Guanxi In Jeopardy

438 Words2 Pages
Let me start this case study with a quote from the case: »The foreign impression is that the Chinese act as if they are in the driver's seat.« After carefully reading the case of the failed joint venture negotiations between Electrowide and Motosuzhou, it seems obvious that in order to succeed in a global economy, Electrowide would need to locate production in Asia – the fastest growing economy. So, Chinese companies indeed are »in the driver's seat«, meaning that the foreign companies, which want to enter the Chinese market, have to adapt to their culture in order to succeed there. Not only have to foreign companies try to adapt to the Chinese culture, but they also have to fully understand it. This is obviously not the case with the Electrowide's approach to the joint venture negotiations with Motosuzhou. Electrowide's three-person team to carry out the task of purusing a JV with the Chinese counterparts has a shortage on three areas: 1) business skills (none of them have degrees that would aid in international business relations), 2) language skills (only Ms. Morgan spoke conversational Chinese, but traditional Chinese society is male-centered, so her Chinese can be of little help) and 3) intercultural competence. The latter plays an especially important role in the failure of the negotiations. There are a few differences between the American and the Chinese culture, which Electrowide's negotiation team did not take into consideration. Electrowide’s team was not mindful of the Chinese’s polychronic time. EW allotted specific time slots specifically for business negotiations. Motosuzhou, the host company, maintained a polychronic schedule. Planned meetings do not allow Guanxi to flow freely, therefore the company regularly cancelled them. Mr. Sherman presented Motosuzhou with a written contract. This greatly offended Ai Hwa Chew who later cancelled

More about Guanxi In Jeopardy

Open Document