Essays on The Michelin China Way Case Study

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The paper "The Michelin China Way" is a good example of a business case study.   The following paper is informal research of a case study that identifies the main cultural and management issues facing Michelin in China. It critically evaluates how well the issues were addressed through the support of relevant theories and framework and proposes reasoned solutions in the light of what is expected. assertions made are backed up with relevant and correct referenced example throughout the essay. Development In today’ s world, business is set not only in the local surroundings but also in the global environment.

Most companies not only consider their primary markets or locations but also the rest of the world. Through globalization campaigns, the supply chains of multinational companies become enriched, potential markets get expanded and high-cost workforce is transformed (Campbell, 1994). Consequently, the competitive advantage of companies becomes strengthened in the global market. On the other hand, these companies face problems brought about by changing environments in foreign countries. The changed environment is brought about by differences in the cultural environment, economic environment, legal environment and the political system. All the changed environments pose a problem for multinational companies.

Problems caused by changing cultural environment are more serious when running a multinational business. The essay will focus on the problems that arise due to cross-cultural issues facing Michelin as a multinational company operating in China (Guillén & Baeza, 2012). Michelin is a multinational organization which is a world-leading French-based tire maker. Like any other multinational company, Michelin set out to establish an infrastructure which would help capture business opportunities in china (Peng, 2012). In a bid to do the company set up a joint venture in Shenyang in the year 1996 and later created one of the biggest tire manufacture sites in Shanghai.

It was clear that major gains would be made in investing in China as analysts predicted a 30% growth in its tire sector. Just like most investments, Michelin’ s investment was faced with risks and challenges and one of the major challenges was managing cultural differences (Verma, 2009). The method of entry into china’ s market that Michelin used was through a foreign investment joint-stock company. During the first years of the joint venture, the management of the venture was carried out by the managers in China who had limited exposure to modern management concepts (Marquardt & Horvath, 2001).

This led to Michelin to send expatriates from abroad to China. The expertise of the expatriates was meant to lay the foundation for other future operations. Over time, the expatriates realized that managing human recourse was one of their biggest challenges. This was because of the fact that Chinese beliefs and values were different from their own, and this would result in a costly misunderstanding. In order to manage the different cultures and facilitate the integration process, the Michelin Company kept the original management team to work together with the foreign expatriates (Marquardt & Horvath, 2001).

This was a measure undertaken to minimize the cultural conflict and nourishing the local management talent. According to Tylor 1977, culture is defined as “ a complex whole which includes knowledge, beliefs, arts, morality, laws, customs and any other abilities and behavior obtained by man as an affiliate of society. ” From the definition, it is evident that every nation has its different cultural preference, value standards and national tastes.

These factors impact every aspect of management in a multinational organization, especially on marketing management, alliance management and human resource management.

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