Management Problems in Japan-Taiwan Joint Venturesin Taiwan: An Analysis of Qualitative Data

Hiroyuki Nishihara
Department of International Business
Meiji Gakuin University
13-01

Hiroyuki Nishihara
Professor, International Management, Department of International Business
Faculty of Economics, Meiji Gakuin University

Full address and contact information:
Address:
Meiji Gakuin University, 1-2-37 Shirokanedai, Minato-ku, Tokyo 108-8636, Japan

Telephone: +81-3-5421-5206 or +81-3-5421-5330 / Fax: +81-3-5421-5207
E-mail: nishihr@eco.meijigakuin.ac.jp

Management Problems in Japan-Taiwan Joint Ventures in Taiwan:
An Analysis of Qualitative Data

The purpose of this study is to clarify management problems in Japan-Taiwan
joint ventures. Data for this study was gathered using a questionnaire. Valid returns
were obtained from 24 companies, of which three quarters were in the
manufacturing sector.
The survey results indicated many factors which influence how eff ectively
Japan-Taiwan joint ventures can operate. For example, the macro environment,
differences in working philosophies between Japan and Taiwan, and interactions
with the Japanese parent companies and Taiwanese partners. Suggestions from thisstudy include improving cooperation with Japanese parent companies and theimportance of implementing effective management localization in Taiwan.

Key words:
Japanese parent companies, Japan-Taiwan joint ventures, qualitative data, Taiwanese
partners.

11 Introduction
The 21 st century is called the “Century of China”, or “Pax Sinica”. People wholive in developed countries like Japan cannot pass their daily lives without using
imported goods from China (Shu 2003). In recent years, Taiwanese enterprises haveincreasingly begun to participate actively in the Chinese economy.
This study focuses on Japanese joint ventures with Taiwanese partners in
Taiwan. The purpose of this research is to make clear the management problems inJapan-Taiwan joint ventures (subsequently abbreviated as JTJVs), and givesuggestions to help overcome these problems. Moreover, the results from this study will
be useful for research not only relating to Japanese companies cooperating with Taiwanese
partners, but also Japanese companies cooperating with Chinese partners in the Chinese
economic area.
At the present time, more than one thousand Japanese affiliated companies have been
established in Taiwan. Some of these companies are JTJVs that cooperate with Taiwanese
partners. The reason for this high number is largely because Japanese companies find it
comparatively easy to find Taiwanese partners who understand the Japanese language andhave some knowledge of the economic and cultural conditions in Japan (Nishihara 1999).
However, some JTJVs suffer from significant management problems. In addition, many
companies have not realized the performance they expected. This has led to a small numberof JTJVs actually withdrawing from the Taiwanese market completely (Liu 2001).
A major factor in management problems in JTJVs is the sudden and veryfrequent changing of the macro environment in Taiwan. The way companies work inthe modern world is changing. Companies such as those promoting automation andinformation network technology are having an enormous impact in changing theworking environment and job content for all workers in Taiwan. Japanese overseas
affiliated companies, which include Taiwan and other Asian countries, have not
managed to solve their own management problems over the last few decades(Hayashi 1994). In clarifying these problems in JTJVs, this study should take into2

account the micro environment within these companies. Furthermore, JTJVs areoften just a part of larger international joint ventures. Therefore, this study must also
consider the management systems of their parent companies.

2 Literature Review
2.1 Management environmental factors
One of the major factors which has influenced problems in JTJVs is the
management environment within the companies themselves. The importance of thisenvironment is introduced in the “Management System Model”, which is a field ofinternational business and comparative management (Ishida 1985, Chen 1998).
This study focuses on international joint ventures that are established by
Japanese parent companies cooperating with Taiwanese parent companies or partners
in Taiwan. So, partially modifying the Management System Model introduced above,
this study adds a new category called “parent companies and local management
partners”. The factors relating to the management environment in this study are
categorized as follows:
1) The macro environment, which includes all external factors that cannot be
controlled by the company. For example, the political and economic state of thecountry, the culture and society, legal regulations, and other factors which relate tostake-holders in the company and their groups.
2) Parent companies and management partners.
3) The micro environment, which includes factors in an organization's immediatearea of operations that affect its performance and decision making freedom. For
example, the attributes of the JTJVs, the managerial resources of these companies,
and management or organizational strategies which relate to these companies.
According to the Management System Model, management principles,
strategies, and operations are all influenced by environmental factors . This study3

surveys any existing statistical data or literature which relate to the factors which
affect the management environment in JTJVs in Taiwan.

