Profitability and the Environment
David L. Bevett, BS, MPH
May 2002
Introduction
The problem statement for study was “Is Taiwan the new land of growth, development, and
economic opportunity or the dumping-ground for the toxic by-products of multinational
pharmaceutical companies?” Granted, the magnitude of the question belied easy answers and was
ultimately beyond the scope of this study. Yet, the critical nature of the question remained and was
deemed viable for investigation. In part due to a Chinese economy, by many accounts, that was
growing and diversifying at a staggering and unprecedented rate, with significant economic
development attributed to the FDI (Federal Direct Investments) of multinational pharmaceutical
companies. Taiwan in particular has become the site of an increasing number of pharmaceutical joint
ventures established by multinational corporations seeking lower labor costs, tax incentives, and
opportunities for increasing profit margins and economies of scale. Thus, the question became
economic development at what cost?
The Bayer Group began conducting business in Taiwan in 1958, with the signing of a distribution
agreement with the Chung Teh Company in 1958 (Bayertaiwan.com). As stated in Bayer-Taiwan’s
corporate communications, “Chung Teh distributed products from Bayer's Chemical, Dyestuffs,
Fibers, Agrochemicals and Veterinary Business Groups. Encouraged by the success of this
arrangement, the Health Care Business Groups soon entered the market” (Bayertaiwan.com). And
sales and market-share for most of Bayer’s products in Taiwan have grown every year. In January
1989, Bayer created a direct subsidiary in Taiwan, Bayer Taiwan Co., Ltd. And Bayer-Taiwan’s sales
per employee are among the highest in Asia (Bayertaiwan.com).
As stated in corporate communications, the principle of sustainable development is fundamental to
Bayer’s philosophy, and the Bayer-Taiwan Group became a founding member of the Taiwan
Responsible Care Association (TRCA) founded in 1998, following years of strong promotion of the
international Responsible Care program (Bayertaiwan.com). Bayer-Taiwan “incorporates guidelines
for Responsible Care throughout all company operations, clearly demonstrating our commitment to
health, safety and environmental protection” (Bayertaiwan.com). Bayer-Taiwan promotes
“Responsible Care practices among company staff, in the community at large, and also take an active
role in environmental education”(Bayertaiwan.com). And in 2001, Bayer employed more than 300
people in Taiwan and achieved sales of over NT$ 10 billion on the island, making Bayer Taiwan Co.
Ltd. one of the four largest subsidiaries in Asia.
As cited in corporate documents, “The aim of Bayer’s investment philosophy is to enable us to offer
our customers top-of-the-line products and services while at the same time achieving a sustained
increase in the company’s value. This means all projects have to promise long-term profitability.”
And “The yardstick is the cost of capital…” (Bayer Annual report, 2000, p.25). In addition,
“…before ground is broken for a project …the planners and financial experts have their say. Detailed
predictions of cash flows are made years in advance to ensure that the investment will in fact create
value for Bayer”(p.25). Yet, what “predicted” environmental impact would be created for the host
country? Was the Bayer Group’s business strategy focused on profit or the environment?
As stated above, the question of whether or not the host country’s economic development and
environmental impact were factored into the Bayer Corporation’s business strategy was critical to
framing the investigation. To limit the scope of the study, The People’s Republic of China (PRC) and
Taiwan were evaluated based on Bayer’s joint ventures and investments in both areas. Web searches
were performed on both Taiwan and the PRC to identify data sources relating to economic
development and the environment. Taiwan was selected for specific examples due to availability of
data, and therefore overall ease of study. Thus, the focus became, were Taiwan’s economic and
environmental concerns incorporated into Bayer’s business strategy. Indeed, would Bayer’s vision of
“Ecology in Harmony” hold true in application (Annual report, 2000, p.50-51)? Or would profitability
take precedence over the environment?
The problem statement for this case study was: “Is Taiwan the new land of economic opportunity or
the dumping-ground for the toxic by-products of the Bayer Corporation’s multinational
pharmaceutical joint ventures?” And the hypothesis was: ”The Bayer Corporation’s business strategy
affects Taiwan’s natural environment.” The independent variable was the Bayer Corporation’s
business strategy, and the dependent variable was Taiwan’s natural environment. The methodology
used was meta-analysis, incorporating the following research questions to test the hypothesis: 1. Is
there a relationship between the Bayer Corporation’s ideology and the environment? 2. Does the
Bayer Corporation adhere to its corporate ideology regarding the natural environment in practice? 3.
