Technology transfer to China

Many multinationals have transferred parts of their production network to China, with global sourcing and R& D, at least in parts, to follow soon. Given China's low level of intellectual property rights protection companies are subject to expropriation of their product and manufacturing technologies. Headquarters fears that once the intellectual property is drained off to Chinese competitors a long term competitive threat may arise not only within in China but also on a global scale. The Chinese subsidiary management of the multinational corporation is dependent on technological resources in order to master the increasingly dynamic competitive landscape in China and to fulfill growth and profit expectations set by headquarters. Chances are that this conflict of interest between headquarters and subsidiary has a negative influence on the sustainable competitive advantage of the multinational corporation. This book presents the results of a research project conducted by the WHU Asia Center that involved numerous German multinational corporations and their Chinese subsidiaries. The objectives of the research project are (1) to gain an understanding of the conflict situation between headquarters and subsidiary, especially of the Chinese business environment regarding technology expropriation, (2) provide a framework that both theoretically and from a management perspective helps to identify situations of latent and manifest conflict, including a tool box for determining vulnerability of technology to expropriation, (3) develop conceptual and practical approaches to conflict management and prevention for coordinating subsidiaries and motivating its management, (4) give insights from theory and multinationals’ best practices on how to manage technology transfer to China or similar emerging markets.