2.2 Macro environment
The history of Japanese companies emerging in Taiwan originates from theJapanese colonial era. These companies were set up on the basis of being “joint
ventures”, which is when two or more existing businesses agree to co -operate andcombine their resources with a view to making a profit (Takahashi 1937, Zhang 1985).
After World War II, foreign direct investment of Japanese companies took
advantage of the fact that the Taiwanese government established “export processing
zones”. These were areas where trade barriers were eliminated with the aim ofstimulating foreign investment. An export processing zone was located in thesouthern part of Taiwan after the middle of the 1960s. Foreign direct investment ofJapanese companies into Taiwan rapidly increased in the beginning of the 1970s(Suzuki 1994b, Ishida 2004). The year 1972 is referred to as “The first year for foreign
direct investment by Japanese companies”. In those years, the trend for Japanesecompanies establishing joint ventures in Taiwan and cooperating with Taiwanese
partners became more and more frequent (Ueno 1990).
The boom in Japanese companies emerging in overseas markets occurred after
the Plaza Agreement in 1985. Therefore, 1986, the year after the Plaza Agreem ent, isreferred to as “The first year for global management of Japanese multinational
companies” (Ikemoto et al. 1990, Ito 1997, Yoshihara 1997). However, after the end of
the 1980s, labour costs rapidly increased in Taiwan. Foreign direct investment in
manufacturing, such as cheap, labour-intensive industries, shifted from Asia’s NIEs
to the ASEAN countries and mainland China (Horaguchi 2002, Shiraki 2005, Liu
1997).
Moreover, the Japanese bubble economy collapsed in the 1990s. This resulted
in a decrease in the growth rate of foreign direct investment into Taiwan from4

Japanese companies. Furthermore, direct investment of Taiwanese companies inmainland China rapidly increased. At that time, a very popular topic of discussion
was the social problems in Taiwan caused by its de-industrialization (Keidanren2002).
Around the 2000s economic growth in Taiwan became stagnant. Rates of
unemployment became worst. In contrast, mainland China had grown rapidly as theworld’s manufacturing centre. After the millennium, mainland China and Taiwan
joined a WTO agreement. At the same time, the ASEAN countries positively
promoted Free Trade Agreements and Economic Partner Agreements with othercountries, such as mainland China, the EU, South Korea and others (Ministry of
Economy, Trade and Industry 2011).
Since 2008, the present government has become concerned over the lack of atruly borderless economy in Taiwan. Moreover, the government would like to get ridof any political tensions between China and Taiwan. Taking advantage of a common
point of culture and language, the present Taiwan ese government is eager to promote
the Economic Cooperation Framework Agreement (ECFA) with mainland China.
The macro environment in Taiwan has been mentioned above. Of the newly
industrialized countries, Taiwan has one of the biggest changeable macro
environments. Despite this, for most Japanese manufacturing companies the purposeof forming partnerships in Taiwan is to utilize its labour power and human resources.
However, in the last two decades the cost of labour has risen with economic growth.
Because of this, JTJVs are likely to have large management problems, which are
related to these macro environmental changes, in the years to come.
In addition to the problems mentioned above, local areas in Taiwan might
impose restrictions on Japanese companies. These may include requiring a raise up
for local industries, recruiting local employees, transferring technology to Taiwan,
respecting the local culture, social customs, protecting the environment, andtransferring management resources to Taiwan（Ogawa and Takahashi 1992, Interchange
5Association, Japan 1994, Institute of Developing Economies 1991）. These may provide
formidable challenges for JTJVs in the future.

2.3 Management problems related to the parent companies and Taiwanese partners
According to previous research into international joint ventures, management
resource support from parent companies is vitally important for maintaining theircompetitiveness in emerging countries and areas (Gerlach 1991, Lewis 1993). Even
though they are independent from their parent companies, through cooperation,international joint ventures can gain a larger bargaining power for the acquisition of
resources. International joint ventures can also obtain a competitive advantage
because they have a more global point of view (Steensma and Lyles 2000). Despite
these advantages, the following paragraphs focus on management problems in JTJVs
which have been previously reported in the literature.
A worrying issue for joint ventures occurs when the parent company has
different purposes and expectations to their partner’s. This is especially the case forinternational joint ventures, because the two companies come from two different
countries. They do not, therefore, share the same cultural background, and so are
more likely to have differing views relating to, for example, the drive for profit, themotivation to work hard, or the appreciation of quality (Harrigan 1987, Collins andDoorley III 1993).
At the beginning of their business relationship, both of the participatingcompanies should make sure that they agree on the purpose and profit forestablishing the international joint venture with each other. However, sometimes
conflicts occur between parent companies. In short, research has indicated that the
management of international joint ventures is not so easy (Muramatsu 1991, Takeda
and Shimada 1994, Killing 1983, Geringer and Hebert 1991, Reece 1998). Some of theanxiety issues in JTJVs arise because of the perceived existence of a managerial gap
6

