standard product, low to mid-range quality


If your product falls in this category there are lots of great options available to you for
sourcing. There are plenty of places to go online to source standard, low- to mid-quality
products.
Visiting www.alibaba.com - the world's largest sourcing website – is a good place to
start. There are also a number of trade fairs in Asia where you'll be able to find these
sorts of products.
The Canton Fair is the world's largest trade fair and is held twice a year in Guangzhou,
China. It's absolutely massive with suppliers of just about every standard, low- to mid-
range quality product showing their wares at the fair. If you're sourcing these sorts of
products, even from a supplier on alibaba.com, you probably won't need to spend a lot of
time in Asia with your suppliers, but I'd recommend at least one or two trips to meet
them, build at least a basic relationship and to check and confirm the quality of the goods
you're buying. While sourcing products in this category is relatively easy, of course the
downside is that there are probably already a lot of people selling the same or similar
products in the market, so marketing might be a little harder for you. You'll need to find a
non-product related way to differentiate yourself in the market, but that's a topic for
another blog post.

2. Niche product, mid- to high-quality

Products in this category can be a little harder to find, as they may not be available on
websites like alibaba.com or at large, general fairs like the Canton Fair. A good place to
start in this category is to do some searches online for product specific trade fairs. For
example, if you're looking to source high quality furniture, high quality leather shoes or
specific pieces of sporting equipment there are a number of trade fairs throughout Asia
each year where you should be able to find good suppliers. There may also be wholesale
markets in China for these products, where suppliers are permanently based. For
example, there are large leather and non-leather wholesale handbag markets in
Guangzhou where you can source pre-designed handbags or find suppliers to make
handbags you've designed.

For products in this category you'll need to spend more time on the ground working with
your suppliers.
If you're going to be developing your own product you'll need to work on your design
with potential suppliers, get samples made and really spend time with your suppliers to
ensure the quality is right.

It's very easy for a supplier to make a good quality sample, then take shortcuts when
making a full run of your products. The only way you'll pick this up is if you're on the
ground with them, and inspecting the final product before taking delivery.

3. Highly specific product, high quality


This category is the hardest to source and will require a lot of time on the ground
working with suppliers. At Shoes of Prey we needed to find suppliers who could custom
make high quality leather shoes; 99% of shoe suppliers require minimum orders in the
100s of each style and color shoe.
We needed to order them one at a time. We spent a lot of time on the ground in Asia
meeting with different suppliers and attending trade fairs to understand the industry, how
it worked and who might be interested in working with us. In the end we were lucky that
we were sourcing during the Global Financial Crisis. Shoe manufacturers were receiving
fewer orders from their existing customers so some of them were more willing to work
with a new and specialized customer. In terms of spending time on the ground in China,
between our three co-founders we have spent a combined eight months out of the two
years we've been working on the business, on the ground in China. In addition to that we
have our own office and two local employees, Vanessa and Qun, who understand our
requirements, systems and processes and work day-to-day with our suppliers to ensure
we're making shoes correctly and at a very high quality for our customers. One of the
things I love about sourcing products in China is how hard-working and efficient most
people and businesses are in the country. We were recently developing a new shoe box
so we went and met with a supplier. Within two hours of meeting them we'd discussed
our ideas, reviewed products they'd made previously, put a design together, selected
materials, negotiated the price and organized for a sample to be ready in five days’ time.
Attempting to do something similar in Australia would have taken weeks. If you're
looking to source products in China hopefully this information is useful. If you have any
experience or thoughts to share, feel free to leave them in the comments.

Michael Fox managed Google’s online sales and operations agency team for Australia
and New Zealand before moving into entrepreneurship. He has co-founded travel guide
website Swift City, spoof online dating site Darwin Dating and Shoes of Prey, which
allows women to design their own shoes. He blogs in detail about the process of running
Shoes of Prey at his blog www.22michaels.com.

ANSWERS

Q1. Changing Environment in General and Economic Environment in


particular
Ans-
Challenges to China’s Economic Growth and International Competitiveness

• Deepening economic reform to facilitate the restructuring the micro-foundation


for competitiveness.

• Restructuring of China’s national systems of innovation , pay more attention to


technology upgrading and R&D.

• Using ICT to shorten the learning process and and make catching-up easier in
areas where clear trajectory of technical progress can be followed.

