Why are alliances between Western companies and Asian competitors different as well as difficult? What are some of the concerns, and how can those concerns be addressed?

Question

What will be an ideal response?

Answer 1

Western companies may find themselves to be at a disadvantage in GSPs with an Asian competitor. To limit transparency, some companies involved in GSPs establish a "collaboration section." This department is designed to serve as a gatekeeper through which requests for access to people and information must be channeled. Unintended transfers are therefore guarded and controlled. A study by McKinsey & Co. identified four common problem areas that have gone wrong in alliances between Japanese and Western firms. The Japanese partner saw itself emerging from the alliance as a leader in its business or building a new basis for the future, whereas the Western partner sought relatively quick and risk-free financial returns. The second area of concern related to the balance between partners. Each must contribute to the alliance and each must depend on the other to a degree that justifies participation in the alliance. Another common cause of problems was found to be due to friction. This mainly stemmed from differences in management philosophy, expectations, and approaches. Lastly, the study found that short-term goals can result in the foreign partner limiting the number of people allocated to the joint venture. The original goals of the venture are lost as each new manager takes their turn. There is little original corporate memory or reminder of the initial intent of the venture. These concerns, if addressed adequately and before any formal agreement is signed, will be helpful in taking care of later concerns, frictions and unnecessary problems.