between the Japanese parent companies and their Taiwanese partners. Between thetwo countries there are big differences in management principles, philosophies,business practices, and business customs. Furthermore, problems can arise becauseof Japanese parent companies withdrawing their investment from the joint ventures(Ichimura 1992).
Typical characteristics of company management in the Chinese economic area,
including Taiwan, are as follows: They tend to follow a hereditary system, where
blood relationships are of great importance (Cheng 1998). One disadvantage of this isthat other, more able, employees cannot get promoted, and end up leaving to findemployment elsewhere (Ogawa and Takahashi 1992, Japan Academy of Small BusinessStudies 1994). Anothre reason for Chinese management problems is that they tend tobe ambiguous. They also often confuse investing in a company to make a short term
profit with managing a company for long term gain.
Japanese and Chinese people, including Taiwanese, are from the same ethnic
background and use the same Chinese characters for writing. However, they are very
different in their philosophy of life and sense of value (Ishida 1985). Regarding
Chinese partners, some studies have indicated that they still have an old-fashioned,
conservative sense of management. They also tend to avoid long term investment
risk, and sometimes lack in business morals (Ichimura 1992, Ogawa and Takahashi 1992,
JASBS 1994). Furthermore, another study indicated that Chinese management ofcompanies tended to be weak and unstable (Ichimura 1992).
Some management problems in JTJVs might be related t o the support systemused by Japanese parent companies. For example, Japanese parent companies sendout expatriates and these people might be unsuitable to communicate with thecompanies in Taiwan. Furthermore, the number of overseas businesses linked toJapanese companies has grown rapidly in recent years, and so the supply of
expatriates from Japanese companies is in shortage. Moreover, expatriates fromJapanese companies might require a greater knowledge than before, because of the7extra demands of internationalization (Ishida 1985, Imanishi 1990). Therefore, thisstudy proposes that Japanese affiliated companies overseas feel that their Japaneseparent companies are not doing enough in terms of human resource support. Also,
Japanese expatriates are seen to not have a sufficiently long period for their
expatriation. They are not able, therefore, to adjust to the local and cross-culturalenvironment before having to return to Japan (Nagai 1999, Black et al. 1991, Zeira andBanai 1987, Ashamalla and Crocitto 1997).
On the other hand, management problems in JTJVs are also related to notsupporting the management resources of the Taiwanese partners. In newly
industrialized counties it is not easy to investigate business information and thefinancial status of local companies and partners (Ogawa and Takahashi 1992, ASEAN
Center 1990). Therefore, Japanese companies might have found it difficult to selectgood Taiwanese business partners in those years of industrialization (Ichimura 1992,
Hori 2000). As a result, research has indicated that some Japanese parent companies
have been suspicious about the management abilities of their local partners. This
study aimed to find management problems in JTJVs relating to the support systems
used by the parent companies.

2.4 Management problems in JTJVs in terms of their organization
Many of the management problems in Japanese companies emerging in Asia
relate to local managers and employees. For example, some research has shown thatthey can lack a feeling of belonging and loyalty for their companies, and that thiscan lead to frequent job-hopping (Ishida 1999, Nishihara 2005, Ichimura 1990). These
management problems have taken place commonly in newly industrialized countries（Ishida 1985, Ishida 1999, Ueno 1990, JOEA 1994). Japanese affiliated companies havenot been able to effectively carry out management localization in t hese areas. This
study stresses that management problems in Japanese affiliated companies occur
because localization of a manager class has been inadequate, and insufficient to8

generate empowerment in their organizations (Imanishi 1990, Yoshihara 1997).
If management localization is not effectively implemented in affiliatedcompanies overseas, Japanese expatriates have to take a leading role in managing
these companies (Shiraki 1999). Management in overseas locations, which are oftenvery different culturally and environmentally, is a big burden for these Japanese
expatriates. Furthermore, having a foreign manager come to direct the business often
leads to a decline in the job morale of the local managers and staff. This, in turn,results in them having a lack of loyalty for their companies.
A better strategy is to employ able local managers and employees who do notleave their jobs and who are more motivated to work for their companies. However,Japanese affiliated companies have so far found it difficult to implement effective
management localization.
Following the borderless economy, overseas subsidiaries, including JTJVs, areplaying an increasingly important role. Making clear problems related to humanresource management in overseas Japanese companies a nd finding out solutions tothese management problems is urgent.

