Powerpoint-HongKongICAC香港廉政公署

1、March,2007.Analysis of AccuForm ManagementAnalysis of AccuForm ManagementReconcile Culture Gap in Globalization“Ethical leadership for the New Generation”NHK-250FUDAN UniversityMarch,2007.Executive Summaryn An accident that 5 children were hospitalised for a rash caused by unqualified clothes broke

2、out, which disclosed a series of business scandal of AccuForm.nAs joint venture, AccuForm is the combination of a German coating producer and a Hong Kong OEM, while placing its R&D center in China mainland.nKim, the general manager of AccuForm, found the obvious differences in business practices

3、 between China and the West, yet failed to tackle the issue.nAs a result of lacking regulated business standard, Ching committed money laundering, misappropriation of company assets, illegal rebates and brides.nActions are imperative to deal with the pressing problem, not only to meet the emergency

4、but also conduct some underlying adjustments concerning business practice involving culture gap.March,2007.AgendaCompany profile and case overviewKeep problem analysisRecommended resolutions AppendixMarch,2007.Coating Industry Profilen82% of Americans wanted more performance clothnEuropean firms pro

5、duced 31% of the worlds chemicalsnThe growth of Chinas apparel market was up to 19.6%Market players were expanding operations in Asia Pacific, esp. in China.Industry standard should be strictly carried out.nThe use of precise quantities and mixtures of chemical properties in the coating production w

6、as important.nThe residue of chemical substances could irritate skin.nThe harm to environment caused by irresponsible handling of chemical waste should be taken seriously.March,2007.Company ProfilenGenerating profits override anything ncharacterized as internal control systemCompanysVisionnEnhance p

7、roduct performance nPlace a strict quality assurance systemnManufacturing base with low cost- Use cheap labor in mainland ChinaMarket PositionnLeading supplier of advanced coating - Hold advantage in high-tech and R&DnDevelop suppliers and customers by Guanxi networkBusinessPracticenTreat ISO st

8、andard as window dressingnTurn blind eyes to environment commitmentaCorporate Social ResponsibilityCreaseFree (HK OEM of clothing)Dynocoat (German coating producer)nDeal with literal rules flexiblynLack of business ethics cultivationCorporate CultureIntellectual PropertynEmphasize the intellectual p

9、roperty protectionnRelationship MarketingnKeep safety standard to minimize negative impacts on the environmentnEnforce strict codes of conduct to ensure professional integritynNeglect the protection of trademarkJoint venture with (1)foreign manager, in charge of R&D and coating production; (2) l

10、ocal staff, taking care of marketing and purchasing activities.March,2007.Case OverviewR&D managerMake purchasing decisionTake charge waste disposalnBehaviorsBuildCoralWearUse the authority to access corporate resources and over-utilize the machineAccept referral money from small suppliers at th

11、e cost of buying potentially inferior material from themShip untested coatings to CoralWear where they were applied to the finished garments, which were finally sold by wholesalerCounterfeit “AccuForm” brand by intent misspelling and sell the garment by distribution networknDiagnoseApply R&D inc

12、entive to AccuForm in spite of cultural difference; Over-decentralization yet lack supervision Effect of Chinese personal tie; interfere with other departmentBlurred authority and work divisionLead to the outbreak of allergies on children and disrepute AccuFormMarch,2007.Company profile and case ove

13、rviewKeep problem analysisRecommended resolutions AppendixAgendaMarch,2007.Typological ProspectFailure to take direct measures to offset and eludethe effects of GuanXi and perform under ethical code of conduct in the business environment in China Key ProblemGenuine dilemmanThis refers to two or more

14、 valid ethic requirements or legitimate interests conflict and consensus do not exist as to how it should be resolved.Moral laxitynThis refers to one believe to do an important moral goal at some time, yet need not perform any particular action at the momentCompliance problemnThis refers to one know

15、s undoubtedly what to do, but performance may be inhibited by pressures which run counter to moralityNo-problem problemnThis refers to one knows what the moral goal is and has the will and ability to pursue itTypologyMarch,2007.nKims management laxityFailure to recognize some cultural differenceGive

16、 minimal direction or supervision staff are expected to be self-disciplinedFailure to settle down the difference- Set up company performance-oriented targetexpected to show his own managerial capabilitiesWrongly disregard informal relationship-guanxi-Admit the informal guanxi by recruiting new colle

17、agues in China from Ching as production line supervisorA late recognition of a lingering self-illusion that one would do tomorrow what one neglected today. He didnt take needed precautionsAccuForm could not surviveMoral laxity of KimMoral Judgment: Ethical management is not changed in accordance wit

18、h different culture.Moral Motivation: He is not prepared to recognize timely the cultural difference and postpone the fulfillment of the duty.March,2007.Moral problem of othersMoral Judgment Has a clear knowledge of the local law which All dictate the same action Moral Motivation:Compliance problemG

19、enuine dilemma13 Workers: To be dismissed or to be exposed?2 line supervisors: Maintain Guanxi or to be exposed? Only his self-interestNeglect of culture reconcilementand leaky supervision systemThrow local staff, under Chinese culture affection, into the moral plight; foster illegal behaviorsTimely

20、 adjustment and ethical management development is imperativeMarch,2007.nKim fails to incorporate the culture difference into his corporate governancenEmphasis on ethical standard in West leads to Kim takes it for granted that staff would strictly conduct the ethical code.nThose together leads to lap

21、se hole of AccuForms flaw management and crisis of ethical managementnDefinitely AccuForm suffered a lot more than what it gained from misbehavior and even corruption rooted in guanxi. From a long-term perspective, the importance of guanxi in doing business in China is doomed to fade, but not in the

22、 present. While non-Chinese westerners have excuses not to conform to intricate ethics of relationship in the guanxi game, they shouldnt overlook its power if they eye the Chinese market expansion. As global companies devise comprehensive ethical policies and apply company-wide rules to Chinese oper

23、ation, the real challenge is the awareness of the importance of being appreciative to Chinese culture. AccuForms case is a typical example of non-appreciative approach, for which all parties paid dearly. Culture analysisMarch,2007.AgendaCompany profile and case overviewKeep problem analysisRecommend

24、ed resolutionsAppendixMarch,2007.Short-range StrategyAuthorities decentralizationSupervisionmechanismRotation system Designate different supervisor for R&D, production line and waste disposal sectors, Let the Board of directors decide from the potential raw material suppliers put forward by R&am

25、p;D manager Kim could form a supervision committee comprised of officers of different sectors and hold regular discussions and annual meetings on existing or potential problems of all sectors Exchange people of high levels from different departments in terms of their positions to prohibit the possib

26、le wrongful utilization of superior-inferior relationshipsMarch,2007.Communicate ethical expectations and requirements in daily and informal meetings with employees of all levels Let workers know what is required for them to survive and how they are doing in terms of ethicsEstablish a committee of i

27、ndependent non-executive directors on its Board of DirectorsTake measures including evaluations of the compliance system, staff training & funding,Issue an annual report of their ethics accomplishments and the challenges AccuForm faced Post the companys vision, values and codes of conduct on the

28、ir websites for public viewingConduct regular trainings for employees on their ethical responsibilities and teach them how to translate the pledge into specific actionsProvide necessary and well-developed support and guidance to them Conduct official and transparent recruiting job recruiting process in the public Organize panels of interviewers from all levels and all sectorsHire high-level employees after sanction o