Does Foreign Direct Investment negatively affect Taiwan’s natural environment?
Operational Definitions
According to Collins and Porras (1997), the following definitions can be used to describe a visionary
company (p.47-75). These definitions also served as a guideline for analyzing the business strategy of
the Bayer Corporation (see appendix 1).
Core values need no rational or external justification. Nor do they sway with the trends and fad of the
day. Nor do they shift in response to changing market conditions. They are the organization’s
essential and enduring tenets and a small set of general guiding principles; not to be confused with
specific cultural or operating practices; not to be compromised for financial gain or short-term
expediency.
Cultural analysis was used as the primary method of analyzing the data based on Brake, Walker and
Walker’s “Cultural Orientations Framework.” The Brake et al.'s model was selected based on its
effectiveness in integrating “…the findings of the anthropologists, psychologists, communication
experts, and business consultants…as well as [their] own experiences in teaching cross cultural
seminars to thousands of executives and managers throughout the world…”(Brake, Walker, &
Walker, 1995, p.44). And the model’s “find our feet in another culture” practicality to assist business
people in “distinguishing between cultures and guiding key decisions” (p.44).
Ideological research indicated that the authenticity of the ideology and the extent to which a company
attains consistent alignment with the ideology counts more than the content of the ideology.
Profitability is a necessary condition for existence and a means to more important ends, but not an
end in itself. In visionary companies, profit is like oxygen, food, water, and blood for the body; they
are not the point of life, but without them, there is no life.
Purpose is the organization’s fundamental reason for existence beyond just making money—a
perpetual guiding star on the horizon; not to be confused with specific goals or business strategies.
Visionary companies don’t see a choice between living up to their values or being pragmatic; they see
it as a challenge to find pragmatic solutions that are consistent with their core values.
Strategic alliances are a type of cooperative agreement that has become increasingly popular”
(Barger, 2000, p.1). Indeed, “The old paradigms of organizational structure, management, and
competition are no longer functional given the nature of pressures created by globalization”(p.1).
Among the many forms of strategic alliance, the joint venture was found to be a common vehicle in
cross-border cooperation. The “Strategic alliances and joint ventures provide a strategic competitive
advantage for global corporations today…in part…attributed to rapid changes and uncertainties in
technology development and the need to compete in a global marketplace”(p.2). Yet “…a significant
number of alliances show or have shown serious managerial and financial trouble within the first 2
years of their formation (Bleck & Ernst, 1991). Several sources cited that up to 60% of all alliances
end in failure, and a significant number of these alliances have suffered from serious managerial and
financial difficulties within the first 2 years of their formation. Thus, the questions became: “Why
were success rates so low?” And “Are differences in cultural orientation contributing factors in the
failure rate of cross-border strategic alliances?”
Question 1: What is Germany’s national cultural orientation?
Conducting an analysis of Germany’s cultural orientation using the Brake et al. (1995) Cultural
Orientation Framework revealed that the German cultural value orientation tends to reflect the
following views: 1. People can dominate their environment and change it to meet their needs, 2.
People concentrate on one task at a time and are highly committed to schedules, 3. Punctuality is
defined precisely, 4. High value is placed on the maintenance of tradition, 5. People are relationship
centered and focus on working in the moment, 6. Information is provided primarily through words
and explicitly expressed, 7. Preference for explicit one or two-way communication and conflict is
managed, 8. People tend to be less unemotional and impersonal in their communication style, 9. High
importance is placed on following rules and social customs, 10. There tends to be a group orientation
in the use of physical space, 11. Value is attributed to power differences between individuals and
groups, 12. Independence is highly valued, 13. Emphasis is placed on rules before relationships, 14.