3 Methodology
In order to find suitable companies as samples for this study, two books which listed
Japanese affiliated companies overseas were referred to (Toyo Keizai Shinpo 2006, Nikkyo
Tsushin 2004). In total 1,204 companies were mentioned. This study selected only those
JTJVs which have Japanese parent companies and Taiwanese parent companies or partners.
Moreover, this study made sure that the respondents to these questionnaires were from seniorJapanese managers of these companies.
When considering how to make a suitable questionnaire, a number of factors werebalanced. For instance, the questions should not relate to too specific an area of JTJVs, as
this may miss out important information which could otherwise be gained. Furthermore it
9was felt that making the questionnaire short would likely result in a larger number of
respondents. Therefore, for the recipients of the questionnaire to be able to express theiropinions widely, freely and concretely, this study adopted a free answer questionnairemethod. The contents were as follows:“Please write freely. As a senior manager of a company, please describe andlist the things which cause you anxiety. What are the management pro blems
related to local government authorities, Taiwanese managers and employees.
If you belong to a joint venture, please also discuss your local partners”.
The questionnaires were delivered on the 14th of May 2007 and were requested
to be returned by post no later than the 15th of June 2007. The anonymity of all thecompany names was ensured.

4 Data Analysis
4.1 Attributes of the participants
Statistics relating to the JTJVs which responded to the survey are shown in
Table 1:Attribute
Value
Number of distributed questionnaires 1,204 companies
Number of valid returns
24 companies
Average number of employees
240 people（standard deviation）（605）
Range in employee number（maximum‐minimum）（3,000 - 8）
Average time since being established 23 years
Total number of items
65 items
Average from each company
2.7 items
Maximum-minimum (range)
8-1(7)
2 items (9 companies)
Mode of items （number of mode）
Table 1: Statistics of questionnaire results.

Furthermore, a breakdown of the different industries of the various companies is10presented in Fig. 1.

Figure 1: The industries of the companies which took part in the survey.

It was found that manufacturing companies made up three quarters of the total number(24).

4.2 Analysis of questionnaire results
Because the questionnaire is answered freely, this study might get various kinds of response.
The procedure for analyzing this qualitative data is described in the following steps:
1) Check the questionnaire was valid. That is, the answers had been given by asenior manger in a suitable type of company.
2) Parts of answers not related to JTJVs were discarded.
3) The contents of the answers were analyzed sentence by sentence. Thisobtained a list of unique points, which are referred to as “items”.
4) Using the K-J method (Kawakita Jiro method), these items were categorized.
Each category was then subdivided into smaller groups. If a similar item wasmade by two different companies then they were combined and the number oftimes mentioned was recorded.
11

5 Results
The results from this study are show in Table 2 below. They have been divided into
five categories: 1) macro environment, 2) Japanese parent companies, 3) Taiwanese partners,
4) cross-cultural (Taiwanese-Chinese) management issues, and 5) organization andpersonnel management.

