Wyoff and China - LuQuan: Negotiating a Joint Venture (A)

Through stalled joint venture talks between Pennsylvania-based Wyoff Corp. and Jina-based China-LuQuan, strategic and cross-cultural negotiation challenges are explored both from American and Chinese perspectives. Wyoff, a leading US chemical company has been seeking ways to secure the company's foothold in China's emerging market since the late 90s. When approached by China-LuQuan in 2000, a major Chinese state-owned chemical producer for a joint-venture opportunity to make a popular chemical catalyst in China, Wyoff, Leveraging its superior technology, demanded one-sided terms and played hardball, ruining both the deal and the relationship with China-LuQuan. Seven years later in 2007, Wyoff faced market pressure to again seek a joint venture with China-LuQuan on two other types of products. Both parties had to overcome past distrust to work things out on a series of strategic issues: investment, product slate, marketing, technology, management, organization, staffing, etc. In the negotiations, cross-cultural themes (e.g. trust, relationships, communication, time, autonomy, face, etc.) and different negotiation styles created challenges along with the business and strategic issues. The (A) case sets up the negotiations, highlights issue impasses, explores cross-cultural frictions, and poses tactical challenges. The (B) case describes the strategies, tactics, and results of these negotiations.