Shui Fabrics Question - Ans

959 Words Feb 11th, 2012 4 Pages
Question 1
Economic factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions.. There are economic differences that influence the relationship between the partners at Shui Fabrics. Chiu Wai operated Shanghai Fabrics LTC located in China, before it became a joint venture with Rocky River Industries in the United States. When the companies became a venture, Chiu Wai became the Deputy General Manager for Shui Fabrics in China and venturing company Rocky River Industries located in US. Ray Betzell who is the General Manager for Shui Fabrics came to China from Rocky River Industries. Many companies who do business in others countries and
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Trends in social factors affect the demand for a company’s products and how the company operates. Ray needs to move outside his personal comfort zone as a manager. There seems to be a lack of clear, shared strategy between the two partners. The intent seemed clear in beginning after many obstacles the joint venture was fulfilling China expectations and those of local government and party officials. It seems there was once a clear strategy that has been forgotten over the course of ten years. Another social factor that is different between the partners would be that a profit over 20% returns on investment may be perceived as Western exploitation. When it comes to doing business in China, respect for people’s feelings is paramount.. Because of China’s history of exploitation by foreign countries, Chinese do not want to be seen culturally as having been ‘had’ by Western business people. Wai is pleased with the way the company is operating and feels that Shui is generating just the right level of. He sees no reason why Ray’s American bosses shouldn’t be more than satisfied with their 5% annual return on investment. This tells me that Chiu is unclear of his company’s strategic goals. Without a clear strategy it is impossible to choose right structure and extent of cooperation with a foreign partner. Unfortunately Chiu Wai’s attitude at

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