Beijing Here We Are
MGMT 302
Homework 5
Chenhong li
Beijing here we come
1. What is likelihood that the Canadians will be able to reach an agreement with the mainland Chinese and not have to go back to their Taiwanese supplier? Explain. Asians are sometimes notoriously slow in reaching agreements. If the Chinese hold up the Canadians and do not reach an agreement within 90 days, it is the Canadians who will be in the weakest position. Given that Canadians do not want labor costs to rise more than 2 percent annually, this is major demand in lieu of what is happening in other world markets including Taiwan. So the Chinese are in the driver’s seat and the Canadians may indeed find themselves unable to make a deal with the Chinese and have to go back to the Taiwanese supplier.
2. Are the Canadians making a strategically wise decision in letting the Chinese from the PRC handle all of the manufacturing, or should they insist on getting more actively involved in the production process? Defend your answer.
If the toys can be manufactured without a great deal of technology or skill, Canadians need only be concerned about the quality of the output. If this is a problem or there are special techniques that must be used in building the toys, the the Canadians should negotiate for some active involvement in the production process. Otherwise, they should stand back and let the Chinese handle things.
3. What specific cultural suggestions would you make to the Canadians regarding how to de business with the Chinese?
One suggestion is to not get into a situation where time is going to be a problem. One solution is to extend the agreement with the Taiwanese firm for another year. This will give the Chinese the opportunity to make a decision, without forcing the Canadian firm into a quick, bad solution
Homework 5
Chenhong li
Beijing here we come
1. What is likelihood that the Canadians will be able to reach an agreement with the mainland Chinese and not have to go back to their Taiwanese supplier? Explain. Asians are sometimes notoriously slow in reaching agreements. If the Chinese hold up the Canadians and do not reach an agreement within 90 days, it is the Canadians who will be in the weakest position. Given that Canadians do not want labor costs to rise more than 2 percent annually, this is major demand in lieu of what is happening in other world markets including Taiwan. So the Chinese are in the driver’s seat and the Canadians may indeed find themselves unable to make a deal with the Chinese and have to go back to the Taiwanese supplier.
2. Are the Canadians making a strategically wise decision in letting the Chinese from the PRC handle all of the manufacturing, or should they insist on getting more actively involved in the production process? Defend your answer.
If the toys can be manufactured without a great deal of technology or skill, Canadians need only be concerned about the quality of the output. If this is a problem or there are special techniques that must be used in building the toys, the the Canadians should negotiate for some active involvement in the production process. Otherwise, they should stand back and let the Chinese handle things.
3. What specific cultural suggestions would you make to the Canadians regarding how to de business with the Chinese?
One suggestion is to not get into a situation where time is going to be a problem. One solution is to extend the agreement with the Taiwanese firm for another year. This will give the Chinese the opportunity to make a decision, without forcing the Canadian firm into a quick, bad solution