Kaper Machinenbau and Tian Fu Tools: A Take-over with Chinese Characteristics (A)

Five years ago, Tian Fu Tools (TFT), a Chinese state owned machinery enterprise, bought the Stuttgart-based mid-sized lathe and machinery building company Kaper Maschinenbau. Case A: Enjoying a rare day off, Heinrich Baumann, CEO of Kaper, is interrupted by a phone call from the TFT GM, Zhang Jian, who informs him that the TFT board has decided to move production of a further 3 Kaper machines to Tianjin, and of plans to move a large portion of Kaper’s research facilities to China. Baumann is caught off-guard and is dismayed at not being involved in this decision. He tries to make sense of Zhang Jian’s behaviour and wonders how to explain this change convincingly to the union and supervisory board. Baumann begins strategizing ways to protect the company from their Chinese owners. Case B: Zhang Jian puts down the phone and wonders what had gotten into the Germans. The Kaper management team and Baumann have always seemed like sensible people despite some of the Germans’ odd habits and stifling regulations. But now they are refusing to comply with decisions made by their owner; Zhang cannot imagine what could explain such behaviour. The global markets make it critical to raise competitiveness whilst ensuring high quality and innovation; Baumann must be able to see this. Zhang tries to understand what has gone awry. This case is particularly well suited to Executive MBA and executive development programs focused on cross-border business. The contents are relevant to topics including International Business, M&A, Cross-cultural Communication, and Global Leadership. The cases may be used together or separately to support discussion of Chinese, European, and cross-border leadership challenges. The accompanying teaching notes provide extensive background information including frameworks and concepts, as well as suggested teaching methodologies for the cases.