Shenzhen Filtroil: Finding Balance

8 Pages Posted: 7 Apr 2010

See all articles by Lynn Isabella

Lynn Isabella

University of Virginia - Darden School of Business

Gerry Yemen

University of Virginia - Darden School of Business

Abstract

Filtroil had opened a new factory that was a merger between Shenzhen Filtroil and its supplier, Liu Li—whose own factory was on the verge of bankruptcy. But the supplier had begun making excessive demands and threatening to delay product shipment to the United States if his conditions were left unmet. The case reveals the options that could be taken to manage the situation. The case is suitable for use in organizational behavior, human resource management, and strategy classes at the MBA and executive education levels.

Excerpt

UVA-OB-0983

Rev. Apr. 13, 2015

Shenzhen Filtroil: Finding Balance

When Jeremy Leahman, president of Filtroil, Inc., tried to explain what he knew about the situation to Albert Randolph, founder and owner of the firm, Randolph's response was decisive. “There is no problem here. We own 90% of that business. Get rid of him—kick him to the curb and move on down the road.”

In the spring of 2007, Leahman and Randolph had created a partnership with a supplier in China to ramp up the manufacture of their China-based filtration system and start a zinc alloy venture. They opened a new factory in Dongwan, which was a merger between Shenzhen Filtroil and its supplier Liu Li—whose own factory was on the verge of bankruptcy. Liu would own 10% of the merged factory. Shenzhen Filtroil owned the rest and would acquire all the necessary equipment. The two businesses—filter and zinc—would operate under the same roof.

By Thanksgiving Day 2008, Leahman was on a plane headed for China to hash out problems with Liu, who had demanded a monthly raise for himself and his wife, a new company car, and an increase in profit-sharing. While Leahman understood how unreasonable Liu's demands were, he kept thinking about the relationship he had with Liu, and Qian Kai Nam (Qian) and Shea Kai Young (Thomas) who ran Shenzhen Filtroil and were in on the zinc partnership. Leahman had been so excited about the financial opportunity for his Chinese colleagues. “They are world-class and worked so hard for the zinc business,” he said. “A $ 10 million [USD] business would change their lives forever.”

. . .

Keywords: cross-cultural relations, global effectiveness, global entrepreneurship, effective working relationships, conflict, building trust, managing performance, difficult conversations, international teams

Suggested Citation

Isabella, Lynn and Yemen, Gerry, Shenzhen Filtroil: Finding Balance. Darden Case No. UVA-OB-0983. Available at SSRN: https://ssrn.com/abstract=1585653

Lynn Isabella (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4818 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/isabella.htm

Gerry Yemen

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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