Case Study: Guanxi in Jeopardy

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Introduction This case study "Guanxi in Jeopardy" is a story of two companies 'Electrowide' and 'Motosuzhou' who planned to do a joint venture. Electrowide is a USA based company which produces new and latest technology equipments for the automobiles while Motosuzhou is a large organization of China working under the instructions of Chinese government like many other Chinese firms. Electrowide planned to improve their business by using the lean production and latest technology methods. Along with this, they also decided to do overseas expansion for which they chose Motosuzhou. They wished to sell their products to Motosuzhou with an aim of enhancing their distribution to different parts of the world and automotive industries, especially to the Chinese industry. In order to fulfill this wish, they did joint venture with Motosuzhou but due to their improper preparation, this joint venture didn't succeed, in fact it was a big failure. This joint venture could have been very successful if these two companies would have understood the differences between their culture and way of operations. They both could have achieved their goals only if they could have made few important changes to their strategy. In this paper, we will analyze the reasons of failure and possible changes that could have changed the situation. Answer 1 There are many obvious differences between the Chinese and United States cultures and the ways of doing businesses. Unfortunately Electrowide and

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