Achievement, assertiveness and material success are valued, 15. There is a high need for
predictability and rules and conflict is considered threatening, and 16. Reasoning tends to be based on
experience and experimentation, and 17. There is a preference for holistic thinking or big picture
thinking that focuses on the relationships between things (Brake, Walker & Walker, 1995, p.47).
Question 2: What is Taiwan's cultural orientation?
Conducting an analysis of Taiwan’s cultural orientation using the Brake et al. (1995) Cultural
Orientation Framework revealed that the Taiwanese cultural value orientation tends to reflect the
following views: 1. People believe they should live in harmony with the world around them, 2. People
focus on multiple tasks and relationships rather than deadlines, 3. Punctuality is defined precisely, 4.
High value is placed on the maintenance of tradition, 5. People are relationship centered and focus on
working in the moment, 6. Shared experience makes certain things understood without being stated
explicitly, 7. People prefer implicit communication and avoid conflict, 8. People tend to be less
unemotional and impersonal in their communication style, 9. High importance is placed on following
rules and social customs, 10. There tends to be a group orientation in the use of physical space, 11.
Value is attributed to power differences between individuals and groups, 12. Individual interests are
subordinate to group interests and identity is based on the social network, 13. Emphasis is placed on
rules before relationships, 14. Achievement, assertiveness and material success are valued, 15. There
is a high need for predictability and rules and conflict is considered threatening, 16. Reasoning is
based on theory and logic, and 17. There is a preference for holistic thinking or big picture thinking
that focuses on the relationships between things (Brake, Walker & Walker, 1995, p.47).
Question 3: What were the areas of conflict and synergy between Germany and Taiwan?
Based on the analysis of the data, there were four dimensions where potential cultural conflict could
occur between the national cultural orientation of the Bayer Corporation and Taiwan: Environment,
Time, Communication, Individualism, and Thinking.
Environment
The Environment variable has three orientations: Control, Harmony, and Constraint. Although both
Germany and Taiwan have a Constraint mix, it was their respective dominant Control and Harmony
opposites that were the source of potential conflict. More specifically, the paradox between the yang
German view of human beings dominating the environment to fit human needs in contrast with the
yin Taiwanese view that humans should live in harmony with the world around them.
Communication
The Communication variable has eight orientations: High context vs. Low context, Direct vs.
Indirect, Expressive vs. Instrumental, and Formal vs. Informal. The differences between Germany
and Taiwan are found in the High vs. Low context, and Direct vs. Indirect orientations. The Low
context German culture that tends to view communication in the context of the exchange of facts
stands in opposition to the Taiwanese view that shared experiences make certain things understood
without needing them to be stated. The yang Directness of the German communication style overlays
a preference for explicit one or two way conversations where conflicts are managed whereas the yin
Taiwanese mode of communication stresses implicit communication and conflict avoidance.
Individualism
The Individualism variable is linked to two orientations: Individualistic vs. Collectivist, and
Universalism vs. Particularism. The potential for tension between the German national cultural
orientation and the Taiwanese view emerges from the dominant “I” versus “We” orientation. The
yang “I” German culture assigns high value to individual achievement opposes the yin Taiwanese
“We” tendency to highly value individuals who subordinate their own interests to serve group
interests.
Thinking
The Thinking variable relates to two orientations: Deductive vs. Inductive, and Linear vs. Systemic.
Interestingly, while both the national cultural orientation of both the German’s and the Taiwanese
tends towards systemic thinking, they differ in the problem solving or reasoning facet of the thought
process. The German tendency for Inductive, experience and experimentation-based reasoning
contrasts the Taiwanese theory and logic-based method of Deductive reasoning.
Literature Review
Research Question 1: Is there a relationship between the Bayer Corporation’s ideology, business
strategy and the environment?
