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Exploring the inuence of cultural elements on Chinese manufacturing quality

David Fenwick, Tugrul U. Daim, Ibrahim Iskin and Yasser Dahlawi
Department of Engineering and Technology Management, Portland State University, Portland, Oregon, USA
Abstract
Purpose The objective of this paper is to identify the reasons behind the recent issues of Chinese manufacturing quality. This paper aims to discuss the inuence of American managers as well as Chinese business cultural effects on Chinese manufacturing quality. Design/methodology/approach In this paper, two survey questionnaires have been prepared for the study based on literature review. Survey instruments were sent to American and Chinese business owners and managers who have a considerable amount of professional experience in the manufacturing area. Findings It is found that both American managers and Chinese business culture have inuence on Chinese manufacturing quality. Originality/value This paper contributes to an understanding of the reasons behind the recent quality issues in Chinese manufacturing. Keywords Manufacturing systems, Quality, Inuence, Cross-cultural management Paper type Research paper

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1. Introduction Rapid political and economic changes, fast growth of manufacturing output, abundant and cheap work force, as well as wisdom of an old civilization made todays China an attractive target for foreign direct investments. Manufacturing output grew by 14.4 percent annually in the 1980s and Chinese economy shifted from poor agrarian economy to the third largest in the world by 1996 (Economist Intelligence Unit, 1992; Osland and Tamer, 1996). International Joint Ventures (IJV) have been historically the primary form in direct foreign investments, since they offer capitalists specic knowledge to operate in the foreign environment, reduce operational risks and costs, provide connections known as Guanxi, and make the entities more competitive on the local Chinese market (Osland and Tamer, 1996; Sanyal and Guvenli, 2001a). Currently, US companies are importing many goods and are procuring many services from China. The USA imported $128 billion in goods last year from China; 80 percent of US toys are manufactured in China, Chinese pharmaceutical imports to the USA were $698 million in 2006, 32 million tires were imported from China in 2006, 80 percent of all the garlic sold in the USA comes from China, and the USA imported $2.5 billion in human food in 2007. Over 28 billion pounds of gluten for animal feed were imported to the USA in 2006, 35 percent of the painkiller acetaminophen used in over 600 over-the-counter and prescription medicines is made in China (Cheng and Tjosvold, 2006).

Journal of Technology Management in China Vol. 5 No. 2, 2010 pp. 141-157 q Emerald Group Publishing Limited 1746-8779 DOI 10.1108/17468771011053162

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The amount of products imported from China has increased every year but also problems with them have increased too. In 2008, product recalls, closure of thousands of manufacturing facilities, spending heavily on promotions that seek to restore the western consumers condence on their products, using unsafe components in the manufacturing of some products and life sentences against corrupted corporations ofcials were some of the headlines about Chinese products (China Daily, 2009, n.d.). 19 million toys were recalled due to suspected lead paint and design aws in magnets; many of these were initially blamed on Chinese manufacturers. Dog food that killed pets was recalled for the presence of melamine in June 2007. Tires that separated and caused accidents resulting in some deaths were blamed on poor quality Chinese manufacturing the US Highway Safety Administration ordered the recall of 450,000 from one company last year. Other products including Starbucks coffee cups, Toshiba adapters, Sports Authority sports bottles, Eveready batteries, QVC Inc. toasters, Target baby bottles, and Cub Scout Totem badges were recalled due to quality issues. 2. Literature review In 1949, the corporate objective in China was to produce enough products to fulll the market needs without regard to the quality of products. From 1966 to 1976, the Cultural Revolution extensively disrupted business operations in China, and as a result any effort toward developing quality management was destroyed. The Cultural Revolution emphasized quantity rather than quality. Beginning in 1978, China has realized the importance of the quality of its products to compete in the international marketplace. Subsequently, Chinese companies have been practicing a form of quality management. From 1980 to 1985, China required that everyone in industrial organizations should learn and participate in quality management and they should start to implement quality management. In 1988, China adopted the ISO 9000 series of standards for its own national standards with conversion made for technical contents and the coding system (Chan et al., 1998). In 1993, the National Peoples Congress passed a law for quality purposes. The law holds producers responsible for the quality of their products. This law requires producers to manufacture products that follow these conditions: . products should maintain the standards; . products should be free of unreasonable dangers to persons and property; and . products should conform with samples or packaging descriptions. Although China has implemented quality management since the 1950s, the concept of quality management has been weak and the quality of many of its products remained poor and non-competitive. Also, the economy in China requires managers to emphasize in quantity rather than quality (Chan et al., 1998). In practice, many companies do not consider long-term business strategies and quality objectives in order to gain long-term success. Actually, they aim to get immediate prots and not commit to the long-term business development of enterprise. Many companies emphasize quantity and production speed without regarding quality (Zhang, 2000). China has taken a step to get into the international business arena and one of its targets is to enter the World Trade Organization (WTO). As a result of this effort, China has been forced to improve its products quality for the foreign customers and the local customers (Chan et al., 1998). In addition, due to the Olympics in Beijing and the

