Case analysis: uncertainty avoidance

By | April 14, 2014

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The uncertainty avoidance is defined as the degree that members of a society are anxious about the unknown, and as a consequence, attempt to cope with anxiety by minimizing uncertainty. In cultures with strong uncertainty avoidance, people prefer explicit rules (e.g. about religion and food) and formally structured activities, and employees tend to remain longer with their present employer. In cultures with weak uncertainty avoidance, people prefer implicit or flexible rules or guidelines and informal activities. For example, under the low uncertainty avoidance, employees tend to change employers more frequently (Hofstede, 2001).

And back in the case of “Replacing locals with foreigners a gamble that paid off”, the attitude of owner of the company towards uncertainty avoidance is high for the following reasons:

First of all, the owner shows resistance to the unknown in his management. As the owner of the company mentioned in the beginning of the case that he used to work with local sub-contractors with the assumption that they did a better job than the foreign counterparts which he later found to be wrong. The owner before working with the foreign partners had never try to get to know the foreign contractors until the time that he had to do so because the local contractor disappointed him so many times by presenting very bad work attitude, blackmailing and aggressiveness which he can not tolerate as he said. Under such case, the owner of the company is actually shows some resistance to the unknown which is uncertainty to him and he try to avoid such kind of uncertainty with assumption that the one that he uses now should be better than those ha does not know.

Secondly, the change to the foreign sub-contractor is a last option for the owner. As the owner of the construction company complained in the case that the bad working attitude of the local partner had cost him a lot financially through behaviors like blackmailing and leaving work uncompleted or behind schedule. And in general understanding, the punctuality in the contracts of construction projects is of extreme importance which is so critical that no construction companies can give a free hand to the contractors to do the job without concern about the schedule. So suffering from so many times of disappointment of the local contractors, the owner of the construction company finally decides to try a foreign partner which he previously did not believe. So this change in this case is actually a final choose for the owner of the company to keep its profitability or else the company will lose its core competitiveness and reputation as a good construction company.

Finally, the local partners still make the owner feel safe. Even after the successful cooperation with the foreign sub-contractor which still working well today, the owner of the company stills prefer to work with the local partners even the local partners will cost more than the foreign counterparts because the local partners have low implication for uncertainty which the owner of the company tries to avoid in his management practices.