Take It to the Web
1. Video Report. Visit this book’s channel on YouTube (YouTube.com/MyIBvideos). Click on “Playlists” near the top of the page and click on the set of videos labeled “Ch 13: Selecting and Managing Entry Modes.” Watch one video from the list and summarize it in a half-page report. Reflecting on the contents of this chapter, which aspects of selecting and managing entry modes can you identify in the video? How might a company engaged in international business act on the information contained in the video?
2. Web Site Report. This chapter’s opening company profile discussed Marvel’s 50/50 joint venture with Sony that oversees all licensing and merchandising for Spider-Man, as well as Sony’s animated TV series titled Spider-Man. Not mentioned in the opener is that Marvel and Sony became embroiled in a series of lawsuits and counterlawsuits. Perform an Internet search for the name of the joint venture, “Spider-Man Merchandising L. P.,” and locate stories that discuss the lawsuits and their settlement.
What reasons did Marvel give for its initial lawsuit against Sony over its activities? Do you think Marvel was justified in filing suit against Sony? Was it a ruse for Marvel to exact something out of Sony, as some believe? Do you think Sony was right to countersue as it did? What do you think was the main motivation to form the venture from the perspective of each partner?
Do you think the 50/50 split had anything to do with the joint venture’s difficulties? Why or why not? Do you think differences in organizational culture (perhaps rooted in national culture) played any role in the conflict? Do you think anything could have been done during the formation of the joint venture that would have reduced the chances of this dispute arising? Explain.
1. You are the director of international operations for a leading clothing designer based in New York. Your firm recently formed a 50/50 joint venture with a top Latin American manufacturer. On a recent trip to the joint venture’s factory in Latin America, you uncovered discrepancies between the financial results sent to the U.S. parent company and those sent to the local parent firm. Further investigation has convinced you that the local venture’s top management is keeping two sets of accounting records to facilitate the diversion of funds to personal bank accounts. This scenario is not surprising to you, however, because it is rather common in the local country. What do you do? Do you confront your local joint venture partner directly or find another solution? Might you devise a policy that encourages the local partner to be honest in its financial reporting? If so, how do you go about doing this?
2. You own a small manufacturing firm in California and are considering entering either Australia or Hong Kong. You are unsure which country you should target and you are unclear about which entry mode is most appropriate. A recent study investigated the differences between ethical perceptions of business managers from Australia and Hong Kong. The researchers determined two factors impact the perception of ethical problems: (a) culture and (b) the particular mode of market entry (e.g., exporting, contractual, investment in subsidiaries, or joint ventures). What ethical issues do you think might arise in conjunction with the various market entry modes discussed in this chapter? How might these issues influence your entry-mode selection?
3. You are chief operating officer of a Germany-based telecommunications firm considering a joint venture inside China with a Chinese firm. The consultant you’ve hired to help you through the negotiations has just informed you that ethical concerns can arise when international companies consider a cooperative form of market entry (such as a joint venture) with a local partner. This is especially true when each partner contributes personnel to the venture because cultural perspectives cause people to see ethical decisions differently. This is of special concern to you because the venture plans to employ people from both China and Germany—which have very different cultural backgrounds. Is there anything that your two companies can do to establish ethical principles in such a situation—either before or after formation of the cooperative arrangement? Can you think of a company that succeeded in the face of such difficulties?
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