Introduction Michelin is a leading French firm in the global tire industry. The company focuses on the production and sale of car and truck tires in various parts of the world. In 2001, Michelin joined the Chinese market in order to expand its market share (Shengiun 2005, pp. 26-32). The company entered the Chinese market through a joint venture with the Shanghai Tire & Rubber Company (STRC). The venture deal appeared to be lucrative because it would enable Michelin to access STRC’s distribution channel and to serve its existing customers. Nonetheless, Michelin faced many challenges in the new market due to the cultural differences between China and France. This paper focuses on the Michelin China case study by analyzing the cultural and managerial issues that faced the company in the Chinese market. In addition, it will critically evaluate how well the challenges were addressed. Cultural Challenges Organizational culture refers to a “communicatively constructed, historically based system of assumptions, values, and interpretive frameworks that guide and constrain organizational members as they perform their roles and address the challenges of their environment” (Pfister, 2009, p. 14). Cultural conflicts usually arise in most multinational corporations because their employees are from diverse cultural backgrounds. Michelin China faced cultural challenges because its employees from China and those from France held different values, beliefs, and assumptions. The challenges include the following. First, Chinese culture is based on power distance in which businesses use a rigid hierarchical organizational structure. In this regard, managers make decisions through a top down approach (Shengiun 2005, pp. 26-32). Moreover, the Chinese considered age more important than ability when promoting their employees. On the contrary, Michelin’s organizational culture was based on respect for people. Concisely, the managers focused on delegating work to junior employees as a sign of trust in them. Consequently, junior employees had the authority to make decisions and to take actions that improved the competitiveness of the company. Promotions at Michelin were based on talent and interest rather than seniority. The importance of this strategy is that it enabled Michelin to enhance innovation through its employees. Since Michelin did not have an established hierarchical organizational system, it faced a lot of trouble in implementing its career management system in China. Second, Chinese culture emphasizes the importance of upholding a good self-image or saving face. Thus, Chinese employees avoided to point out the mistakes made by their colleagues in the spirit of saving face (Shengiun 2005, pp. 26-32). On the contrary, Michelin’s culture emphasized open-mindedness by encouraging employees to speak freely and to give immediate feedback to the management. However, the Chinese employees did not like the immediate and direct feedback from the expat managers concerning their performance. This is because the feedback made them to lose face. Third, Chinese value personal relationships in which a person helps another with the expectation of a similar favor at a future date. The French managers, on the other hand, did not value personal relationships at the workplace (Shengiun 2005, pp. 26-32). Thus, their Chi