1. What were the strategic rationales for the establishment of the product development centre in Shanghai, China? As Hi tech systems established a few joint ventures and they owned subsidiaries in China it had become a significant player in the rapidly growing Chinese market. China had become one of Hi Tech Systems’ most important markets where it was competing with other Western, Japanese and local competitors. Moreover most of the products sold in China were produced in the local factories. To be more competitive it was essential for Hi tech systems to create PDC in China. One of the relevant reason for establish PDC in Shanghai was that PDC would be able to use the existing HI Tech Systems organization in the city. Both China Hi Tech System’ headquarters and its production were located in Shanghai.
2. •Evaluate the approach to managing people in the Product Development Centre. What should Peter Hanson, the leader of the centre, have done differently? Why? One of the things that Peter learnt after he joined to Hi Tech systems was the importance of having good personal contacts within the company. Peter must follow the competence development of his employees, also all employees should carry out performance management discussions with their superiors. Peter believe that the compensation system work well for China giving to employers a package of bonuses if they fulfill well the tasks. Peter wanted to sent employees clear message that their performance equals what they deliver. Local employees would have to be taught to manage themselves and to take responsibility and to understand the western culture of the non-hierarchical and meritocratic system. Peter aim for an innovative behavior from the local employees. He tries to coach the expatriates to respect the local employees by not mention how much money they made and how they founds (cheap) many things in Shanghai. Also he thinks to involve employees...
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