The Bayer Group in Taiwan is an affiliate of Bayer AG, Germany, and is considered one of the largest
diversified international chemicals and health care groups in the world. Bayer has maintained ties with
Taiwan dating back to 1882. Bayer’s business presence in Taiwan was established in 1958 with the
founding of its independent trading entity, Bayer Taiwan Co., Ltd. in Hong Kong (Sinofile.com). The
Bayer-Taiwan group, with its four offices in Taiwan, “has been the engine of growth for Bayer’s
core business sectors—Health Care, Polymers, Agriculture and Chemicals.” And “It is responsible for
managing Bayer’s sales and overall activities in Taiwan”(Bayer.com). In 1993, a “comprehensive
cooperation agreement with the Ministry of Chemical Industry served as a catalyst for the
establishment of “Joint Ventures in Taiwan.” The Bayer-Groups Corporate goals “…are to steadily
increase corporate value and generate a high value added for the benefit of our stockholders, our
employees and the community in every country in which we operate.” And “…our technical and
commercial expertise involves responsibility to work for the common good and contribute to
sustainable development” (Bayer.com). The driving force behind these efforts was brought about
because “Bayer’s corporate vision to change the world with great care also defines our environmental
vision.” And ”…minimizing our environmental impact is an integral part of every product, process or
development we initiate” (Bayer.com). By 2001, the Bayer Group had established over 11 production
entities in the life sciences, polymer and chemical sectors in Taiwan and Taiwan: with goals to
increase profit and protect the environment.
Research Question 2: Does the Bayer Corporation adhere to its corporate ideology regarding the
environment in practice?
According to Bauman (1998), “Alongside …business, finance, trade and information flow, a
‘localizing,’ space-fixing process is set into motion…as globalization for some means localization for
others; signaling a new freedom for some, upon many others it descends as an uninvited and cruel
fate” (p.2). Bauman (1998) also states that, “Globalization divides as much as it unites; it divides as it
unites—the causes of division being identical with those which promote the uniformity of the globe”
(p.2). Yet on the surface, “For Bayer and the Taiwan government, it is a perfect match. The German
chemical giant has chosen the western port city of Taichung to build a $1.8 billion plan...[that] would
spin-off $2 billion worth of economic benefits”(Suh & Eyton, 2001, p.1). The project, if realized,
“…would also give a boost to Taipei’s vision of the island as a major industrial and technological
center in the region” (p.1). However, “The environmentalists look at the issue from a different angle.
For them, and an increasing number of residents, the question should be: Is economic growth worth
pursuing at all costs?” ”(Suh & Eyton, 2001, p.1). And although corporate communications state that
“Bayer has succeeded in using resources more effectively and reducing emissions over the past
decade, mainly by applying the principle of in-process environmental protection,” in Taiwan it was
not enough (Bayer.com, 2001). Indeed, “…what brought local residents out into the streets …to
protest against the project was the prediction of catastrophe in the event of an accident… [When]
…warned that phosgene—a poisonous by-product of TDI production…was used as a chemical
weapon during World War I …would devastate the area if it escaped” (Suh & Eyton, 2001, p.1).
Research Question 3: Does FDI affect Taiwan’s economy and environment?
Based on a recent report from the Organization for Economic Cooperation and Development,
“Taiwan is increasingly interested in further advancing its investment co-operation with the OECD,
This is in part due to the fact that Taiwan wants to attract more ‘quality’ foreign direct investment
(FDI)…”(OECD). FDI, according to the report, “…has been one of the most significant features of
Taiwan’s economic reform and opening up to the outside world” (OECD). During the last two
decades Taiwan has become progressively more liberal in its FDI policies, addressed barriers to FDI,
and taken steps to improve the investment environment in general. Foreign direct investment, in fact,
“has been playing an increasingly important role in Taiwan’s economy in terms of capital formation,
employment creation, labor training, export promotion, technology transfer, productivity growth,
competition and integration with the world economy”(OECD). Taken together, “Taiwan has become
one of the most attractive destinations for FDI in the world. The total amount of incoming FDI rose
from almost zero in 1978 to a high of about $360 billion in 2000” (OECD). And “…Taiwan has come
to terms with the rest of the world because it is so dependent on it”(Rohwer, 2001, p.1). In the year
2000, for example, Taiwan’s “Exports…were more than 20% of GDP and imports about 12%”(p.1).
And FDI has been rising by $45 billion a year, and foreign-owned companies account for nearly half
of Taiwan’s export (p.2). And Bayer in particular “is highly committed not only to trading with
Taiwan but to investing substantially in [Taiwan’s] economy”(Sinofile.com). In effect, the increasing
level of FDI is fueling Taiwan’s economic growth, and thus has become less independent and more
influenced in its development of domestic and foreign policy: to include environmental policy.
