Andrew Robinson Goes to Taiwan

1. Andrew Robinson Goes to Taiwan By: Janessa Hunter, Bo Lee, Nina Tsoi, Kane Wong, and Denise Yee IBUS 818 Professor Yang Spring 2005 Case #6

2. Case Background • Expatriate Performance • Australia • Taiwan • Compensation/Training • Elements for Successful Expatriation and Repatriation • Conclusion Case Overview

3. Telequip is a multinational telecommunications equipment supplier in Sydney, Australia They sell their first “world” product to Taicom, a company in Taipei, Taiwan The equipment is estimated to take 6 months to set up the equipment with software programmers working from Sydney, one flying to Taipei and TCNs from India will also be brought in to work on the set up Case Background

4. Case Background • Andrew returns to Australia • Buys home with wife • Andrew is asked to take short term assignment in Taipei • Negotiates short term expatriate contract with Telequip Australia • Andrew Robinson: experienced software programmer at Telequip in Sydney, Australia. January March - June November February • Andrew is rushed to Taipei • Expected to find apartment and work 24/7 • Wife has to move into new home alone • Found an apartment • Started learning Chinese on his own • Andrew is sent to Taipei for 4 weeks • Has to personal credit card and max it out = very upset wife

5. Case Background (cont) • Andrew goes home for 10 days • Wife has a million things for him to do • Personnel at Telequip tell him that the need to scale back his expatriate allowances and that he may need to pay tax in Taiwan • Project and company morale is low • Team members sent to different divisions of Telequip • Telequip Australia change to a domestic rather than international focus July - August Mid-August June • Andrew goes back to Taipei • Australian work colleagues still detached from culture and country • Taicom very dissatisfied with product • Taicom cancels project • Andrew flies back to Sydney

6. Expatriate Failure • Taicom cancelled the project • Premature return

7. Costs of Failure • Direct Costs • Airfares • Salaries • Relocation expenses • Indirect Costs • Loss of market share • Damaged relationships with customers • Strained relationship with wife • Low morale among the staff • Loss of opportunity for international expansion

8. Factors Moderating Performance • Length of Assignment • 2 month stay turned into a 4 month assignment • Willingness to Move • Reluctant to continue because of increased tensions with his wife

9. Factors Moderating Performance • Work-Environment Related Factors • Poor planning and execution of expatriate assignment • Poor communication between the offices • Employment Relationships • Relational contract • Transactional contract

10. Australia Area: 7,686,850 sq km Population: 19,169,083 Language: English, native languages Ethnic Groups: Caucasian 92% Asian 7% Aboriginal and other 1% Religion: Anglican 26.1% Roman Catholic 26% Other Christian 24.3% Non-Christian 11% Government: Democratic

11. Australia • GDP: US $528 billion • GDP per capita: US$27,000 • Annual growth: 3.6% • Inflation: 1.8% • Major Industries: mining, industrial and transportation equipment, food processing, chemicals, and steel. • Major trading partners: Japan, EU, ASEAN, US, South Korea, NZ, Taiwan, Hong Kong, and China.

12. Cultural Norms-Dress • Men wear a conservative dark business suit and tie. • Women may wear a dress, or skirt and blouse, for business. • Informal clothing is appropriate when not attending business functions.

13. Cultural Norms- Behavior • Being punctual is critical. • Good eye contact during meetings and conversations. • Gift giving is not a common practice in business.

14. Cultural Norms- Communications • Shake hands when meeting and when leaving. • Australians are friendly and open, but directness and brevity are valued. • Opinions are respected, and opinionated discussions are entertaining.

15. Hofstede Analysis

16. Taiwan • Full country name: Republic of China (ROC) • Area: 35,563 sq km • Population: 22.89 million • Language: Mandarin • Ethnic groups: • 84% Taiwanese (including Hakka) • 14% mainland Chinese • 2% aborigine • Religion: • 93% mixture of Buddhist, Confucian, and Taoist • 4.5% Christian • 2.5% Other • Government: Multiparty democracy

17. Taiwan • GDP: US$247 billion • GDP per capita: US$16,100 • Annual growth: 4.8% • Inflation: 3.1% • Major Industries: Machinery, electrical equipment, electronic/computer goods, textile, iron and steel • Major trading partners: USA, Japan, China (including Hong Kong), South Korea

18. Taiwan ICT Sector • Information and Communications (ICT) in Taiwan • Production exceeds A$80 billion • Over 70% of ICT companies in China have Taiwanese investments

19. Australia and Taiwan • Taiwan is Australia’s 8th largest trading partner • Taiwan joined the WTO in January 2002 • More trade between Australia and Taiwan • ICT investments grew • Eg. Taiwan Telecommunications Group invested A$15 million into Australia for new headquarters and R&D center

20. Taiwan History • Taiwan had changed hand numerous times (Portugese, Spaniards, Dutch, Japanese, Chinese) • Heavily influenced by China • Heavy Chinese immigration started during Ming dynasty when Manchus kicked the Dutch out 1660s • Most recent migration in 1949 when communist took over Mainland China • General Chiang Kai-shek and his Nationalist Party, Kuomintang (KMT) was overthrown • Over 1.5 million Chinese migrated to Taiwan

