Michelin in China: Implementing a Human resources Strategy

Running head: MICHELIN IN CHINA 1
Michelin in China: Implementing a Human resources Strategy
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Running head: MICHELIN IN CHINA2
Executive Summary
This report concerns the human resources management challenges experienced during and after
the joint venture between Michelin Company and a Chinese company, Shanghai Rubber and Tire
Company Limited. The report starts with an introduction to the content of the case study,
followed by a description of eight management approaches that the company applies in its
management including: Empirical approach; Human behavior approach; social systems
management approach; Decision theory approach; mathematical approach; Socio-Technical;
Systems Approach; Contingency Approach; and Operational Approach.
The report then outlines the Hofsted cultural model effect on organization effectiveness,
specifically the Power Distance Index (PDI) dimension. Further, the report discuss the PDI
application in New Zealand’s Health sector organization effectiveness. The report ends with a
critical look at the meaning of culture.

Running head: MICHELIN IN CHINA3
Contents
1. a). “Michelin China Way”........................................................................................................................4
Introduction................................................................................................................................................4
b). Michelin China Management Approaches............................................................................................5
i). Empirical Approach.............................................................................................................................5
ii). Human Behaviour Approach.............................................................................................................5
iii). Social Systems Management Approach...........................................................................................5
iv). Decision Theory Approach................................................................................................................6
v). Mathematical Approach....................................................................................................................7
vi). Socio-Technical Systems Approach..................................................................................................7
vii). Contingency Approach.....................................................................................................................8
Viii) Operational Approach.....................................................................................................................8
2. Hofstede’s Cultural Models and Organization Effectiveness.................................................................8
Power Distance Index (PDI)........................................................................................................................9
3. Hofstede Cultural Model Application in organization Effectiveness in New Zealand’s Health Sector 10
4. Critical Assessment of the meaning of Culture....................................................................................11
Conclusion.................................................................................................................................................12
References.................................................................................................................................................13

Running head: MICHELIN IN CHINA4
Michelin in China: Implementing a Human resources Strategy
1. a). “Michelin China Way”
Introduction
The case is about how to effectively manage human resources in an international setting.
Michelin, one of the world’s biggest producers of car tires with the main headquarters in France,
decided to get into the rapidly growing Chinese market through a joint venture with a Chinese
company, Shanghai Rubber and Tire Company Limited. The main challenges the company
faced was on how to integrate employees with different cultural and historical background into a
team that works flawlessly to produce desired results.
The company retained some expatriate managers from the parent company, hired some
managers from international firms working in China and the rest of the employees was made of
Local Chinese. The cultural differences between the expatriates and the locals were one
challenge the company had to overcome before it could become fully functional.
The cultural differences were minimized by the mediation of the Chinese managers hired
from international organizations operating in China who had experience working with people
with different cultural backgrounds. Also, the company invested heavily in the training of the
employees which included study abroad for managers.
Michelin China way is the incorporation of the best of both worlds: Chinese and Western.
The chines have respect for authority and follow communication strictly from their seniors while
the western culture allows all the employees to get involved in decision-making processes.