subsequent visibility on a world stage, Chinese manufacturers were instructed to improve their product quality in winning bids for infrastructures, construction, architectural design, transportation services, and telecommunications at the games. Chinese manufacturers were forced to excel in supplying competitively priced, high quality sporting goods and gift items (Hong Kong Trade Development Journal, 2001). In order to improve production, Chinese managers are using international standards such as ISO 9000 that fulll the quality needed to compete with the international companies, employee training to increase their knowledge for improving production quality and replacement of old technology and production facilities with updated ones (Hong Kong Trade Development Journal, 2001). The single largest tool at the disposal of the manager is the use of employees where needed, which is a HR issue. Also, communications to partners and customers is crucial in the attainment and maintenance of quality standards. The recent globalization of Chinese economy revealed that American managers consider quality of Chinese manufacturing generally low. This evaluation has also been supported by a number of Chinese managers (Osland and Tamer, 1996). In China, the basic corporate production goal is that of having the work done quickly rather than committing to 100 percent quality. Despite this cultural societal determinant, Chinese will attend to higher quality standards when more rigorous requirements for product quality are made (Walsh and Wang, 1999). The low level of quality in China was the subject of many researches that tried to understand the reasons behind this fact and provided a number of solutions and recommendations to overcome this critical burden of growth to the Chinese industrial sector. Much research has been conducted on the issues of Chinese production quality; quality standards and maintaining product quality. 3. Methodology and research design Two surveys have been conducted for the purpose of the study. One of the surveys is focused on identifying potential effects of Chinese business culture on Chinese manufacturing quality where as the second survey is focused on identifying effects of American managers. Ten managers from China have responded to the survey for effects of Chinese culture on Chinese production quality where as eight managers from America have responded the survey for effects of American managers on Chinese production quality Questions regarding American managers inuence on Chinese manufacturing quality have been developed and detailed in Table I to test the seven Propositions. Proposition 1 and Proposition 2 summarize the effects of the common goal of being the rst to market and the effects of fearing to communicate production problems to the American partner on the manufacturing quality level. Proposition 3 and Proposition 4 describe the American businessmen mentality and their perspective on the Chinese obligation toward quality and how their fear of losing the business relationships with their Chinese partners made them more exible toward less commitment to manufacturing standards in some cases. The last three Propositions discuss how the International Joint Venture (IJV) with Chinese businessmen has improved the quality level and how this partnership would keep to improve and encourage more commitment to quality which would benet both sides. Questions regarding Chinese business cultures effect on Chinese manufacturing have been developed and detailed in Table II regarding the inuences of two aspects of business culture on production quality human resources (HR) and international

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Survey questions 1. Qualication: What is your company job title or position?

Answers and results (n) number of responses; number rank (2) Owner (4) President/CEO/Chairman (4) Manager (0) Other

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2. HR: How many hours are your (0) Less than 4 employees expected to work per (0) 4 to 8 day? (10) 8 to 10 (0) More than 10 3. HR: Do you expect your employees to work on extra hours if required? (10) Yes (0) No

