Ford Chinese Venture

Ford’s expansion into the Chinese market through a joint venture with the Changan Auto Co. makes perfect strategic sense. Explain, therefore, why the joint venture has not developed as successfully as had been anticipated. China had experienced the global recession of 2008-2009 with minimal losses unlike most Western markets such as the US and Europe. Because of that, as in many markets, China overtook the US and became the largest car market in the world in the beginning of 2010. Its internal market was rapidly growing, including cars, so since the Western markets were still suffering, the expansion of Western car manufacturers into Asia and especially China seemed like a great strategic move. Such a move was made by Ford, which went into a joint venture with Changan the fourth largest Chinese car manufacturer over 100 years old. The joint venture was proving to be successful but no as successful as anticipated. The reason for that are the severe cultural differences between the American and Chinese managers. The two companies had to work together and complement one another’s skills, but instead there was a lack of cooperation due to these cultural differences. Some of these differences are the different values between managers, or different points of view which if worked on can produce new ideas and suggestions which can be very successful and effective. Also, American managers work individually, they make decisions on their own, work on their own and mind their own business unless they are asked to do otherwise, whereas Chinese managers always work as a group and decisions are made as a group. Americans consider that not to be important and a waste of time since the Chinese’ process of decision making is too long. Furthermore, in the Chinese managerial systems, people readily accept leadership authority and bureaucracy whereas in America people have the right to question the organisation’s decision making. Also, in Chinese companies’ managers choose a

References: * G. Johnson, R. Whittington, K. Scholes, Exploring Strategy Text & Cases * http://ajc.sagepub.com/content/5/2/57.full.pdf+html