Concept explainers
Global Human Resource Management
MMC Cortana Operation
It had been a bad morning for Jonathan Reid, the general manager of MMC’s Cortana joint venture. He had just gotten off the telephone with his boss in New York, Phillip Smith, who was demanding to know why the joint venture’s return on investment was still in the low single digits four years after Jonathan had taken over the top post in MMC Cortana’s operations.
“We had expected a much better performance by now” Smith said, “particularly given your record of achievement; you need to fix this Jonathan, our patience is not infinite. You know the corporate goal is for a twenty per cent (20%) return on investment for operating units, and your unit is not even close to that”. Jonathan felt his boss had just issued a subtle threat, and for the first time in his 20-year career, felt that his job was on the line.
MMC is an American multinational electronics enterprise with operations in ten (10) countries and has annual sales of two billion United States dollars (US$2B). MMC Cortana specialized in the mass production of printed circuit boards for companies in the cell phone and computer industries. MMC was in a joint venture with Cortana Electronics Corporation, and MMC owned 51% of the firm’s equity. However, based on the laws of Cortana, MMC as a partner, is mandated to consult with Cortana Electronics before making major investments or changing employee levels. Jonathan was transferred to MMC Cortana due to his outstanding performance as a manager with MMC. He took up the Cortana position following other management positions in Mexico and Australia. Jonathan knew his new position would be challenging, but if he succeeded, he would shortly be in line for an executive position at the company’s headquarters. However, what Jonathan found at the Cortana operation was a total mess, productivity was low, manufactured products were of low quality, there was too much inventory and employee turnover was unusually high. Added to this, Cortana Electronics had failed to keep up with the latest development in manufacturing technology.
As the manager, Jonathan requested specialist help to manage the operations and headquarters sent two managers who requested to be returned home in less than three months due to personal reasons. Despite these turns of events and extreme competitiveness in the industry, MMC Cortana had just started making a profit and productivity was improving. He was angry and felt unappreciated by his boss at the parent location.
Question 4
Discuss the merits and demerits of a joint-venture multinational enterprise such as MMC Cortana.
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