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Business Culture Environment
Pages 4 (1004 words)
The TNT manager holds a very strong personal viewpoint that to succeed in an international joint venture with the Chinese for the long-term, one needs to stick to one's principled stand at all costs. As a result of this personal belief, the TNT manager makes a protracted negotiation over the terms and conditions of employees' compensation, and it costs the joint venture a delay of eighteen months.
His mission does not include trying to transform the Chinese business culture or their society. So taking a very hard and principled stance is never a great business strategy. A sound business strategy is one that is pragmatic, realistic and with a clear profit motive and wealth maximization for the company's stakeholders. [Ref. 2: "Profit Motive" by Murphy Warren.]
This is even more so, because by winning one moral victory at a very high cost, there is no guarantee that it will bring greater benefits to the joint venture in the future. There is no guarantee that it will lead to a change of heart and a change of culture of your Chinese partners. There is no guarantee that even the same people with whom you negotiated this protracted conflict, will even be there by the time the joint venture moves forward into its next stage of progress, considering that most of the key employees belong to the state and the communist party, and can be re-shuffled or transferred to other positions at any time.
The problem with a joint venture is that the more time you lose in the beginning over smaller issues, the lesser time you are left with by the time you confront larger issues. [Ref. 3: "Effective International Joint Venture Management" by R.C. ...
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