4. HR: Do you expect your (3) Yes employees to work on holidays if (7) No required? 5. HR: How quickly can you hire (0) Less than 1 week extra employees when needed for (2) Less than two days extra production? (8) Between two and seven days (0) Longer than four weeks (0) Cannot hire extra employees for higher production 6. HR: How quickly can you acquire extra or better equipment and facilities when needed to improve quality? 7. HR: Rank the responses to increased production demand in the order of importance ( no. 1 Highest)? Rank Values must be between no. 1 and no. 7 (4) Less than one week (5) Between one to four weeks (1) Between 1 to 6 months (0) Longer than six months (0) I will not acquire extra equipment or facilities to improve quality Add more or better equip: (4) no. 1, (4) no. 2, (2) no. 3 Reduce Product Quality: (10) no. 7 Hire more employees: (3) no. 1, (2) no. 2, (2) no. 3, (2) no. 4, (1) no. 5 Increase work hours of existing employees: (3) no. 1, (2) no. 2, (3) no. 3, (2) no. 4 Require employees to work on holidays: (2) no. 2, (2) no. 3, (4) no. 4, (2) no. 5 Discuss problem with customer: (1) no. 3, (1) no. 4, (6) no. 5, (1) no. 6 Do nothing (maintain existing levels): (10) no. 6 Add more or better equipment: (2) no. 1, (4) no. 2, (3) no. 3, (1) no. 4 Add a lower grade of product quality: (1) no. 1, (4) no. 2, (1) no. 3, (4) no. 4 Hire more employees: (1) no. 2, (1) no. 4, (4) no. 5, (4) no. 6 Increase work hours of existing employees: (1) no. 1, (5) no. 3, (2) no. 4, (1) no. 5, (1) no. 6 Train existing employees to improve quality: (6) no. 1, (1) no. 2, (3) no. 5 Discuss problem with customer: (1) no. 3, (2) no. 4, (2) no. 5, (5) no. 6 Do nothing until next production run: (10) no. 7 (continued)

8. HR: Rank the responses to a low quality problem in the order of importance (no. 1 Highest)? Rank Values must be between no. 1 and no. 7

Table I. The effects of American managers on Chinese manufacturing quality questionnaire

Survey questions 9. HR: Rank the rewards given to employees for doing a good job, in order of importance ( no. 1 Highest)? Rank Values must be between no. 1 and no. 5

Answers and results (n) number of responses; number rank One-time pay bonus: (2) no. 1, (3) no. 2, (3) no. 3, (2) no. 4 Permanent pay raise: (3) no. 1, (3) no. 2, (3) no. 3(1) no. 4 Promotion: (2) no. 1, (4) no. 2, (2) no. 3, (2) no. 4 Certicate or award: (3) no. 1, (2) no. 3, (5) no. 4 None (good work is expected): (10) no. 5 Best product quality: (3) no. 2, (2) no. 3, (4) no. 4, (1) no. 5 High production quantity: (2) no. 2, (3) no. 3, (2) no. 4, (2) no. 5, (1) no. 6 Employee satisfaction: (1) no. 3, (4) no. 5, (5) no. 6 Lowest production cost: (3) no. 2, (2) no. 3, (4) no. 4, (1) no. 6 Fastest production speed: (2) no. 1, (2) no. 3, (3) no. 5, (3) no. 6 Customer satisfaction: (7) no. 1, (3) no. 2 (1) Enforced by your company management (3) Responsibility of customers (2) Controlled by each production employee (4) Other (2) Less than 1 (5) 1 to 4 (3) 4 to 12 Other Chinese Dialect: None selected English: (10) no. 1 German: (2) no. 2, (1) no. 3 Russian: (1) no. 3 French: (1) no. 2 Japanese: (6) no. 2, (1) no. 3 Other: None selected Chinese: (3) no. 1, (1) no. 2 American: (5) no. 1, (2) no. 2, (2) no. 3 European: (1) no. 1, (2) no. 2, (1) no. 3 Russian: (1) no. 1, (1) no. 2 Japanese: (3) no. 2, (1) no. 3 Other: None selected (continued)

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10. HR: Rank the production attributes in order of importance ( no. 1 Highest)? Rank Values must be between no. 1 and no. 6

11. HR: How does your company manage product quality?

12. HR: How many weeks of training does your average employee receive each year either in a classroom or on the job? 13. International relations (IR): Rank the following second languages in the order that you would prefer your employees know ( no. 1 Highest)? Rank Values must be between no. 1 and no. 7

14. IR: Rank the following nationalities in the order that you would prefer to do business with ( no. 1 Highest)? Rank Values must be between no. 1 and no. 6

Table I.

