chapter 3 for strategic management text and cases, mana 4322 at uta
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Answers to Sebesta's chap 1 questions.Full description
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chapter 6 for strategic management text and cases
Chapter 05 - Managing Across Cultures
Chapter 5: Managing Across Cultures Learning Objectives and Chapter Summary 1.
EXAMIN EXAMINE E the stra strateg tegic ic dispos disposit ition ionss that that charac character terize ize resp respons onses es to dif differ ferent ent cultures. One a!or challenge facing MNCs is deterining ho" to anage across cultures. MNC dispositions to"ard anaging across cultures can #e characterized as $1% ethnocentric& $'% pol(centric& $)% regiocentric& and $*% geocentric. +hese different approaches shape ho" copanies adapt and ad!ust to cultural pressures around the "orld.
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,IC ,IC cro cross ss-c -cul ultu tura rall diffe differe renc nces es and and siil siilar arit itie ies. s. One a!or challenge "hen dealing "ith cross-cultural pro#les is that of o/ercoing parochialis and siplification. siplification. arochialis is the the tendenc( to /ie" the "orld through ones ones o"n e(es and perspecti/es. perspecti/es. iplification is the the process of e2hi#iting the sae orientation orientation to"ard different cultural cultural groups. Another pro#le is that of doing things the sae "a( in foreign ar3ets as the( are done in doestic ar3ets. 4esearch sho"s that in soe cases& this approach can #e successful& successful& ho"e/er& effecti/e cross-cultural anageent ore coonl( reuires a pproaches different than those those used at hoe. One area "here this is particularl( e/ident is huan resource anageent. 4ecruitent& selection& selection& training& and copensation often are carried out in different "a(s in different countries& and "hat "or3s in the nited tates a( ha/e liited /alue in other countries and geographic regions.
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4E6IE7 4E6IE7 cultur cultural al diff differe erence ncess in sele select ct count countrie riess and regi regions ons&& and note note soe soe of of the the iportant strategic guidelines for doing #usiness in each. ,oing #usiness in /arious parts of the "orld reuires the recognition and understanding of cultural differences. differences. oe of these differences differences re/ol/e around the iportance the societ( assigns to tie& status& control of decision a3ing& personal accoplishent& and "or3 itself. itself. +hese t(pes of cultural cultural differences help to e2plain "h( effecti/e anagers in China or 4ussia often are uite different fro those in 8rance& and "h( a successful st(le in the nited tates "ill not #e ideal in Ara# countries.
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Chapter 05 - Managing Across Cultures
The World o !nternational Management: Car Culture: Changing "lobal Trends in the Automotive !ndustry 1.
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uar(< +his /ignette discusses the challenges created #( the ongoing shift of po"er in the glo#al auto industr(. As copanies in China and India #ecoe increasingl( doinant pla(ers in the industr(& traditionall( strong copanies fro the .. and Europe ust learn to understand and adapt to the traditions of other countries. uggested Class ,iscussion< 1. tudents should #e a#le to discuss ho" siilarities and differences across cultures create challenges for MNCs and reflect on ho" anagers should respond to these challenges. '. ,iscuss the iportance of encouraging ulticultural anageent at all le/els of the MNC. +hen& consider ho" coon assuptions and stereot(pes a#out people in other countries can lead to anagerial ista3es.
Chapter Outline #ith Lecture $otes and Teaching Tips The Strategy or Managing Across Cultures 1% As MNCs #ecoe ore transnational& their strategies ust address the cultural siilarities and differences in their /aried ar3ets. Strategic %redispositions 1%
+here are four distinct strategic predispositions. a% Ethnocentric predisposition - a nationalistic philosoph( of anageent "here#( the /alues and interests of the parent copan( guide strategic decisions. #% Polycentric predisposition - a philosoph( of anageent "here#( strategic decisions are tailored to suit the cultures of the countries "here the MNC operates. c% Regiocentric predisposition - a philosoph( of anageent "here#( the fir tries to #lend its o"n interests "ith those of its su#sidiaries on a regional #asis. d% Geocentric predisposition - a philosoph( of anageent "here#( the copan( tries to integrate a glo#al s(stes approach to decision a3ing.
