CONSOLIDATED ENGINEERING

CO GOES TO CHINA
FMB26
• Identify the main cultural issues underpinning the misunderstandings
and resulting conflicts in the business scenario described in the case
study

The major differences between the two companies were their cultural
outlook. CEC was more outspoken and direct in their way of
communication whereas the Chinese counterpart was not very open
and indirect in their way of communication
• How are opposing assumptions and expectations between parties
involved shaped by fundamentally different framework of
“sensemaking”, thereby resulting in largely predictable
misunderstandings and conflicts?
• The two parties had very different assumptions and expectations
which was the cause of the conflict. The Chinese counterpart wanted
lot of customizations in their system and they were always in their
own terms without much flexibility. CEC wanted everything as per the
contract and they were afraid of the IPR protection due to the
capabilities of the Chinese companies to do reverse engineering
efficiently.
• Make a thorough analysis of these key points of cross cultural conflict
interface and the resulting trajectories of conflict escalation.

There were several instances of conflicts arising.

 Chinese parties kept giving amendments and there were lot of
different people involved in the project.
Food was an integral part of the Chinese meetings and the meeting
was conducted in the Cafeteria and CEC refusal to avoid fish soup.
Chinese made all possible ways to agitate CEC and make sure they
delay the agreement and payments so that everything goes as per
their expectation.
They even wanted the translator as per their own requirement.
They created delays in payment and dragged the terms
• Consider too not only those conflicts which are already explicity
manifest but those which may yet occur at a later stage of the project
if appropriate action is not undertaken

There will surely be a conflict arising during the operation of the

system as the operation team did not travel to US during the
negotiation and this will be a huge conflict.
Different people were attending the meetings at various places so
there will be potential delays in payment and schedule.
The costing is surely going to be out of bound as the budget has
increased exceedingly due to imminent changes in the design and
travel.