Table 2 Outline of the results［total number of items: 65; number of valid questionnaires returned: 24］
1) Macro environment：eight items
Public-administration, law, local rule etc…
 The Taiwanese government has, to some extent, improved.
 Regarding administration, the situation is very bad.
 The reforming of the retirement pay system, the transfer pricing taxation system,
the examining of the SOX (Sarbanes-Oxley) Act, and the law for re-hiring retired
employees have all put pressure on company management.
Joining international organizations
 After the AFTA+3 (ASEAN Free Trade Agreement which also includes three
additional countries: China, Japan and the Republic of Korea) Agreement,
Taiwan’s global position has become unclear because it is not a part of this treaty.
 After joining the WTO agreement in 2002, the agricultural industry had become
more competitive. Moreover, this industry is no longer protected by thegovernment, and so the market has begun to shrink.
Inter-enterprise competition.
 There has been an opening from isolationism in international economics, andChina is very eager to absorb ideas from other cultures. In terms of technology andknow-how, Taiwan will be surpassed by China in the near future.
 Competition has increased.
 The agricultural market has been in recession in T aiwan
122) Japanese parent companies: 6 items
Communication with Japanese parents
 Japanese parent companies take a long term view, and carefully consider
future profits.
 Depending on the situation, in difficult times Japanese parents can accept
some self-sacrifice.
 A Japanese senior manager commented that it was easier to communicate
with his Japanese parent company than with the Taiwanese partner.
Commitment of local management
 The level of requirement and expectation from the Japanese parent
companies is higher than the real ability of the JTJVs.
 The parent companies have to solve problems with Taiwanese subordinates.
 The attitude of Taiwanese employees was that they had no difficulty incopying and imitating, whereas Japanese parents had to take some
responsibility with respect to international copyright and patent laws.
3) Taiwanese partners: 14 items
Differences in management principles between Japanese parents and Taiwanese
partners.
 There is a big difference in management principles between Japanese parents andTaiwanese partners.
 The cultures are different between Japan and Taiwan, and this made cooperating
difficult.
 There is a big difference in the understanding of business policy in JTJVs.
 Because of the Taiwanese management style, making Taiwanese partners
understand the differences in business customs and values is difficult. Thissituation was disadvantageous for the company.
The attitude of the Taiwanese partners was as investors
 The attitude of the Taiwanese partners was that they were not managers, but only
13

investors. There is a different idea of how to divide up the profits between the
Taiwanese partner and the Japanese parent company [this was mentioned 4 times
by different companies]
Management of Taiwanese partners.
 Taiwanese partners had an almost cold-hearted view of the companies themselves,
services and goods, and their employees.
 Taiwanese partners felt that the guidance and coaching from Japanese parents for
subordinates in Taiwan might threaten their vested rights.
 The attitude of the Taiwanese partners was that they found it difficult to accept theadvice and guidelines given to them from their Japanese parent companies.
 In one case, a JTJV trusted a local manager, but he acted independently and took
management resources and used them for himself. This is a typical example of the
management culture in the Chinese economic area, including Taiwan.
4) Cross-cultural (Taiwanese-Chinese) management issues： 9 items
 There is a good feeling on a personal level, because Taiwan is a pro –Japanese
area.
A

lot

of

management

problems

occurred,

such

as

management

irresponsibility, organizational operation etc...
 The Taiwanese style of management, which is similar t o the Chinese style,is very slow moving.
 Relating to the copy and imitation culture, there is a lack of creativity [thiswas mentioned by three companies].
 Taiwanese companies cannot go beyond the copy and imitation world.
Taiwanese are very old fashioned and conservative. From a Japanese pointof view, Taiwanese have only made copies and imitations, and they lackcreativity. Because of this, Taiwanese think of themselves as followers
rather than leaders.
 Taiwanese have confidence in themselves, but with out using principles or14

basic rules.
 It is very difficult to change the peculiar business ideas and way of
Taiwanese thinking, which has been acquired from their relations hipswith Japan, Europe, and America over a long period of time.
5) Organization and personnel management: 22 items
Information and communication
 Reporting rules are ambiguous in the organization, and the company needs
to re-organize itself. In some departments, there is a lack of information
sharing and unification.
 Taiwanese employees do not obtain enough information from local staff.
 The Japanese phrase “Hou, Ren, Sou” is translated as “reporting, informing,and consulting”. This means that employees should report their progress totheir colleagues or boss, inform them of any developm ents, and consult withthem if they need help. This type of business practice is limited among
Taiwanese staff.
Differences in language
 Taiwanese employees sometimes express their opinions based on wrong
information because they had not properly communica ted with their
Japanese headquarters.
 One reason for management problems is a combination of a difference inlanguage coming up against a difficulty in understanding between Japaneseand Taiwanese cultures.
 Japanese has not become understood in the compan y.
Employees
 Taiwan is a typical society which sets a very high value on the academic
career of an individual rather than his or her real ability.
 Qualifications do not necessarily help people to work in a company.
 Japanese companies are not so interested in the academic qualifications of15

