Student Name Scott Erskine Course Name Culture and Ethics in Business Lecturer Dr Andrzej Gwizdalski Assignment Number 3 Assignment Name Individual Analysis: Due Date 5th June 2016 Date Submitted 5th June 2016 Word Count 2349 words   TABLE OF CONTENTS 1.00 – INTRODUCTION 1 2.00 – HOW CHINESE CULTURE AND HISTORY INFLUENCES INTELLECTUAL PROPERTY RIGHTS VIEWS 3 3.00 – THE CHALLENGES FACING THE GLOBAL MANAGER 4 4.00 – DEVELOPING A GLOBAL UNDERSTANDING 6 5.00 – CONCLUSION 8 REFERENCES 9 APPENDIX 11 APPENDIX A – CHINA’S SELF-DEFEATING CLAMPDOWN ON MULTINATIONALS 11 APPENDIX B – THE IP PROTECTION WEB 13   1.00 – Introduction When the Chinese Government introduced their “Open Door” policy in 1978 one key objective was to encourage foreign investment into China. Due to the lack of in country development it became essential that they modernize all areas of their industry, “If a company has a low level of in-house operational capacity, the company can only own or use mature technology which is often found from other technical sources (Chen. X, C. Sun; 1999; p354). Within a short time multinational enterprises (MNE)began scrambling to obtain a foothold into a country that they had been previously excluded from and had 1 billion potential consumers. But what these MNE’s failed to realize was that the laws that had protected key components of their business in many other countries, including Trademarks and Intellectual Property were not provided in China. When MNE’s began to arrive in China they quickly discovered that Trademark laws were based on a strict “First to File” policy and for some MNE’s there trademark had been previously registered without authorization (Dittrich, Kurt P., Stanton J. Lovenworth; 1996). As part of China’s requirement to join the World Trade Organization (WTO) they modified their laws in this area allowing for immediate recognition of MNE trademarks and then made further modifications to cater for international trademarks that were well recognized by the Chinese public however the “First to File” system continues to be applied for all other trademarks. Although the loss of trademark could potentially cost company’s billions of dollars there is potentially a greater risk that these companies are now facing in China according to the article “China’s self-defeating clampdown on Multinationals” (http://www.theage.com.au/business/china/chinas-selfdefeating-clampdown-on-multinationals-20160517-gows9c.html) and which I have used as the basis for this document. For MNE’swanting to gain access to Chinese consumers they are required to establish joint ventures with local Chinese companies (that are directly or indirectly owned by the Chinese Government) and then as part of these joint ventures, the MNE’sare required to deliver their IP technology to their Chinese joint venture company. When this happensMNE’sare finding that there is aIP leak which allows another Chinese owned company to manufacture the same goods at a substantially reduced price and it is these cheaper products which will then be sold to the Chinese consumers (http://www.theage.com.au/business/china/chinas-selfdefeating-clampdown-on-multinationals-20160517-gows9c.html). Within this paper I will consider why the Chinese believe that it is acceptable to use another person’s Intellectual Property and why they do not consider the need to pay for this Intellectual Property. Furthermore, Iwill investigate how these risks must be managed by a Global Manager when working for any company wanting to undertake a business venture into China. Finally, I will provide a personal conclusion based on all of the academic articles that I have read in regard to this subject.   2.00 – How Chinese Culture and History Influences Intellectual Property Rights Views The stealing of “a book is an elegant offense because society values an individual who strives for access to knowledge, which may cause it to pardon the offense” (Keupp, Marcus Matthias, Angela Beckenbauer and Oliver Gossmann; 2009; p211). When looking at traditional Confucius teachings the idea that one would fail to share knowledge in the hope that they could gain profitsis considered as being unacceptable as “profit had been seen as a characteristic of an inferior person (xiao-ren) who acts out of self-interest and not principle” (Lehman, John Alan; 2006; p6). Based on these tradition teachings it is understandable why “intellectual property is something that the Chinese do not generally recognize” (Creer, Greg; 2004; p220)as it is not theft but the sharing of knowledge which has been part of their culture for over 2000 thousand years. These cultural teachings,combined