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Survey questions 15. IR: Rank the following difculties in producing for nonChinese customers in order of importance (1 Highest)? Rank Values must be between 1 and 10

Answers and results (n) number of responses; number rank Language and Communication: None selected Time zone difference: None selected Shipping costs, duties, and delays: (2) no. 1, (1) no. 2, (1) no. 3 Product quality expectation: (2) no. 1, (3) no. 2, (1) no. 3 Payment: (1) no. 2 Production capacity: None selected Customer worries of intellectual property (patents): (2) no. 1, (3) no. 2, (1) no. 3 Pricing: None selected Employee training: (2) no. 1 Customer loyalty: (1) no. 1, (1) no. 2

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Table I.

relations (IR) to determine the extent of the connection linking Chinese business culture and production quality. The choices of these two aspects represent the extensive production worker resources as well as the interests of foreign companies to enter into IJV relationships with Chinese manufacturers. Answers covering corporate attitudes towards HR and IR will reveal the extent of connection between production quality and these business cultural issues. The small size of the samples for both of the surveys is a limitation to this study. Nevertheless, the high level and the practical experience that came from both Chinese and American managers who responded to the survey questions let us have valuable propositions and recommendations. A future study could test similar Propositions with a larger sample size and with a larger industry perspective. Propositions Effects of Chinese culture on Chinese production quality. Management of human resources is one of the most important factors in a corporations success. A comprehensive HR strategy will provide a huge advantage over competitors. Foreign investors of IJV need to study different aspects of Chinese business culture because it will have a large impact on the outcome of the production. International joint venture (IJV) relationships with Chinese business managers are an important and vital aspect in doing business in China. The old Chinese proverb, The rules are xed; the people are exible, might not be true anymore, because rules might be xed for the moment and is subject to change in the future. This Chinese proverb leads to very important subject: the relationships between foreign businesses and the Chinese concerns. The inuences on this relationship come from many sources such as; direct role of the government in the Chinese economy, usage of laws as a means of social pressure rather than legal instruments to ensure compliance and business practice based on relationships and connections (Amber and Witzel, 2000).

Survey questions 1. Qualication: what is your company job title or position?

Answers and Results (n) number of responses; number rank ( ) Owner ( ) President/CEO/Chairman (3) Manager (5) Other

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2. Do you expect your employees to (4) Less than 4 work extra hours if required? (2) 4 to 8 ( ) 8 to 10 ( ) More than 10 As needed Cant quantify no. of hours required but answer is yes 3. Do you expect your employees to (3) Yes work on holidays if required? (5) No 4. How often do you prevent a product with new technology to ship due quality issues? 5. Are you aware that Chinese employees are reluctant to express their views to foreign managers about production quality? 6. If YES to Q5, do you follow a procedure to ensure they communicate problems with production quality timely? (2) Never (2) Seldom (4) Always (5) Yes (3) No

(7) Yes ( ) No

7. How often do you get feedback or (1) Never concerns from Chinese (7) Seldom employees (not managers) about ( ) Always your production/product quality? 8. Are you willing to forfeit your (4) Yes relationship with a Chinese (3) No employee to enforce strict quality Ill coach them to understand their charter quality procedures or policies to improve quality? 9. Do you encourage your Chinese manufacturer(s) to recommend product improvement? 10. Do you accept a review to your designs from Chinese partners? 11. Rank the rewards given to employees for doing a good production/product quality job, in order of importance ( no. 1 Highest)? Rank Values must be between no. 1 and no. 5 (7) Yes (1) No (6)Yes (1) No One-time pay bonus: ( ) no. 1, (5) no. 2, ( ) no. 3, ( ) no. 4, ( ) no. 5 Permanent pay raise: (1) no. 1, ( ) no. 2, (1) no. 3, ( ) no. 4, ( ) no. 5 Promotion: (1) no. 1, ( ) no. 2, (1) no. 3, (1) no. 4, (1) no. 5 Certicate or award: (5) no. 1, ( ) no. 2, ( ) no. 3, (1) no. 4, ( ) no. 5 None (good work is expected): (2) no. 1, ( ) no. 2, ( ) no. 3, ( ) no. 4, ( ) no. 5 (8) Yes ( ) No (continued)

12. Do your company has a dene procedure to follow if production/product problem occurs?

Table II. The effects of Chinese business culture on Chinese manufacturing quality questionnaire

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Survey questions 13. If Yes, do you follow a procedure to ensure they communicate quality related problems timely? 14. If there is a quality problem during production, who will take the lead within your company to resolve the problem? 15. Do your company offer quality training program to your Chinese manufacturing partners? 16. Do your company have a well dened product check list that all products should meet before bulk production? 17. If you notice a product quality problem before shipping your product, what do you do?

Answers and Results (n) number of responses; number rank (8) Yes ( ) No (1) Chinese counterpart (7) American counterpart

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(4) Yes (3) No (8) Yes ( ) No

18.

19. 20.

21.

Table II.

