Shenyang Machine Tool SCHIESS implemented new managerial and distribution system at the beginning of March: working hours increased by 10% weekly: distribution according to work. “It is really not easy under the background of German society and culture when Europe has turned into high welfare and market economy. However it was put forward by the Germany party first instead of imposed. It is also a successful case for new SCHIESS to expand ‘cultural advantages’between China and Germany.” revealed by CHEN Huiren, President of Shenyang Machine Tool Group on March 5. Seeing that the economic scale of Shenyang Machine Tool was rapidly increased by 50%, Dr. Nicai, General Manager of the German party could not be steady any more. On behalf of the employees he put forward that they would double the original capacity also. “To double the original capacity”is simply a Chinese saying. It indicates that the employees of SCHIESS are gradually accepting the business culture of Shenyang Machine Tool.

　　 “The cultural difference ” between China and Germany exploits favorable conditions and avoids unfavorable ones

　　 “Chinese culture was born of farming culture. The most typical saying is ‘not to let rich water flow into others' field’ Therefore many enterprises would send a number of people after they take action to purchase. They would only catch sight of land, workshops, and technology instead of personnel that is the most active factor in productivity. We will be a “local rich man”forever if our purchase of SCHIESS only rests on ‘employing our persons and feeling relieved to see with our own eyes ’”, revealed by CHEN Huiren. So far there are only two Chinese personnel in new SCHIESS, he is President, and GENG Hongchen, President of Shenyang Machine Tool Co., Ltd. is General Manager of the Chinese party. Furthermore they only go to Germany regularly to make a study of developing direction of the enterprise. Dr. Nicai who has been well experienced in business administration for over 10 years is responsible for management.

　　 The cultural difference between China and German is obvious. How to complement the two cultures in a “mixed blood”enterprise? It is a new task in front of the decision-makers of Shenyang Machine Tool Group. Both parties between China and German gradually had common understanding through their discussion: for “mixed cultural form to become future individuation advantages of new SCHIESS”it was urgent to exploit favorable conditions and avoid unfavorable ones for two business cultures to be blended.

　　 How to exploit favorable conditions? The clew of Shenyang Machine Tool Group at the decision-making levels is to combine the attitude of the German employees who work carefully with the spirit of the Chinese employees who work hard; and to combine the habit of the German employees who follow the prescribed order with the working enthusiasm of the Chinese employees who quickly rise to the occasion.

　　 Thus both parties can only bring their advantages in supervisor macro and micro operations into play.

　　 How to avoid unfavorable conditions? It is considered by Shenyang Machine Tool Group at the decision-making level that an enterprise can only increase its operating efficiency and obtain better economic benefit with mutual communication, confidence, and cooperation. Therefore the Chinese party has established “the principles of 3C”and “3C”are respectively communication, confidence, and cooperation.

　　 The Chinese and the German employees communicated “point to point”about operation concerned with previous SCHIESS, namely they separately communicated with those interrelated. As a result they often had unnecessary misunderstandings. At present to communicate “point to point” is changed to “point to group”, namely they make a copy for persons concerned between the Chinese party and the German party when they discuss matters. On the contrary the mode of “point to group”is also used. It has been proved in practice that the mode of open information is very effective.

　　 Confidence, namely to eliminate prejudice and being jealous of suspicious; cooperation, namely to cope with specific matters together

　　 “Tactics in making a psychological attack”: 6 steps derived from“3C”

　　 At the beginning of the purchase Shenyang Machine Tool already made an integrated plan for new SCHIESS: taking China, Russia, Korea, and India as main target markets; to reduce cost by use of Chinese human and manufacturing resources; integration with domestic manufacturing resources to transfer manufacturing technology step by step; to gradually build new SCHIESS into a marketing base for research & development, core manufacturing, training for talented persons, and European market. In practice Shenyang Machine Tool did not simply impose the plan on the administrative level of the German party in haste in order to give attention to cultural habits between both parties. “The tactics in making a psychological attack” was used for management of multinational culture at the beginning. The Company held a meeting monthly to discuss a topic, why previous SCHIESS went bankrupt, for 7 running months from the operation of new SCHIESS. GENG Hongchen said to the German party at the managerial level, “Let’s beat our brains to find out all sticking points and reasons for previous SCHIESS going bankrupt to avoid the same mistake in the future. ”

