Case Study Analysis: AccuForm: Ethical Leadership and its Challenges in the Era of Globalization
Nicolle R. Waddy AMBA 660 Managing Global Business Professor Dr. Elena Zavialova January 22, 2012
Introduction The ethical environment of a company’s leadership heavily impacts business decisions, and thus impacts the public’s image of the company. These decisions and the process by which they are made will affect the world’s view of the company, and it is important for company’s to understand the significance of ethical decision-making particularly in international business relations on the company’s reputation. AccuForm was a joint venture company, organized by the joining of CreaseFree, a Hong Kong OEM manufacturer of CreaseFree, on the other hand, a Hong Kong company, operated in a traditional Chinese culture and used informal control systems, which was widely acceptable in the Chinese business environment. According to Lau and Wong, “business was established on closed and personal connections – guanxi – with government officials or business partners in mainland China through different informal methods” (p. 4). For example the exchanging of gifts, money, or other goods for jobs for family or bribery was common practice. CreaseFree stance on guanxi was to do what was necessary to complete business deals and nothing more. They operated within the Chinese culture according to the traditional norms. Also in contrast to DynaCoat, they did not have a high level of standard for environmental sustainability and did not have in place corporate social responsibility policies. The two conflicting ethical and cultural environments created an unbalanced starting point for AccuForm. The second key issue was the management style of Raymond Kim. As mentioned above, Kim very competent leader, but he lacked the skills needed to properly manage in this new environment, and his laissez-faire management style was ineffective in the Chinese culture. When Kim first came on board at AccuForm he recognized several things that he did not agree with, but rather than address the issues and change them, he passively managed the