Methodology
The research design was based on the exploratory case study model due to time constraints, and
desire to investigate potential areas for future research in the subject area. The data required for
answering the hypothesis was in three basic areas: the Bayer Corporation’s business strategy, FDI
(foreign direct investment) and environmental studies in the PRC and Taiwan, and information about
Bayer’s corporate ideology. The information was collected primarily through the World Wide Web,
literary reviews, and previous research. A brief summary of the data collection process follows: 1.
Conduct web search on the specified population (multinational pharmas) 2. Select five cases from the
results to be considered for inclusion in the study, 3. Conduct searches combining each case AND
the selected region (Taiwan), 4. Review each case using breadth and quality of information available
as a guideline, 5. Select top two cases and perform detailed searches based on topics of interest, 6.
Select top candidate based on best fit between availability of data and topic of interest, 7. Draft
problem statements and hypothesis to refine research efforts, 8. Expand research to include literature
reviews, proprietary databases to collect data relating to the problem statement and hypothesis.
The theoretical perspective guiding this study was based on Collins and Porras’ (1997) “More than
Profit” concept of a visionary company constructed utilizing Collins’ et al. framework for identifying
best practices identified in visionary companies (see appendix 1). The model was used to establish a
range from low to high level of fit between best practices and the Bayer Corporation’s business
strategies. The primary method used to analyze the data was meta-analysis (appendix 2). The
secondary method for analyzing and cross-referencing the data was the triangulation method
(appendix 3).
Limitations
The research was based on qualitative analysis following a case study format. Therefore, the
limitations of the research include researcher bias, lack of generalizability, and limited data collection
due to time constraints and relative scarcity of academic research on the direct environmental impact
of the Bayer Corporation’s pharmaceutical production facilities in the PRC and Taiwan. Thus data
collection was largely limited to systematic Internet searches, database searches, and literature
reviews. In addition, the sources were second party references and many were not derived from
academic research data, hence the information provided was considered subjective. The interpretation
and analysis of the data was likewise considered subjective. As a result, the research should be
evaluated in light of its subjectivity; therefore the findings may be questionable in terms of the degree
of academic rigor applied, and its general applicability, reliability and validity.
Analysis and Discussion
Research Question 1: Is there a relationship between the Bayer Corporation’s ideology, business
strategy and the environment?
As cited in the literature review, Bayer’s “…goals are to steadily increase corporate value and
generate a high value added for the benefit of our stockholders, our employees and the community in
every country in which we operate”(Bayer.com). And “Bayer’s corporate vision to change the world
with great care also defines [their] environmental vision.” Yet, these statements stand in contrast to
“The aim of Bayer’s investment philosophy …to enable us to offer our customers top-of-the-line
products and services while at the same time achieving a sustained increase in the company’s value” ”
(Bayer Annual report, 2000, p.25). And “The yardstick is the cost of capital… [Thus]…before
ground is broken…the planners and financial experts have their say…[and]…Detailed predictions of
cash flows are made years in advance to ensure that the investment will in fact create value for Bayer”
(p.25). Therefore, Bayer’s efforts to “…set up 10 joint ventures and two wholly owned subsidiaries
in Taiwan, all of which operate production facilities” were driven by a strategy of “Market presence
through joint ventures,” to “create value for Bayer” (Sinofile.com, 2001; Bayer Annual Report, 2000,
p.25). And the construction of the production facilities were linked to Bayer’s belief “…that taking
into consideration and minimizing our environmental impact is an integral part of every product,
process or development we initiate” (Bayer.com). However, in Taiwan the strategy to build a $1.8
billion plant met with resistance due to “…predictions of catastrophe in the event of an accident”
caused by the escape of poisonous by-products into the environment (Suh & Eyton, 2001, p.1).
Research Question 2: Does the Bayer Corporation adhere to its corporate ideology regarding the
environment in practice?
As stated above, Bayer’s believes “…that our technical and commercial expertise involves
responsibility to work for the common good and contribute to sustainable development”(Bayer.com).
