East Asian Business Influence on Western Production and Business Organization - Essay Example

The paper "East Asian Business Influence on Western Production and Business Organization" is an outstanding example of an essay on business. This discussion will analyze how East Asian business has influenced business organization and production of western companies with specific attention to China’s Automobile or Car Industry.

Discussion

While various Western business organizations and productions are challenged and preparing for an austerity age, China’s automobile industry is experiencing new prosperity and success, in its automobile production and currently challenging most established world industries. The foreign business has caused some advancement in Chinese automobiles. This also can be attributed to emission control and efficiency of fuel technology installed in China’s vehicles, (Norcliffe 2006, p.25). Foreign direct investment in the sector of Chinese automobiles has led to economic development and prosperity in the Chinese automobile industry. For instance, it has resulted in desirable, stable Chinese job opportunities for employees in the joint venture companies, and enormously improved overall economy mainly via spillovers into the fields and components of the sector.

Additionally, by having to meet the foreign-invested requirements of the joint venture, China’s suppliers of parts were a force to enhance the quality of their products, minimize costs and gain a crucial competitive edge as exporters.

Similarly, key East Asian automakers and crucial manufacturers have heavily invested in Chinese industry in a bid to attain a competitive advantage, for instance, General Motors, and others have moved their Center for the Asia Pacific to China. Similarly, General Motors and Honda have created china R and D headquarters and have started to make models of cars dominantly for customers in China. This has increased international demand for Chinese productions, improved the public image of the industry, enhanced Chinese production capacities, and enhanced the quality of Chinese automobile productions.

From the East Asian business, the Chinese automobile industry has benefited from modern car designs and new technological powers in the automobile industry. New technology has increased Chinese automobile production, capacity, and quality and product base.

Despite these positive influences, East Asian business has also created some negative impacts on Western production and organizations. For example, economists agree that foreign investment does not encourage new developments in the economy in western organizations because the FDI is likely to follow and not bring prosperity, (Harwit, 1995, p.45). Similarly, there is an inverse correlation between the formation of domestic skill and foreign investment in western organizations. Increased FDI levels are linked with reduced formation of domestic skills because foreign companies mainly supplant local providers of technology and minimize the requirement for further local innovation. For instance, statistics show that FDI in China’s automobile industry has lowered the domestic Chinese technological creativity incentive in the car industry, and this may reduce the economic prosperity in the end.

The foreign business makes some of the local Chinese automobile producers to major foreign markets. Similarly, some of the joint ventures aim at enhancing their car quality and prices but some protection of tariffs remains. Therefore, for some of the manufacturers in China, the image is not good, as they cannot compete in the local market against joint venture companies. Therefore, if some of the local automobiles industries collapse; significant loss of jobs and dislocations of labor markets could result, (Norcliffe 2006, p.35).

Foreign interference has also raised concerns about the standards of safety and quality of manufactured components of automobiles of China because some customers feel that such productions are of low quality and less durable compared to other western countries' production. This reduces the production base and organizational image of the country.

Conclusion

In conclusion, therefore, the success and failure of the Chinese automobile industry depend on the type of influence gained from East Asian business because the influence is accounted for establishment, innovativeness, and sustainability of the industry.