Richmond Engineering
| Assignment 3- Richmond Engineering in China | |
Executive Summary Richmond Engineering has been attempting to enter the Chinese market since 1984 without much success however in 1991 they were sought out to be part of a joint venture with the Chinese. Two years later Richmond Engineering’s vice-president and treasurer, Smilla Finn, has been summoned to China, for final negotiations, in an isolated town outside of Beijing and the grueling hours of negotiations were not going well nor seemed to be on a level playing field for Finn. Finn has the ultimate decision of deciding whether to accept a contract that has been deviated from the original agreements or confront the deviations and risk the possibility of losing the Chinese market and other international connections for the company. One of the partners in this joint venture is Minzhong, a large Chinese government investment and finance agency, which has international prospects for Richmond Engineering assuming this relationship can be built with trust. Richmond Engineering would receive 25 percent equity in the joint venture for a minimal input of the required equipment and training, if Finn can work with the method of negotiation the Chinese use to get the deal closed. My recommendation is that Finn is firm and applies pressure to the Chinese in order to ensure that this deal is finalized and keeps a long-term outlook on the future benefits this joint venture, specifically Minzhong, can do for Richmond Engineering. Problem Statement
It is essential that Finn’s response to the final agreement is in the best interest of Richmond Engineering without impacting the progress they have made in Chinese market. The problem she is facing is how to respond to the deviations of the initial contract, should she have trust in the Chinese that the kinks in the contract will be worked out in the future and the potential of other international markets outweigh these deviations, or should she challenge the
Executive Summary Richmond Engineering has been attempting to enter the Chinese market since 1984 without much success however in 1991 they were sought out to be part of a joint venture with the Chinese. Two years later Richmond Engineering’s vice-president and treasurer, Smilla Finn, has been summoned to China, for final negotiations, in an isolated town outside of Beijing and the grueling hours of negotiations were not going well nor seemed to be on a level playing field for Finn. Finn has the ultimate decision of deciding whether to accept a contract that has been deviated from the original agreements or confront the deviations and risk the possibility of losing the Chinese market and other international connections for the company. One of the partners in this joint venture is Minzhong, a large Chinese government investment and finance agency, which has international prospects for Richmond Engineering assuming this relationship can be built with trust. Richmond Engineering would receive 25 percent equity in the joint venture for a minimal input of the required equipment and training, if Finn can work with the method of negotiation the Chinese use to get the deal closed. My recommendation is that Finn is firm and applies pressure to the Chinese in order to ensure that this deal is finalized and keeps a long-term outlook on the future benefits this joint venture, specifically Minzhong, can do for Richmond Engineering. Problem Statement
It is essential that Finn’s response to the final agreement is in the best interest of Richmond Engineering without impacting the progress they have made in Chinese market. The problem she is facing is how to respond to the deviations of the initial contract, should she have trust in the Chinese that the kinks in the contract will be worked out in the future and the potential of other international markets outweigh these deviations, or should she challenge the