• 4. Pressures are mounting for Chinese firms to improve productivity..

• Creating a competitive environment will facilitate fast learning


Q2. Economic Growth and Change Areas, Emerging Opportunities in
Various Sectors including Social Sector, Management Practice and
Cultural Issues

Ans- Emerging Opportunities in China

China's Emerging Tier 2 Cities: Opportunities for US Companies

As living standards and the business environment improve, US companies may be able to
export more goods and services to China's second-tier markets.

China's expanding economy is rich with business opportunities for US firms, many of
which are small and medium-sized enterprises. In 2008 and 2009, the United States
exported more than $69 billion worth of goods annually to China. As China's wages rise
nationwide and interior regions receive greater investment and government support, US
exporters may find more opportunities to sell to China's second-tier markets.

Quick Glance

• Though China's Tier 2 cities may be less populated than their Tier 1 counterparts,
they receive more than half of total US exports to China.
• Each second-tier city is strong in certain industries, such as high-tech
manufacturing, food and agricultural processing, and clean technology.
• US exporters that research and understand China's diverse business environment
may find more markets for their products.

China's diverse urban and rural markets present challenges for foreign companies,
however. To understand domestic market trends and opportunities, companies should
study the strengths of various regions—and do their homework.

The importance of Tier 2 cities


Though analysts often categorize China's Tier 2 cities in different ways because the PRC
government does not officially define tiers, this article focuses on 15 key Tier 2 cities,
many of which are provincial capitals: Chengdu, Sichuan; Chongqing; Dalian, Liaoning;
Hangzhou and Ningbo, Zhejiang; Kunming, Yunnan; Nanjing and Suzhou, Jiangsu;
Qingdao, Shandong; Tianjin; Shenzhen and Zhuhai, Guangdong; Wuhan, Hubei;
Xiamen, Fujian; and Xi'an, Shaanxi. Though the total population of the 15 cities accounts
for only 8 percent of China's overall population, these markets receive more than 59
percent of total US imports, according to the US Commercial Service. Global Trade
Atlas statistics show that the cities with the highest year-on-year growth in US imports as
of June 2010 were Hefei, Anhui (164 percent), Ningbo (90 percent), Chengdu (75
percent), and Hangzhou (63 percent)—far outpacing the 19 percent and 21 percent
growth rates in Beijing and Guangzhou, Guangdong, respectively.

Recent social and economic reforms have transformed and reshaped the industrial,
commercial, and regulatory landscapes of China's developing Tier 2 cities. As living
standards and the business environment improve, these cities have enormous market
potential. For example, Suzhou's population was roughly 6.3 million and its gross
domestic product (GDP) was $774 billion in 2009. (In comparison, New York, the
largest US city, had a population of about 8.4 million and GDP of nearly $1.5 trillion in
2009.)

Consumer spending is an important factor in Tier 2 cities' growth. Purchasing power is


increasing, as evidenced by major retailers' expansion into these cities. Wal-Mart Stores,
Inc. opened its first supercenter in Shenzhen in 1996 and expanded to 189 stores in 101
cities throughout China by August 2010. Home Depot Inc. operates 12 stores in six
Chinese cities, including Qingdao, Tianjin, and Xi'an.

The PRC government is considering a $738 billion 10-year energy plan that could
provide opportunities for US companies that export components or key technologies to
manufacturers.
China's 12th Five-Year Plan (FYP, 2011-15), which lays out national policies in major
social and economic areas for the next five years, is currently being drafted and is
expected to continue funneling major investments into Tier 2 cities. The plan will likely
focus on seven strategic emerging industries: biotechnology, high-end equipment
manufacturing, new energy, new-energy vehicles, new materials, and next-generation
information technology. According to PRC state media reports, the government is
considering a $738 billion 10-year energy plan that will develop clean energy by
investing in nuclear, solar, wind, and other non-fossil fuel energy sources. These sectors
could provide opportunities for US companies that export components or key
technologies to manufacturers.

Based on data available for different sectors, this article primarily focuses on second-tier
market opportunities in China's high-tech, food processing, and clean-tech sectors.

