Challenges revealed in the many faces of EMS provider culture

VentureOutsource.com reader opinion

Most mid-level managers for Flextronics in southern China are Chinese. There is a constant sense of urgency in Chinese EMS factories. An EMS buyers in China makes one-tenth the salary of his peer in the US. EMS providers in Thailand place more emphasis on details.

COUNTRIES AND PEOPLE BEHAVE in different ways. Employee work force and working styles in electronics manufacturing services (EMS) companies is no different.

Following are some of my personal experiences and insights gained through my years of dealing with different countries, EMS provider organizations and people in the EMS industry across Asia, Europe and the Americas.

However, fewer culture gaps exist between Asian countries than, say, compared to western nations, or counties on the Africa continent.

Similarly, working styles in western countries tend to be less divergent with countries located on the same continent than compared to a Chinese or Thai style.

Many EMS providers place emphasis on the importance of having a ‘corporate culture’, yet few really understand the differences their corporate cultures really exhibit across different geographic regions.

After working four-plus years in our industry in an American sales culture where each person’s sales performance is widely announced internally, and sometimes publicly, I have found this cultural environment to prove successful in motivating those not performing so well to do better, while allowing bragging rights for top performers.

However, a culture of self-proclamation with performance results openly displayed and visible to anyone is counter-productive in a Chinese corporate cultural setting.

China
For a Chinese corporate culture in the EMS industry, sales performance is kept more low profile. I have seen some non-western companies in our industry with strong American influence trying to apply this same model, publicizing results thus placing competitive pressures on employees.

The results tend to be more negative than positive producing high turnover and lack of cooperation as a result.

Humbleness and keeping a low profile are long-standing customs for Chinese.

Subtleties of Southeast Asia EMS
Following many trips to Thailand and Southeast Asia, I have become more and more aware of subtle cultural differences within Asia.

The work force and the attitude of the EMS providers I have visited are very different from the Chinese EMS work force.

Some differences are easily identifiable when it comes to in a sense of urgency.

In Chinese EMS factories, there is a constant urgency to get things done then move on to the next item.

By contrast, the Thai style is more mellow. A slower pace. Thai EMS providers place more emphasis on details. If they cannot finish something today, they understand they can do it tomorrow.

There are some advantages of this type of behavior. In my opinion, it is reflected in lower corruption levels in Southeast Asia than in China.

Expectations vs. reality: Management, salaries, performance
With ongoing expansion of globalized EMS and company operations spanning many countries and/or more than one continent, how can EMS executives overcome cultural differences within their organizations?

EMS providers Flextronics and Celestica have each chosen to select Singapore- or Malaysia-trained management to work as expat managers in countries like China or Thailand.

Some US-based EMS companies send expats from their headquarters, or local employees trained at corporate, to work in these environments.

The biggest challenge I see for these organizations is transmitting a ‘corporate message’ to the local work force. Expecting similar results, while only paying 10% to 20% of some salaries is foolhardy.

A buyer in a North American EMS company makes 10x the salary of his peer in China. Also, the workload for employees in a China-based EMS company is much higher, plus they have to work in a foreign language since most correspondence is not in Chinese.

Correct alignment of corporate expectations vs. what a far-away, local work force can deliver is important if the EMS organization wants to avoid feelings of unfairness and resentment.

Understand your peers
Communications among global EMS offices within the same EMS provider is always challenging. And undeniably, many readers might have faced the same challenges I share below.

One day a colleague from the US sent an email to one of my Asian counterparts located in Asia.

The American was requesting assistance from a Chinese co-worker.

He wrote: “Hi Bro! Can you help me find out if customer X is building for OEM Y? If so, then I can try to convince them locally to instruct the order to go your way.”

My Chinese counterpart understood the message to represent the American side being too informal while also trying to find out information about the customer to try to steal the business.

Some misunderstanding might have come from the fact that my Asian sales counterpart did not know the meaning of the statement ‘order going your way.’

But it was likely the lack of cultural sensitivity.

The key to successful collaboration is to have sensitivity and empathy for what the reality of a less developed manufacturing facility in Asia might be able to offer.

‘Local’ EMS in China, Thailand, Singapore, Malaysia
Mistakes are bound to happen. The focus should be to try and minimize error frequency and / or the consequences.

From all of the EMS companies I have visited, and meetings held in Asia, Europe and the Americas, one pattern I’ve noticed emerging is most EMS companies tend to utilize Singapore or Malaysian trained managers to lead the local work force in regions in Asia.

This is due to the fact on the ground EMS company culture in Singapore and Malaysia facilities is more closely aligned to what is already in US or European EMS corporate headquarters and, is what is expected from Thailand or Chinese EMS factory sites.

Another point or trend I’ve noticed is with the increased growth of contract electronics manufacturing services being in China and the increased costs of sending expats to foreign soil. Because of this, more western EMS providers want to rely on local expertise.

Such is the case with Flextronics in southern China.

Most mid-level managers for Flextronics in southern China are Chinese. Only a few, top managers for Flextronics in the region are from Singapore or Malaysia. Almost none are from the US or Europe.

The process of training a local work force to understand cross-cultural differences is not simple.

Another reason to cite improvements in China’s EMS work force is its movement toward meeting western expectations and narrowing EMS cultural differences partly due to the ‘westernization’ of the younger Chinese generation.

The new, post 80’s generation of Chinese have been escalating in Chinese EMS company ranks and they are more understanding of foreign (non-Chinese) ways of thinking than their Chinese counterparts educated in the 60’s or 70’s during the strict communist system of education.

Future trends
The trend in the EMS industry in Asia is more uniformity…with EMS companies becoming more like original design manufacturers (ODM) and ODMs morphing into EMS providers.

From an EMS cultural perspective, China has grown considerably and its EMS culture is moving closer to the EMS cultures found in Malaysia or Taiwan, in terms of cultural understanding and level of professionalism in the middle management levels.

Also, developments in China and other Asian countries have encouraged Asian work forces already trained and working abroad in western regions to be willing to return to their countries of origin, thus providing the EMS industry across Asia with native workers armed with overseas training and western culture sensibilities.

However, there remains some local practices / trends more associated with Asian countries such as: focusing on the relationships; differences in income that can tempt the ethics of the work force, paternalistic behavior in smaller groups within organizations…that will require many more years before we see improvements.

In the big picture, Asian EMS is on the right track to provide better and more efficient production capabilities for not only the Americas and Europe, but also Asian regional and other local growing markets.

So, what’s next?
The issue of cultural differences in our industry is serious given the fact the majority of the work force in EMS companies (the industry) is not as educated as, say, the work forces in the banking and finance industry.

I recommend some reading on the topic of cultural differences for those interested in wanting to improve their understanding.

Managing Cultural Differences, Fifth Edition: Leadership strategies for a new world of business, Philip R. Harris, Robert T. Moran, Ph.D.

Cultural Intelligence: A Guide to Working with People from Other Cultures
, Brooks Peterson


Kevin Wang
Director, Purchasing Asia Pacific
Advanced MP Technology
www.advancedmp.com

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