　　 At the beginning the German party at the managerial level only rested on emphasizing objectively —— not good economic situation in Europe and depression for 7 running years; a great deal of funds were invested in research and development of new products, and thus circulating funds were strained and it was difficult to operate; through much discussion they gradually realized that the main reason was the enterprise's insufficient capability in market expanding, not high labor and production efficiency, high cost, and not superior inner management. The enterprise could only obtain lasting development after such negative factors as “making inferior achievements at top-ranking technical level”were eliminated.

　　 When the conditions were ripe, Shenyang Machine Tool Group began to set up the direction of business development of new SCHIESS, “to be elaborated, powerful, and great”. The products must be elaborate and powerful as the core products of SCHIESS are high grade and large-sized; and the enterprise would be expanded when it was really leading on the market.

　　 Shenyang Machine Tool Group designed “6 steps” to increase core competitiveness of new SCHIESS on the market: at first keeping high quality; secondly expanding products to have more market share; thirdly reducing manufacturing cost to be ahead of competitive rivals with regard to quality and price; fourthly increasing service ability to provide effective service in time; fifthly keeping improving in products to meet user’s requirements; and sixthly building the troop of employees well so that the German employees will gradually tend towards positive competitiveness from being ease in the past.

　　 The facts will utter for Chinese management business

　　 “Cultural indoctrination”is not effective to eliminate “cultural difference.” The most effective cannot exceed “facts uttering it.” The strategy of new SCHIESS began to take effect: so far new SCHIESS has gotten possession of 37 million Eurodollar order forms; the terms of employment have been improved as compared with those before bankruptcy, and they are getting better and better. In the past they signed 2 contracts for the products of SCHIESS during 3 years; at present they had gotten possession of 11 set and 20 million Eurodollar order forms within less than l year. The rapid market expansion makes the German employees recognize their parent company′s culture quickly.

　　 On Nov. 3 last year the Company celebrated the 1st anniversary of purchase in the assembly shop of new SCHIESS. All the German employees were present and listened respectively when CHEN Huiren was making a speech. They also presented fresh flowers to CHEN Huiren of themselves. Local governmental officers and representatives of the labor union were invited to the ceremony. Different newspapers and television stations of Germany reported the news one after another. Germany Middle Economic Newspaper reviewed, “Now SCHIESS is operating as a subsidiary of Shenyang Machine Tool Group. Shenyang Machine Tool saved the enterprise from being ruined.”

　　 “It can only be ‘a good beginning’”

　　 The decision-making level of Shenyang Machine Tool Group began to evaluate the purchase objectively and prudently when people from Germany in the circles of machine tools were applauding for the Chinese enterprise to purchase the German enterprise. The purchase was still at “a stage of recognition”between the Chinese and the German parties. If it will be successful in the future or not has to be observed for 3 years at least. At present it can only be “a good beginning.”

　　 CHEN Huiren once explained “an inner principle” to his subordinates, namely to communicate with the German managers by use of principled compromise. The Chinese managers found that a lot of things tended to be more efficient after they implemented such principle. What Shenyang Machine Tool Group has learned from multinational cultural management in practice also is “to employ talents of dependency in management of dependency”. “International expansion is only the first step. It is easy to walk out of the step, and it is difficult to walk into the step. We have just set foot in the doorsill without going deep into the “core spirit” of the German enterprise although we have walked into the step. It is necessary to further blend in order to realize positive cooperation between parties so that the German employees will bring their initiative into play.” GENG Hongchen said, “We still have a lot of essential and arduous work to do for new SCHIESS to give off its energy while such two cultures are blended.”