with the emergence of the Chinese Communist Party, who, under the rule of Mao Zedong, repealed all laws, including IP and mark protections when taking power in 1949 (Wong, Jessica C.; 2006)has meant that knowingly or unknowingly the Chinese returned to the teachings Confucianism by enforcing the belief that all intellectual ideas and associated knowledge was the property of the state and not the individual. For over 2000 years China has believed, even under the reign of communism that knowledge must be shared. After China implemented their “Open Door” the philosophy that knowledge was to be shared for the greater good of the people was considered unacceptable by MNE as their laws and traditions believed that this property is the rights or to be owned exclusively by the people or companies that developed knowledge.   3.00 – The Challenges facing the Global Manager “China aspires to be a technology powerhouse by 2020 and a global technology leader by 2050” (Schotter, Andreas and Mary Teagarden; 2014; p42). To meet these expectations China is forced to ignore the cultural beliefs and obtain the requiredknowledge either by joint ventures, strategic purchases of international companies or by industrial espionage.For MNE’s wanting to participate in China’s growth,IP and Mark protection has to be considered of paramount importance for “according to the U.S. Government, China accounted for nearly 80% of all IP thefts from U.S.-headquartered organizations in 2013 amounting to an estimated $300 billion in lost business (Schotter, Andreas and Mary Teagarden; 2014; p41). No company can expectto remain profitable if the 2013 estimated losses of IP theft continuestherefore, prior to contemplating any move into the Chinese domestic market MNE’s “will have to increasingly look for ways to redefine their strategies and realign their organization” (Kedia, Ben L., and Ananda Mikherji; 1999; p230) and include within these strategic plans a well-defined IP protection plan that must reviewed and updated on a regular basis, possibly even daily basis (Schotter, Andreas and Mary Teagarden; 2014). When establishing a joint venture with a Chinese state-owned enterprise there is a high probability that shared technology will be passed onto other state-owned competitors (Kennedy, Gabriela., Douglas Clark; 2006) and this technology will then be used to build an identical product at a cheaper price for the Chinese domestic market.There are examples of counterfeit factories being constructed and operated in China that are identical to ones that have been built by MNE’s, including one who filed for Chinese patents prior to the construction of their factory only to discover another fraudulent factory existing in China that was identical in every way (Keupp, Marcus Matthias., Angela Beckenbauer and Oliver Gassmann; 2009). There are also examples of counterfeit products being manufactured for the Chinese domestic market that are identical in appearance to well-known international products including the Range Rover Evoquehttp://www.motoring.com.au/land-rover-fuming-over-chinese-copy-47793/. When China introduced their “Open Door” policy in 1978 the laws for IP and mark protection was identical to most other developing countries, the “First to File” system. Although China has made continued improvement with IP legal protection the U.S. Government “continues to list China on the Priority Watch List, a list which identifies countries that do not offer adequate levels of intellectual property rights (IPR) protection” (Greene, Stephanie M.; 2008; p372). Stephanie M. Greene’s article has further detailed that China established a State Administration of Industry and Services (SAIC) that is responsible for the protection of well-known IPR’s and marks however the SAIC do not oversea their various provinces, cities or towns. The SAIC have established local divisions; called AIC’swhoand these local offices are responsible for the enforcing of these protections. As the AIC’s receive no income from this enforcement it is not uncommon for them to take “incentives” from local businesses to ignore trademark enforcements (Greene, Stephanie M.; 2008).   