Getting to “we”: agility and the role of face in preventing supply chain problems from boiling over into supply chain disasters

A hypothetical based on the facts of the heparin case provides an apt illustration of how to be Ethically Agile and effectively manage supply chain safety and efficacy. Let us imagine that, before any patients were harmed,

Baxter and Scientific Protein became aware of, or even just suspected, quality control issues at Changzhou SPL. When they investigate, they discover that Changzhou was sourcing ingredients from middlemen, who in turn buy ingredients from small independent producers, which are often family-run operations. Those operations are supposed to be working with pig entrails to produce raw ingredients for heparin, but in some cases, are substituting OSCS to cut costs, presumably as a result of the higher price of pigs following the outbreak of blue-ear disease two years earlier.

Clearly the imperative is to fix the supply chain problem—quickly and verifiably. How best to do this? The Western mindset on these kinds of issues is pretty set. Someone from the “home office” shows up to ask a lot of questions and impose order and discipline on the process. It is not necessary to consider the ethical perspectives and cultural sensitivities of Changzhou executives. Perhaps that is even perceived as a distraction or pandering. Chinese manufacturers expect to be a part of, and profit from, the global trading system and so they should be expected to conform to global safety and efficacy standards. Full stop. No need to consider local cultural niceties and sensitivities. Everyone in the supply chain needs to snap to it. As we have noted previously, this perspective has a lot of merit behind it. The only question is whether it is the most effective way to accomplish the most important goal—to assure the safety and efficacy of the drug supply chain and avoid seriously injuring or killing patients.

Consider, however, the perspective of the Changzhou managers: a bunch of foreigners with little local authority, whom you have never seen before, are flinging accusations at you, causing you to lose face. A common reaction under these circumstances would be to not only limit access to the plant, but slow the inspection process down while appearing outwardly polite and compliant. It is also common to claim that slowdowns, or even limited access itself, are caused by mysterious company policies, state or company bureaucracy, absent managers or employees, or recent illnesses. Miscommunications may also be blamed. Overt stonewalling is typically avoided as it is considered rude to Chinese perspectives, but excuses and half-explanations for delays and lack of access are either real and exaggerated, or invented from whole cloth. Frustrated, and nearly as befogged as before, the Baxter and Scientific Protein teams are unable to achieve real clarity on what happened at Changzhou SPL. Far too often, the situation descends into an international merry-go-round of counterproductive fingerpointing (Gibson & Singh, 2018, p. 26).

A better way for Westerners to approach such a difficult conversation, one that would confer appropriate face on the Chinese counterparts and would better accomplish their goal of making safe and effective products, would be with a script like this:

We are having some trouble with the heparin supply in the US and Europe. We found this batch of heparin that contains a chemical compound which has replaced some of the compound derived from pig entrails. We are hoping we can collaborate with you—with your experience and expertise, we are hoping to figure out where the altered heparin came from. That way, we can help our customers and patients and stop them from getting hurt.

This approach avoids common affronts to face that Westerners commit unawares, by: acknowledging the intelligence and ability of the Chinese manager; in that light asking for help; avoiding anything that sounds like an accusation or assigning blame; adopting a cooperative problem-solving attitude, and finally; giving the manager the option to agree to help. This last is especially important because it offers Chinese managers opportunities to help “save the day” by uncovering problems in the supply chain. A further benefit is that those same managers and their coworkers are likely to be more vigilant on your behalf in achieving compliance by middlemen and producers further down the supply chain.

An important feature of scripts like these is that they offer the manager a way forward by preserving their face. By not assuming fault or responsibility on the part of the representatives of the Chinese firm, in fact implicitly assuming that the problem lies elsewhere, one not only avoids insulting the Chinese manager but simultaneously allows them the opportunity to either find blame and responsibility elsewhere, or to eventually acknowledge some of the responsibility on behalf of the Chinese firm, or a mix of both (as the facts on the ground require). One way to promote your own Ethical Agility in situations like these is to focus on addressing the problem, which is after all a “we’’-problem in the sense that the foreign managers need the cooperation of the Chinese firm’s managers, while setting aside outward assignments of responsibility and blame. All of this is part of Ethical Agility, being able to apply one’s understanding—Awareness—of what counts as respectful and disrespectful in Chinese contexts so as to protect and even promote face.

