The process of making a Chinese subsidiary company meeting Western standards : A case study in a Chinese manufacturing company

• Main Authors: Leng, Yue, Mohamed, Mohamed, Westerberg, Peter
• Format: Others
• Language: English
• Published: Högskolan i Gävle, Avdelningen för Industriell utveckling, IT och Samhällsbyggnad 2015
• Subjects: subsidiary; china; erp; quality; culture; dotterbolag; kina; kultur; affärssystem; kommunikation; kvalitetsstyrning
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:hig:diva-20098

This research is carried out by studying a Chinese factory, producing metal spare parts, and its Swedish parent company that produces binding machines. The companies recently merged together after a previous relationship as supplier and customer. To bring the companies closer together an ERP-system was implemented during the research period. The purpose of this study is to answer three research objectives: Explore what outcomes there are when a Swedish company acquires a Chinese factory related to cultural differences affecting the merging process. Investigate conditional barriers for developing the Chinese factory to meet Swedish standards regarding the relation of quality and production. Discover how efficient communication with ERP-system can help with the achievement of meeting Swedish standards for the subsidiary Chinese factory. To answer these questions, interviews with three people in management positions was constructed and carried out. A questionnaire was constructed to get the employees views on changes. Observations was made in the Chinese factory which provided some information useful to answering the research objectives and with these three methods the results could be triangulated. Literature was reviewed with connections to: culture differences, ERP-systems and quality perspective in China to construct the theoretical basis for this research.   The study discovered how culture differences affected important areas such as communication, work implementation and management. The cultural differences also affected the second research question about quality and production. Other aspects as education, quality focus, and involvement from employees were also acting as a barrier for developing quality and production. The implementation of an ERP-system experienced some of the barriers mentioned above as language and culture differences but also providing effective communication. Also other benefits as a clearer view of the organization structure, manufacturing processes and the production flow.  However, the ERP-system implemented also has its flaws since it is not fully adapted to the Chinese market and users’ needs. It is also a reflection on the importance of understanding and adjusting to the Chinese culture.