“Managing the transition” – supplier management in international joint ventures in China

Abstract

Attracted by the easier access to local markets, many foreign companies have formed manufacturing joint ventures in China. One of the key elements of successful international joint venture (IJV) manufacturing in China is the management of suppliers, since the supply chain plays an essential role in contributing to both the quality of finished products and controlling costs. Supplier management in Chinese IJVs is an under-researched area and so an exploratory study of five manufacturers was conducted using a case study approach. The results show the difficulties faced by IJVs which are in attempting to maintain quality levels at the same time as trying to reduce costs by purchasing materials and components locally. In addition to identifying important implications for companies, the research shows the need for further investigation of the contextual aspects of good supplier management.

The role of relational capabilities in the organization of international sourcing activities: A literature review

“…At the corporate level, MNCs set up various organizational arrangements such as international purchasing groups (Lihong & Goffin, 2001;Giunipero & Monczka, 1997), global sourcing project teams (Trent & Monczka, 2003), product teams for sourcing components and materials (Fynes & Ainamo, 1998), lead buying systems (Gelderman & Semeijin, 2006), and corporate contract coordinators (Giunipero & Monczka, 1997). These organizational solutions have different features in light of the international or global approach and of the timing of the mandate, which could be temporary or permanent.…”

Decision Sciences Research in China: A Critical Review and Research Agenda—Foundations and Overview*

“…China is the largest emerging economy in the world (Rao, Raghunathan, & Solis, 1999; Li, 2000) and is characterized by very rapid change. Since the start of its economic reform in 1978, China's gross domestic product (GDP) has been growing at an annual rate of around 10% (Ta, Choo, & Sum, 2000; Lihong & Goffin, 2001; Li, Anderson, & Harrison, 2003). Figure 1 shows China's GDP and growth rate in constant dollars, revealing that GDP increased 49 times since 1978, currently exceeding $2.31 trillion.…”

“…Although similar in size to the United States, China has a much larger population (296 million vs. 1.3 billion) (Carter, Pearson, & Peng, 1997; China Research Center of Population and Development, 2005) and is, in fact, the most populous country in the world (Xu, Jayaram, & Xu, 2006), with 20% of the world's population. Its vast internal markets (Rao et al, 1999; Goh & Ling, 2003) are growing at a very rapid pace (Lihong & Goffin, 2001; Lau, Zhao, & Xiao, 2004). Personal incomes have increased rapidly with China's transition to a market‐driven economy, and there is a burgeoning Chinese middle class (Rao et al, 1999; Goh & Ling, 2003).…”

Sustainability-Conscious Stakeholders and CSR: Evidence from IJVs of Ghana

“…For IJVs, mostly the foreign parents get involved with the supply network of the local parent and need to consider the expectations and concerns of the supply-chain. As they endeavor to establish higher standards or meet CSR initiatives which involve sourcing guarantees or international standards, suppliers tend to be in the category of key stakeholders in attaining these goals [45]. Studies by Zhang et al [46] reveal that impressing local suppliers creates good image and benefits the firm in the form of augmented creditworthiness.…”