Case Company is facing increased pressure to
Case Study 5James W.
BeckerMGMT 427- Embry Riddle World-Wide Case Study 5 The Boeing Company was founded in 1916, and is currently thelargest aerospace company in the world (Boeing, 2016). Its mission statement is, “People workingtogether as a global enterprise for aerospace industry leadership” (Boeing,2016). The Boeing Company has been responsiblefor significant technological achievements during the 20th century,and is looking for opportunities to expand its global presence in the 21stcentury. Boeing has a largeindustrial supplier-base outside of the continental United States, but hastraditionally kept all of its heavy manufacturing and operations located in thecountry.
Recently, the company has showninterest in expanding its manufacturing base to China (Thompson, 2015). This is bold move, for the traditionallyall-American firm, the company’s organization culture will have to adjust tomake this a successful venture. TheBoeing Company is facing increased pressure to reduce its operating costs, inresponse to increasingly difficult market demands, and its main competitor–Airbus, receiving state-funding from European Union nations.
The Boeing Company is looking to China toestablish a low cost manufacturing operation, and could potentially investhundreds of millions in capital to construct a plant in-country. China was the logical choice, as over 95% ofits exports are industrial manufacturing, and its top exporting nation is TheUnited States. China’s low cost, highlyskilled workforce, presents The Boeing Company an opportunity to expand theirmanufacturing capability at a lower cost.
TheBoeing Company has a distinct organizational culture, which mirror traditionalthought regarding typical American behavior. Culturally the company promotes, collectivism, flexibility, and holisticthinking, however, this message does not permeate well into the members of theorganization. As most employees aretypical Westerners, specifically Americans, they are individualistic thought,have a direct communication manner, and are relatively inflexible. (Ferraro& Briody, 2013)China, however, holds verydifferent views on these cultural aspects.
Chinese culture, focuses on collectivism, and has an indirect manner ofcommunication. This poses a potential conflict area during negotiations betweenthe two partners for a new Boeing manufacturing plant in the area. (Ferraro& Briody, 2013)The Boeing Company has avery talented pool of employees from many different areas of the world. Even though this is their first majorinternal manufacturing effort with China, the company has been doing businesswith the Chinese for decades.
As suchtheir negotiation team for this effort should leverage lessons learned in pastnegotiations, and use cultural education to ensure this venture is amenable toboth parties. Aviation in general is avery technical field, and negotiation contracts in that field require a levelof expertise in engineering, manufacturing, litigation, and operations. The negotiation team should bring an expertfrom each of these areas into the process, however, the lead negotiator shouldbe an expert in the Chinese culture, with the ability to fluently speakMandarin. There is a potential conflictpoint, if a group of hyper-intelligent engineers from an informal culture, withdirect communications skills, gather around with similarly intelligentindividuals from a formal culture, with an indirect communication style. The lead negotiator, corral theBoeing group, and instruct all members of the team to focus on listening,instead of speaking.
That is not to saythe engineering, manufacturing, and operations members should be stifled duringthe negotiation process, as all of them are vital to its success. (Ferraro& Briody, 2013) The team should display a quiet professionalism during the exchange, andallow the lead negotiator to bring them into a discussion, in-lieu of talkingover the conversation. As this contract will be beneficialto the Chinese and The Boeing Company, there is mutual interest in a successfulnegotiation, and through proper understanding of each other’s culture theprocess can be leveraged to benefit both parties. References Boeing. (2016). Boeing: Vision. Retrieved from www.
boeing.com/principles/vision.page Ferraro, G. P.
, & Briody, E. K. (2013).
The cultural dimension of global business. Boston: Pearson. Thompson, L. (2015). Boeing to build its first offshore plane factory in china as ex-im bank withers. Retrieved from Forbes: http://www.forbes.com/site/lorenthompson/2015/09/23/Boeing-to-build-its-first-offshore-plane-factory-in-china-as-ex-im-bank-withers/#7452d0fe5252