4.00 – Developing a Global Understanding “In the volatile world of transnational corporations, there is no such thing as a universal global manager” (Bartlett, Christopher A.,SumantraGhoshal; 1992; p102). It is impossible to expect that a single person is capable of developing a “viable global strategy, facilitate and develop supportive processes by which globalization can be managed and create appropriate conditions by which overall strategy, process, culture, and structure can be meaningfully aligned to achieve organizational effectiveness” (Kedia, Ben L., Ananda Mukherji; 1999; p230). According to the Bartlett and Ghoshal (1992) journal paper and referred to many others when investigating the role of the “Global Manager” the only way any company be prepared for moving into any international market would be by creating a Global Management Team. One critical component of Bartlett and Ghoshal (1992) Global Management Team is that it allows for the creation of a team that has a “flexible management process, in which business, country and functional managers form a triad of different perspectives that balance each other” (Bartlett, Christopher A.,SumantraGhoshall, 1992, p102). These 3 separate levels of specialist managerswill then allow for strategic planning so that the international move can progress. The specialist managers are (without in-depth definition) • Business Managers • County Managers • Functional Managers Once the Global Management Team has been established one of its first priorities will determine what IP knowledge is required for the international move and the potential risks to this IP. Until recently there had been no in depth published study on how this could be best completed with many studies indicating that the legal protection of IP in China was impossible as theassumption was made that the greatest offender in China was the Chinese Government. In 2014 Andreas Schotter and Mary Teagarden created an IP protection concept they called The IP Protection Web “that is based on a multiyear research project on intellectual property protection and innovative management practices in emerging markets, in particular China” (Schotter, Andreas and Mary Teagarden; 2014; p42). For any MNE considering entering an emerging market then this document must be foundation plan used to protect their IP knowledge. “The IP protection web consists of three interconnected layers. Strategic clarity forms the first layer, followed by legal fundamentals and business intelligence as the second layer. The inner layer consists of six operational practices that should be woven through the entire company” (Schotter, Andreas and Mary Teagarden; 2014; p43). By linking the Schotter and Teagarden IP Protection Web levels of operational practices with the Bartlett and Ghoshall Global Management Team it may be possible to begin to develop a protection strategy The IP Protection Web Global Management Team Externally Focused Defensive Practices 1. Develop Strategic Clarity Business Manager 2. Collect Business Intelligence Business Manager 3. Follow Legal Fundamentals Business Manager / Country Manager 4. Create Interest Alignment Country Manager Internally Focused Practices 5. Disaggregate Processes Business Manager / Functional Manager 6. Implement Control Discipline Business Manager / Country Manager 7. Create Dynamism Country Manager 8. Manage Human Resources Strategically Business Manager / Country Manager 9. Engage in focused Corporate Social Responsible Activities Business Manager / Country Manager Reconfigure IP Protection Practice Business Manager / Country Manager / Functional Manager (Please refer to Appendix B for an overlay of the IP Protection Web) The other possible solution, which one may consider to be radical and not included in any journal that was reviewed is based on the expression “If you can’t beat them, join them” (Unknown) Whilst China continues to manufacture counterfeit products at a substantially reduced price for their domestic market, the MNE’s will continue to receive no income for a concept that they conceived, tested and then manufactured for sale. A possible solution could be that the MNE considers a licencing agreement between the Chinese counterfeit manufacturer and themselves. Whilst Chinese businesses continue to make fraudulent products for their domestic market at a substantially reduced price and at a standard that is generally considered unacceptable by western consumers then the loss to the MNE will continue. By implementing a licencing agreement with these fraudulent manufacturers it will allow this Chinese business to build and sell the MNE’s product legally, under a different brand name to local Chinese market with the MNE receiving some level of compensation and allowing the MNE to receive some level of comfort that these items will not be sold outside of China and as they are sold under a different name there will be no association with their company.  