Mmc China Joint Venture Case Study

Ashley Canter

International Business

BUS471

MMC China Joint Venture Case Study

#1 Holding Ross to the same performance goals as other units does not properly take into account all of the improvements that he has already made in this location, nor does it properly reflect the additional challenges that he faces working in China and working as part of a joint-venture.  Apparently, this was not good enough for corporate headquarters. Ross knew that improving performance further would be tough. The market in China was very competitive. MMC was competing with many other enterprises to produce printed circuit boards for large multinational customers that had assembly operations in China. The customers were constantly demanding lower prices, and it seemed to Ross that prices were falling almost as fast as MMC's costs.

The company should give this unit benchmarks to reach that are based on the challenges it faces.  Instead of holding it to a specific percent of return, it should be basing the performance goals on improvements over numbers that the unit posted from the start, or that they have now. Expecting a unit to make a 20% profit when it took years to even make it profitable at all is unrealistic. Comparing him with other managers from other countries fails to take into account the improvements he has achieved in his new location and appreciate them. It also fails to recognize the extra difficulties he goes through particularly operating in China and under a joint venture involvement.

#2  Ross was limited in his ability to cut the demands of his Chinese joint-venture partner. He had tried to explain all this to Phil Smith, but Smith didn't seem to get it. “The man is just a number cruncher,” thought Ross. “He has no sense of the market in China. He has no idea how hard it is to do business here. I have worked damn hard to turn this operation around, and I am getting no credit for it, none at all.” The two HR specialist from US had a difficult time interacting with the locals. This led to more ineffective training in China. Ross having to sacrifice four of his best Chinese production employees for a two month training program in the US. By letting the employees learn by operations in the US.  Also by having a specialist from the US come into the MMC China organization would not help because the international markets are not similar. MMC China failing to keep up with the latest developments in technology with manufacturing it fell behind.