1. Do you believe the cell phone incident is a big deal? Why or why not?

2. Why is Roc Yang experiencing such a dilemma regarding the cell phone incident? What are the roots causes for his dilemma?

3. How would you handle the cell phone incident and the upcoming meeting with Chen if you were Roc Yang? Where should he draw the line between upholding CDG's company culture based on professionalism and quality, and adhering to the local business culture that relies on guanxi? Discuss the risks and consequences of your decision.

CDG: Managing in China's Economic T ransformation

Late on a cold Friday evening in the autumn of 2008, as Roc Yang, the cofounder and CEO of China Data Group (CDG) waited for his flight to take off from a Shanghai runway toward Beijing and CDG's headquarters, he found his phone finally quiet after a day of urgent conversations with CDG's executive members. That morning, CDG's executive team had exploded in an argument over CDG's policy for acquiring, developing, and maintaining client relationships. Ming Chen, CDG's VP of sales, was the company's integral lead in building strong, personal relationships with clients and had recently used company funds to buy a cell phone for a potential client. This gesture was an effort to help CDG win a bid for the client's project, valued at over US$1 million. While some senior CDG executives felt Chen should be promoted for taking the initiative to win this important deal, others felt such actions had hurt CDG's reputation as a company grounded in professional quality service.

Yang knew that Chen's contributions and the key clients with whom Chen was associated had been critical to CDG's success. The local Chinese way of building relationships that Chen subscribed to had initially been necessary to gain traction in CDG's target market in mainland China, but these same practices might now be hurting the professional culture Yang wanted to build at CDG. Yang had hoped the company's fast growth would provide alternatives for Chen in his conduct as client relationship manager; yet as debate catalyzed by the cell phone incident escalated among CDG executives, Yang knew he had to come to a decision quickly-where and how should he draw the line between building a company culture based on professionalism and quality service and the deeply rooted local practices of relying on personal relationships to do business.