| Assignment 3- Richmond Engineering in China | |
Executive Summary Richmond Engineering has been attempting to enter the Chinese market since 1984 without much success however in 1991 they were sought out to be part of a joint venture with the Chinese. Two years later Richmond Engineering’s vice-president and treasurer, Smilla Finn, has been summoned to China, for final negotiations, in an isolated town outside of Beijing and the grueling hours of negotiations were not going well nor seemed to be on a level playing field for Finn. Finn has the ultimate decision of deciding whether to accept a contract that has been deviated from the original agreements or confront the deviations and risk the possibility of losing the Chinese
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Richmond Engineering will need to view this joint venture as a long-term profit potential for minimal input and the potential that the joint venture could be bought out by one of the partners after it gains expertise within the local market.
Future Expansion
The training component of the contract requires Richmond Engineering to train individuals who may not be very motivated as they may feel as though it is beneath them. In China individuals tend to be well educated and hard working however most of them lack advanced professional training and will require a more intensive on-the-job training that is tailored to local practices. Any employees from Richmond Engineering working in China during the training period should be well versed in the Chinese culture to warrant a successful response to necessary training.
The risk of losing this joint venture is a major concern as Richmond Engineering has been working on entering the Chinese market since 1984 and if this deal is tarnished it is hard to say how long it could take for a third chance to come along. Cultural elements are a key element that influences international business negotiations, in China it is important that both parties refrain from embarrassing one another and to meet any differences halfway to ensure a successful negotiation. If Finn can enhance the current relationship to build trust
Joining with Helen Neil would provide supplier deals and an established network in the industry. A joint venture would require Evan’s to give up some of her autonomy and with little operating management the company may have a negative impact on Heather Evans.
The training and development of employees in William Hill is imperative for the performance or the company as they are in a competitive market. William Hill has to inform workers to be aware of surroundings in the area that they work. Training and Development Training
Andrew pays the Chinese workers 50% less than he did with the British workers and only 5% of the employees are in a trade union meaning that there is a less likely chance of a strike occurring. There is also a 40% number of staff that is temporary in the business which means that Andrew can choose to hire and lay off staff during peak periods and when they are not needed. They also have close links to recently graduated university students. The ROCE in China is 3.44% which is a lot better than that of the -9.24% in the UK. The asset turnover in the UK was 1.17 and in China it was 2 which mean that they are selling more of their products in China than they were in the UK. The gearing ratio in China is 50.17% which is average for the business and means that they are not in risk of when the interest rate rise they will lose a lot of revenue. The employees that had been working at Burkinshaw had worked there a long time before hand and had possessed unique skills that would allow them to be in a niche market of handmade pottery products that had been hand made to a high quality standard. In the UK the defective products was only 5.0% which was lower than China by 2.5%. The EU and USA markets had showed more percentage of sales growth in Burkinshaw’s Plc markets than China did in 2005-2010 which would have been a safe bet to go with rather than going to China.
Chern should take an approach train and develop needed skills. In today’s selection of employment seekers it is difficult to find people who have the right level of qualifications. Training will allow Chern to ensure that the employees are at the best skill level for their business. They will be able to mold employees into what they want them
In China, they don’t believe time is a barrier and don’t put much into deadlines like the Americans. Chinese see the relationship building as their driver of time, rather then getting tasks accomplished in a short period of time. The Chinese people generally believe that a considerable amount of time should be invested in establishing a general climate of understanding, trust, and willingness to help, in matters quite apart from the specific business issues brought to the table. Producing a satisfactory agreement in as short a time as possible may be one of their least concerns. Therefore, the non-task sounding stage of negotiation often witnesses much time spending in establishing rapport and getting to know their partners. The Americans grew frustrated with this approach at the start of the negotiation as well as when Mr. Brickley
The 2001-2002 failed Caxtalene joint venture negotiations between CLQ and Wyoff provide important lessons on how to avoid failure in the current negotiations over the proposed AD/CE JV at CLQ’s Rizhao complex. In the Caxtalene negotiations there were critical substantive differences which prevented the parties from even reaching a preliminary agreement on ownership structure. Wyoff and CLQ were at polar opposites on both the equity split and the terms of technology transfer, with Wyoff demanding 80% and CLQ not prepared to go over 50%, Wyoff anxious to limit any substantive technology transfer and wanted to charge a substantial licensing fee for any technology that was transferred and CLQ expecting a free transfer of technology as part of the JV agreement.