(5) Fix the problem before shipping ( ) Ship the product and improve the quality in a later shipment batch ( ) Do nothing (if the problem is minor) (3) Other (explain) ___________________ Depends on the quality problem and what it takes to x the problem How often does your company (4) Once yearly send a representative to visit (4) More than once a year your production site in China? ( ) Have an employee (American) on site ( ) Never Do your company provide (6) Yes Chinese culture training? (2) No Is there a Joint Venture between (3) Yes your company and your Chinese (5) No manufacturers? If Yes to 19, does the joint (3) Yes venture help improve product ( ) No quality?

In summary, the two primary aspects discussed above and inuencing this model are rst, human resources, which includes: (1) Employee contribution: . dedication; . loyalty; . hard working; . working long hours; and . holidays. (2) Harmony: . team work; . clear denition of responsibilities and authority; and . labor exibility.

(3) Training the improvement of worker productivity. (4) Scalability the ability to expand the work force for extra production. (5) Motivation: . salary; . social benets; and . rewards. Second, international relations, which includes: (1) Customer orientation: . rst class service and products; . customer is number one; and (2) Customer relationship: . Chinese native; and . foreign (European, Americans). Each point of these two aspects forms the basis for a proposition that is used to help test the quality problem. Employee contribution. Employee contribution refers to cultural values that make contributions to a companys success. In general, Chinese employees are very loyal to the rm and they are very hard working. A majority of them would work long hours or on holidays if they asked to. There are advantages and disadvantages to have Chinese employees work overtime (including holidays). On the one hand, this helps to complete tasks on time. On the other hand, it might have a negative effect on quality due to fatigue, tiredness and loss of concentration. Few Western organizations allow workers to continue working after a designated number of hours: P1. Overworking an employee to maximize production quantity will have a detrimental effect on production quality.

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Harmony. Harmony is highly valued in China, and that includes communication, teamwork, friendship, expression, and sharing of feeling and emotions. Corporations are like a big family, or one body, and employees are members in the family, or part of the body. Members are encouraged to share not only their ideas and thoughts, but also their emotions and feelings:
Chinese managers believe that one of their key tasks is to maintain harmony within the organization, both between people and between work units (Bak, 1998).

This HR value might affect production quality as well, because of this close relationship between employees and managers will possibly create an unprofessional business climate, where an employee may not speak out or report to management if quality issues have been noticed. Harmony is of great value to a corporation, as long as limits are set. Harmony needs to be managed properly and balanced between work related, feelings and emotions. Managing harmony correctly will lead to success: P2. Too much emphasis on harmony will prevent an employee from rocking the boat and speaking out regarding a quality issue.

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Training. Training is an important value in the business culture; it keeps employees up to date on new technologies, services and new tasks. Training programs generally ensure that employees feel valued by the rm. An emphasis on training will help to ensure production quality and consistency. Training is an effective retention tool. If employees do not feel that their employer is willing to invest in them, then they may be more likely to accept a job at another company (Pacic Bridge, Inc., 1998). Training employees to enhance skills and talents has a direct correlation to production quality and a companys success: P3. Lack of training leads to reduced production quality.

Workforce scalability (hiring). Due to the massive available work force in China, it is not a problem getting and expanding the work force by hiring more employees. Willing employees are available nearly anywhere in China and can be hired on very quickly. The newly hired employees might not have proper experience at a particular job, and they may not be ready to do the job successfully. P4. New employees need time and training before they can complete work with an attention to quality.

Motivation. There is evidence from studies undertaken in China, and among Chinese cultures, that particular motivational considerations apply in Chinese context, and that certain motivational techniques have been successfully developed and employed (Bak, 1998). Chinese managers reward hard working employees with salary raise, promotion or other form of employees satisfaction. It is a way to keep employees and make them more loyal to the institution. However, since there is always an available replacement, employers may not be as interested in keeping an employee motivated: P5. With less motivation, employees will produce products of lower quality, and create a greater turnover of workforce.

Customer orientation. Chinese authorities consider IJV as the preferable form of foreign investment, because IJV provide an opportunity for the transfer of advanced technology and management skills to the Chinese economy, which leads to increased exports (Lihong and Gofn, 1999). IJV may face a few problems and obstacles when dealing with Chinese managers, although Chinese managers give much attention to the foreign partner. One of these problems can be identied as lack of Chinese managers experience in managing production quality. Even though Chinese managers are dedicated to the needs of the foreign partner, they often believe the priorities are the need to meet deadline, ship date or quantity without regards to the quality outcome. Also, due to the decades of limited supply and always increasing demand, two important attitudes shape Chinese business motivations: (1) Long-term relationships are not important because there is always another customer waiting. (2) Because of the huge demand, a Chinese corporation can always sell what it makes, regardless of quality.