their employees. They prefer people who have a sense of craftsmanship andwork hard to do a good job.
 Local managers and employees have no overall plan for personnel training
and education. Therefore, the differences in individual ability are very
marked.
 There is a shortage of able employees in Taiwanese companies.
 A small group of able workers have a big burden of responsibility. On theother hand, the other local employees share the more menial, easy tasks.
 Although one respondent to the survey did not mean to look down upon
Taiwanese business people, they stated that they were sometimes surprisedthat Taiwanese found it difficult to do even simple tasks.
 The lack of foundation educational, which comes from cultural diffe rences,might be the origin of problems in Taiwan.
Job attitudes
 Individualism exists very strongly in Taiwanese managers and theiremployees. There is a lack of cooperation and ability to plan.
 Taiwanese workers tend to cope well with routine jobs. However, they are
not so open to change and do not react positively to new jobs.
Management successors and personnel management
 Successors to local senior management had not been grown in the company.
 The company limited to increase its number of employees. The Japanese
senior management felt it indispensable to grow a successor with technicalknowledge and know-how. However, the situation was found to be difficult.
 One company had a female vice-president. Because of her way of thinking,she could not become a successor to the company.
 Personnel management in the organization is troublesome and full ofanxiety.

16

6 Discussion
This study received 24 completed questionnaires from senior managers of JTJVs.
These companies have been established for an average of more than twenty years in Taiwan.
Therefore, this study has received comments from abundantly experienced international
business people. This is vitally important data for understanding the situation for JTJVs.
Moreover, by making clear the management problems in JTJVs in Taiwan, this study has
found some common points of view with former research into cross-cultural management.
One important result from this study is that some of the new laws, rules and acts
currently being implemented might put pressure on JTJVs. In July 2005, the reforming of theretirement payment system was set out in the Labour Pension Act in the Taiwan area
(Bureau of Labour Insurance 2004). As a consequence, it is now necessary for companies toreserve payments for this.
In relation to retirement, the Labour Standard Act in Taiwan was amended in May
2008, and the compulsory retirement age has been extended from sixty to sixty five years old.
This Act has been adopted since January 2009 in the commerce industry. Therefore,
Japanese affiliated companies have had to prepare and adapt for these changes.
According to the transfer pricing taxation system, the Taxes Agreement Policy in
Taiwan, which has the purpose of avoiding duplicate taxation and tax evasion, has been
based on the OECD (Organisation for Economic Co-operation and Development) model.
Japan and Taiwan signed up to an agreement which came into effect in 2009 in theinternational marine and airline transportation industries. Institutionalizing of the transfer
pricing taxation system between Japan and Taiwan has progressed in this respect (Taxation
Agency, Ministry of Finance, R.O.C. 1990).
An examination of the SOX Act (the Sarbanes-Oxley Act) in Taiwan shows it has notbeen institutionalization at the present time. However, a major international audit
corporation noted that Japanese parent companies had adopted J-SOX, and affiliatedcompanies overseas are not exempt from this (PricewaterhouseCoopers International
Limited 2011).
17

The Japanese Ministry of Foreign Affairs indicated that AFTA+3 was its highest
priority for the Japanese Free Trade Agreement (FTA) strategy (Ministry of Foreign Affairsof Japan 2011). On the other hand, although Taiwan is not a member of AFTA+3, it does
belong to the WTO. However, it will not get a big profit from the FTA agreement between
Japan and Taiwan. So, based on the requirements of private business and economics, Japanand Taiwan will try to strengthen and concrete their economic relationship. Moreover, thepresent government of Taiwan would like to catch up with the current trend of economic
agreements in East Asia. For instance, it would like to promote the ECFA (Economic
Cooperation Framework Agreement) with China for its own economic benefit (Bureau of
Foreign Trade 2009).
A second result from this study showed that the level of requirements andexpectations from the Japanese parent companies were higher than the real abilityof the JTJVs. Moreover, one JTJV indicated that companies have to solve
problems between Japanese parent companies and Taiwanese subordinates.
From the Japanese parent company’s point of view, because of the current
trend towards a borderless economy, overseas companies, which include those in
Taiwan, have become more and more important. As this happens the burden on thesecompanies, particularly in terms of sending Japanese expatriate managers, will
become increasingly great（ Ishida 1999, Imanishi 1990). On the other hand, a shortagein understanding and a perception gap of the management in these companies is oneof the main management problems. In some cases, adjustments in the relationshipbetween the Taiwanese partners and their Japanese parents is the responsibility of seniorJapanese managers in the company.
A third result from this study, relating to Taiwanese partners , indicateddifferences in management principles between Japanese parents and Taiwanese partners.
A characteristic attitude of Taiwanese partners is that they regard themselves not as senior
management, but rather as investors. Taiwanese partners consider only their share of the
profit. Moreover, they pursue immediate profit rather than taking a more long term view.
18