Training of General Motors’ employees on their job specifications will improve their productivity. Ofshore trainings in China and Japan are recommended . This will allow the corporation’s manufacturing engineers to learn new efficient production technologies of Japan and China in making cheaper and highly effiecient cars. Motivational incentives such as team building sessions, delegation of duties, self-managed leadership styles, and monetary rewards will boost their commitment to the organization. The combined effect of training and motivation will necesitate restructuring of a pay roll while leveraging on improved productivity of highly productive employees.
This process has more significance in most countries except the Unites States. The approach in the U.S. is to get down to business straight away without wasting too much time on people. This is in stark contrast to the process in China where the focus is on building “Guanxi”, that is, the intricate and omnipresent network of personal relations. The U.S. approach can be a huge problem when doing business with China. The American efficiency interferes with the patient development of a mutually trusting relationship – the very basis of an Asian business agreement. This is what happened in the case study. Mr. Smith had done his research and was aware about the Chinese business methodology, but he did not think it was important to implement it. He was well advised by Mr. Tang. Mr. Tang, even though pointed out the significant features of the “American” and the “Chinese” way of doing business, did not stress enough to make Mr. Smith understand its significance. Mr. Tang also jeopardized his relationship with Mrs. Ming whom he had known for many years by not disclosing that the supplier was not a direct supplier.
Form Barry’ opinion, he thinks USTech and TaiSource have become so interdependent that USTech must establish either a more formal alliance with TaiSource or a more strictly defined arm’s-length relationship. Provided the distrust on both sides, the only viable option is the latter. His suggestion for Greg is that USTech should diversify USTech’s ODM relationships; source directly in China and Taiwan, or combine these approaches to expand in China at a safe pace. According to our analysis in Question 1, we agree with Barry at this point.
As a Wholly Owned Foreign subsidiary in the Chinese market Our Aero Engine Assembly and Maintenance firm will encounter significant challenges as a Greenfield start up within the Chinese markets and our Human Resource Strategy will be key to competitive advantage.
QI-TECH, a Chinese manufacturer of precision Coordinate Measurement Machines, is a joint venture established by Indiver BV, a Dutch aircraft engine manufacturer and a Chinese state-owned enterprise QQMF. Looking for a strategic exit, Indiver BV, which holds 50% of QI-TECH, must negotiate a sale with its Chinese partner and a potential buyer, Brown & Sharpe. For this purpose Roger Kollbrunner, the Business Development Manager at Indivers BV, has to develop a viable deal structure and negotiation strategy.
With China emerging as a global power in business within the last decade, knowing about doing business in China has become more important than ever. There are both many advantanges and challenges with doing business in China in this modern era, and understanding both sides of this coin is the key to being successful in China. Some aspects to keep in mind include the cultural barrier, the price of the work force in China compared to the United States, and have the “made in China” brand be accepted back in the United States.
China is becoming more westernised, particularly the ‘cosmopolitan’ city of Shanghai, where demand for Western products is increasing rapidly as disposable income rises in line with China’s strong economic growth. Michel’s wanted to establish a foothold in the market at an early stage to demonstrate a long-term commitment, which has been identified as essential to compete successfully in the Shanghai market (per Tim Harcourt, Austrade Chief Economist).
i. By creating a sourcing contract with the JV partner, one will minimize the risk of financial lose. Example: If there is a change in Renaults production goals.
There are two sides to the problem, the Chinese and the American, and Ray is the only one who can see both of them. The reasons for these two points of view are the socio-cultural differences that exist among countries. Culture is what defines a country and it can be composed of the language, values, religion, models of conducts, and beliefs, among others. There are many cultural differences between China and the U.S. China has a strong sense of hierarchy and respect towards figures of authority. For example, the vice president of a company might decline to participate in a very lucrative opportunity if it meant going over the president and his boss. This is a behavior that many Americans would find difficult to understand because their priority would be to make money. Another example is the role women play in business world. Even though the number of professional Chinese women has grown, men still think they are inferior, which is why when they see a woman succeeds in a position usually occupied by men; she earns great respect (Fang, 2008). This is actually something that other countries looking to enter Chinese market can use to their advantage. These and the many other cultural differences that exist between China and the U.S. explain why they see the problem in a very different way. Based on these differences, if Rocky River decides to pull out of the venture, it will be very difficult for the Chinese to trust the