These attitudes may carry over to the relationship with the foreign partner, even if the Chinese company is willing to give the IJV a special relationship status: P6. Lack of interest in long-term relationships will reduce the need for repeat business in an IJV.

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Customer relationship. Chinese managers prefer dealing with foreign customers more than native customers. Americans are especially prized as a business partner. This stems from the benets of technology and management transfer that can benet the Chinese economy as a whole. Communication with the foreign partner may also be compromised because the Chinese business will not want to lose face, or be embarrassed, if there is a problem with production: P7. Foreign partners will not be informed of production problems until too late because of the need for the Chinese managers not to lose face.

Effects of American managers on Chinese production quality. According to literature review there are multiple effects that play role into Chinese manufacturing quality caused by American partners. Below, you can see these effects and proposition accordingly. First mover advantage. Being rst to market is very important for American companies for new technology. Most American managers have to make tradeoffs between getting a product in the market with less quality over improving a product and introducing it to the market at a later time. Time-to-market in new product development (NPD) projects is a key factor in the competition between innovative rms especially after 1980s. For example; in the hardware industry rst mover advantage is very different than software industry since it is not possible to release patches if there is bug within a product. As this situation does not apply to hardware industry managers have to make a tough decision between launching a product that will meet the companys nancial goals and possible bad reputation caused by product bugs: P8. American managers prioritize meeting project schedules to be the rst to market for a new technology (Cheng and Tjosvold, 2006).

Reluctance in expressing quality problems. Employees have been found to be reluctant to express their views directly to foreign managers (Cheng and Tjosvold, 2006). Chinese managers are aware of this fact and might fail to report employee views that might result in production quality issues. As a result, American managers are not well informed about production quality issues: P9. Chinese employees are reluctant to express their views directly to foreign managers and this can result in poor production quality (Cheng and Tjosvold, 2006).

Quality issues between the USA and China. The popular American phrase getting what you pay for? applies to this Proposition. According to experts in this matter, much of the blame for unsafe or low quality products lies squarely with the purchasing policies put in place by Western companies. Policy of some companies to sign short-term easy in, easy out contracts with multiple organizations can cause problems in production quality. This policy allows them to use the threat of moving to

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another manufacturer in order demand the lowest possible per unit price, and to chop and change manufacturers at will if one proves unable to meet their requirements for unit price and quantity. This in turn creates a low security, high competition, environment in which factory owners must compete with each other for thin margin contracts, and in which they feel forced to cut corners or to infringe on regulations as a way of staying in businesses. P10 is proposed to test if the product recall is the result of US multinational corporations pursuing low-priced products and lacking social responsibility, or if the Chinese culture pressures itself to get the business, and then blames itself for the quality defects: P10. Most American managers in China are of the view that Chinese standards are too low and are always quick to blame others in business for difculties they meet, whereas Chinese people always blame themselves rst (Chen et al., 2005). American managers approach to production quality. Western managers might be reluctant to initiate conict because they have been told that Chinese people, as they are collectivists are committed to personal harmony (Chen et al., 2005). American managers are aware of this fact and might be hesitant to ask Chinese managers to discipline employees who do not following production/product quality guidelines. P11 is proposed to nd out the ways American managers are dealing with Chinese manufacturing in terms of how behavior is affecting Chinese product quality: P11. Fear of losing personal relationships with Chinese people may result in poor product quality (Xin and Pearce, 1996; Midler, 2007). Effects of joint ventures on quality. One way to create a win-win situation is through joint ventures with Chinese manufacturers. Joint ventures can integrate quality commitment from both parties. However, when joint venture cannot be achieved, American companies need to create other incentives for manufacturers. There are some benets for joint ventures by manufacturing in China including the exibility to arrange business relationships and opportunity to gain a cultural understanding of China through local partners, and the benet of not needing to set up a new corporation in China. For all the benets that joint ventures offer, there are also some drawbacks to establishing and operating this type of business model. For example, compared with license and contract manufacturing in China, joint ventures may require greater investments from a foreign enterprise. In addition, cultural differences and prot sharing issues can arise if correct communication techniques are not used. Joint ventures with Chinese companies provide one of the most effective ways for international companies to establish a foothold in the booming Chinese economy. Not only do they serve economic interests, but also joint venture serves as a way to make manufacturing a part of the product quality and function: P12. Joint ventures can be seen as a good problem solver for quality structure in China (Yan and Gray, 1994). Social relationship between American and Chinese organizations. In the West, having connections, is very important and usually not a sufcient condition on its own, nor