Taiwanese partners were reported to be almost cold-hearted towards the companies
themselves, services and goods and their employees.
A fourth result from this study related to cross-cultural “Taiwanese-Chinese”
management. This study found evidence for a lot of problems related to management
irresponsibility, and ineffective organizational operations. Also, although Taiwanese tend
to have a fast pace for their daily lives, the Taiwanese style of business, like China, tends
to move very slowly. Moreover, in Taiwanese businesses, better time management
and expressing more care about issues might be effective approaches to take.
Regarding issues related to copying and imitation, there is generally a lack ofawareness in the Chinese economic area (including Taiwan). After joining the WTO,
illegal copying has been restricted. The situation, however, has not attained thelevel of regulation in Western countries. Punishment within companies themselves
might be an effective way to deal with these problems. Also, only copying andimitating other people’s work is not a good long term business strategy. It is betterto build the uniqueness of a company’s brands as a way to strengthen it for the
future.
No evidence from this study was found for employees lacking in loyalty to theircompanies and job hopping (Suzuki 1994a, Suzuki 1994b, Nishihara 2005). These
management problems have often been indicated in previous research into Japanesecompanies in Asia.

7 Limitations
The limitations of this study are as follows:Firstly, comparing this research to others in the literature, it is possible to findmany different points of views. All of the companies in this study have specificdifferences such as emerging purpose, industrial sector, status of capital ratio etc...
In identifying management problems, this study should really also consider these19micro environmental factors.
Secondly, this study adopted a free questionnaire method. A lot of thequestionnaires were not filled in, but this does not mean that the se companies had no
management problems. In other words, the questionnaire method is limited by thewillingness of companies to discuss their problems openly.

8 Conclusions
This study has made clear some of the management problems faced by JTJVs. From
this, it can be proposed that it is timely for companies to reassess the strengths andweaknesses of working in Taiwan.
The results from this research showed a variety of macro and micro environmental
difficulties, some of which reinforced the same ideas which have been written about
in the literature for several decades. Firstly, this study identified problems related to
Taiwanese partners. According to the theory of partnership in international joint ventures,
learning with each other is the best attitude to take（Collins and DoorleyⅢ1993）. If
Japanese parent companies expect their Taiwanese partners to manage themselves
effectively, they have to recognize that bringing up the standard of Taiwanese coremanagement is important. This is a contribution they have to make to the industry in
Taiwan. Carrying out this idea might be beneficial for both companies. In addition, it isindispensable for the Taiwanese partners and senior Japanese management to work together
for the mutual success of their international joint venture.
Secondly, important results

from

this

study related tocross-cultural“Taiwanese-Chinese” management. This study strongly recommends that Japanese
senior managers in Taiwan should study the political and historical background of therelationship between Japan and Taiwan.
Thirdly, regarding language differences, Taiwanese are generally eager tostudy Japanese as a foreign language. Large sized Japanese affiliated companies
20

often support local managers and employees studying Japanese language. Moreover,this study recommends that for cooperating with Japanese parent companies, JTJVs
should promote Taiwanese who have studied abroad in Japan. They understand not
only the Japanese language, but also have a feeling for how Japanese society works.
They would help to support the developing markets not only in Taiwan, but also in
the Chinese economic area in the near future. Therefore, these companies will be at
an advantage from a human resources point of view.
Fourthly, this study gave results relating to local managers and employees, job
attitudes, and management successors. The JTJVs in this study have to adopt not
only a supplemental personnel management, but also promote candidates for senior
managerial positions in the long term. The energies of the companies have to be
devoted to the training and educating of their local managers and employees.
Therefore, the companies should show their senior managers the way in which theyshould behave. Moreover, the companies have to make personnel evaluations fairand impartial. By promoting management localization, the companies must develop
suitable candidates as successors to the business. By cooperating with their Japaneseparents, JTJVs should give local managers opportunities and roles in overseas
activities. The companies have to promote Taiwanese managers as successors or
local partners in the future.
Finally, JTJVs in Taiwan have many advantages. Their location allows easy
access to the Chinese economic market and other Asian markets. Also thesecompanies have human resources that have the ability to adjust flexibly to thechanging macro environment in this region.

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