Problems of Managing Joint Ventures in China

The enterprises are busy in making their products and services more and more attractive for the consumers all around the world. They make changes in their products and services in order to meet the requirements of their culture and society.
The cultural changes, throughout the world, act as a strong challenge to the enterprises. Efficient cross culture management can guarantee flourishing worldwide operation of international enterprises in the multi-culture and region. The worldwide business dealings are also flourishing in Chinese enterprises. Chinese enterprises have made it an aim to progress and make their name all around the world. Chinese enterprises are making progress in their fields of expertise to promote their abilities and talents throughout the world market. Foreign companies have been working in China for many years, frequently by joint ventures with local firms and usually in the more developed coastal areas. Nowadays, however, Government is now developing the areas with poor infrastructure and encouraging investment in those areas. The poor infrastructure, illiterate public and employers with less knowledge about market economy concepts made it very difficult for the firms existing there and even for the firms making joint ventures to progress. In the central Shaanxi province, fifty four interviews were planned with the managers in twenty four join ventures clearly shows the prospective hazard in the way of a thriving join venture.
As Chinese market is becoming the centre of attention of more and more foreign investors the pitfalls of Chinese market, management and hurdles in its way to success are given proper thought and suggestions are made to solve these problems (Ahlstrom et al. 2003. Beamish, 1993. Child, 1994. Goodall and Warner, 1999. Peng, 2000). It is already known that in the previous twenty five years, almost 85 percent foreign firms, located in China, are sited along the Coastal belt of China (SSB, various years). Since late 1990s, the Chinese government is busy in the developmental process of the areas with weak infrastructure and poor growth rate in order to get rid of the local regional differences. "The Great Western Development Strategy (xibu da kaifa)" was commenced in 1999 with a motive to encourage local and international investment in the country. It was a categorical effort to increase investment in those regions of China, mainly in need but least likely to attract support on their own. Under its persuasion, an increasing number of foreign firms and joint ventures entered in the underdeveloped hinterland. In 2002, 31,822 foreign ventures had been set up in China’s 18 interior districts and one municipality (SSB, 2003, p.678). All the regions carry some importance. In the same way, China’s interior is of great importance, without development of those regions China wouldn’t be able to progress in the international market. All facilities and technologies must be equally provided in the underdeveloped regions. For this reason, under the 7th Five Year Plan (FYP) (1981-1985), China’s economies were separated in to three regions, namely, the Eastern region, the middle region and the Western region (Linge and Forbes, 1990, p.68 and Chen, 2000, pp.9-10. Wei. 2000, p. 1).
Traditionally, the Middle and the Western areas have been considered as one large part, the interior (Chen, 2000, p. 10 and Wei, 2000, p. 1). As stated in the 7th Five Year