Partnering with Chinese Firms: Lessons for International Managers (review)

Yadong Luo's Partnering with Chinese Firms: Lessons for International Managers is a timely publication. China's accession to the World Trade Organization has encouraged many Western companies to seek joint-venture partners there. Economic downturns in the West have compelled (or tempted) many more companies to close their plants and move their operations to China to take advantage of low labor costs. And then there is the persistent allure of a China that could make us rich—if every Chinese person just buys a little of what we make. Luo's book helps bring us back to reality.

Partnering with Chinese Firms is divided into three parts. Part . is a factual overview of what has happened in the area of trade between China and the West from 1979 to 1997. This easy-to-read section, filled with statistics and interesting observations, offers insightful accounts of the changes that have taken place in China during the first twenty years of that country's recent opening to the world. Anyone who has no prior understanding of doing business in China can get up to speed by reading this section.

In part 2, "Partnering with Chinese Firms: Foreign versus Chinese Perspectives," Luo analyzes the factors that affect partnerships, referring to them as "strategic attributes, organizational attributes, and financial attributes." Luo uses "major findings from a recent study of 122 Chinese firms" as the basis for his analysis. He explains how international joint ventures in China can be understood as a "Three-Fold Classification Scheme" (p. 48). Examples that he calls mini-cases are used to support his reasoning. He relates how Chevron, DuPont, Toyota, 3Com, and other multinational companies came to select their partners in China.

Part 3 focuses on how ten multinational enterprises have done business in China over the years, namely Atlantic Richfield, Intel, PepsiCo, Xerox, OTIS, Kodak, Coca-Cola, Microsoft, Boeing, and KFC.

Yadong Luo grew up in China and came to the United States in 1992. Prior to his arrival in America, he had "served as a provincial official in China in charge of international business for six years" (p. 351). By 1995 he had earned a Ph.D. from Temple University. Luo deserves credit for being able to convey his personal and academic understanding of the business culture in China in accomplished English, and his ability to master the English language in a very short time is a considerable achievement. On the other hand, readers should be prepared to sift through the bulk of the book to get to the kernels of truth. Throughout parts 2 and 3 there is a considerable amount of wordy, didactic, and at times befuddling passages.

The author has a tendency to become didactic and unnecessarily "technical" in his writing style. The "Three-Fold Classification Scheme" is an example. He makes partner selection and relationship building look unnecessarily technical. It is good for the untrained student to learn what it takes to do business successfully in China. But for practicing international managers—who are supposed to be the main audience for this book—this is unnecessary lecturing. Much of part 2 and most of part 3 read as though they were culled from the Internet or are the product of desk research, even though Luo has made it clear that he had sent out a survey and followed up with private telephone interviews.

Partnering with Chinese Firms wants to impart "lessons" to international managers. What it has done instead is to highlight case studies. The word "lessons" connotes mishaps, pitfalls, or mistakes, but the reader will not find many such revelations here. Few companies are willing to wash their dirty laundry in public, and a work like this that is based on desk research and a questionnaire, however conscientious the author obviously has tried to be, does not always deliver what it promises.

Perhaps where the book is most in need of improvement is in its overwhelming emphasis on large multinational...