The challenges faced by Intel, China

Newly Appointed manager of marketing programs of Intel in China, Charles Tang was facing resistance from an account manager is his division Yong Li. Conflict between Chinese and Western management styles is evident and needs to be considered carefully besides the individual traits of personnel. Western management processes and style should be developed to suit the Chinese style of management as the former style will not be effective if implemented directly due to cultural restraints. More training to the Chinese staff was required to change attitudes towards the western style of management and expat managers were required to show more restraint and caution using western management patterns.

In the case of Tang he should have given Li an option of either stopping work on the project or to complete the project within a specific time frame. This would allow Li to save “face” which is very important in Chinese culture.

Introduction

Intel was operating in China from 1985 but only in 1993 that it went ahead with two wholly owned foreign enterprises. The enterprise in reference is Intel Architecture Development Co. Ltd. (IADL). On taking over his new position at Intel, Tang started restructuring of the company staff to make them more effective in achieving the goals of the company.

Tang had been away from his home country for eight years and working in western environments, his perspectives and perceptions had changed. During this same period China had gone through some drastic changes due to the economic situations prevailing but the basic Chinese principles did not change. Chinese culture is collectivist whereas western culture is more individualistic which led Tang to see each individual rather than the overall team performance. This led to problems that Tang faced in establishing himself within his new role.

Home country culture and themes was reflected in the multinational companies setting up in new countries. Such establishments tend to face problems when they duplicate these values in other cultural backgrounds. Organisations of this nature may need to modify their home country settings to suit the local norms. The Intel ideology of “disagree and commit” may be working well in western cultures but would need to be adjusted if it needed to be adopted within the Chinese cultural setting.

The conflict that occurred between Tang and Li could be analysed against the Chinese cultural hallmarks as follows:

Harmony: Harmony in an organization is created when people have the same thoughts and beliefs and no conflicts exist. Li was seeking harmony but then Tang came along and disagreed with the continuation of his project. Tang disturbed the harmony that existed when the former manager was supervising Li’s project. Another fact to be noted is that in the face of conflict Chinese will try to maintain harmony between the parties but there is also a belief that there is a limit to everything.

Time and Patience: Tang did not wait for Li to finish the project at hand considering that it would be a waste of time which is characteristic of western culture where time is considered as very important. Contrary in Chinese culture where the virtues of patience and calmness symbolize sincerity, seriousness, competence and self-control. Li might have been offended, considering that his sincerity and competence to complete the project could be in question.

Flexibility: Li was not given a chance to discuss the options for completing his project and was ordered to stop work. As per popular Chinese proverb “to be successful in life and to achieve greatness, one must be flexible”. Another Chinese saying teaches “Nothing in life is impossible, unless one has doubts in one’s own abilities”. These two popular sayings show that given the opportunity and the ambitious character that Li possessed he would have been flexible to adjust the goals which were too high to achieve and would have realigned with the company charter.

Trust and Collectivism: Tang being outside China for so long was considered as an outsider and the only way forward to create a harmonious situation was to win the trust of the employees. Li and the other employees had a reason to suspect, resist and probe Tang’s decision since he changed people’s roles as per his judgment. Study by Hofstede (1991) suggests that Chinese believe in long term as opposed to short-term orientation. Due to this fact expatriates and outsiders do not gain acceptance easily into the Chinese group, which might have further alienated Tang.

Communication: Trust is a key factor in communication with Chinese as the form of communication would change from an accepted member and an outsider. The communication trend will be more unrestricted if a person is accepted and would be inhibitive with an outsider. Also another important factor here is the choice of words to be used when communicating with Chinese as they could misinterpret conversations leading to misunderstandings. Double or hidden meanings could be taken from the conversations considering the indirectness of Chinese communication. A statement made by Chinese may hide a message in his conversation as they avoid the confrontational, provoking and threatening style and conform more to being polite and graceful. Li when asked to stop the project might have seen a hidden agenda by Tang and caused him to break his silence and come forward to oppose the decision. The way the information for stopping the project was conveyed to Li through his supervisor Qing Chen on behalf of Tang might be a reason for further misunderstandings.

Rule of “Guanxi”: Which is an important aspect of doing business in china was possibly ignored by Tang. “Guanxi” is the forging of relations between individuals or organisations. In the case of Tang and Li there was no relationship built between the two wherein no understanding would be granted for the others decision.

The Concept of “Face”: Understanding the concept of “face” is also a critical issue in dealing with Chinese workers. El Kahal (2001) describes face as the public image of a person which has been earned by his/her social role and is respected by others. If someone doesn’t succeed in managing his/her social tasks and duties, he/she loses face. If someone causes another person to lose face, he/she deserves revenge (Xiaoli, 2001). The importance of face is so high that Chinese don’t give up on a task or business even if the task or the business has been proven to result in no positive outcomes. Under these circumstances, Chinese show high degree of patience to maintain face (Sheh, 2001). Tang asked Li to stop the project which was not a positive feedback. He didn’t support Li’s efforts put into the task he had been assigned to and thus caused him to lose face. Li possibly expected a degree of patience from Tang and opportunity to finish the project.

