“Outline
Introduction
Question 1
Question 2
Question 3
Question 4
Introduction
Ray Bertzell is the general manager of a particular joint venture. The joint venture which is a form of business co-ownership was established between Rocky River industries and Shanghai Fabric. The companies established the joint venture a decade ago. It is a fifty-fifty business agreement between a U.S textile manufacturing firm and a Chinese company to produce coat fabric for sale to the Chinese and international sport wear dealers. The companies have abolished the red tape bureaucratic measures and has started pleasing some key stakeholders. For instance the Chinese deputy general manager Chui Wai was comfortable with the companys state of affairs as the joint venture was attaining some of its expectations. This is evidenced by a work force of around 3000 employees in a country with an average 20 percent unemployment hence a real contribution to the country. However the president at Rocky River Paul Danvers was starting to grow frustrated with the Return on investment that averaged at 5 percent as he expected a 20 percent return on investment (Daft 2012).
Question 1.
The general manager is in a rather difficult situation. This is because from Ray Betzells perspective Chiu Wai will not be pleased with the current trend. If for instance the deputy general manager had a clue about the conversation between the boss Ray Betzell and the president at Rocky River and Paul Danvers. This annoyed the deputy general manager. The difference in perspective and thoughts was based on differentiated expectations in return on investment with regards to the Globe project. The Americans and the Chinese have different dimensions when evaluating their economic legal-political and sociocultural factors. For instance the Chinese are humane oriented while the Americans are performance oriented. In addition the Chinese are mainly concerned with job creation while their counterparts the Americans focus on economic enhancement in order to attain higher profits. In addition the Chinese do not focus on cutting jobs. On the other hand the Americans are concerned with cutting the labor costs as they deem the US tariffs and quotas highly uncertain. These are some of the reasons that result in a differentiated expectation of return on investment between Ray Betzells and Chiu Wais perspectives on Shui Fabrics ROI in terms of the globe Project (Daft 2012).
Question 2.
Among the many differences the reduction of personnel and enhancing Shuis level of technology is the central issue at hand. This is because; the joint ventures management seems to have different views with regard to the rate of return on investment. The Chinese managers are comfortable with a 5 percent rate of return on investment. This is because; they keenly emphasize on humane working conditions and job creation in order to impact significantly on their economy. However the American partners consider pulling out of the business agreement if Shuis performance does not improve (Daft 2012). The Americans are more of task oriented and intend to raise a 20 percent return on their investments. They consider a reduction in the work force and more technological inputs the key ingredients to the much desired cost cut. The cost cutting strategy has improved the performance of the company.
Question 3.
Before thinking of pulling the plug on Shui the American counterpart Rock River should consider a compromise. It might be an important consideration that the Chinese should focus on higher profits. This can only be attained if Shui engages in enhancing efficiency of the manufacturing firm. Efficiency can be attained through cutting labor costs and focusing more on mechanized operations. This strategy will in turn lead to a boost in the level of profits attained. However if the Chinese firm concedes to the request to enhance efficiency the American firm should desist from engaging in drastic measures. This is because; the transition from the humane oriented perspective to the performance and task oriented perspective is a gradual process meant to take some time (Daft 2012).
Another feasible strategy would be to engage in licensing. Under the licensing agreement the Chinese would be licensed by the Americans in a deal that would result in reduced costs in the companys foreign operations. With the licensing agreement the Americans would lose a sizable amount of control as compared to the current joint venture agreement. This would in turn reduce the initial cost involved and the 20 percent return on investments by Rocky Rivers would be attained (Genzberger 1995).
Question 4.
The essence of the strategy is to enhance a good working environment. This is a scenario where both parties benefit and coordinate in a favorable business environment. For this to be attained compromise has to take place. In the first instance the Chinese firm is required to compromise their humane business antique and adopt cost cutting measures. The main benefit with this strategy is that costs would be reduced and both parties would continue to work in harmony. The second option involves the American firm relinquishing some control through licensing (Gillespie & Hennessey 2011). This will reduce the costs involved in international operations thus boosting profits.
Conclusion.
Shui Fabric Company is a joint venture between an American firm and a Chinese firm. Currently there exist wrangles between management on the required rate of return on investment. It is hence essential that the company adopt a strategy that will enhance compromise as well as maintain the status quo and facilitate continued business.”
