This week's discussion will focus on cultural decision-making using the case study about Danone in China (in the below picture).

This case focuses on the cultural differences and management styles of the French company Danone Group in its joint venture with its Chinese company partner, Wahaha Group. In this situation, Wahaha established other companies outside the joint venture that Danone Group claimed infringed on Danone's interests. These infringements were alleged to be in violation of a non-compete clause and unauthorized use of the "Wahaha"' trademark owned by the joint venture. Danone sued Wahaha and the lawsuit eventually resulted in Danone Group accepting a cash settlement from Wahaha Group to the "Wahaha" trademark. After reflecting on this situation involving cultural differences, as a leader:

Q1: How might an international company enter into a joint venture in Saudi Arabia with a domestic company and demonstrate the commitment to working together well, respecting the Saudi Arabian culture and management style to resolve such a conflict?

Q2: What types of decisions would you need to make? Would there be bias in the decision-making process? Can you give an example?

Danone Strategy in China Danone entered the Chinese market in the late 1980s. Since then, it has invested heavily in China, building fac- tories and expanding production. Today, Danone has 70 factories in China, including Danone Biscuits, Robust, Wahaha, and Health. Ten percent of Danone's workforce is located in China. Danone sells primarily yogurt, bis- cuits, and beverages in the Chinese market. By 2014, Danone's Asia-Pacific division employed 28,000 people in the Asia-Pacific area, which was almost 30 percent of Danone's total employees. In the early 2000s, Danone's Wahaha was China's large est beverage company. In 2008, 57 percent of Danone's Asian sales were in China. Two billion liters of Wahaha were sold in 2004, making it the market leader in China with a 30 percent market share."In Asia, in 2007, Danone Group was the market leader with a 20 percent share of a 34-billion-liter market. In comparison, rivals Coca-Cola and Nestle had a 7 percent and 2 percent share, respec- tively. Evian, its global brand, was sold alongside of local brands such as China's Wahaha. In the past 20 years, Danone has purchased shares of many of the top beverage companies in China: 51 percent of the shares of the companies owned by Wahaha Group, 98 percent of Robust Group, 50 percent of Shanghai Mal- ing Aquarius Co., Ltd., 54.2 percent of Shenzhen Yili Mineral Water Company, 22.18 percent of China Huiyuan Group, 50 percent of Mengniu, and 20.01 percent of Bright dairy. These companies, leaders in their industry, all own trademarks that are well-known in China. However, while expanding into the Chinese market, Danone faced challenges due to lack of market knowl- edge. In 2000, Danone purchased Robust, the then-second- largest company in the Chinese beverage industry. Sales of Robust had reached RMB2 billion in 1999. After the purchase, Danone dismissed the original management and managed Robust directly. Because its new management was not familiar with the Chinese beverage market, Robust struggled. Its tea and milk products almost disappeared from the market. During 2005-2006, the company lost RMB 150 million.19