AddThis Social Bookmark Button
15
Aug
2010
The Chinese Dichotomy E-mail
Featured - Business
Written by David A. Dayton
I spent 12 hours in a factory on Monday resolving concerns, fighting with resistant engineers, negotiation with managers, hobnobbing with the owners over lunch, discussing solutions with line managers, reviewing standards with QC/QA folks and generally working though every single production issue imaginable to try and jump start a stalled project.

What did my 12 hours get me? A signed agreement that the factory will deliver the promised product a month late and I won’t be charged for it! I was quite pleased. Really. Now this factory is world class—in terms of production capabilities, machinery and facilities, that is. They have over 3000 employees, are privately owned and some minority owners are Japanese technology companies who are also the biggest customers. But problem solving, customer service, real-time communications and “win-win” are concepts that management has yet to embrace (or even define). This is nothing new in China, of course. While China leads the world in growth rates, largely on the back of manufacturing for export and domestic infrastructure, it is in no way anywhere near the top in the “science” of business management and customer service. In fact it’s probably one of the world’s worst.

For example, China has gone from almost no cars in the 1980’s to the second largest market in the world twenty five years later. Ditto for the airline industry, home computers, beer and many others. But the average education level is still less than 6th grade. Technical skills and science are a focus for education in China but the application of that education, the ability to use abstraction and social sciences education are more than a little weak. Specifically, while China pumps out 3-4 million college grads every year, less than 10% of them are of the level necessary that they could work in an international company.

What this meant for me at the factory on Monday was simply this: the factory can manufacture just about anything that I want, but if there are problems or if quality standards are not meet, resolving concerns and meeting international standards are difficult requests to accomplish. Changes are often difficult to accommodate even with Western educated engineers—even when the changes are coming from the factory engineers themselves in response to production problems.

In China the typical answer to production problems or QC issues goes something like this: First, try to convince the client to accept the completed, but inferior product. Second, if that won’t work, stall, delay, and find whatever excuse there is to force the client into a time crunch so that the inferior product looks better and better in relation to a whole new production run. Third, if the client is still insistent on original standards, negotiate new prices. Fourth, present new samples, new production schedules for approval. If new samples are not approved return to step number one.

In most Chinese companies the mentality is still “duck and cover” when there are problems. This is not surprising when the costs of mistakes are often taken directly out of the responsible party’s salary. And since upper level managers are never told bad news, when they are finally brought in it’s usually pretty late in the game. That’s where I was on Monday.

Discussions about our production started with the engineers saying how badly the factory (they themselves) had underestimated the difficulty of the project and how much it was costing them. No matter how many times I hear this excuse it always shocks me. Basically, their saying: We were dumb, it’s our fault, but we’re not going to take responsibility for it. But this seems to be a standard line regardless of factory size and international experience.

The conversation then moved to how difficult and inflexible my standards were. Of course I’d been hearing this same story for the last week as various sample products were rejected, so I waited until they were done before reiterating the same standards that we’d established together months earlier. Now, it’s not like these standards were new or had changed—they are listed clearly in the PO that the factory signed (I know, that’s my mistake—I assumed that a signed contract actually mean something!).

There was no mention of why there were delays or problems, rather just how much it was going to cost to finish the project. Managers, new to the discussions on Monday, were initially angry with me for not being flexible enough, changing standards and not giving them enough time. At this point, when I was being falsely accused, it was time to go on the offensive. I brought out all the contracts and PO’s, the photos, the samples, and every fax and email the factory had ever sent us concerning this project. I knew going in that the managers had never head the whole story and probably hadn’t even ever seen the PO. My strategy was to answer every single objection and misrepresentation with the facts. Since I knew that I didn’t have the clout (small $200,000 order) or the inside track I had to help the managers see the whole story and “shame” them into honoring their previous agreements. To get the mangers on my side I also had to give them a way out—and that way out was to identify two engineers as the culprits.

Throughout the day there were some moments of joking, some angry yelling, a lot of discussion of specifics by me each time they voiced a concern over price, process or standards. By Chinese design it was a contest of wills—who was going to give in first (sometimes called the “iron ass” strategy)—and I was already 3 months and $100K into this so I wasn’t about to cave.

In the end, I got what I expected to get—I got them to retract their demands for more money and to complete the project according to the previously agreed to standards. Basically they’ll complete the contract late and not charge me for it.

