Cross- cultural Communication This page intentionally left blank

Case study: transfer of technology to a Chinese company
A British multinational chemical company wishes to set up a joint venture 
with a Chinese chemical company in China in order to establish an 
advanced petrochemical project to serve the domestic market. The British 
company will be supplying much of the high technology involved, together 
with specialist training for the Chinese workforce who will be constructing 
the complex and subsequently taking a major share in operating the system 
on completion. The British company has held preliminary negotiations in 
China and has met with a number of potential problem areas. Its negotiat-
ing team has reported back to the Board in the UK. The Board has asked for 
a full briefing before further progress can be made. The following are the 
likely problem areas to be overcome before transfer of the technology and 
related skills can be successfully carried out:
management of change: a modern Western enterprise with a
well-
established market economy background is seeking to set up a joint 
venture in a developing quasi- market economy. The result will produce 
both cultural and economic problems in adjustment;
the need to identify key change agents, ensuring top management com-
mitment and support from the Chinese government;
government ‘interference’ is likely as the project progresses, particularly 
the insistence on having a majority control in what is considered to be 
an economically strategic industry;
bureaucracy over labour regulations, local taxation and planning 
regulations;
language difficulties, which will require specialist interpreters and 
translators;
different negotiating styles, differences in representation, status and 
decision making;
a need for precise project definition at all stages;
quality control, health and safety regulations and inspection;
training requirements for the local workforce, including managers and 
supervisors, taking into account educational standards, working practices, 
defining training objectives and local wage rates;
sharing competitive knowledge and technology, including legal confi-
dentiality safeguards;
a need for environmental safeguards to avoid pollution and contamination 
of the local environment.
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Transfer of Skills, Technology and Knowledge 255
Figure 13.3 below provides a suggested approach through the key planning 
stages of such a transfer of technology.
Preparation 
– gain commitment to project
– assemble expertise
– 
background briefing on cultural and social differences in 
receiving culture, including culturally sensitive areas
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