High-tech manufacturing

China's high-tech manufacturing industry has seen unprecedented growth in the past
decade. From 1995 to 2007, the industry grew from $19 billion to $167 billion, ranking
third worldwide after the United States ($374 billion) and the European Union ($306
billion). The 12th FYP will continue to provide subsidies, deferred interest and lower tax
rates, and other support policies to advance the development of high-tech enterprises.
The industry's rapid growth has created opportunities for US companies that export
precision machinery used in high-tech manufacturing.

China is the world's largest manufacturer of consumer electronics—including electric


office appliances, electronic communication equipment, home appliances, and plasma
and digital TVs—and accounts for more than 35 percent of the global electronic
industry's total revenue. Suppliers and manufacturers of high-tech portable consumer
electronics, market-leading innovative technologies, and smartphones may find
opportunities in this sector. For example, as of second quarter 2010, Apple Inc. was
China's fifth-largest smartphone vendor, accounting for more than 7 percent of the
country's smartphone shipments.
Qingdao ranks high as a potential export market because of its numerous industries,
including alcohol, auto manufacturing, building materials, cargo handling, chemical
fertilizers, consumer electronics, food processing equipment, petrochemicals,
shipbuilding, steel, and textiles and apparel. The local government has placed special
emphasis on the development of consumer electronics. Qingdao is home to more than 30
research, higher-education, and managerial institutions and has roughly 800,000
scientifically and technically skilled personnel. In 2009, Shandong's GDP grew 12
percent to nearly $495 billion, ranking third among China's provinces.

Other key cities with strengths in the consumer electronics industry are Lu'an, Anhui;
Luoyang, Henan; and Shenzhen.

Food and agricultural processing

Despite the global economic downturn, China's food processing industry output reached
a record high of $662 billion in 2009. The industry grew nearly 30 percent annually from
2003 to 2008, as more consumers replaced traditional fresh foods purchased at morning
and wet markets with packaged foods found in Western-style hypermarkets.

The food processing industry is one of the six pillar industries of Chengdu. Chengdu has
companies in 22 divisions in the industry and competitive advantages in beverages, dairy
products, feedstock, meat, and tobacco. The city's total food processing industry output is
expected to reach $11.5 billion by the end of 2010. This growth has created opportunities
for US exporters, especially those that export high-tech equipment used in food and
agricultural processing.

Other cities that have strengths in food and agricultural processing include Nanchang,
Jiangxi; Tianjin; and Zhangzhou, Fujian.

Clean tech

In 2009, investment in China's clean-tech industries reached about $34 billion,


overshadowing the $18 billion total investment made in the same industries in the United
States. The PRC Ministry of Environmental Protection stated that the total output of
enterprises in the environmental protection industry is expected to exceed ¥1 trillion
($149 billion) by the end of 2010. Some PRC sources have predicted that the 12th FYP's
budget for environmental protection, which includes wastewater and solid-waste
treatment, will reach roughly $454 billion—more than double the amount allocated in the
current FYP. Further investment and development plans are underway as China attempts
to derive at least 15 percent of all energy from renewable sources by 2020. Companies
that provide innovative solutions and advanced equipment and technologies may find
opportunities in China's clean-tech sector.

Wastewater treatment

China generated 57.2 billion tons of wastewater, composed of 58 percent municipal


wastewater and 42 percent industrial wastewater, in 2008. Analysts expect that the
country's total wastewater output will reach 79 billion tons by 2015 because of rapid
urbanization and industrialization. China's current wastewater treatment infrastructure is
still inadequate. The PRC government plans to build new facilities and upgrade existing
ones, resulting in a large demand for technology and components. Competition for these
projects is fierce, however, and ranges from foreign companies that provide advanced
technology and management to domestic players that typically offer more competitive
prices and in some cases comparable technology.

Wuhan, Hubei, is a key emerging market for wastewater treatment facilities. The city is
particularly rich in fresh-water resources and the local government strongly supports the
development of wastewater and urban sewage treatment facilities. The city's industrial
zones, which will each have wastewater treatment facilities, may present additional
export opportunities for US suppliers.

Other key cities with strengths in the wastewater treatment industry include Tianjin;
Wuxi, Jiangsu; and Xiamen.

Solid-waste treatment
China is the world's largest producer of municipal solid waste (MSW). In 2008, the
country produced more than 223 million tons of MSW. With a forecasted annual growth
rate of 8-10 percent, production is expected to top 250 million tons in 2010. To reduce
the amount of MSW, the PRC government is making investments to improve its solid-
waste treatment capabilities.

