How to get rid of the "right to speak" dilemma for joint venture auto companies?
Wuxi ASK Pneumatic Machinery Co.,Ltd , https://www.askpneumtic.com
For car reporters, no problem is more exciting than "speech right." Regardless of the theme of the conference held by the joint venture, the "speaking right" question is a dish preferred by reporters. If it happens that the company has previously or will soon make organizational adjustments or high-level personnel changes, the "speech right" has become the main dish. The reporter kept asking questions and it seemed shallow if they did not ask questions. The issue of “speech right†has long exceeded the scope of the internal affairs of joint ventures and was promoted to the likes and dislikes of national sentiments, the survival of national industries, and the height of national security. In particular, for a full-vehicle joint venture such as a stock ratio, any problem will be nationalized and politicized. On the one hand, the pressure on public opinion in the joint venture is huge. It seems that as long as you don't compete with the foreign party in all aspects of the right to "speak," or "sell the country," and then try hard to compete with the foreign in practical work; on the other hand, The party consciously and unconsciously entered the seat and was caught in a situation where China competed for "the right to speak." Chinese people in the joint venture's managerial level are self-employed as Chinese shareholders, and foreign parties also speak in the tone of foreign shareholders. People have been surprised.
Everyone wants to be the boss and they have to say it for themselves. This is true for the Chinese people and foreigners. However, whether it will achieve a win-win result through compromise is not what everyone thinks or everyone can do. If the ownership of the joint venture is different, the cultural background is different, the business philosophy is different, the behavior is different, and the strength is relatively equal, the ratio is equal. Then, to solve a problem, there are three possibilities: First, the party is on the surface or in the form He yielded to the other side's will, and in the actual implementation of continuous trouble, to each other to wear small shoes to prove himself correct; Second, the two sides did not give way until one side exercised the right of veto, which led to revenge on the other side, cycle; It is the two sides that take the interests of the joint venture company as the priority, seek common ground while reserving differences, reach a compromise, and implement it without hesitation.
The three possibilities, their respective advantages and disadvantages are self-evident. To be sure, if you want to destroy a joint venture, the best way is to encourage the joint venturers to fight for "the right to speak."
Although the competition for “speech right†is deadly for the joint venture, few joint ventures can avoid being caught by reporters on this issue; some joint venturers even have to use the reporter’s curiosity and inclination. It is intended to disclose some information to make reporters hype, in order to exert pressure on the other party.
Shanghai GM is an exception. There is little controversy about “speech rightâ€. The reasons are related to the general concept of localization and even to its self-serving business status. Guangzhou Honda has always given the impression of a high degree of unanimity between Chinese and foreign parties, and it is in line with the strength of its partners. Too weak. But no matter what, the performance of the two is not necessarily inversely proportional to the “speech right†issue. However, those joint ventures that are not very much in the “speaking right†issue are often flattered by their performance, even though many “speech rights†issues themselves are caused by poor performance. Even Shanghai GM and Guangzhou Honda are not without the “speech right†issue. With the development of time and other factors, the “speech right†issue may also erupt.
It can be said that how to get rid of the "speaking right" dilemma poses a fundamental challenge to the survival and development of joint ventures, especially for those joint ventures with strong Chinese partners. Difficult to achieve, apart from the compromise or convergence of different nationalities, cultures, and business concepts, the Chinese side of the Chinese and foreign vehicle joint ventures is a state-owned enterprise. Its crucial business objectives also include the guarantee of employment and development beyond profit. Self-owned brands, etc., often have the common problem of state-owned enterprises - short-term behavior.
Finally, at the beginning of last year, Dongfeng Nissan made a "comprehensive action plan" based on the win-win result of the joint interests of both parties, to break through the "speaking right" dilemma. After one year's practice, the performance of the company is no longer comparable, and the "Common Action Plan" was immediately called the "basic law" of the joint venture, which was highly evaluated by experts and the media.
Observe carefully what Dongfeng Nissan can get out of the "speaking right" dilemma and what it can be achieved from.
The establishment of Middle East Wind Nissan in 2003 pointed out that the main parties of the joint ventures expressed the following viewpoints to the media: All the management personnel of the joint venture, whether from Dongfeng or Nissan, are no longer Dongfeng or Nissan, and do not represent their respective shareholders. The interests, but the people of the joint venture, only represent the interests of the joint venture, implement the decisions of the board of directors, and do their best for the development of the joint venture; all issues related to the interests of the joint venture parties are decided by the board of directors and have nothing to do with the management of the joint venture. The views of the shareholders and business executives on such a clear and consistent expression of the “speech right†issue are unprecedented in the entire vehicle joint venture. This shows that both sides are aware of the seriousness of the "speech right" issue and reached an understanding on this issue. However, this expression did not attract enough attention from the media at that time. Instead, the media focused its attention on “full-scale joint ventures†(in contrast to previous Chinese joint venture partners that used a factory to join a foreign joint venture, it was a In addition to existing joint ventures, all subordinate companies have taken out joint ventures with a new foreign partner. Some media even attacked the Chinese to sell their country.
Since then, the performance of Dongfeng Nissan has been relatively poor. The reason is that despite the unanimous intention of both parties on the “speech right†issue, there is no institutional “hard constraint†related to “speech rightâ€, and both internal management personnel of the enterprise are In practical work, he always consciously or unconsciously falls into the predicament of “voice powerâ€. As a punishment for the “voice power†competition, the sales of Dongfeng Nissan fell into production suspension. As a result, the two sides were forced to face the reality. After a year of brewing, they upgraded the unanimous intention or understanding on the “right to speak†issue. It is the "Basic Law."
Compared with certain joint ventures that have reached a memorandum of understanding or verbal agreement on the issue of “speech right,†Dongfeng Nissan’s “basic law†obviously relies on the strength of the system to solve the “speech right†problem through “hard constraintsâ€. Although both sides of the joint venture of Dongfeng Nissan declared that the process of formulating the "Basic Law" is more important than the outcome, the "Basic Law" can be "shelved" after it is released, but it cannot be said that the specter of the "right to speak" will come out one day. " The Basic Law cannot be stopped. It can only explain that the operating procedures and even principles of the "Basic Law" are still not perfect.
For joint ventures, the basic consensus of the joint venture partners is the basic premise for the formulation and implementation of all corporate strategies and strategies. Because of its extremely challenging and difficult conditions, reaching a consensus and putting it into practice requires a plan of its own. And procedures to protect, but can not pin their hopes on the personal likes and dislikes or value standards. Of course, just as joint venture partners have their respective advantages in talents, technology, products, management, marketing, etc., strong cooperation between the two parties is not in itself a sufficient condition for business success, but it is undoubtedly a necessary condition, and the “Basic Law†is to create or improve this. The conditions provide a completely new solution that is worth referring to other companies. One of the best ways to invigorate a joint venture is to work together to get rid of the "speaking right" dilemma. 