Reference no: EM132111263

Clark Copy International Corporation’s China Experience In the early 1980s, China’s powerful State Economic Commission launched a major effort to attract small Western enterprises. It was dissatisfied with large firms that sell expensive consumer items such as VCRs that do little to aid China’s economy. This policy helped Clark Copy International Corporation, a small company making plain-paper copiers in a cramped plant in Melrose Park, Illinois, beat out the industry’s world leaders to sign a lucrative contract with China. At that time, it had only 14 employees and had earned only $58,000 on $1.5 million of sales for 1982. Clark agreed to sell 1,000 CMC 2000 copiers assembled and ready to use, as well as to provide parts and instructions for the Chinese to assemble into another 5,000 machines. Also, Clark would train 1,600 Chinese technicians to manufacture the copiers and other Clark products for domestic and export sales in a new plant in Kweilin in the south of China. Page 243How did Clark do it? According to Clark’s founder and president, Otto A. Clark, a Slovak who emigrated to the United States in 1950, “You can’t do business in China on a simple buy-and-sell basis, like most multinationals do. Instead, you have to establish a close human relationship and a commitment to stay.” That relationship was established with the help of David Yao, Clark’s Far East representative, who was born in Shanghai and speaks fluent Chinese. Yao and Clark went to China eight times to negotiate before closing with China’s National Bureau of Instrumentation Industries in April 1982. In the mid- to late-1980s, the Chinese attitude toward private enterprise and foreign investments changed, and Clark wasn’t permitted to complete the agreement. By 1991, it was out of business.

Questions

Evaluate the procedure followed by Otto Clark in his effort to enter global operations.

What went wrong? Explain.

What—if anything—would you have done differently?