The Internationalization of Small and Medium Enterprises in Taiwan: The Control Mechanism of an Agency and a Joint Venture Subsidiary
In this study, the internationalization process of Taiwanese small and medium enterprises (SMEs) was investigated by observing a company that manufactures pressure tanks. To increase the company’s market share, the company entered the international market, initially cooperating with an agent to operate in the American market. Because of the positive cooperative experience with the American agent, the company decided to establish a 50% /50% joint venture subsidiary with the American agent in Luxembourg. The joint venture subsidiary was responsible for product marketing in 3 global markets outside North America. However, the complex cooperative relationship among the Taiwanese parent company, the American agent, and the joint venture subsidiary caused communication problems. Through this case study, we explored how the Taiwanese parent company cooperated with the American agent and managed the joint venture subsidiary. In addition, we investigated how the Taiwanese parent company selected an effective control mechanism with which to manage the joint venture subsidiary.