5.00 – Conclusion “From the point of view of moral justification, the most important thing about any property right is what it prohibits people from doing” (Waldron, Jeremy; 1993; p842). But when considering China and Intellectual Property should the same philosophy apply?One of the most intriguing problems that have been experienced by MNE’s is the theft of their IP, but is it really theft? Is the problem another case of “East Vs West”? Personally, I believe it is impossible to change over 2000 years of culture and tradition in a period of less than 40 years which means that the theft of IP knowledge in China will continue regardless as to the number of the international agreements and laws that the west endeavours to force onto the Chinese population. Maybe MNE’s and their Global Managers need to think outside the box and consider a solution that is fair to all parties concerned. Some academics have suggested the implementation of a tax that is applied to western consumers to offset the costs of IP theft in China, but this will cause greater problems as western consumers endeavourto avoid such a tax by purchasing goods via the internet. Others academics, such as Schotter and Teagarden have suggested a complex system to protect IP however this could be rather costly to the businesses and in the long term does not guarantee the protection of IP. So what is the solution? Maybe MNE’s should approach the Chinese with a different strategy rather than beating the Chinese with the preverbal legal stick. Although the Chinese government will continue to try and police these laws, corruption at local province, city and town levels will continue to preventthe prosecution of the offenders. Should MNE’s be forced to be the © police in China, personally I don’t think they want to be placed into this position. As an aspiring Global Manager I believe that this problem needs to be addressed by considering Chinese culture and how this can be integrated in international IP and mark legal protection. As suggested is the implementing of a licencing agreement with Chinese manufacturers a solution or could there be other options that need to be investigated by the MNE’s and their Global Manager.  References Bartlett, Christopher A., and SumantraGhoshal, (1992), “What Is a Global Manager?”,Harvard Business Review, Aug 2003, Vol. 81 Issue 8, p101-108 Chen X., C. Sun, (1999), “Technology transfer to China: alliances of Chinese enterprises with western technology exporters”, Technovation 20, 2000, p353-362 Creer, Greg, (2004), “The International Threat to Intellectual Property Rights through Emerging Markets”, Wisconsin International Law Journal, 22, no1, 2004, p213-243 Greene, Stephanie M., (2008), “Protecting Well-Known Marks in China: Challenges for Foreign Mark Holders”, American Business Law Journal, Colume 45, Issue 2, Summer 2008, p371-398 Kedia, Ben L., Ananda Mukherji, (1999), “Global Managers: Developing A Mindset For Global Competitiveness”, Journal of World Business, 1999, 34(3), p230-251 Kennedy, Gabriela, Douglas Clark, (2006), “Outsourcing to China – Risks and benefits”, Computer Law and Security Report 22, 2006, p250-253 Keupp, Marcus Matthias, Angela Beckenbauer and Oliver Gassmann, (2009), “How managers protect intellectual property rights in China using de facto strategies”, R & D Management, (2009), Vol 39, Issue 2, p211-224 Lehman, John Alan, (2006), “Intellectual Property Rights and Chinese Tradition Section: Philosophical Foundations”, Journal of Business Ethics, 2006, 69, p1-9 Lovenworth, Stanton J., Kurt P. Dittrich, (1996), “Protection of Well Known Trademarks in China”, Journal of the Patent and Trademark Office Society, 1996, 78.3, p181-187 Schotter, Andreas and Mary Teagarden, (2014), “Protecting Intellectual Property in China”, MIT Sloan Management Review Summer, 2014, p41-48 Waldron, Jeremy, (1993), “From Authors to Copiers: Individual Rights and Social Values in Intellectual Property”, Chicago-Kent Law Review, 1993, Volume 68, Issue 2 Symposium on Intellectual Property Law, p841-887 Wong, Jessica C., (2006), “The Challenges Multinational Corporations Face in Protecting Their Well-Known Trademarks in China”, Brooklyn Journal of International Law, 2006, Volume 31, Issue 3, p937-976 http://www.theage.com.au/business/china/chinas-selfdefeating-clampdown-on-multinationals-20160517-gows9c.html accessed 21st May 2016 http://www.thelocal.se/20111107/37218 accessed 29th May 2016 http://www.motoring.com.au/land-rover-fuming-over-chinese-copy-47793/ accessed 29th May 2016   Appendix Appendix A – China’s Self-Defeating Clampdown on Multinationals   (http://www.theage.com.au/business/china/chinas-selfdefeating-clampdown-on-multinationals-20160517-gows9c.html) Appendix B – The IP Protection Web (Schotter, Andreas and Mary Teagarden; 2014; p43) Student