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Chapter 05 - Managing Across Cultures
Teaching Tip: +here are a nu#er of consulting firs that help firs Bgo glo#al. Dour
students ight #e interested in 3no"ing a little #it a#out these copanies. One copan( is the Chicago #ased uandral :roup =http<>>uadralgroup.co>?. Teaching Tip< +here are an( resources a/aila#le on the Internet to help #usinesses
#ecoe acuainted "ith foreign cultures& tastes& and custos. An e2aple is the F+ra/lang ite&F "hich contains a "ide /ariet( of inforation on cultural and language issues. oe features of interest< international calendars of holida(s& online translating dictionaries& coon phrases for #usiness tra/elers& currenc( e2change rates& and hotel directories. +he site is a/aila#le at =http<>>""".tra/lang.co>?. Meeting the Challenge 1% ,espite the need for and tendenc( of MNCs to address regional differentiation issues& an( MNCs are coitted to a glo#alization iperati/e& "hich is a #elief that one "orld"ide approach to doing #usiness is the 3e( to #oth efficienc( and effecti/eness. a% 8actors facilitating the need to de/elop uniue strategies for different cultures< i% +he di/ersit( of "orld"ide industr( standards such as those in #roadcasting& "here tele/ision sets ust #e anufactured on a countr(-#(-countr( #asis. ii% A continued deand #( local custoers for differentiated products& as in the case of custoer goods that ust eet local tastes. iii% +he iportance of #eing an insider& as in the case of consuers "ho prefer to F#u( local.F i/% +he difficult( of anaging glo#al organizations& as in the case of soe local su#sidiaries that "ant ore decentralization and others that "ant less. /% +he need to allo" su#sidiaries to use their o"n a#ilities and talents and not #e restrained #( headuarters& as in the case of local units that 3no" ho" to custoize products for their ar3et and generate high returns on in/estent "ith liited production output.
Cross&Cultural 'ierences and Similarities 1%
As sho"n in Chapter *& culture can #e siilar or uite different across countries. +he challenge for MNCs is to recognize and effecti/el( anage these siilarities and differences.
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Chapter 05 - Managing Across Cultures
%arochialism and Simpliication 1% arochialis and iplification a% Parochialism - the tendenc( to /ie" the "orld through oneGs o"n e(es and perspecti/es. +his can #e a difficult pro#le for an( international anagers& "ho often coe fro ad/anced econoies and #elie/e that their start-of-the-art 3no"ledge is ore than adeuate to handle the challenges of doing #usiness in less de/eloped countries. In addition& an( of these anagers ha/e a parochial point of /ie" fostered #( their #ac3ground. #% Simplification - the process of e2hi#iting the sae orientation to"ard different cultural groups. 8or e2aple& the "a( in "hich a .. anager interacts "ith a ritish anager is the sae "a( in "hich he or she #eha/es "hen doing #usiness "ith an Asian e2ecuti/e. c% nderstanding the culture in "hich the( do #usiness can a3e international anagers ore effecti/e. Similarities across Cultures 1% 7hen internationalization #egan to ta3e off in the 1H0s& an( copanies uic3l( aditted that it "ould not #e possi#le to do #usiness in the sae "a( in e/er( corner of the glo#e. +here "as a secret hope& ho"e/er& that an( of the procedures and strategies that "or3ed so "ell at hoe could #e adopted o/erseas "ithout odification. +his has pro/ed to #e a false hope. At the sae tie& soe siilarities across cultures ha/e #een unco/ered #( researchers. Many 'ierences across Cultures 1% ,espite siilarities #et"een cultures in soe studies& far ore differences than siilarities ha/e #een found. Teaching Tip< 8or inforation a#out foreign go/ernents and their approaches to
international trade& /isit the Electronic E#ass( at =http<>>""".e#ass(.org?. +his site pro/ides lin3s to all of the foreign e#assies located in 7ashington ,.C.