even necessary in some circumstances to accomplish a business objective. Chinese managers observe business deal as a win-win, mutual benet, and a long-term relationship. This paper deals with the deep cultural differences between Chinese culture and the western culture. P13 is proposed to test whether American managers are using Guanxi and Mianzi with Chinese manufacturers or not. It will also provide information about how the American culture acts in terms of relationship and social events with supplier: P13. American companies improve social relationships with Chinese manufacturers (Xin and Pearce, 1996). Resistance to change in Chinese organizations. Literature review indicates that there are differences in behavioral patterns between China and the USA. While Chinese culture emphasizes seeking security and quality of life, developing good relationships with people in the workplace, and reducing or avoiding competitive relationships with others in the workplace, American culture emphasizes achievements, successes and professional development, and places a high value on seeking and confronting risk as well as a taste for work involving change, challenge, and competition. In particular, what has been noticed is that resistance to change in China is especially related to disruption of interpersonal relationships. P14 is proposed to test whether American managers seek to reduce the resistance to change in their suppliers: P14. When an American rm discovers that a Chinese supplier is not meeting its expectations, discussing the need for changes is strongly resisted by the Chinese organization (Hetzel, 2008; Sanyal and Guvenli, 2001b). 4. Survey results Below, you can nd recommendations for both of the surveys separately. Results of the survey for effects of Chinese culture on Chinese production quality Question 1 simply establishes a qualication for the respondent. Questions 2 and 4 test P1, which refers to overwork, and the results show that Chinese employees are expected to work at least wight hours per day. However, none of the respondents require employees to work on holidays. Question 5 tends to indicate that employees can be hired quickly to ll production requirements. Along with question 12 regarding the amount of training an employee receives, P4 regarding new employees and lack of training is supported. Questions 7 and 8 compare the responses to both increased production demand and a quality problem, and, again in consideration of question 12, indicate support for P3, lack of training, but also a desire to acquire more or better equipment. A large percentage of respondents would add a lower quality product line to market those substandard products being produced. Also, all respondents would not reduce product quality to increase production. In addition, P7 is supported because few respondents would want to inform the customer of potential problems. Question 9 tests P5 by indicating a pay raise, promotion, or an award in response to a good job by an employee. None of the respondents would ignore a good job by an employee without some form of reward. P5 is not supported by the questionnaire.

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Question 10 asks managers to rank production attributes in order of importance, and includes quality and quantity among the possible answers. Due to the ambiguous nature of one of the answers regarding customer satisfaction, no conclusions can be drawn. Customer satisfaction can include shipping speed, quality, production speed, and a wide variety of attributes. Responses to question 11 support P6, which deals with a lack of long-term business relationships. A large percentage of respondents expect quality management to be the responsibility of the customer. Also, only 10 percent of the respondents indicate the quality concerns were the responsibility of the Chinese corporate management. Question 12 shows a minimum of employee training, which supports P3. Of the respondents, 70 percent provide less than four weeks of training per employee per year. Questions 13 and 14 provide background information for Question 15, and indicate a preference for foreign partners. Question 15 shows that the Chinese managers are concerned with product quality expectations of the customer, customer worries of intellectual property, and shipping costs. We were relying on responses to question 7 to give us evidence to support P2 dealing with harmony. No conclusions can be made regarding whistle blowing, or speaking out if there is a quality issue. Results of the survey for effects of American managers on Chinese production quality Question 4 and 17 test P8 how American managers value being rst to market. Half of the respondents state that they would never ship a product even if the product has quality problems. Other half states that they would seldom or never ship a product with quality problems. Based on this result and the literature review P1 is supported. Questions 5, 7, 12 and 13 test P9 which refers to Chinese employees reluctance to express their view about production quality. About two third of the respondents are aware that Chinese employees are reluctant to express their views about quality issues. All the respondents with one exception states that they never get feedback from Chinese employees abut production quality. However, question 6 shows that all respondents have procedures in place to report production quality issues. Thus, P9 is supported. No specic question tests P10 which refers to American managers in China blaming their Chinese counterparts for poor quality. However, a combination of survey questions show relationship between American and Chinese managers and how American managers view Chinese products. For example, question 9 tests whether American managers would accept review from Chinese employees. All of the respondents except one say they would accept review from Chinese employees where as in question 14 all the respondents except one say American counterpart takes the lead if there is a quality problem. Thus, P10 is not supported. Question 8 tests P11 which is claiming that fear of losing personal relationship with Chinese partners might result in poor product quality. Having a good relationship is very important for Chinese employees and this is valuable in their culture. Based on the survey responses, four of the American managers are willing to forfeit their relationship to enforce strict product quality rules while three of the managers are not. Although there is not an agreement among the respondents we can say that P11 is supported. Questions 20 and 21 test P12 which is claiming that having a joint venture can improve production quality. Half of the survey respondents have a joint venture with