For example, the primary methods of disposing of solid waste in Ningbo in the past 100
years included uncontrolled burning, terrestrial dumping, and dumping into waters—all
of which have polluted the environment and affected citizens' daily lives. To minimize
the negative effects of MSW, Ningbo has made significant improvements to its waste
treatment facilities in the past few years. The local government has invested roughly $88
million to develop a comprehensive infrastructure system for MSW.

More than 90 percent of China's landfills do not meet international standards because of
capacity constraints and unsanitary conditions. Alternative MSW treatment methods such
as incineration will likely become more widely accepted by local governments and
industry players in China. These methods require more advanced technologies and
instruments than Chinese companies currently have the capability to produce—including
sanitary landfill and incineration equipment, treatment equipment, waste-to-energy
technologies, and sampling instruments—and thus open greater export opportunities for
US firms.

Other cities with strengths in the solid waste treatment industry include Chongqing,
Hangzhou, and Harbin, Heilongjiang.

Other industry opportunities

In addition to the main sectors discussed above, exports of other products to key Tier 2
cities are also growing rapidly. Xi'an's imports of electrical machinery rose 118 percent
in 2009, while Tianjin's imports of railway equipment jumped 634 percent during the
same period. Wuhan's chemical imports increased 100 percent, and Xiamen recorded 544
percent growth in imports of pharmaceuticals.

Considerations for US companies

Tier 2 cities may present opportunities for US companies that take the time to research
and understand China's domestic market trends and complex business environment.
Companies must recognize that the China market is highly fragmented with significant
differences between cities and regions. They must also choose an appropriate location
with a market environment most suitable to their industry and objectives.

Companies may also face other challenges when entering the China market, such as
China's selective enforcement of World Trade Organization rules, vulnerable intellectual
property rights, government restrictions on foreign ownership, local content
requirements, and competition from established domestic enterprises. In some cases,
markets are either premature (especially in the case of expensive or advanced
technologies) or highly saturated with intense competition. US companies must therefore
understand the China market and assess all opportunities and challenges when
determining their entry strategy.

To help US companies better understand the China market, the US Commercial Service
offices in China, together with the China Council for the Promotion of International
Trade, provide business counseling and matchmaking services for US exporters in 14
markets. To learn more about the services of the US Commercial Service in China and
opportunities in emerging Tier 2 markets, visit www.buyusa.gov/china/en, contact a
trade specialist at a US Export Assistance Center in any state, or visit www.export.gov
or www.trade.gov to find the nearest office. These websites, and the US Comercial
Service, are under the US Department of Commerce International Trade Administration

The Global Political Situation, The Global Competitive Environment and the
internal scene.
Economy of China
Since the initiation of economic reforms and trade liberalization 30 years ago,
China has been one of the world’s fastest-growing economies and has emerged as
a major economic and trade power.
China’s rapid economic growth has sharply improved Chinese living standards
and helped raise hundreds of millions of people out of extreme poverty. Trade
and foreign investment flows have been major factors in China’s booming
economy. In 2008 China, was the world’s second largest merchandise exporter
and third largest importer. Over half of China’s trade is conducted by foreign-
invested firms in China. In 2008, foreign direct investment (FDI) in China totaled
$92 billion, making it the destination for FDI among developing economies. The
combination of large trade surpluses, FDI flows, and large-scale purchases of
foreign currency (especially dollars) has helped make China the world’s largest
holder of foreign exchange reserves at $2.3 trillion.
The global economic crisis began to impact China’s economy in late 2008. After
growing by 13% in 2007, China’s real GDP slowed to 9.0% in 2008 and to 7.1%
in the first half of 2009 (year-onyear basis). China’s trade and inflows of FDI
diminished sharply, and millions of workers reportedly lost their jobs. The
Chinese government has sought to boost the economy by implementing a $586
billion economic stimulus package (largely aimed at infrastructure projects),
establishing easy money policies to boost banking lending, and providing
assistance to various industries. Such policies have helped stabilize China’s
economy; real GDP is expected to grow by over 8% in 2009—far higher than the
expected growth of any other major economy.
Despite the relatively positive outlook for its economy, China faces a number of
difficult challenges that, if not addressed, could undermine its future economic
growth and stability. These include pervasive government corruption, an
inefficient banking system, over-dependence on exports and fixed investment for
growth, the lack of rule of law, severe pollution, and widening income disparities.
The Chinese government has indicated that it intends to create a “harmonious
society” over the coming years that would promote more balanced economic
growth and address a number of economic and social ills.
China’s economy and economic policies are of major concern to many U.S.
policymakers. On the one hand, U.S. consumers, exporters, and investors have
generally benefitted from China’s rapid economic and trade growth. China’s large
holdings of U.S. securities have helped keep U.S. interest rates relatively low.
Some contend that China has a large stake in ensuring the continuance of a
liberalized global trading system. On the other hand, the surge in U.S. imports of
Chinese products has put competitive pressures on various U.S. industries. Many
U.S. policymakers have argued that China maintains a number of economic
policies that violate its commitments in the World Trade Organization (WTO)
and/or are harmful to U.S. economic interests, such as its currency policy.
Concerns have also been raised over China’s rising demand for energy and raw
materials in terms of the impact that demand may have on world prices,
Chinese efforts to purchase energy and raw materials assets around the world, and
the growing level of pollution and greenhouse gases that has resulted from
China’s growing energy needs. China has been pursuing free trade agreements
around the world, especially in Asia. This has raised concerns that China might
try to promote a greater Asian trading area that would exclude the United States,
and thus possibly diminish U.S. economic power and influence in the region.