Name Scott Erskine Course Name Culture and Ethics in Business Lecturer Dr Andrzej Gwizdalski Assignment Number 3 Assignment Name Individual Analysis: Due Date 5th June 2016 Date Submitted 5th June 2016 Word Count 2349 words   TABLE OF CONTENTS 1.00 – INTRODUCTION 1 2.00 – HOW CHINESE CULTURE AND HISTORY INFLUENCES INTELLECTUAL PROPERTY RIGHTS VIEWS 3 3.00 – THE CHALLENGES FACING THE GLOBAL MANAGER 4 4.00 – DEVELOPING A GLOBAL UNDERSTANDING 6 5.00 – CONCLUSION 8 REFERENCES 9 APPENDIX 11 APPENDIX A – CHINA’S SELF-DEFEATING CLAMPDOWN ON MULTINATIONALS 11 APPENDIX B – THE IP PROTECTION WEB 13   1.00 – Introduction When the Chinese Government introduced their “Open Door” policy in 1978 one key objective was to encourage foreign investment into China. Due to the lack of in country development it became essential that they modernize all areas of their industry, “If a company has a low level of in-house operational capacity, the company can only own or use mature technology which is often found from other technical sources (Chen. X, C. Sun; 1999; p354). Within a short time multinational enterprises (MNE)began scrambling to obtain a foothold into a country that they had been previously excluded from and had 1 billion potential consumers. But what these MNE’s failed to realize was that the laws that had protected key components of their business in many other countries, including Trademarks and Intellectual Property were not provided in China. When MNE’s began to arrive in China they quickly discovered that Trademark laws were based on a strict “First to File” policy and for some MNE’s there trademark had been previously registered without authorization (Dittrich, Kurt P., Stanton J. Lovenworth; 1996). As part of China’s requirement to join the World Trade Organization (WTO) they modified their laws in this area allowing for immediate recognition of MNE trademarks and then made further modifications to cater for international trademarks that were well recognized by the Chinese public however the “First to File” system continues to be applied for all other trademarks. Although the loss of trademark could potentially cost company’s billions of dollars there is potentially a greater risk that these companies are now facing in China according to the article “China’s self-defeating clampdown on Multinationals” (http://www.theage.com.au/business/china/chinas-selfdefeating-clampdown-on-multinationals-20160517-gows9c.html) and which I have used as the basis for this document. For MNE’swanting to gain access to Chinese consumers they are required to establish joint ventures with local Chinese companies (that are directly or indirectly owned by the Chinese Government) and then as part of these joint ventures, the MNE’sare required to deliver their IP technology to their Chinese joint venture company. When this happensMNE’sare finding that there is aIP leak which allows another Chinese owned company to manufacture the same goods at a substantially reduced price and it is these cheaper products which will then be sold to the Chinese consumers (http://www.theage.com.au/business/china/chinas-selfdefeating-clampdown-on-multinationals-20160517-gows9c.html). Within this paper I will consider why the Chinese believe that it is acceptable to use another person’s Intellectual Property and why they do not consider the need to pay for this Intellectual Property. Furthermore, Iwill investigate how these risks must be managed by a Global Manager when working for any company wanting to undertake a business venture into China. Finally, I will provide a personal conclusion based on all of the academic articles that I have read in regard to this subject.   2.00 – How Chinese Culture and History Influences Intellectual Property Rights Views The stealing of “a book is an elegant offense because society values an individual who strives for access to knowledge, which may cause it to pardon the offense” (Keupp, Marcus Matthias, Angela Beckenbauer and Oliver Gossmann; 2009; p211). When looking at traditional Confucius teachings the idea that one would fail to share knowledge in the hope that they could gain profitsis considered as being unacceptable as “profit had been seen as a characteristic of an inferior person (xiao-ren) who acts out of self-interest and not principle” (Lehman, John Alan; 2006; p6). Based on these tradition teachings it is understandable why “intellectual property is something that the Chinese do not generally recognize” (Creer, Greg; 2004; p220)as it is not theft but the sharing of knowledge which has been part of their culture for over 2000 thousand years. These cultural teachings,combined