their Chinese partners. The ones that responded No to this question provide a training mechanism to their business partners to improve production quality. By having a joint venture or providing training, American managers can inuence their Chinese employees to be aware of the importance of manufacturing quality. As a result, P12 is supported. Questions 18 and 19 test P13 which is claiming that American companies improve relationship with Chinese employees by attending classes that teaches Chinese culture, and visit China to better understand the Chinese culture. P13 is supported since all the respondents indicate that they travel to China and visit their Chinese business partners at least once in a year. In addition to it, one fourth of the respondents have Chinese culture training programs. Questions 7, 10-11 and 14-16 tests P14 which is Chinese managers are reluctant to change due to inuences from their culture. These questions are designed to test whether or not American managers are aware of this and how they are addressing this issue. Recommendations Following recommendations were revealed for dealing with maintaining quality problems with Chinese manufacturers by considering Chinese culture features and American managers approach to Chinese partners. Incentives should be provided to promote communications. By this way American managers can make sure that the channel of communication is going in both directions instead of one way. Moreover, the earlier feedback can be acquired from Chinese partners so that quality matters can be resolved in the production process. Penalties should be reduced and bonuses should be provided if Chinese business managers contact the foreign partner immediately in the event of a quality problem. As Chinese business culture expects the customer to be responsible for quality, a substandard should be ensured that a product will not shipped to the foreign partner as the time and expense wasted to return the production may be excessive. The foreign partner should emphasize their uniqueness as a customer, to avoid the potential cultural attitude that another foreign customer can easily be found if needed. Guanxi relationships should be developed with Chinese partners (Christensen, 2008). This statement also comes up repetitively and consistently in the literature. According to our study, American managers develop such a relationship. However, it is not sufcient to meet once a year to maintain strong relationships. The foreign liaison to the Chinese business should be non-Chinese, and preferably American, due to the Chinese business cultural bias towards foreigners. Also, correspondence and letters should have non-Chinese names on them, due to the impression it makes to business and government ofcials. Specics in an agreement should be avoided since Chinese solutions to problems require latitude, and foreign specics may not be applicable. Quality training programs are being provided now, but intensity and frequency should be improved. Experts should be employed to serve as advisors and monitors. Since, American managers cannot fully understand Chinese culture and are not equipped to fully appreciate the depth of Chinese business experts can be very helpful. It is also essential that American rms should be represented by reliable Chinese agents (Christensen, 2008).

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5. Conclusions Many of the proposed propositions were supported by the survey questionnaire. This indicates that answers to the research questions regarding corporate emphasis on quality versus quantity, preferences for foreign versus domestic partners, and the actions that Chinese business managers make in response to quality concerns show a denite link to production quality. The results also show that there is a concern on the part of Chinese business managers that quality is an important issue in IJV. This paper also addressed the American businesses role on the Chinese production quality matter. Many of the proposed Propositions were supported by the survey questionnaire. This indicates that answers to the research questions regarding the inuence of American managers on Chinese production quality show a positive inuence to production quality. The results also show that there is awareness among American managers of their role on the Chinese production quality on contrary to what the Chinese belief. The reasons for stating such conclusions come from the survey respondents inputs. Those inputs showed that American managers adopted practices to positively inuence the Chinese production quality such as Chinese culture classes, frequent visits, and dened quality procedures to follow. Such practices are in the area of understanding Chinese cultures, accepting product review from the Chinese, procedures in place to address quality and understanding the importance of business relationship. Finally, our research is just exploratory and inclusive. An expanded research with more questions and greater number of responses is required to justify our ndings.

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