A related and common mistake occurs when Westerners arrive at the Chinese firm equipped with failed test results, a list of demands, and an overt expectation to uncover wrongdoing (if not outright accusations). As with making plans for a site visit, a much more effective approach is to treat representatives of the Chinese firm with what they will recognize as respect. That is, to treat them as valued collaborators rather than as wrongdoers, or even suspected wrongdoers. The better approach would include references to the following sorts of issues: the grave risk to their firm and yours because of tragic deaths and media coverage; the resulting harm to reputations as well as the relationship your firm has with theirs; your firm’s direct obligations to the patients who might suffer and die if the problem is not fixed; how that necessitates the need for a speedy outcome; and the grave embarrassment as well as expense when regulators, especially foreign regulators, show up.

Another common mistake is to be outwardly in a hurry, demanding meetings and access right away. Again, a better approach is to acknowledge that the managers of the Chinese firm must be very busy and have important work to do, but to ask them to sit down to dinner or tea so that the matter can be discussed. In reality of course, this should have been planned when the visit was arranged; as a show of respect, they should have asked if it would be polite to offer to take representatives of the Chinese firm out to dinner. In a pinch, tea or coffee together with the associated connotations of a more social environment could suffice, as it expresses the hope that both sides will sit down like civilized collaborators. In Chinese culture contexts, it is expected that a problem, including its immediacy and its size, will be discussed in some detail before any requests are made for help. This should be viewed by Western businesspeople as an opportunity to indirectly but clearly reveal (rather than bluntly assert) how dire the situation is, or could easily become. Demands for information, help, and other things are verboten: demands are reserved for how parents treat children; schoolmasters treat students (especially those that misbehave); and for how powerful, inconsistent, and distant Chinese government officials address problematic citizens and organizations, usually to make examples out of them. Awareness of Chinese contexts and mindsets is needed to realize how profoundly rude making demands would be, to Chinese counterparts.

As explained previously, outwardly hurried and adversarial behavior from Westerners renders them clueless buffoons, thereby giving Chinese businesspeople implicit permission to treat Western counterparts (and even their companies) as outsiders and hence ethically undeserving, i.e., dismissively. At that point, Western counterparts become people to say yes and nod to, to misdirect endlessly, and to get rid of as quickly as possible. Again, as far as representatives from the Chinese firm are concerned, foreign executives are presumed guests in China and of the Chinese firm. As a result, the Chinese expectation is that Westerners will act like guests, where coming in hot is rude to the point of being unethical in Chinese culture contexts, displaying a lack of respect, and resulting in a corresponding erosion of face. Such uncouth behavior underscores ancient and widespread Chinese preconceptions that foreigners really are just barbarians that never learn. Once managers from each company have had a chance to sit down and get acquainted, the matter of impure heparin can be broached.

We acknowledge that the approach we have outlined may seem counterintuitive or even circuitous to Western executives. “We are talking about drug safety,” one may understandably argue; “how can the situation demand that we do anything but go in and be very direct and to the point to solve a critical problem?” It seems viscerally inappropriate to react to a quality and safety issue with anything less than righteous indignation and hot pursuit. While we understand and appreciate the concerns behind such sentiments, our answer to this question is quite simple. What would you rather do—express your righteous indignation and elevated concern, or solve the problem? If you want to solve the problem, and if it’s in China, our approach is much more likely to be successful. The approach we have outlined is no less concerned about drug safety and efficacy than is the Western “home office” approach. Understanding and applying the concepts of face can help executives to manage their supply chains so that problems don’t boil over into disasters.

Another objection to the practice of Ethical Agility is that it is not compatible with the way supply chain compliance is usually done, i.e., with a comprehensive checklist of concerns that (often independent) auditors test and validate. Our reply to this objection is two-fold. First, what we are describing is the best way to remediate a problem once it has been identified. This is compatible with a compliance mindset. Ethical Agility is a skill that can help you fix a problem, but companies still need compliance systems and protocols to exercise proper oversight in a supply chain. A second point we would make is that Ethical Agility is a valuable skill to have in the design of compliance systems. One size does not fit all. Things are less like to go wrong in the first place if compliance systems incorporate what, from a cultural perspective, is likely to work or not work in a particular place. In China, that means exercising Ethical Agility and being able to put into practice knowledge of traditional Chinese culture.