Changan-Ford Joint Venture
1) Evaluate the motives of Both Changan Automobiles of China and Ford Motor Co. of USa in forming the Changan ford joint venture.
2) Using section 10.4 describe the type of strategic alliance, the motives for alliance, and highlight the issues with their probable causes.
3) Make recommendations to the CEO and senior managers of Changan-Ford on how they can address the cross-cultural issues identified.
The Changan Ford Joint Venture: Same Bed but still different dreams?
1. This joint venture has provided both companies many advantages. From an economic level, they both wanted to increase their production and sales of cars. Due to a bigger budget, they were able to improve their R&D level (innovations, production processes, new technologies, superior quality….).
In addition, China represented at this time a huge potential market with only 20% of the population who owned a car, allowing us a possible increase of their market share and portfolio.
Ford, the global leader in the automobile industry benefited from certain notoriety. In a same time, China was the largest world car market. So, this joint venture was considered as a “Win –win strategy” for both parties.
Other motives for this joint venture were to overcome cultural differences, norms, values… in terms of management, conflict, processes …. However, strong tensions remained among the two cultures, even after the joint venture. Geographical barrier can also be considered as a motive for this joint-venture.
They both have different approaches in terms of way of working and managing. America is an individualistic culture. They tend to work in isolation and have more flat organizational structure (right to question decision making within the organization).
On the contrary, China is based on ethics and morality. Their collectivistic culture tends to avoid confrontation, preferring harmony at work. Decision making is gathered and evaluated with other members of the corporation. It takes more time to
2) Using section 10.4 describe the type of strategic alliance, the motives for alliance, and highlight the issues with their probable causes.
3) Make recommendations to the CEO and senior managers of Changan-Ford on how they can address the cross-cultural issues identified.
The Changan Ford Joint Venture: Same Bed but still different dreams?
1. This joint venture has provided both companies many advantages. From an economic level, they both wanted to increase their production and sales of cars. Due to a bigger budget, they were able to improve their R&D level (innovations, production processes, new technologies, superior quality….).
In addition, China represented at this time a huge potential market with only 20% of the population who owned a car, allowing us a possible increase of their market share and portfolio.
Ford, the global leader in the automobile industry benefited from certain notoriety. In a same time, China was the largest world car market. So, this joint venture was considered as a “Win –win strategy” for both parties.
Other motives for this joint venture were to overcome cultural differences, norms, values… in terms of management, conflict, processes …. However, strong tensions remained among the two cultures, even after the joint venture. Geographical barrier can also be considered as a motive for this joint-venture.
They both have different approaches in terms of way of working and managing. America is an individualistic culture. They tend to work in isolation and have more flat organizational structure (right to question decision making within the organization).
On the contrary, China is based on ethics and morality. Their collectivistic culture tends to avoid confrontation, preferring harmony at work. Decision making is gathered and evaluated with other members of the corporation. It takes more time to