In China, a jV contract is “nice framework” from which to begin the real negotiation process. The Controls JV negotiating team viewed the contract as a conclusion to negotiations and returned to the United States in late December of 1992. James soon discovered that the process of negotiations would be ongoing- On almost a daily basis, some element of the agreement was adjusted or augmented with new understanding.
A misconception held by the Controls negotiating team related to the ease of obtaining appropriate governmental approvals. There were various annexes and subcontracts that were yet to be finalized and approved when they departed. Some of these approvals were required front government officials with whom they had had very little interface. The impact of this miscalculation was that production in the jv didn't commence on January 1, 1993, as anticipated. Instead it took until August 1,1993, to get the operation going
One of the most serious issues affecting the operation of the JV that directly impacted James's effectiveness was the JV's organization structure, which was negotiated by the Controls' team. The organization chart for the JV is shown in Exhibit C6-2. Controls perceived the position of Chairman of the Board (COB) of Directors to be of greater importance in operating the company than that of Managing Director, thinking that they could “run the company” from that position. Consequently, when the organization chart was drawn up, Controls conceded the position of Managing Director to the Chinese partner in exchange for the right to appoint the COB for the first three of the five years. James noted that in Chinese JVs negotiated by Filtration Inc., the U.S. partner always secured the position of Managing Director.
ONGOING NEGOTIATIONS : A First Time Expatriate is Experience in a Joint article from Business Technical Catagory ONGOING NEGOTIATIONS
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