Synopsis of the Situation: TCL a Chinese company founded in 1982 as a Multimedia manufacturer in 2003 has a market share of 18% of Television set sales in China (Bartlett, Choshal and Beamish, 2008). With a run-up to China’s World Trade Organization (WTO) China will be open to international competitors and TCL will be better placed in the competition by internationalization. The process of internationalization leads TCL in January 2004, into a joint venture (JV) with Thomson, formerly known as Thomson multimedia S.A., was formed in 1982 and is based in Boulogne Billancourt, France (Consumer network solution, 2009). Thomson owns the popular RCA line of product which was popular in Europe and North America, TCL Thomson Enterprise (TTE) a joint venture that combines the television asset of TCL and Thomson was created.
Key Issues: Top Chinese managers who headed the venture’s only profitable operations there earned less than foreign subordinates in the unsteady U.S. and European segments. TCL is weak in product diversity and advertising budget when compared to competitor such as LG and Samsung, also linguistic barriers and unexpectedly high costs in European operation was among concerning issues.
Define the Problem: Chinese hourly manufacturing wages averaged $1.01 in 2003 compared with $8.79 in France (Bartlett, Choshal and Beamish, 2008), while more compensation problem occurs with the executive compensation structure. A top Chinese manager was making less than its subordinate in Europe and U.S. In think link Chinese, Li Dongsheng, Chairman and largest shareholder of TCL electronics express his experiences with United States and Europe employee as uncomfortable when his foreign managers whip out charts and talk about problems their units face in ways that seem dry and intangible- and then volunteer solutions as if there were no need to consult their senior managers (Zhang & Baker, 2008)