Lexitronics is a Japanese manufacturer of mobile phones. Established in the 1980s, the company closely follows traditional Japanese business culture with seniority-based promotions and lifetime employment. The company also uses teams of engineers and designers who work together on new product development.
The company has identified Vietnam as a potential market to manufacture and sell mobile phones in the country. The company is yet to decide on the appropriate entry mode to enter the Vietnamese market. Their decision will be influenced by a number of factors:
- Maintaining control over the subsidiary to ensure the same high quality of production in Vietnam as they currently have in Japan.
- Not having existing networks in, or knowledge about the local business culture and regulations in Vietnam, which is necessary to operate in the country.
- Concerns about intellectual property theft in Vietnam.
Based on this information, identify:
- What do you believe is the organizational culture of Lexitronics? Explain your answer.
- Which is the most appropriate entry mode that Lexitronics should use when entering Vietnam? Explain and justify your choice of this entry mode
- What is the form of communication flow that one would expect between Lexitronics head office and the subsidiary? Provide details to support your answer.