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September 2011

reprint R1109X

HBR Example

Culture Collide in

The Boardroom

Ought to a German-Chinese joint venture stick to the

ethical rules of the mother or father company or maybe the country

of operation? by Katherine Xin and Wang Haijie

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Knowledge

Case Study

Katherine Xin can be described as professor of management, an associate dean at China The european countries International Organization School (CEIBS), and the publisher of HBR China. Wang Haijie is actually a senior manager at HBR China.

Should certainly a German-Chinese joint venture comply with

the honest rules from the parent firm or the

nation of procedure? by Katherine Xin and

Wang Haijie

The Experts

Xu Shuibo is a former

CEO of TNT Mainland

China's subsidiary TNT Hoau.

Traditions

Clash in the

Boardroom

T

Illustration: agata nowicka

Zhang Tianbing is a

global vp and

the director of the China

Study Center in A. T.

Kearney.

HBR's fictionalized circumstance studies present

dilemmas faced by frontrunners in true compaВ­

nies and offer alternatives from specialists. This one can be

based on a teaching case at Cina Europe InterВ­

national Business School in Shanghai.

he room was already packed once

Liu Peijin walked in. His trip from

Shanghai to Chongqing had been deВ­

layed, and he had fretted about lacking the

teaching. But fortunately he'd gotten there

with time. Liu recognized his presence was imporВ­

tant. As the president of Almond China, he

desired to show his Chongqing fellow workers

how much he cared about the topic underneath

discussion: moral business techniques.

Taking his seat, Liu nodded on the

head of HR, who was running the trainВ­

ing. The two went way back: Equally had

recently been with their The german language parent organization,

Almond Chemical, since 1999, when it

first established operations in Cina. Since

after that Almond China had build two joint

ventures with local partners—the only way

foreigners may do business in chemicals

in the area. Almond controlled 70% of

the stock in one of these. The other was a

endeavor with Chongqing No . a couple of Chemical

Business, in which Cashew had a 51%

stake and the Chinese administrators were very

active.

Liu sat next to Wang Zhibao, the vice

president in charge of product sales for the ChongВ­

qing joint venture. Wang looked skeptical.

He was great at his task, having sealed sevВ­

eral key deals that had kept the company

afloat during its early years. But he was

also at the center of a discord between the

endeavor partners: The Chongqing execuВ­

tives were increasingly singing about how

challenging it was to control according to

European requirements, particularly the guidelines

against gifts and commissions. Such incenВ­

tives had been commonly recognized in Chinese suppliers

and routinely employed by Almond's

competitors. Looking to do business with out

them, Wang argued, was foolhardy. " This

is definitely China, certainly not Europe, ” was his refrain.

Nevertheless the line between these techniques

and breaking the law was a great one. AlВ­

mond was headquartered in Munich and

listed on the Nyse

as well as the The netherlands Stock Exchange,

which means it was instructed to adhere to the

U. S. government's Foreign Corrupt PracВ­

tices Take action, which specifically forbade the

September 2011 Harvard Organization Review two

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bribing of foreign government officials by simply

U. T. -listed companies.

Liu held an eyesight on Wang as the HR

overseer explained Almond's ethics

polices and the legal consequences

of business bribery. Liu understood the rules

produced sales more challenging, but Almond's

policy was clear, and he...



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