With a cross-disciplinary perspective, this field-based case series uses the purchase of a manufacturing company based in China to set the stage for an analysis of cost accounting, operational effectiveness, and cross-cultural communication. It offers a discussion about the strategy to purchase a Chinese firm to enter a promising business line for the Chinese market and provides an opportunity to introduce basic accounting, management communication, and operational terms that can be explored in following classes. The material includes an overview of a partnership between a Westerner and two Chinese executives, the issues they discovered through due diligence, plans to break into a new market, and their efforts to communicate lean manufacturing principles in another language and culture. If possible, inviting colleagues from accounting, communications, or operations to jointly teach the class enriches the discussion and provides an integrated learning experience.
The B case adds a twist. After the purchase, following a 90-day stabilization period, an optimization plan, a strategic review, and a purchase of land to build a larger operation, the leadership team was finalizing plans to drop two production lines and invest in supercapacitor production. At that point, a key air conditioner customer asked to meet with the team, seeking to double its capacity to meet market demand?which would entail ordering at least triple the number of capacitors China Star was then producing. There was only one problem: the requested product would be a line slated for elimination. Did it make sense to ramp up a line China Star had planned to de-emphasize?