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Question 1:
Why Michelin sent experts rather than managers to the joint venture in the beginning? What will be the likely situation if they sent managers to work at the joint venture? What would you do before you send your managers to China to work with their Chinese counterparts?

In 2001, STRC a Chinese company signed a Joint Venture with Michelin (70% stake for Michelin). This deal was anopportunity for the Chinese company to benefit from Michelin knowledge and technology and sharpen the competitive edge of Chinese tire producers. In the same time STRC had financials difficulties. For Michelin, this Joint Venture allowed them to create the largest tire production site in China.

It was clear that there were major gains to be made in China, but there were also risks andchallenges. The main challenge was managing cultural differences and instilling Michelin's culture in China.
The main question was whether Michelin should adapt its management practices in Chinese culture or whether it should instead implement his global management policies in China.

In order to facilitate the integration process, Michelin has decided to keep “the original management team” andemphasized “the importance of nourishing local management talent”.

The Michelin expatriates realized that the management of human resources was one of the biggest challenges facing the Group. The fact that Chinese values and beliefs were different from their own could result in costly misunderstandings. If successfully managed, however, the differences in culture could complement each other and lead tobetter and faster knowledge transfer within the company.

And so, Michelin China CEO and chairman, Eric Jugier stated “that is why expatriates that joined in were mostly experts rather than managers”. This decision was a good strategy in order to proceed to transfer technology while saving the face of the management in place. When you realize that the Chinese education system placed fare greateremphasis on testing individual, technical, skills than on leadership and team work, one can easily understand that sending out expert was a pretty good decision.

It is difficult to know how things would have gone if Michelin had sent managers rather than expert to work at the Joint Venture. Indeed this likely situation depends of so many factors like their missions, their training andpreparation for this mission, their technical expertise,…

But if they had had a better knowledge or significant experience of the Chinese culture, they would have taken into consideration the fact that Chinese management culture is based on hierarchy. If managers had been sent there, there would have been somehow an interaction with the current management team and would have been a risk for the localteam to loose their face, which is not at all part of the Chinese culture as they have face saving issues. Causing other people to lose face could be seen as a challenge to their positions in the hierarchy which could threaten group harmony and the social order.

Before sending out managers to China, I would provide a relevant training to my team on cultural and legal aspects in doing business inChina and leading Chinese teams. In France, the trainings shall cover all the strategic points at stake for Chinese people (the importance of face, guanxi, importance of group, leader position).

It is important to carefully select the managers to be sent over, to assess their integration capacity, their adaptability and their area of expertise. It is also extremely important to strictly borderthe mission, its objective and also provide Chinese language training.

In the same time, I would prepare the Chinese team to welcome the expatriated managers. To that extend, I will explain them the culture of the expatriates and the sharpen differences of the managerial conduct between the two countries. My Chinese counterparts have to know as must as possible about the company culture and...
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