Prof. Dr. Haiyan Zhang MGM1: Asian Business 30 January 2011 FRANCINE CARRON OWNERSHIP CONTROL AND MANAGEMENT CONTROL: Ownership control and management control are two concepts that are interpreted based on the cultural environment. In the case of Danone and Wahaha, the French assume to have management control by having ownership control. Danone understands these 2 topics as 1 whole. However, this is where it all goes wrong; having a majority ownership doesn’t guarantee management control. Therefore, it is wise when companies decide to expand abroad, or create partnership with foreign companies that they understand each other’s business culture. Once both companies understand their business cultures, they can find a balance between the legal aspects and their execution strategy. A win win partnership would be that each company has 50% of the shares, that there is no majority ownership. Clear rules about the execution strategy should be put into a legal format as well. KEY POINTS : Explain the different managerial styles Assess the conflicts of interests of ownership What are the management styles of the key stakeholders? Explain US management control Explain EU management control Explain Chinese management control Explain US ownership control Explain EU ownership control Explain Chinese ownership control In partnerships, is one company allowed to have a majority of the shares Cultural differences should they be recorded into legal documents for execution strategy Win win?

Joint Venture Danone Wahaha - ownership control

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Prof. Dr. Haiyan Zhang MGM-‐1: Asian Business 30 January 2011 FRANCINE CARRON OWNERSHIP CONTROL AND MANAGEMENT CONTROL: Ownership control and management control are two concepts that are interpreted based on the cultural environment. In the case of Danone and Wahaha, the French assume to have management control by having ownership control. Danone understands these 2 topics as 1 whole. However, this is where it all goes wrong; having a majority ownership doesn’t guarantee management control. Therefore, it is wise when companies decide to expand abroad, or create partnership with foreign companies that they understand each other’s business culture. Once both companies understand their business cultures, they can find a balance between the legal aspects and their execution strategy. A win-‐ win partnership would be that each company has 50% of the shares, that there is no majority ownership. Clear rules about the execution strategy should be put into a legal format as well. KEY POINTS: -‐ Explain the different managerial styles -‐ Assess the conflicts of interests of ownership -‐ What are the management styles of the key stakeholders? -‐ Explain US management control -‐ Explain EU management control -‐ Explain Chinese management control -‐ Explain US ownership control -‐ Explain EU ownership control -‐ Explain Chinese ownership control -‐ In partnerships, is one company allowed to have a majority of the shares -‐ Cultural differences should they be recorded into legal documents for execution strategy -‐Win-‐ win?