Cultural 'ierences in Selected Countries and (egions 1% Certain regions of the "orld ha/e siilar cultures. It is iportant for anagers toda( to learn a#out their #usiness and the eerging ar3ets en/ironent through foral classes& entoring& and e2perience.
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Chapter 05 - Managing Across Cultures
'oing )usiness in China 1%
,espite its glo#al presence and econoic potential& an( .. and European ultinationals ha/e found that doing #usiness in the 4C can #e a long& grueling process. 6er( fe" outside firs ha/e (et to a3e a profit in China. One priar( reason is that 7estern-#ased MNCs do not appreciate the iportant role and ipact of Chinese culture. a% Guanxi - In China& it eans good connections.
'oing )usiness in (ussia 1%
+he 4ussian econo( has e2perienced se/ere pro#les& and the ris3s of doing #usiness there cannot #e o/erstated. At the sae tie& ho"e/er& #( follo"ing certain guidelines& MNCs can #egin to tap the potential opportunities. +he guidelines are pro/ided in the te2t.
'oing )usiness in !ndia 1% In recent (ears& India has #egun to attract the attention of large MNCs. nsaturated consuer ar3ets& coupled "ith cheap la#or and production locations& ha/e helped a3e India a desira#le ar3et for glo#al firs. 'oing )usiness in *rance 1% Man( in the nited tates #elie/e that it is ore difficult to get along "ith the 8rench than "ith other Europeans. +his feeling pro#a#l( reflects the 8rench culture& "hich is ar3edl( different fro that in the nited tates. Teaching Tip< +his is a "e#site sponsored #( the European Aerican Cha#er of
Coerce $8rench%. +he site pro/ides inforation a#out the legal& financial& and huan resource iplications of doing #usiness in 8rance. +he site is a/aila#le at =http<>>""".faccparisfrance.co>?. 'oing )usiness in )ra+il 1% razil is considered a Jatin Aerican countr(& #ut it is iportant to highlight this region since soe characteristics a3e it ar3edl( different to anage as copared to other Jatin Aerican countries. 'oing )usiness in Arab Countries 1%
+he intense edia attention gi/en to the Ira 7ar& terrorist actions& and conflicts in the Middle East ha/e pointed out that Ara# cultures are distinctl( different fro Anglo cultures. Aericans often find it e2treel( hard to do #usiness in Ara# countries& and a nu#er of Ara# cultural characteristics can #e cited for this difficult(.
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go/ernent& histor(& geograph(& touris& and #usiness related issues for o/er '0 Ara# countries. +he site is a/aila#le at =http<>>""".ara#.net>?.
The World o !nternational Management & (evisited ,uestions - Suggested Ans#ers 1.
In "hat "a(s could +ata and :eel( integrate their acuisitions into their glo#al organizations "hile preser/ing the technological& operational& and #randing attri#utes of the copanies the( acuireK Ans"er< +ata and :eel( ha/e #oth acuired "ell-3no"n #rand naes in recent naes. +ata acuired the Jand 4o/er and Laguar #rands& "hile :eel( #ought 6ol/o. No"& these copanies are faced "ith challenges of integrating these ne" units into their e2isting operations "hile at the sae tie& aintaining their distinct and /alua#le identities. Man( students "ill pro#a#l( suggest that +ata and :eel( loo3 for areas "here there are potential s(nergies that can #e gained. 8or e2aple& it a( #e possi#le to use e2isting plants to produce the acuired #rands& (et 3eep the design teas and ar3eting teas intact. :eel( and +ata could also loo3 for "a(s to utilize the 3no"ledge of the acuired #rands in their e2isting odels.
