Electrowide Case Study: Examining the Chinese Culture

Introduction

China has made quite the impression on the world’s economy over the years. Catapulted to the top in such a short period of time, the already major player has held the world in anticipation of what else it has to offer. Therefore, it comes to no surprise as to why foreign firms are keen to form strong business alliances with China as it offers an attractive platform of vast opportunities for firms to profit from its growth. However, the crossing of both immensely different worlds does not fall short of challenges. Distinct in more than just business styles, it has become increasingly necessary for international entities to have an insightful understanding of the other’s culture for the benefit of both parties.

This report will examine the case study of Electrowide, a billion-dollar U.S-based manufacturing company of automotive electronics, and its difficulties in forming a joint venture (hereafter referred to as JV) with Motosuzhou, an established Beijing municipal government enterprise. Elaborated first in detail will be the main characteristics of Chinese culture and the subsequent differences of that of the U.S. culture that correlates to the negotiation process of the JV. Next, the critical evaluations of 4 key criteria unaddressed for the selection of the JV partner that led to the failure of the negotiations. Following that will be the assessment of the sounding question, “Did Electrowide pick the right team for the negotiations of the decisive JV?” The report will finally be concluded with recommended strategic alternatives for the team leader, Tom Sherman and the proposed guidelines for any future negotiations by Electrowide.

1. Culture differences and the negotiations process

1.1 The main characteristics of Chinese culture and how the distinction of that in the U.S. culture relates to Electrowide’s negotiation process.

There are 4 vital values practiced in Chinese culture; Guanxi, Mian-zi, Keqi and Confucianism (Winters 2007)....