with the emergence of the Chinese Communist Party, who, under the rule of Mao Zedong, repealed all laws, including IP and mark protections when taking power in 1949 (Wong, Jessica C.; 2006)has meant that knowingly or unknowingly the Chinese returned to the teachings Confucianism by enforcing the belief that all intellectual ideas and associated knowledge was the property of the state and not the individual. For over 2000 years China has believed, even under the reign of communism that knowledge must be shared. After China implemented their “Open Door” the philosophy that knowledge was to be shared for the greater good of the people was considered unacceptable by MNE as their laws and traditions believed that this property is the rights or to be owned exclusively by the people or companies that developed knowledge.   3.00 – The Challenges facing the Global Manager “China aspires to be a technology powerhouse by 2020 and a global technology leader by 2050” (Schotter, Andreas and Mary Teagarden; 2014; p42). To meet these expectations China is forced to ignore the cultural beliefs and obtain the requiredknowledge either by joint ventures, strategic purchases of international companies or by industrial espionage.For MNE’s wanting to participate in China’s growth,IP and Mark protection has to be considered of paramount importance for “according to the U.S. Government, China accounted for nearly 80% of all IP thefts from U.S.-headquartered organizations in 2013 amounting to an estimated $300 billion in lost business (Schotter, Andreas and Mary Teagarden; 2014; p41). No company can expectto remain profitable if the 2013 estimated losses of IP theft continuestherefore, prior to contemplating any move into the Chinese domestic market MNE’s “will have to increasingly look for ways to redefine their strategies and realign their organization” (Kedia, Ben L., and Ananda Mikherji; 1999; p230) and include within these strategic plans a well-defined IP protection plan that must reviewed and updated on a regular basis, possibly even daily basis (Schotter, Andreas and Mary Teagarden; 2014). When establishing a joint venture with a Chinese state-owned enterprise there is a high probability that shared technology will be passed onto other state-owned competitors (Kennedy, Gabriela., Douglas Clark; 2006) and this technology will then be used to build an identical product at a cheaper price for the Chinese domestic market.There are examples of counterfeit factories being constructed and operated in China that are identical to ones that have been built by MNE’s, including one who filed for Chinese patents prior to the construction of their factory only to discover another fraudulent factory existing in China that was identical in every way (Keupp, Marcus Matthias., Angela Beckenbauer and Oliver Gassmann; 2009). There are also examples of counterfeit products being manufactured for the Chinese domestic market that are identical in appearance to well-known international products including the Range Rover Evoquehttp://www.motoring.com.au/land-rover-fuming-over-chinese-copy-47793/. When China introduced their “Open Door” policy in 1978 the laws for IP and mark protection was identical to most other developing countries, the “First to File” system. Although China has made continued improvement with IP legal protection the U.S. Government “continues to list China on the Priority Watch List, a list which identifies countries that do not offer adequate levels of intellectual property rights (IPR) protection” (Greene, Stephanie M.; 2008; p372). Stephanie M. Greene’s article has further detailed that China established a State Administration of Industry and Services (SAIC) that is responsible for the protection of well-known IPR’s and marks however the SAIC do not oversea their various provinces, cities or towns. The SAIC have established local divisions; called AIC’swhoand these local offices are responsible for the enforcing of these protections. As the AIC’s receive no income from this enforcement it is not uncommon for them to take “incentives” from local businesses to ignore trademark enforcements (Greene, Stephanie M.; 2008).   