KFS (KM) in China:
X Personal interview with John Tennet

Interviewee: Consultant at a US multinational IT company
Interviewer: Stefan Broda
Date: 2.2.2005
Media: Personal interview

Topic: IPR in China

Author: When it comes to knowledge and China, many companies have fallen victims to IP theft. How do Chinese companies handle this internally?

This is a very interesting topic. About five years ago, I did an industry analysis in Taiwan focusing on the machine tool market. There were about 150 competitors which could be traced back to three original large companies. It happens all the time that teams leave the company after developing a cool product to found their own enterprise. The whole industry down there is built upon that way and in my three year China experience, it is not any different on the mainland.

Author: But doesn't IP theft lead to the destruction of relationship and therefore Guanxi?

Tennet: That is right. This is why for example if you have one team which has good relationships to each other it is less likely that one will break out of the group and damage the others. Looking closer at the machine tool industry in Taiwan, one can see that once a team leaves the company, the former superior invests in the new venture which maintains or sometimes even improves the Guanxi. This way, the Taiwanese industry has developed an enormous flexibility to which they can react to changes in demands and technology.

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