Alpha Gearing Systems
ALPHA GEARING SYSTEMS
MGMT 810
November 29, 2004
ALPHA GEARING SYSTEMS
Alpha gearing systems an Illinois based gearing manufacturing company made a joint venture with China's Kai Li Machine systems; the joint venture was called Alpha Shanghai. The Illinois based company had an entirely different method of working the western culture while Kai Li had a different method of operation that was based on the Eastern culture.
In the Western culture the manufacture is more concerned about customer satisfaction at the design phase where as in the Eastern culture the manufacture worries about customer satisfaction after production.
Another major difference is that Western companies are more inclined to run operations with the least number of people, they don't keep into the fact that employee job security is important as long as costs can be reduced in the production phase. In the Eastern region companies work on the basis of ensuring employments. In China you create "relationships first" and everything else follows.
So when you want to do business in the Chinese environment you first create a relationship in which each party understands each other, and on the basis of this trust that is created other terms of the business are negotiated.
It is considered rude to ask for payments because it's a way of saying that you do not trust the other party.
Due to these cultural differences doing business between some Eastern company and some Western company is a lot demanding. In the West when you do business the first step is to negotiate a contract, terms and conditions and a price when both parties mutually agree and a deal is struck that's when a transfer of products and service or business is done.
In the deal between Alpha shanghai and San Yu, Alpha Shanghai was more interested in getting hold of San Yu as their customer due to the fact that San Yu had a high profile in the Chinese moped market. Alpha Shanghai entered into negotiations optimistically with every
MGMT 810
November 29, 2004
ALPHA GEARING SYSTEMS
Alpha gearing systems an Illinois based gearing manufacturing company made a joint venture with China's Kai Li Machine systems; the joint venture was called Alpha Shanghai. The Illinois based company had an entirely different method of working the western culture while Kai Li had a different method of operation that was based on the Eastern culture.
In the Western culture the manufacture is more concerned about customer satisfaction at the design phase where as in the Eastern culture the manufacture worries about customer satisfaction after production.
Another major difference is that Western companies are more inclined to run operations with the least number of people, they don't keep into the fact that employee job security is important as long as costs can be reduced in the production phase. In the Eastern region companies work on the basis of ensuring employments. In China you create "relationships first" and everything else follows.
So when you want to do business in the Chinese environment you first create a relationship in which each party understands each other, and on the basis of this trust that is created other terms of the business are negotiated.
It is considered rude to ask for payments because it's a way of saying that you do not trust the other party.
Due to these cultural differences doing business between some Eastern company and some Western company is a lot demanding. In the West when you do business the first step is to negotiate a contract, terms and conditions and a price when both parties mutually agree and a deal is struck that's when a transfer of products and service or business is done.
In the deal between Alpha shanghai and San Yu, Alpha Shanghai was more interested in getting hold of San Yu as their customer due to the fact that San Yu had a high profile in the Chinese moped market. Alpha Shanghai entered into negotiations optimistically with every