4.00 – Developing a Global Understanding “In the volatile world of transnational corporations, there is no such thing as a universal global manager” (Bartlett, Christopher A.,SumantraGhoshal; 1992; p102). It is impossible to expect that a single person is capable of developing a “viable global strategy, facilitate and develop supportive processes by which globalization can be managed and create appropriate conditions by which overall strategy, process, culture, and structure can be meaningfully aligned to achieve organizational effectiveness” (Kedia, Ben L., Ananda Mukherji; 1999; p230). According to the Bartlett and Ghoshal (1992) journal paper and referred to many others when investigating the role of the “Global Manager” the only way any company be prepared for moving into any international market would be by creating a Global Management Team. One critical component of Bartlett and Ghoshal (1992) Global Management Team is that it allows for the creation of a team that has a “flexible management process, in which business, country and functional managers form a triad of different perspectives that balance each other” (Bartlett, Christopher A.,SumantraGhoshall, 1992, p102). These 3 separate levels of specialist managerswill then allow for strategic planning so that the international move can progress. The specialist managers are (without in-depth definition) • Business Managers • County Managers • Functional Managers Once the Global Management Team has been established one of its first priorities will determine what IP knowledge is required for the international move and the potential risks to this IP. Until recently there had been no in depth published study on how this could be best completed with many studies indicating that the legal protection of IP in China was impossible as theassumption was made that the greatest offender in China was the Chinese Government. In 2014 Andreas Schotter and Mary Teagarden created an IP protection concept they called The IP Protection Web “that is based on a multiyear research project on intellectual property protection and innovative management practices in emerging markets, in particular China” (Schotter, Andreas and Mary Teagarden; 2014; p42). For any MNE considering entering an emerging market then this document must be foundation plan used to protect their IP knowledge. “The IP protection web consists of three interconnected layers. Strategic clarity forms the first layer, followed by legal fundamentals and business intelligence as the second layer. The inner layer consists of six operational practices that should be woven through the entire company” (Schotter, Andreas and Mary Teagarden; 2014; p43). By linking the Schotter and Teagarden IP Protection Web levels of operational practices with the Bartlett and Ghoshall Global Management Team it may be possible to begin to develop a protection strategy The IP Protection Web Global Management Team Externally Focused Defensive Practices 1. Develop Strategic Clarity Business Manager 2. Collect Business Intelligence Business Manager 3. Follow Legal Fundamentals Business Manager / Country Manager 4. Create Interest Alignment Country Manager Internally Focused Practices 5. Disaggregate Processes Business Manager / Functional Manager 6. Implement Control Discipline Business Manager / Country Manager 7. Create Dynamism Country Manager 8. Manage Human Resources Strategically Business Manager / Country Manager 9. Engage in focused Corporate Social Responsible Activities Business Manager / Country Manager Reconfigure IP Protection Practice Business Manager / Country Manager / Functional Manager (Please refer to Appendix B for an overlay of the IP Protection Web) The other possible solution, which one may consider to be radical and not included in any journal that was reviewed is based on the expression “If you can’t beat them, join them” (Unknown) Whilst China continues to manufacture counterfeit products at a substantially reduced price for their domestic market, the MNE’s will continue to receive no income for a concept that they conceived, tested and then manufactured for sale. A possible solution could be that the MNE considers a licencing agreement between the Chinese counterfeit manufacturer and themselves. Whilst Chinese businesses continue to make fraudulent products for their domestic market at a substantially reduced price and at a standard that is generally considered unacceptable by western consumers then the loss to the MNE will continue. By implementing a licencing agreement with these fraudulent manufacturers it will allow this Chinese business to build and sell the MNE’s product legally, under a different brand name to local Chinese market with the MNE receiving some level of compensation and allowing the MNE to receive some level of comfort that these items will not be sold outside of China and as they are sold under a different name there will be no association with their company.  