China is the largest country regarding population which is nearly 1.3 billion, with a huge amount of cheap labour and less manufacturing cost. Many foreign companies have been attracted by ample investment opportunities. China in the past decades has decreased its poverty. Although the nation is ruled by the communist leadership, the government has played a major role in following western type, mixed economy approaches. Chinese set their strategy to develop their economic growth by becoming an efficient player of globalization. In 2001 China joined WTO
China is much known for its huge investment potential, for such reason, most of the western multinational companies are planning to invest in China. It is a nation of that is progressing in technology and has become largest manufacturing in the world. In spite of to such ample investment opportunities, many western MN companies internationalize in the prospect of sales growth and market access through the joint venture with a potential Chinese partner. Many foreign firms that have tried to access Chinese economy through joint ventures with the Chinese enterprise have reported that doing business in China is a very challenging task and need much time and effort.
GLOBALIZATION AND CULTURE
Some international companies that have developed the joint venture with Chinese partners are reported to have been unsuccessful for different reasons.
Global companies have to align their business strategy with their counter part in China. The Chinese company wants the foreign firms to introduce technological know-how, to boast domestic businesses activities. There is a success for the joint venture firms if they focus in the right direction at the right time.
Joint ventures and strategic alliance can be extremely challenging and risky. Firm's ability to anticipate, prevent and resolve challenges associated with the joint venture arrangements is crucial. Failing to detect and consider the risks related to these arrangements can have a significant impact on the formation and performance the joint venture.
Conflicts may arise between partners of the joint-venture, and these could be the main causes of failure for much Chinese joint-venture alliance. Some research has stressed that cultural conflicts have very important influences to the performance the of joint-venture enterprises in China. The main aspect concerns the management systems of joint-venture enterprises. One is about the relevant body or trustee board decision systems, and the other is about operation management systems. Exploring the potential differences in planning, decision making, organization, and control between China and western company is so crucial, as a result, some management patterns and methods are being studied by different bodies. New experiences and knowledge about joint-venture enterprise development and management have been gathered on China.
Different researches stated that China, regardless of...