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A Rare Success in China - the Celanese Joint Venture

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Disclaimer: It is against the The Negotiation Experts' principles to offer its services to the tobacco industry. The Celanese case study has been reproduced for the purposes of study only, and is in no way a condonement of the damage the tobacco is causing.
Overview

One of the most closely studied Chinese joint ventures is that involving Celanese Corporation of the United States, a producer of value-added industrial chemicals, and China National Tobacco Corporation (CNTC). The venture produces tow, the fluffy synthetic fiber in cigarette filters.

In 1982, when CNTC decided to increase its production of filter cigarettes, it was on the lookout for international suppliers. Since all tow providers refused to sell their technology to …show more content…

New cultural difficulties arose daily, as Chinese practices collided with Western performance imperatives. Celanese employees noted:

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Crews of Chinese subcontractors would disappear for days at a time, leaving work unfinished. *

In work units supervised by foreigners, the Chinese observed workloads; but in those supervised by Chinese, the workloads were usually reduced and additional employees hired. *

Many employees appeared indifferent to the satisfactory completion of the project. *

The Celanese habit of flagging errors or shortcomings was taken by many Chinese as a personal affront—compounded by the indignity of seemingly being “talked down to.”

The Nantong factory was completed in 1989, when the joint venture went into operation, with a mixture of Chinese and U.S. managers and staff. Most of the Chinese managers appointed to the new enterprise saw themselves as loyal to CNTC, and their allegiance to the new venture was initially fragile. The Chinese managers discussed problems with their seniors at CNTC, rather than with their U.S. venture colleagues. Neither side could identify with the new entity at first, and managers held meetings in their native tongue, which upset those on the other side.

But overall, a long-term perspective was taken regarding the factory, where training was provided to enable employees to carry out prescribed operations.

At the same time,

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