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,o (ou thin3 these eerging ar3ets pla(ers can help turn around the copanies the( acuire& each of "hich has #een struggling in recent (earsK Ans"er< +he decision #( 8ord to sell its 6ol/o& Laguar& and Jand 4o/er #rands cae after the copan( e2perienced slo" sales and lo" profits. oth :eel( and +ata are gro"ing copanies "ith ore resources to de/ote to the copanies the( ha/e acuired. Most students "ill pro#a#l( agree that the( are in a #etter position than 8ord to help the ne"l( acuired #rands thri/e.
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;o" "ould (ou characterize +ata and :eel(s approach to o/ing into these de/eloped countr( ar3ets in ters of the four #asic strategic predispositionsK Ans"er< +he four #asic strategic dispositions are ethnocentric& pol(centric& regiocentric& and geocentric. +ata in particular appears to #e ta3ing a ore pol(centric or geocentric approach to de/eloped countr( ar3ets. +he copan( is 3no"n for its Bhands off approach after it acuires a copan(& allo"ing copanies to reain essentiall( intact. ;o"e/er& it is clear that soe integration ust ta3e place for the acuisitions to #e successful.
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,efine the four #asic predispositions MNCs ha/e to"ard their international operations. Ans"er< 1% Ethnocentric redisposition - A nationalistic philosoph( of anageent "here#( the /alues and interests of the parent copan( guide the strategic decisions. '% ol(centric redisposition - A philosoph( of anageent "here#( strategic decisions are tailored to suit the cultures of the countries "here the MNC operates. )% 4egiocentric redisposition - A philosoph( of anageent "here#( the fir tries to #lend its o"n interests "ith those of its su#sidiaries on a regional #asis. *% :eocentric redisposition - A philosoph( of anageent "here#( the copan( tries to integrate a glo#al s(stes approach to decision-a3ing.
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Chapter 05 - Managing Across Cultures
'. If a locall( #ased anufacturing fir "ith sales of )50 illion decided to enter the E ar3et #( setting up operations in 8rance& "hich orientation "ould #e the ost effecti/e< ethnocentric& pol(centric& regiocentric& or geocentricK 7h(K E2plain (our c hoice. Ans"er< +he effecti/eness of the orientation used "ill depend on a nu#er of factors. 8or e2aple& if the fir uses a fle2i#le anufacturing s(ste& a regiocentric or geocentric orientation "ould #e appropriate& "hereas a #atch production s(ste "ould "arrant a pol(centric orientation and a ass production s(ste "ould "arrant an ethnocentric orientation. An ethnocentric predisposition is one in "hich the /alues and interests of the parent copan( guide the strategic decisions. 8or e2aple& this MNCGs orientation "ould #e to"ard top do"n authorit( relationships& product de/elopent deterined #( the needs of the hoe countr(& and personnel of the hoe countr( de/eloped for 3e( positions "orld"ide. A pol(centric predisposition results in strategic decisions that are tailored to suit the cultures of the countries "here the MNC operates. 8or e2aple& there "ould #e an ephasis on pu#lic acceptance& ore #otto up authorit( relationships& local product de/elopent #ased on local needs& retention of profits in the host countr(& and people of the local countr( "ould #e de/eloped for 3e( positions in their o"n countr(. A regiocentric predisposition results in the MNC tr(ing to #lend its o"n interests "ith those of its su#sidiaries on a regional #asis. :o/ernance is often utuall( negotiated #et"een the region and its su#sidiaries. oth profita#ilit( and pu#lic acceptance are iportant& and profits are often redistri#uted "ithin the region. 8urther& regional people are de/eloped for 3e( positions an("here in the region. A geocentric predisposition results in the copan( tr(ing to integrate a glo#al s(stes approach to decision-a3ing. +his reuires a glo#al integrati/e and national responsi/eness strateg(. A net"or3 of organizations "ould e2ist& including soe sta3eholders and soe copetitor organizations. +he product orientation "ould #e glo#al "ith soe local /ariations& and profits "ould #e redistri#uted glo#all(. +he #est people "orld"ide "ould #e de/eloped for 3e( positions e/er("here in the "orld. +he firGs strateg( is another iportant factor. Is the fir concerned "ith glo#al integration& national responsi/eness& regional integration& or a co#ination of the threeK +he e2isting structure of the fir& and the firGs "illingness to de/iate fro its e2isting structure "ill #e another iportant factor. If the fir is set on a hierarchial product di/ision structure& it "ill tend to adopt an ethnocentric orientation. If the fir is currentl( using& or is open to the possi#ilit( of a atri2 structure& a regiocentric structure a( #e ore appropriate. +hese factors& and a nu#er of others "hich a3e up the profile of the fir& "ill ultiatel( deterine "hich orientation is li3el( to #e ost effecti/e.
