Study On Taiwanese High Tech Corporation Inotera Inc Management Essay

Study On Taiwanese High Tech Corporation Inotera Inc Management Essay

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In order to survive in a changing business environment which is characterized by increasing speed, pluralisation and most importantly, a unique pressure towards globalisation- a trend which has become particularly powerful in the past decade, firms now have to adapt different management skills (Büchel, Prange, Probst and Rüling, 1998). Therefore, constructing relationships with the other firms has become an essential strategy to compete effectively in the rapidly changing business era. The emergence of international joint venture (IJV) is one of the most well researched topics that has been caused by the globalisation of the world economy and are benefiting from the use of global teams. However, despite the popularity of IJV, it seems to have extremely high failure rates. Statistical evidences show that two thirds of IJV cases in Auster's (1986) and 70 percent of those studied in Coopers and Lybrand's research (1986), 50 percent of those in Harrigan's (1988), a third of those in Franko's (1971) and 40 percent of those in Millington and Bayliss' (1997) eventually had been led to disintegration. Moreover, relating to the success rate of IJVs, Bleeker and Ernst (1993) found a less than 50 percent survival rate.

Different cultures will lead to different organizational structures (Adler, 1991) and will demand different leadership and management theories (Erez and Earley, 1993). However, most of these theories were formed in the Western Countries, and rare research has examined into Taiwanese high-tech IJVs. Furthermore, little studies has provided a picture of inter-partner team management and investigated what kind of factors influence performance to Taiwanese IJVs in the area of high-tech industry.

This study will focus on a Taiwanese high- tech corporation- Inotera Inc. as the case study company. Originally, Inotera Inc. was formed from two countries- Germany and Taiwan, and it changed to a US and Taiwanese IJV in the end of 2008 due to operation reason. Hence, this research also tries to find out the pattern of inter- partner team management and performance based on IJV perspective in Inotera Inc. and it can be as a good lesson for the newly formed from US and Taiwanese teams through the previous experience which operated by German and Taiwanese teams.

1.2 Research Background

The information technology and high-tech industry has become a preferred worldwide hub for software applications and related services. The global high-tech industry has been through a marvelous transformation during the last few decades. On one hand, the market in most developed countries are nearly saturated; on the other hand, there is a continued growing market demand in developing countries. In particular, Taiwan's high-tech industry is considered to be one of the major players in global IT markets. The country is also the third largest producer of IT products after the US and Japan (Datamonitor, 2008). With the growth and increase in demand for electronic products, Taiwan can leverage its current expertise to bring about growth in the future. As a result, Taiwan is considered to be one of the best places for setting up business in Asia. In addition, the government of Taiwan also offers adequate investment incentives, along with superior infrastructural support, to create a suitable and easy business environment. The Taiwanese government provides investment tax incentives, training programs, loans and numerous other forms of governmental assistance for this purpose. In the survey from World Economic Forum (WEF) on global competitiveness for 80 countries, it ranked Taiwan third in the growth competitiveness index and 16th in the domestic level competitiveness index (Datamonitor, 2008). This dissertation gives a look at how foreign multinationals have used joint venture to work with Taiwanese high-tech companies. Normally, one company of the joint venture will play a lead role and another one will be "partners" in the contract. Whether it is the case when Taiwanese high-tech company forms with foreign multinational companies will be examined. Hence, most importantly in this research is to investigate the outcome of the performance of joint venture.

1.3 Research Objectives and Questions

Taiwan's high-tech industry is considered to be one of the key players in global IT markets. For the past few years, Taiwan has exhibited strength in the production of electronic products and has shown enormous potential in technological innovations. Foreign companies are aware of the benefit from taking advantage of the phenomenal growth of Taiwanese high-tech industry. This country's total foreign investment in 2006 stood at $29 billion, of which $22 billion was contributions to portfolio investments (Datamonitor, 2008). During last decade, there were a lot of joint ventures formed between Taiwanese companies and foreign companies. As Taiwanese government plays an active role and the restriction on foreign direct investments, joint venture has been the most popular entry mode in Taiwan's business environment. In this context, there is a lack of research on their inter-partner team management and performance after forming the joint venture. Therefore, there is an incentive to investigate the outcome of joint venture between foreign high-tech firms and their Taiwanese partners. Based on the research background, this research explored the factors that impact on team management and performance in Taiwanese high- tech international joint venture. In other words, the objective of this dissertation is investigating inter-partner team management and IJV performance in Taiwanese high- tech international joint venture. This objective of this research will be achieved by exploring the following three research questions:

1. To examine the critical success factors and the development of inter-partner team management.

2. To explore the impact of successful inter-partner team management on IJV
 performance.

3. To investigate the ramifications of inter-partner conflict.

This research will focus on the leading semiconductor company in Taiwanese high-tech industry. It is Inotera Inc. which has implemented successfully joint venture with foreign high-tech company for years. Originally, this company was formed with German company, and it now changed to from with American company in the end of 2008 due to operation reason. This research tries to find out the specific pattern of inter- partner team management and performance based on IJV perspective in Inotera Inc. The outcome of this research also can be a good example through the previous experience for the newly teams that joined from US and Taiwan.

1.4 Contribution

Since this dissertation explores the inter-partner team management and IJV performance when foreign high-tech company joins with Taiwanese high-tech company, it is expected that the conclusion and outcome would give the multinational enterprises (MNEs), which would like to form strategic joint venture with Taiwanese company in the future. In addition, to insure that they will keep adapting the positive things while avoiding the negative effect factors for both companies, in order to operate strategic joint venture more effectively and successfully in Taiwan. Expecting that both companies of joint venture would receive an equal benefit from the formation. Furthermore, it is expected that this research will motivate more researchers to further investigate in this specific topic in the future.

1.5 Structure of the dissertation

Chapter 1: Introduction

In this chapter, the overview of this research and background will be introduced first, following with research objective. Moreover, the contribution of the research will be indicated.

Chapter 2: Literature Review

In this chapter, theoretically review the literature on international joint venture. In addition, there will be a comprehensive literature review on the management of international joint venture and team management. The section of team management carries on with the discussion of the success factor of team management. Besides, this chapter is also concerned with the performance in term of what are the main factors determine the performance on international joint venture and team respectively.

Chapter 3: Methodology

This methodological chapter explains how and why a specific methodology is chosen. This section presents and explains the research methods, techniques and procedures used by the author in detail that are employed in studying this particular topic. This study was based on a case study approach to investigate the inter-partner team management and IJV performance in a Taiwanese high-tech IJV.

Chapter 4: Result Analysis and Research Findings

This chapter includes the analysis and findings of the research. The chosen company will be well studied according to case study method. Identifying factors that impact on inter-partner team management and after forming the joint venture. Furthermore, this chapter also provides the analysis to evaluate the performance after forming the international joint venture between two different countries.

Chapter 5: conclusions and summary

In the last chapter, the outcome and discussion of international joint venture will be concluded. Besides, further investigation and research on this specific topic will be suggested.