The paper "Michelin’ s Culture Management " is a good example of a management case study. Arguably, Michelin is the most distinguished French tire maker which among the first multinational conglomerates to venture into the Chinese mass market during the 1980s as well as the 1990s. The core attraction that led Michelin to develop an interest in the Chinese mass market was simply its extensive size and profound diversity. Michelin instigated the sale of tires in the Chinese market around the year 1988. The firm was quite enthusiastic about setting up the awesome infrastructure to create its business awareness in the market ( & , 2005) Subsequently, Michelin took part in a joint venture in the year 1996 in Shenyang.
In the advent of the 21st century, the prospects of the tire industry in China was quite assenting and were predicted to expand for at least five continuous years. The demand for tires was quite rampant and it was exceedingly explicit that there were fantastic, rewarding opportunities in the Chinese tire market. Nevertheless, there was an array of challenges risks in this extensive market (Jasen, 2008), which am going to tackle. Definitely, there was a daunting challenge ahead for Michelin to cope with.
In fact, Michelin was in an intricate dilemma on whether to carry out its managerial practices in China or to adopt China’ s managerial culture (, 2005). Being a world leader in tire production technology, Michelin had a 20% share of the universal tire market. After a series of lengthy negotiations, Michelin signed a deal worth $200 million in partnership with Tire and which lead to the formation of an overseas investment joint-stock company (JSC) and assumed the name Shanghai Michelin Warrior Tire (China Europe Business school. et al.
2012). This joint-stock company brought the first and most complex challenge for Michelin’ s management. In fact, the joint-stock invested was entirely controlled by the mentality of other state-owned enterprises. This mentality advocated for respect of people, the environment, the shareholders, the customer and identified facts in the business environment. Thus, the profit raised from the stock listing of the joint venture was entirely invested in the real estate industry in which an office tower and some apartment blocks were put up.
However, this venture was not successful since the real estate had a dismal performance during that particular century. Thus, the joint-stock company recorded formidable losses. The top management from the government sought to avert the situation and appointed Fan Xian a renowned manager in China who was given the responsibility of reviving the dwindling performance of Joint Stock Venture (& 2008). mentality, In essence, the Chinese shareholders raised their concern about the merger of their tire producing conglomerate with Michelin. They had reservation regarding the deal and some terming it a poor decision (China Europe Business school, et al.
2012). However, with it came to an opportunity for Michelin to learn the manner in which to integrate cultural values in the Chinese market with their expertise and share management and marketing skills with their hins counterpart hence a mutual, professional exchange. The joint-stock venture’ s legal team embarked on legal matters to provide a control mechanism whereas the technical and managerial teams went on board to perfect business development, operations and communications. Thus, Michelin had an auspicious experience and opportune moment in Shenyang to carry on with the production of tires especially the Warrior brand after acquiring such credible experience from their partners Shanghai Tire and Rubber company.
Shortly after, Shanghai Michelin Warrior advanced to shipping branded tires. The process was quite hard and Michelin had to put extra effort and bring on board a group of experts to assimilate the Chinese managers who did not have the fundamental exposure to the aspect of modern management proficiency. In addition, they had to come with a team of technical experts to lead in the refurbishing and replacement technology, which was crucial as management step to make the employees from both sides, the Michelin group and the Shanghai group compatible and a harmonious industrial family.
Furthermore, an extra team of staff took part in critical work which entailed the training of retailers and restricting distribution. This undertaking was quite substantial since the Warrior brand was in great need of support to lay a foundation and relationship with its customers for prospective operations. Inexorably, human resource management was a predominant problem and the top management of Michelin put their best foot forward to address the issue (Mead & Andrews2008).
China Europe Business School. (accessed 16.09.12) who is the author of this article
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Morris, T and Pavett, C. M.. Journal of International Business StudiesVol. 23, No. 1 (1st Qtr., 1992), pp. 169-179 Published by: Palgrave Macmillan Journals Article Stable URL: http://www.jstor.org/stable/154889