Nowadays China becomes one of the hottest market places all over the world. From the viewpoint of the investors, China seems to be the most potential market with the huge market and attractive economic situation. The apparent result is the increase in number of foreign investments put into China. Gentran Machinery (GM) is one of the foreign investors of China. It has a joint venture (JV) in Hangzhou. Although GM has been quite successful in its operations showing an average annual growth of 12 percent in sales volume, net profits and its stock value during the past 20 years, it is noted that the joint venture in China is struggling along and is already way behind schedule. In order to address the possible problems in the JV and find solutions, some issues are to be discussed.
Global assignment of managers has been a traditional method of operating international companies. The importance of transferring knowledge, upskilling remote or local managers and instilling best practice throughout a multinational organization has long been recognized as a source of competitive advantage for those firms able to expand successfully.
Chinese Brush for Writing Calligraphy
Flickr Chinese Dragon Year Statue
expatriatesThe failure of rate of global assignments, and indeed international expansion, has throughout history been nothing less than fantastic. Although it is obvious that the expatriate managers don't know the local labour markets and local education system, have the communication, culture, and language problems, they are familiar with the corporate culture, have advanced management skills, and also have stronger informal linkages with decision makers in the parent company. Many companies send their home country employees to foreign subsidiaries (Hutchings 2002). In the GM case, it is indicated that there isn't a modern management system in the JV and the JV managers are at only the Chinese traditional stage of management development and they haven't effective and...