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% Series1
8.20%
8.00%
7.80%
7.60%
2004RealG D P 2003 RealG D P
G row th Rate G row th 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

Human Finance
Production Marketing
Resource

Asia Pacific Americas EMEA

Region Region Region
 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)
FY 04 FY 03 FY 02
United States 4793.7 4658.4 4669.6
EMEA 3834.4 3241.7 2696.5
Asia Pacific 1613.4 1349.2 1134.9
Americas 624.8 527.0 568.1
Other 1386.8 920.7 823.9
T otal 12253.1 10697.0 9893.0

Total net rev. increased 15%

 Net Revenue in U.S.
FY’04 : $4.8billion (39% of Nike revenue)
Increase 2.9%Net R evenue in US R egion
4800

4750
US $, millions

4700

4650

4600

4550
F Y 04
F Y 03
F Y 02
F iscal Y ear
 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