The Accuform Company was a joint venture between CreaseFree a Chinese fabric coating company and DynaCoat[i]. The joint venture with the two companies was established because DynaCaat was a leading German company with a well established research and development department focused on coating products and chemicals while the CreaseFree company was local to China and Hong Kong and had business contacts, and connections with the suppliers and possible business partners in the market.
Accuform was assigned a general manager named Raymond Kim who had experience in operating business in an international environment and represented the business culture of DynaCoat. On the other hand the research and development head was appointed by Kim as Ching, an ex-employee CreaseFree who was responsible for spearheading R&D who later on also took over management of waste and contact building in the supplier networks for Accuform. Issues arose when children in mainlandChinawere diagnosed with severe allergic reactions to un-graded clothes manufactured using Accuform technology bearing their label on them. Accuform was accused of the incident however an in-depth investigation revealed that Ching along with his accomplices was responsible for the illegal business practices of personal contact building and under the table dealings with suppliers to set up a farce company by the name of Coral Wear which sold the un-graded and low quality performance fabric at lower prices in the local Chinese market.
[i] Note. From “Accuform Ethical Leadership and its Challenges in the Era of Globalization” by R. Wong, A. Lau, 2006, Harvard Business School Cases McGraw-Hill Companies, Copyright Asia Case Research Centre
Wong, R., Lau, A., (2006), Accuform Ethical Leadership and its Challenges in the Era of Globalization, Asia Case Research Centre