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Red Dragon Enterprises: Red Dragon Enterprises: A failing Chinese joint venture
1. Trust is very important thing doing business in China. ...
... Strategically, logistics-savvy enterprises are moving toward multi-source strategies,
pre ... Britain in 1947, India has grown up in the shadow of the Red Dragon. ...
Submitted by stirniuke on October 8, 2007
Category: Business
Words: 983 | Pages: 4
Views: 104
Popularity Rank: 88,758
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Red Dragon Enterprises:
A failing Chinese joint venture
1. Trust is very important thing doing business in China. A very good example of it is Rex’s contract with Tsang. In this country entire relationship should be based upon trust and a contract only represents “paper trust” which is meaningless. People in China do not want to recognize a formal agreement. They don’t like contracts and business relationships in China are based on trust and “face” more than legal documents. It is not good, because a low is very important thing in all the world. And signing contract without a paper and just with “trust” is like contradictions of business rules.
Other interesting aspects of Chinese culture are their belief and religiousness. For example, when Tsang visited a fortuneteller and asked her about joint venture’s success or his belief in the meanings of names. He also thought that anything else would “encourage evil spirits” like the name of Red Dragon Enterprises.
Chinese people are very united nation as well. They like to have many contacts and connections with others. It is important for them and maybe it makes sometimes them proud. Moreover, their English knowledge is not very good, so it is difficult to communicate with them.
So, these aspects of Chinese culture caused some of the difficulties when Rex and his firm wanted to enter into a joint venture with a Chinese manufacturer in order to reduce production costs. When Rex was trying to make a contract with Tsang he felt uncomfortable, confused and uncertain of their business success, because these aspects of Chinese culture made him to feel so.
2. Rex Adams didn’t take culture differences between running business in China and Australia seriously. He was aware of some aspects of the Chinese business culture but he handle them incorrectly. The biggest mistake he made was the agreement, which was too general. He knew that in China the partnership...
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