Establishment of Sino-foreign strategic alliance in the Chinese construction industry

The establishment of strategic alliances with Chinese manufacturing and construction companies has become an important value creation strategy for western engineering and construction companies. Alliances of this nature are common for multinational companies. Such relationships in China, however, provide unique challenges for western companies and therefore the following issues require evaluation: (1) The underlying motives of Chinese manufacturing and construction companies to enter into alliances with western partners; (2) Differences in national and corporate cultures and the effect on management of Sino-foreign strategic alliances. Within the Chinese construction industry when evaluating Sino-foreign strategic alliances, formal controls and social controls are not mutually exclusive. Control mechanisms established by foreign companies including formal controls and social controls can be evaluated once motives and cultural differences are understood. The understanding of motivational and cultural differences and the subsequent implementation of appropriate control mechanisms are critical to the ultimate success of Sino-foreign alliances. Therefore, information included in this article provides important guidance for foreign companies in preparation for or already engaged in Sino-foreign alliances in the Chinese construction industry.