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Critical Review Of Jagersma And Van Gorp(2003)"Still Searching For The Pot Of Gold: Doing Business In Today's China" In Harvard Business Review.

1466 words - 6 pages

IntroductionThe role of economic information and the process of globalization are two of the most important influences currently affecting the global economy. Western multinational companies aimed at organization framework and operation strategy to do new essential restructuring and development since 90s' of the 20th century. Probably, the restructuring and development refer to relevant areas. We can concentrate on the following four points:i. Multinational combination increasingly becomes a leading manner for direct foreign investment of multinational companies."The strategic objectives of transnational mergence is to rapidlyexpand corporations' scale, pursue scale economy, strengthencorporations' competitive capacity, promote global operatingstrategy, grasp the commanding point of internationalindustry, scramble advanced technology and buildcorporations' whole competitive capacity",(Hongjiang, Li. 2002, p:2).ii. With the development of technology revolution, the organization structure and management of multinational corporations also gradually becomes a network framework."The purpose of the new type of management is to developnetwork's external economic efficiency, improve corporations'capacity on resources adjustment, enhance the communicationand utilization of internal and external info...improvecorporations' innovative capacity and organization's operatingfunction", (Hongjiang, Li. 2002, p: 2).iii. The international alliance has been developed in many multinational corporations."Its purpose focuses on fully utilization of external resources,obtaining economy of scale and range, sharing risks, avoidingand preventing excessive competition and improvecorporations' competitive capacity", (Hongjiang, Li. 2002, p: 3).v. Multinational corporations have had internationalized business research via newrestructuring."The purpose is to utilize foreign technological resources anddecentralize risks, to more perfectly meet local market requirements,to establish its own international research and development networktherefore to strengthen its monopoly advantages", (Hongjiang, Li. 2002, p: 3).However, China had an economy reform in the early 1980s and opening policy was produced by Chinese host government (Shibai, Liu. 1998, p: 425). The process of Chinese economy development has been greatly accelerating when China joined the World Trade Organization (WTO) in 2001."China agreed to undertake a series of commitments to open andliberalize its economy in order to better integrate with the world andto offer a more predictable environment for trade and foreign investmentunder WTO rules", (Equant, 2003)Especially, to obtain maximum profits and enlarge business scale, multinationalcorporations begin to pay great attention to Chinese market for being a profitable investor whilst Chinese government adopts to encourage their entering.Pieter K. Jagersma and Desiree M. van Gorp studied on western multinational corporations entering China market, which the title of the...

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