5.00 – Conclusion “From the point of view of moral justification, the most important thing about any property right is what it prohibits people from doing” (Waldron, Jeremy; 1993; p842). But when considering China and Intellectual Property should the same philosophy apply?One of the most intriguing problems that have been experienced by MNE’s is the theft of their IP, but is it really theft? Is the problem another case of “East Vs West”? Personally, I believe it is impossible to change over 2000 years of culture and tradition in a period of less than 40 years which means that the theft of IP knowledge in China will continue regardless as to the number of the international agreements and laws that the west endeavours to force onto the Chinese population. Maybe MNE’s and their Global Managers need to think outside the box and consider a solution that is fair to all parties concerned. Some academics have suggested the implementation of a tax that is applied to western consumers to offset the costs of IP theft in China, but this will cause greater problems as western consumers endeavourto avoid such a tax by purchasing goods via the internet. Others academics, such as Schotter and Teagarden have suggested a complex system to protect IP however this could be rather costly to the businesses and in the long term does not guarantee the protection of IP. So what is the solution? Maybe MNE’s should approach the Chinese with a different strategy rather than beating the Chinese with the preverbal legal stick. Although the Chinese government will continue to try and police these laws, corruption at local province, city and town levels will continue to preventthe prosecution of the offenders. Should MNE’s be forced to be the © police in China, personally I don’t think they want to be placed into this position. As an aspiring Global Manager I believe that this problem needs to be addressed by considering Chinese culture and how this can be integrated in international IP and mark legal protection. As suggested is the implementing of a licencing agreement with Chinese manufacturers a solution or could there be other options that need to be investigated by the MNE’s and their Global Manager.  References Bartlett, Christopher A., and SumantraGhoshal, (1992), “What Is a Global Manager?”,Harvard Business Review, Aug 2003, Vol. 81 Issue 8, p101-108 Chen X., C. Sun, (1999), “Technology transfer to China: alliances of Chinese enterprises with western technology exporters”, Technovation 20, 2000, p353-362 Creer, Greg, (2004), “The International Threat to Intellectual Property Rights through Emerging Markets”, Wisconsin International Law Journal, 22, no1, 2004, p213-243 Greene, Stephanie M., (2008), “Protecting Well-Known Marks in China: Challenges for Foreign Mark Holders”, American Business Law Journal, Colume 45, Issue 2, Summer 2008, p371-398 Kedia, Ben L., Ananda Mukherji, (1999), “Global Managers: Developing A Mindset For Global Competitiveness”, Journal of World Business, 1999, 34(3), p230-251 Kennedy, Gabriela, Douglas Clark, (2006), “Outsourcing to China – Risks and benefits”, Computer Law and Security Report 22, 2006, p250-253 Keupp, Marcus Matthias, Angela Beckenbauer and Oliver Gassmann, (2009), “How managers protect intellectual property rights in China using de facto strategies”, R & D Management, (2009), Vol 39, Issue 2, p211-224 Lehman, John Alan, (2006), “Intellectual Property Rights and Chinese Tradition Section: Philosophical Foundations”, Journal of Business Ethics, 2006, 69, p1-9 Lovenworth, Stanton J., Kurt P. Dittrich, (1996), “Protection of Well Known Trademarks in China”, Journal of the Patent and Trademark Office Society, 1996, 78.3, p181-187 Schotter, Andreas and Mary Teagarden, (2014), “Protecting Intellectual Property in China”, MIT Sloan Management Review Summer, 2014, p41-48 Waldron, Jeremy, (1993), “From Authors to Copiers: Individual Rights and Social Values in Intellectual Property”, Chicago-Kent Law Review, 1993, Volume 68, Issue 2 Symposium on Intellectual Property Law, p841-887 Wong, Jessica C., (2006), “The Challenges Multinational Corporations Face in Protecting Their Well-Known Trademarks in China”, Brooklyn Journal of International Law, 2006, Volume 31, Issue 3, p937-976 http://www.theage.com.au/business/china/chinas-selfdefeating-clampdown-on-multinationals-20160517-gows9c.html accessed 21st May 2016 http://www.thelocal.se/20111107/37218 accessed 29th May 2016 http://www.motoring.com.au/land-rover-fuming-over-chinese-copy-47793/ accessed 29th May 2016   Appendix Appendix A – China’s Self-Defeating Clampdown on Multinationals   (http://www.theage.com.au/business/china/chinas-selfdefeating-clampdown-on-multinationals-20160517-gows9c.html) Appendix B – The IP Protection Web (Schotter, Andreas and Mary Teagarden; 2014; p43)