21. Mainland China vs. Taiwan • Mainland China (PRC) and Taiwan (ROC) both claim to be the legitimate China • International community generally recognize the PRC as “official” China • PRC and ROC presently still have tension • PRC: Views ROC as “renegade” state and seeks reunification • ROC: Views Taiwan as “independent” country

22. Conversation Topics in Taiwan • Topics to avoid • Avoid topics about mainland China • Communism • Any local politics • Politics in general • Neutral topics • Expatriates experience in Taiwan • Expatriates home country • Good topics • Baseball • Family

23. Other Cultural Differences • Taiwanese like to start conversation with “small talk” • Taiwanese may ask personal questions • “How much is your salary” • “How much did that cost?” • When given a compliment try to be modest and not directly acknowledge it • People stay out really late at bars, nightclubs, and restaurants • Try not to schedule early meetings • Napping between 1:30pm and 2:00pm is sometimes practiced • Try not to schedule meetings at 2pm since counterpart may be sleepy

24. Gift Giving • Exchanging gifts is common practice in Taiwan • Gifts may be presented on first meeting, so be prepared • Chinese custom to decline gift 3 times before accepting • Gift should be received in both hands facing upwards • Don’t open gift in front of giver • Gifts and wrappings in red, pink, and yellow are good • Avoid wrappings in black and white

25. Good gifts Items with your company logo Imported liquor Gold pens Magazine subscription Perfume Anything “high-tech” Anything related to baseball Bad gifts Items made in Taiwan Knives, scissors, or any cutting tool Suggests severing friendship or close bond Anything associated with funeral Gift wrap in white, black , or blue Clocks Towels Handkerchiefs Straw sandals Gift Giving

26. Dress Code • Professional, conservative is always best choice • Avoid wearing black, or white • Men should wear dark, conservative suit and tie • Women should wear business suits, conservative skirts and blouses, or dresses • Modesty is respected so women should stick with less revealing clothing • Taiwan has a “hot season” from May – October • Prepare light weight clothing • Casual wear should be modest • Shorts are considered appropriate only for young people

27. Andrew’s Compensation Package • Initial Visit • Andrew used his personal card and submitted an expense report upon his return • While in Taipei the card maxed and his wife had to use cash until his return • First Short Term Assignment • Offered financial incentive to take assignment • Receive salary from Telequip Australia • Additional daily per diem – Andrew would still use his credit card and get a monthly reimbursement

28. Second Short Term Assignment Telequip Australia told Andrew the per diem allowance was much higher then normal guidelines and it would scaled back Told Andrew it was his job to check on his tax liability in Taipei Taxation Approach Telequip Australia used the laissez-faire approach to expatriate taxation Telequip should have: Used the knowledge of the Telequip office in Taiwan to develop a Tax Equalization approach Compensation (cont)

29. Andrew wanted to move into an apartment for his short term assignment Apartments hard to find in English Hard to find shorter than one year lease No help from Telequip to find an agent Telequip should have Offered corporate housing Real estate agents General housing info should have been shared: Apartments 1/3 smaller in Taipei No ovens Mostly 2 or 3 bdr places Housing in Taipei Source: www.kojenenglish.com

30. Language and Culture Training Listing of Language and Cultural programs in Taipei • Mandarin Training Centre (National Taiwan Normal University) • Mandarin Studies Program (National Chengchi University) • Mandarin Learning Centre (Chinese Culture University) • Chinese Language Program (Tamkang University) • Fo Guang University - Chinese Language Instruction Centre • Feng Chia University Language Center • The Language Center of Fu Jen Catholic University • Taipei Language Institute (TLI) • China Language Institute • Telequip should have • Used the affective training approach • Since Andrew was sent to Taipei last minute training in Taipei should have been offered to all Telequip staff going to Taipei • A large reason Telequip was unsuccessful with Taicom was due to the lack of: • Communication • Cooperation • Cultural understanding • Mandarin speaking team members Source: http://taiwan.8m.net/study.html#schools

31. Expatriation & Repatriation • Elements for a successful expatriation and repatriation • Role of family • Cross-cultural perspectives on managing diversity • Performance appraisal in organization control • Health and Security

32. Role of Family • Difference in culture view of work-family relationships • Family Impact on expatriate adaptation, performance, and retention • Family conflict • IHRM policies and support services

33. Cross-Cultural Perspective on Managing Diversity • Communication • Between expatriates • Between home-country headquarter and host country • With host country workers • IHRM policies and support services

34. Performance Appraisal in Organization Control • Improving performance appraisal system • Goal setting • Measurement validity • Feedback

35. Health & Security • Health issues • Weather/climate • Food • Security • Natural disaster • IHRM policies and support service

36. Presentation Summary • We have analyzed the case background and expatriate performance (a failure expatriation experience). • We compared the two distinctive countries, Australia and Taiwan in perspectives of their culture, economic system, social and political behaviors. • We looked at the expatriate compensation package and other costs associated to the expatriation. • We examined the elements that impact the success of expatriation: role of family, managing diversity, performance appraisal, health and security.

37. Thank You!Questions?