In the same context analysing Li’s behaviour have brought about the following thoughts:

Personality and socialization: According to the available information, Li is low in agreeableness and emotional stability. Considering these traits, his aggressive response towards the challenge he has faced is not surprising. Also, he is high on assertiveness and responsiveness scales which show that he decides intuitively and demonstrates impulsive manners, which had been the case in the given situation.

Motivation: Li had been trusted with a project by his former manager and was working hard on it for two months. Although not relevant to his main responsibilities, the task had been appreciated and when he took a bigger step in the project (preparing a book instead of a simple manual) he was not guided appropriately. He thought he was doing a fine job until suddenly Tang asked him to halt the project. That high level of motivation (due to intrinsic factor of self-satisfaction maybe) all of a sudden changed to a sense of being misused, not being appreciated, frustration and disappointment.

Lack of communication: Although Tang is trained to respect the philosophy of “disagree and commit” followed by Intel, Li is not aware of such a concept as he was not indoctrinated. Instead of a direct firm order which caused resistance in this case, Tang should have asked for a meeting and should have clarified to Li where the problem lies.

False perceptions: Tang had been considered as an expatriate and stereotypically judged to be an expat manager who didn’t show respect to his subordinates and changed the situations of the workplace without explanation. This stereotype might have occluded Li’s mind. Another aspect of the case which might have played a role is that Tang was paid generously in the eyes of his colleagues as opposed to themselves. This kind of thought can influence people’s judgment.

Case Presentation

Considering the facts about the employees and the cultural setting (including Li) Charles should have first considered about getting a “guanxi” going with his employees, winning their trust and becoming part of the group. This would have opened up the communication with his employees. The reassignment of the work would have then been more receptive rather than the suspicion and resentment that Tang created as a new manager. Li needs to be assured that although there have been changes in the management; there is no reason for suspicion as he is a capable and talented employee.

In Li’s view he had lost “face” and was demotivated and according to his character it was quiet natural for him to react aggressively. Tang should have given Li a more challenging project and bargained with him to stop work on the current project citing his talent and commitment for giving him a better project than the one that he is currently working on. Here Tang could also show Li his future prospects within Intel if he concentrates on his key role rather than the project which is not aligned with the company requirements anymore. Alternatively Tang should have given him a definite time frame to complete the project or stop work on it immediately and concentrate on his main duties.

Another aspect that needs consideration is the interpersonal styles. According to what we learn about Li, he is high on both assertiveness (he “tells” and doesn’t “ask”) and responsiveness (he shows emotions and doesn’t hide them).

This presents us with two situations: will Li continue the project and align it with company policy which will save his “face” or will he stop completely and concentrate on his key role. In this situation he is more likely to continue and complete the project as it is a matter of saving his “face” and also to demonstrate his ability. Conversely if he stops the project, being an expressive character he will not be at peace with himself and will leave the company being a loss to Tang as Li is a talented and dedicated employee.

Recommendations

In conclusion Tang should give Li a fixed time frame and revised project goal to complete the project at hand allowing him to save “face”, prove his talent and not be demotivated. Given this chance would help Tang to forge a “guanxi” with Li, keep him motivated and win over his loyalty; all of which would help in retaining young and talented Li who has lot of potential. This would also help Tang to break the ice with the other Chinese employees as Li is expressive and would spread the word to others bringing in acceptance and factor of trust to Tang within the company.

There are some factors which influence the attraction and retention of the best employees. These factors are recognized universally and are not restricted to a certain culture and nationality. Anne Caldwell (2001) summarizes the most important factors in four categories: offering a benefit package, defining the job clearly and setting up recognition programs, creating the right environment, and offering creative bonuses. In her opinion, the most valuable and vital feature is a positive and supportive working environment. Robert Bradford (2007) believes that “people want to feel that they are special and that their jobs are special”. He adds some other elements to those mentioned before, such as: The name and the fame of the company, the fulfilling nature of the work itself, a prestigious job title, flexible working hours and vacations, and building a corporate culture in which employees are empowered to help customers, themselves and their colleagues.

Corporate culture would be difficult to transfer to China unless they do not adjust it for the local settings. Laurent (1986) argues that when a conflict is seen between national cultural values and organisational culture the former always takes precedence. In case of Intel the policy of “disagree and commit” can only be implemented if it is well indoctrinated to the employees and gains acceptance by them.

Intel in China can learn a lot from other internationally spread Intel companies which have chosen a successful strategy in attracting local and international employees. Intel India Development Center (IIDC) is an example. Batra from Intel India (2003) acknowledges the impact of cultural differences between his country and Western organizational culture of Intel and remarks that the India based company hires experienced professionals who wish to move to India. These professionals help the culture and values of Intel to prevail throughout the company; then experienced local professionals and recent college graduates are hired and integrated into Intel culture and values. Working in IIDC has the benefit of increasing technical skills and as a result, being promoted and obtaining a higher pay. Those professionals who move to India are offered a compensation package that consists of stock options, employee stock purchase plan and/or cash bonuses. Those employees who decide to move to India are also provided with financial help and relocation assistance. Intel in China can also offer a compensation package for those brilliant Chinese talents living abroad to encourage them to move back to China. However, this package should be delicately tailored to meet both personal and cultural values of those employees.