Q3. Consulting Proposals. Identification and Definition of Problem,


Fact-Finding Leading to Solution Development and Implementation
Ans- Fact-Finding Leading to Solution Development
( Growth, you can explain here)

Q4. Creating work cultures with competitive advantage


Ans- China’s culture is primarily based on the 2500 year old teachings of Confucius and
revolves around the group, relationships, a strict power structure and risk aversion.
Collectivist in nature it is the polar opposite of America’s and Staples individualistic
culture. Although China has spent the last two decades striving to achieve globalization,
its historic national and business cultures are still very evident. China’s market is largely
dominated by state-owned businesses with hierarchical structures and staffed by
employees expecting guaranteed employment and benefits. China’s hope for successfully
making the transition is the young, who, fueled by the global reaching Internet, are
embracing a more western culture. Until the rest of China is able to balance the
capitalistic requirements for global competition with the historic collective roots it does
not represent a profitable expansion route for Staples.

Although Sullivan (2002) doesn’t provide scores for four of the five Hofstede’s
dimensions to culture for China, it can be estimated that they would fall in the following
ranges:
a. Degree of individualism – This score would historically be on the low end
(collectivism), similar to Hong Kong, given China’s focus on the group v. the
individual.
b. Power distance – With a large portion of the population employed in
agriculture this score isn’t relevant for all, but for the bureaucratic, state-
owned businesses this would be on the high end due to their hierarchical
nature.
c. Intolerance for uncertainty -- This score would be on the higher end,
again stemming from the state-owned bureaucracy exemplified by a lack of
risk or uncertainty. This however is probably moving lower (toward accepting
risk and change) as outside / westernized influences creep into the culture,
businesses become privatized and China opens itself to globalization.
d. Degree of assertiveness – This score would probably be located on the
lower end of the scale (toward “nurturing” and “cooperative living”), similar
to South Korea.
e. Long-term orientation – This is the only score Sullivan provides and it is
off the scale on the high end, which tracks, since China has one of the highest
rates of savings in the world (40% GDP).

If you compare the estimated Chinese culture scores to those of the United States it
immediately becomes clear just how different the two are across the board.

Power Uncertainty Long-Term


Individualism Assertiveness
Distance Avoidance Orientation
United
91 40 46 62 29
States
China ~25 ~70 ~85 ~39 118

This analysis and these scores apply to both the national culture of China and the US, but
also to the business culture. Where the US focuses on individualism, equality and
achievement, China is more collective, valuing cooperation within a hierarchical
structure. Americans tend to thrive or at least easily tolerate change while China dislikes
the unpredictable. The largest gap though is in long-term orientation where the US
culture lives for the present, wanting immediate gratification, making quick decisions,
and short term planning. Conversely, the Chinese, save for the future, make decisions
only after careful and detailed analysis and value persistence (Sullivan, 2002). “China
and the U.S. represent ideological opposites in the work environment, in spite of the
present move toward capitalism in China.”

