Efforts Bear Results
Looking back, Celanese says its joint-venture agreements reflect the learning and the changes that occurred in the wake of the original Nantong joint venture. In 2002, the flake facility in Nantong was expanded to provide flake to Zhuhai and Kunming. A senior Celanese manager said that the performance of the Celanese joint ventures in China had exceeded original investment expectations.
There are few joint ventures in China that have been as successful and learned so much from their own experiences. At the same time, the Chinese laws and regulations affecting joint ventures have seen tremendous changes since 1989, making it easier to do business in China.
In May 2001, after ten years of increasingly successful operations, the two partners announced they had “formed joint work teams to complete a feasibility study on an expansion of their joint venture to produce diacetate tow cigarette filters in China” (Chemical Market Reporter, May 21, 2001).
This coincided with the Celanese plan to phase out its Rock Hill, South Carolina, plant by the end of the first quarter of 2002. It is to be assumed that Celanese and CNTC will be more professional this time around in planning their joint venture, particularly since China is a growing contributor to the bottom line.
Celanese is now firmly established as a profitable corporate citizen in China, but cross-cultural learning and problems remain part of joint-venture life. A senior Celanese manager commented:
“My wife and I lived in Nantong from June 1997 until March 2000. We found the Chinese people, regardless of their personal circumstances or status, to be extremely friendly and supportive. One very unexpected aspect of life in China is the way we felt completely safe and secure, more so than in any place we have lived, including in the United States.
Close friendships are developed between expatriates and people in every walk of life, including government officials. The only observation I would make here is that it probably takes longer and more effort to cultivate friendships at higher levels, and this usually requires a peer relationship.
As I expected, I saw that there was a big variation in how well expatriates respected and adjusted to the culture. Those who tried to have things work the way they did back home became frustrated, and the Chinese quietly resented their attitudes. Likewise, some Chinese had no desire or ability to learn and adopt modern business and management ideas, and they became frustrated and were resented by the expatriates.”
In such cases, the performance of the venture was affected, so the Chinese and Celanese directors ended up looking for ways to resolve the issues, which usually meant moving someone out of the joint venture. Over time, this has made the directors much more careful in the management selection process.”
This case illustrates how vital it is that a very long-term view be taken when planning one’s objectives, to ensure that every debatable issue—often resting on widely divergent cultural values and practices—is thrashed out among the parties concerned. We believe that the Celanese approach could not have been bettered. Both parties handled problems as they arose, choosing not to adopt stereotypical formats. Meanwhile, LEC’s role as long-term mediator easily qualifies as the No. 1 point to note and mull over in this case.
Source: Dr. Bob March’s book The Chinese Negotiator.
Turn in a 3-page paper (page count does not include cover or reference list) addressing the following questions:
1. In 1982, why did CNTC approach Celanese and start the negotiation? What was the reaction of Celanese at that time?
2. Discuss the importance of mediation attempts on the part of LEC with respect to contributing to the success of this joint venture?
3. What were the key culture-shocks during the negotiation?
4. Can you list more based on your experience with eastern (or other foreign) cultures?
5. In your opinion, how should we deal with cultural conflicts in international negotiation?
1. Answer questions with clarity.
2. Show depth and breadth to enhance the quality of your paper.
3. Search in our library to find some papers/articles to support your argument and show them in the reference list.
Turn in your at least two page answers by the module due date.