Changan-Ford Joint Venture

606 Words Mar 16th, 2012 3 Pages
1) Evaluate the motives of Both Changan Automobiles of China and Ford Motor Co. of USa in forming the Changan ford joint venture.
2) Using section 10.4 describe the type of strategic alliance, the motives for alliance, and highlight the issues with their probable causes.
3) Make recommendations to the CEO and senior managers of Changan-Ford on how they can address the cross-cultural issues identified.

The Changan Ford Joint Venture: Same Bed but still different dreams?
1. This joint venture has provided both companies many advantages. From an economic level, they both wanted to increase their production and sales of cars. Due to a bigger budget, they were able to improve their R&D level (innovations, production processes, new
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This cultural barrier is the major issue that has to be resolved.
Question 2:
Knowing that the Joint Venture is the most common form of equity alliance, we can say that Changan-Ford’s strategic alliance is an Equity one. That is say that Changan and Ford remain independent but set up a new organization jointly.
In this case, we can talk about an access alliance. In fact, Ford needed a local distributor to access the Chinese market.
About the issues, Ford does not make available the engineering resources to their Chinese JV partner, they just transfer the engineering voice and specifications from Ford and block the local engineering improvement. Moreover, the report highlights several points, all about cultural differences. They don’t share their knowledge, therefore Americans have difficulties to match Chinese customers’ needs. Furthermore, it is important to notice that Ford has an independent engineering centre in China whereas they also have an engineering team in their JV.

3. To address the cross cultural differences identified, both companies should understand the strengths and weaknesses of their different cultures. Indeed, by mixing the two cultures, it could allow to a better communication and collaboration among employees, leading to a better efficiency at work. Both cultures have different values that they should share, and could benefit from this information transfers. It’s

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