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Chapter 05 - Managing Across Cultures
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In "hat "a( are parochialis and siplification #arriers to effecti/e cross-cultural anageentK In each case& gi/e an e2aple. Ans"er< +he( are #arriers #ecause the( can draaticall( alter perceptions. E/en a siple concept such as a handsha3e can ha/e draatic iplications if not done correctl(. tress the iportance of understanding the an( cultural differences around the "orld. +his "ill pre/ent anagers fro isinterpreting "hat is happening in a gi/en situation.
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Man( MNCs "ould li3e to do #usiness o/erseas in the sae "a( that the( do #usiness doesticall(. ,o research findings sho" that an( approaches that "or3 "ell in the nited tates also "or3 "ell in other culturesK If so& identif( and descri#e t"o. Ans"er< tress that this is a ne" area in anageent. 7e are onl( #eginning to understand "hat "or3s and "hat doesnGt "or3 glo#all(. One practical e2aple is to discuss ho" different copensation s(stes "ill ha/e different ipacts on different cultures. On the other hand& soe anageent practices that ha/e #een de/eloped in the 7est are generaliza#le to other cultures. Dou could dra" on the e2aples listed in the #oo3& or ha/e a class discussion "ith the international students assessing "hat the( "ould thin3 the ipact of such anageent practices as feed#ac3& erit copensation& or participation in decision a3ing "ould ha/e on "or3ers fro their hoe countries.
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In ost cases& local anagerial approaches ust #e odified "hen doing #usiness o/erseas. 7hat are three specific e2aples that support this stateentK e coplete in (our ans"er. Ans"er< +here are an( different e2aples listed in the te2t. Ma3e sure that the( ha/e a theoretical foundation& such as the ;ofstede or the +ropenaars diensions. Dou can use 8igure 5-1 as a general guideline.
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Chapter 05 - Managing Across Cultures
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7hat are soe categories of cultural differences that help a3e one countr( or region of the "orld different fro anotherK In each case& descri#e the /alue or nor and e2plain ho" it "ould result in different #eha/ior in t"o or ore countries. If (ou li3e& use the countries discussed in this chapter as (our point of reference. Ans"er< +he "a( in "hich the countr( /ie"s tie& the collecti/istic>indi/idualistic diension& attitude to"ard affection& the nature of #usiness con/ersations& negotiating st(les& protocol for eetings& eating #eha/iors& and dress are all e2aples of cultural differences that are different in /arious cultures around the "orld.
!nternet /0ercise: Sony1s Approach Suggestion for Using the Exercise
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After (our students ha/e in/estigated the issues pertaining to on( suggested in the e2ercise& as3 (our students to /isit the ,isne( "e#site and ans"er the sae uestions =http<>>""".disne(.co?. +his "ill gi/e (our students a perspecti/e of the challenges of international ar3eting fro #oth an Asian and an Aerican point of /ie".
!n The !nternational Spotlight: Me0ico Questions & Suggested Answers
1.