So what’s the Chinese Dichotomy? It’s the contrast between the most modern technology and the absolutely parochial mentality of some of the people running it. It’s the size and incredible growth of the Chinese market and the scarcity mentality that still pervades both domestic politics and business in China. It’s the advanced education necessary to use modern technology and the simplistic short sightedness of single project profit maximization. On a physical scale, it’s the few hundred million urban residents with money, education and exposure to the world vs. the eight hundred million rural peasants. As one of my friends described it “it’s like the Flintstones meets the Jetson’s.”

That’s China—same planet different worlds.

Dichotomy

A dichotomy is any splitting of a whole into exactly two non-overlapping parts, meaning it is a procedure in which a whole is divided into two parts, or in half. It is a partition of a whole (or a set) into two parts (subsets) that are:

  • jointly exhaustive: everything must belong to one part or the other, and
  • mutually exclusive: nothing can belong simultaneously to both parts.

The two parts thus formed are complements. In logic, the partitions are opposites if there exists a proposition such that it holds over one and not the other. Learn more on Wikipedia. Click here.


David A. Dayton is the CEO of Silk Road International (SRI), an U.S.-owned and managed international procurement agency based in China. Click here to visit SRI's Website.

Our valuable Editor David A. Dayton has been with us since Monday, 02 November 2009.

Show Other Articles Of This Author

Do you have a story to share? Do you want to be a ND Author? Send your own story, write about family, friends, life in Xi'an, business, real estate, education, travel, entertainment, write a review, suggest a column and more! In any language! Please include at least one picture about your story if possible, your name, email address, blog-/web-address, so we can give you credit. Go ahead, click here: Submit your Story now and we will publish it and list you as a ND contributor! Alternatively you can send us your story to: xianstories@newdynasty.com.cn

Add comment


Security code
Refresh

More Articles in this Category

Latest Articles in Business

NEW DYNASTY TV - Xi'an Reports, Interviews and Movies

ND TV - Premier Web TV Reports, Interviews, Movies about Expats and Locals in Xi'an/China! This is UNIQUE in Xi'an!

ND proudly presents: Xi'an Models Volume 1

Xi'an Models

Advertisement

RECOMMENDED LINKS  
MANGO - Women's Collection
HaoHao - China Stories
Silk Road International (SRI)

Special ND Promotion 2015


New Dynasty Comics


We want you! - 加入我们!

We're currently looking for some down to earth people who can spare a little time each week to write about anything related to Xi'an and China, who are eager to share stories, news, insight info and be a part of the most sophisticated and fastest growing Digital Magazine in Xi'an. Whether you're young or old, we'd like to hear from you. Click for more info.

Editorials

Xi'an goes digital
To all readers, subscribers, friends: Welcome to Xi'ans most sophisticated, multilingual digital magazine. We are excited to offer you from today on, 15. June 2009, a new and superior kind of publication in Xi'an and a refreshing new concept. Of course, as with any technology-related... Click here to read the full story!

Skype ND!

Skype ND!

Featured Website

¡XABOO! is a brand new interactive Community Platform for Locals and Expatriates in Xi'an (China).¡XABOO! is an interactive Community Platform for Locals and Expatriates in Xi'an. Click here & register now!

Editor Team

We have a team that works on the articles presented on ND. Please contact us if  you are interested in helping us out with the creation of articles or researching information in Xi'an. Contact:  info@newdynasty.com.cn

Post translation

ND has readers from all over the world and in several languages. If you translate one of our articles please let us know so we can add a link at the original article! Your site and name will be posted as well. Thanks!

Restaurants

article thumbnail Tuscany Restaurant

We are a family owned restaurant and take pride in everything we do. From the fine ingredients we use to the wines we carry, you...

ND Digital Magazine Xi'an - Subscribe now!

ND Digital Magazine Sample  Cover
*Sample Image

Hotels

article thumbnail Grand Noble Xi'an

The hotel has 428 well-appointed guestrooms and suites, a full range of dining, recreational and conference facilities. ...

ND on your Mobile Phone Browser - Coming soon

ND Mobile v1.0 is online! Browse ND's eMag with your mobile device by typing the address m.newdynasty.com.cn in the browser of your device or be auto-redirected to our mobile site by typing newdynasty.com.cn. You can read our articles, watch ND TV and more even better in the future with your iphone, android etc. Stay tuned. Click here for more Info or here if you want to report a bug.