Asimco Case Analysis

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Asian Strategic Investments Corporation (“ASIMCO”) was founded in China in 1994 by Jack Perkowski who had worked on Wall Street for 20 years. By 2002, ASIMCO had become one of the largest automotive components manufacturers in the Chinese automobile industry, and by 2008, it had established 17 manufacturing operations in 10 provinces in China, as well as regional offices in the US, Japan, and England (Wong, 2009). However, the company encountered management problems in the early stage. To break through the impasse, ASIMCO replaced senior management staff with “New China” managers and introduced its Leadership Development Programme (“LDP”) instead of the traditional succession planning system. This essay will attempt to describe the logic behind ASIMCO’s shift in management strategy. In addition, it will analyze both the benefits and challenges of pursuing its “New China” manager programme. Because of the limited management poor available to foreign investors in China, ASIMCO chose a team of expatriate managers to take charge of the operation in the beginning (Wong, 2009). However, expatriates’ management was proved ineffective in China since they knew little about China. For example, expatriates had limited knowledge of guanxi relations that should be important in operating the business in China (Tsang, 1998). They could not integrate the advanced operation and management experience with the practices in China. Although China started to apply the economic reforms since 1978, under the influence of the planned economy, most managers in China during the early 1990s were from the state-owned enterprises (“SOEs”) and therefore tended to be highly bureaucratic. To these managers, they were more like cadres and had political skills required by SOEs to maintain the interests of the CCP, but lacked knowledge of management principles and exposure to competitive market outside the country (Taylor et al., 2003; Wong, 2009). By contrast, managers formed in private-owned...
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