7h( "ould ultinationals #e interested in setting up operations in Me2icoK :i/e t"o reasons. Ans"er< One reason "h( Me2ico is of interest to ultinationals is that the "or3 force is uite producti/e and turns out high ualit( goods. +his is particularl( e/ident fro the inforation in the case related to 8ordGs ;erisillo plant. A second reason is that the Me2ican econo( is gro"ing and this eans a local ar3et for goods and ser/ices. o #( setting up operations in Me2ico& ultinationals can tap this ar3et.
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Chapter 05 - Managing Across Cultures
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7ould culture #e a a!or stu#ling #loc3 for Aerican firs doing #usiness in Me2icoK 8or European firsK 8or Lapanese firsK E2plain (our ans"er. Ans"er< Culture is al"a(s a a!or pro#le for those not a"are or sensiti/e to differences. ince .. firs are closer to Me2ico and ha/e ore e2perience there& the( "ould undou#tedl( ha/e fe"er pro#les than the Europeans and especiall( the Lapanese. One #arrier discussed pre/iousl( is the concept of tie. ecause Me2icans ha/e a different concept of tie than .. anagers& this could #e a a!or stu#ling #loc3 if it is not understood.
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7h( ight MNCs #e interested in stud(ing the organizational culture in Me2ican firs #efore deciding "hether or not to locate thereK E2plain (our logic. Ans"er< One reason "h( MNCs "ould #e interested in stud(ing the organizational culture of Me2ican firs is #ecause of the differences in organizational culture. 7hile the national cultural differences "ould help identif( general differences #et"een the ultinational and the local personnel& the organizational culture differences "ould help e2plain the "a( things are done "ithin the fir. MNCs could learn a great deal #( finding out ho" Me2ican eplo(ees are accustoed to doing things& rather than sipl( tr(ing to transplant their operating philosoph( and st(le on the local eplo(ees. +he ne2t chapter loo3s at anaging organizational cultures and di/ersit( in depth.
2ou )e the !nternational Consultant: )eijing3 4ere We Come Questions & Suggested Answers
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Chapter 05 - Managing Across Cultures
1.
7hat is the li3elihood that the Canadians "ill #e a#le to reach an agreeent "ith the ainland Chinese and not ha/e to go #ac3 to their +ai"anese supplierK E2plain. Ans"er< +his is a difficult uestion to ans"er #ecause Asians are soeties notoriousl( slo" in reaching agreeents. If the Chinese hold up the Canadians and do not reach an agreeent "ithin H0 da(s& it is the Canadians "ho "ill #e in the "ea3est position. :i/en that the Canadians do not "ant la#or costs to rise ore than ' percent annuall(& this is a a!or deand in lieu of "hat is happening in other "orld ar3ets including +ai"an. o the Chinese are in the dri/erGs seat and the Canadians a( indeed find thesel/es una#le to a3e a deal "ith the Chinese and ha/e to go #ac3 to the +ai"anese supplier.
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Are the Canadians a3ing a strategicall( "ise decision in letting the Chinese fro the 4C handle all of the anufacturing& or should the( insist on getting ore acti/el( in/ol/ed in the production processK ,efend (our ans"er. Ans"er< If the to(s can #e anufactured "ithout a great deal of technolog( or s3ill& the Canadians need onl( #e concerned a#out the ualit( of the output. If this is a pro#le or there are special techniues that ust #e used in #uilding the to(s& then the Canadians should negotiate for soe acti/e in/ol/eent in the production process. Other"ise& the( should stand #ac3 and let the Chinese handle things.
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7hat specific cultural suggestions "ould (ou a3e to the Canadians regarding ho" to do #usiness "ith the ChineseK Ans"er< One suggestion is to not get into a situation "here tie is going to #e a pro#le. One solution is to e2tend the agreeent "ith the +ai"anese fir for another (ear. +his "ill gi/e the Chinese the opportunit( to a3e a decision& "ithout forcing the Canadian fir into a uic3& #ad solution.
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