Creating a positive first impression is not enough. One should also have an understanding
of the following aspects of Chinese business etiquette:

• Gift giving
• Greeting rituals
• Business relationship development
• When to display emotions
• Time perceptions
• Differences in decision making and problem solving
• Guest-Host relations
• Negotiation styles
• How to use intermediaries
• Meeting customs and conduct
• Use of the names, titles and business card presentation
• How to establish relationships with government officials

(COMPETITIVE ADVANTAGE)

China remains the best destination for any serious businessman who thinks of investing
in whatever market and for many reasons. Despite the hullabaloo raised by Washington
and other large economies, businessmen are trooping to China in droves, hoping to
capitalize on this phenomenon. It’s not easy to name any western company that is yet to
set shop in China. From electronic manufacturers, car makers and even Google, all big
companies have gone for a piece of china and for a good reason.

• A large domestic market – No serious businessman or woman can ignore a large


domestic market like that of China. You may be producing goods and or services
for export, but the domestic market remains significant from whichever direction
you look at it. China has a population of more than 1.3 billion and still counting,
making it very attractive to investors more than the whole of Africa, Latin
America, and Eastern Europe. It’s this domestic market that serious businessmen
are looking for before venturing into the export zone.
• Cheap labor – The wages and salaries paid to the average Chinese worker
remain significantly lower than the rest of the world mainly because of its
communist past. Workers are paid less than half of what those in Eastern Europe,
Latin America and even Africa are paid per hour mainly because the cost of
living is significantly lower too. Who wants to spend all business fortunes on
labor or wages? No serious businessman and hence migration to china.
• Flexible tax laws – Compare China’s tax laws with those of Britain and the
United States or even Japan and Germany and you will realize why china is the
place to be for every serious businessman. Its remains almost a tax holiday to be
sincere while the rest of the world levies hefty taxes on foreigners making them
run away in order to save and build on capital instead. Most of these
businessmen, some from as far as united States have set up shop in china while
running away from stringent measures from their own home countries.
• Cheap energy – China has some of the cheapest energy options any businessman
or investor can think of. With huge coal deposits that are cheaply made available
to those who need some, there isn’t any other better reason for an investor to
relocate to China. Those in the know will agree with my assessment that energy
tariffs are higher in the rest of the world and this scares investors away to this
emerging investment hub – China!
• Zero tolerance to corruption – China punishes corruption with a death sentence.
Yes, you heard me. If you are found corrupt, you are sentenced to death before
human rights activists can raise any objection and the court system works so
efficiently that the corrupt have nowhere to hide. Corruption dissuades many
businessmen from investing in Africa, South America and Eastern Europe but not
so when it comes to china.
• Proper infrastructure – The west has the best infrastructure yes but so has china
invested a lot in a good road network, efficient railway transport and other
infrastructure that readily attract investors. Those who saw the ease with which
the Chinese held the Olympic games in Shanghai will agree with me that they
have infrastructure just as good if not better than what is found in the rest of the
world.
• Government support – Businessmen can totally count on the Chinese
government for support. Investors receive a lot of subsidies, flexible taxation
measures and everything else that would guarantee them a high return on
investment more than elsewhere in the world.

Q5. What is the consultant’s role and what skills are required?

Ans- Conducting analysis and research.


- Data collection.
- Conducting interviews with clients, their employees, and their management
team.
- Facilitating workshops and assisting focus groups.
- Organizing business presentation and business proposals.
- Managing a highly motivated, results focused team.
- Consolidation of metrics needed for planning and business reviews.
- Identifying and isolating pressing issues.
- Formulating and implementing solutions or recommendations.
- Assisting clients in putting plans into action.
- Managing programmers and existing projects.

Keep in mind that management consultants are mainly involved in providing objective
expertise, advice, and specialist skills with the aim of improving business performance
and maximizing its growth.
As a consultant, you are expected to operate across a wide variety of services which
include marketing, financial and management controls, business strategy, e-business and
operations, information technology, and supply-chain management.

Q6. Which do the typical techniques exist to aid implementation?


Ans-

• Producing quality work under pressure,


• Keeping project managers and clients happy and
• Maintaining client relationships.
• Deal with dynamic targets,
• Set and manage expectations,
• Communicate effectively with your team and your clients and:
• Make your life on projects easier.