Thus, one could argue that the construction of pharmaceutical production facilities would be linked to
this ideology. Yet, in Taiwan, Bayer’s proposal “to build a $1.8 billion plant that would manufacture
toluene diisocyanate (TDI)…[that]… If realized… would spin off $2 billion worth of economic
benefits” was protested by environmental activists (Suh & Eyton, 2001, p.1). And “…many in
government and industry [were] asking a question that [was] reverberating around the region: Is
environmental activism stifling the business climate?” (p.1). However, for “The
environmentalists…and an increasing number of residents, the question should be: Is economic
growth worth pursuing at all costs?” (p.1). The catalyst for resident protesting in the streets against
the proposal was “An ‘Anti-Bayer Action Group’ [that] warned that phosgene—a poisonous by-
product of TDI production that was used as a chemical weapon in World War I—would devastate
the area if it escaped” (Suh & Eyton, 2001, p.1). Yet, “Regarding such a scenario, Bayer Taiwan
Chairman Horst Muck [had] two words: ‘Total nonsense.’ The firm insists that only one thing could
rupture the system: and explosion”(p.1). But Shi Hsin-min, coordinator of the Taiwan Environmental
Protection Union, was “skeptical.” Thus, the overall scenario appears in contradiction with Bayer’s
ideology of “Ecology and Economy in Harmony” and its “very high score for its social commitment
to the communities around the world…” (Bayer.com; Annual Report, 2000, p.50).
Research Question 3: Does FDI affect Taiwan’s (Taiwan’s) economy and environment?
As cited in the literature review, “Taiwan has become one of the most attractive destinations for FDI
in the world…from almost zero in 1978 to a high of about $360 billion in 2000”(OECD Report).
According to Rohwer (2001), FDI has been rising by $45 billion a year, and foreign-owned
companies account for nearly half of Taiwan’s export (p.2). And “As this process unfolds, Taiwan
will face dislocations, political risks, and business opportunities all at the same time. Consider what is
happening to its state-owned enterprises”(p.2). In fact, “For decades they have been…employing up
to 120 million people in jobs and factories that were notably unproductive” (p.2) The government did
not address the issues: “Now, these factories are…being dismantled”(p.2). It was estimated that, “By
2005 some 75% of Taiwan’s industrial economy will be in private hands”(p.2). And Bayer, in
particular “is highly committed …to investing substantially in [Taiwan’s] economy”(Sinofile.com).
The increasing level of incoming FDI was fueling both Taiwan’s economic growth its development
of domestic and foreign policy. As stated in the literature review, “Taiwan is increasingly interested
in…advancing its investment co-operation with the OECD…in part due to the fact that Taiwan wants
to attract more ‘quality’ [FDI]…”(OECD). Yet, “…Taiwan does not outperform other developing
countries on average after controlling for the market size and other independent factors. Therefore,
the potential for Taiwan to improve it FDI performance is large”(OECD). In fact, “Taiwan expects
significantly increased inflows over the next five years following its WTO accession…and is on the
threshold of crucial …policy decisions concerning FDI”(OECD). However, as in the Bayer-Taiwan,
scenario:”Is economic growth worth pursuing at all costs?”
Conclusions
Research Question 1: Is there a relationship between the Bayer Corporation’s ideology, business
strategy and the environment? Based on the findings of this study it appears that there is a relationship
between the Bayer Corporation’s ideology, business strategy and the environment. Indeed, it was
clear that Bayer’s goals of increasing corporate value and generating value-added for the benefit of
stockholders…and the community…” were linked to “Bayer’s corporate vision to change the world
with great care” which also defined their environmental vision”(Bayer.com).
Research Question 2: Does the Bayer Corporation adhere to its corporate ideology regarding the
environment in practice? The paradox of Bayer’s ideology of “Ecology and Economy in Harmony”
and the TDI scenario in Taiwan led to the conclusion that there was a questionable degree of
alignment between Bayer’s ideology and its actions regarding the environment in practice (Bayer.
com; Annual Report, 2000, p.50).
Research Question 3: Does FDI affect Taiwan’s (Taiwan’s) economy and environment? The
increasing level of incoming FDI clearly appeared to affect Taiwan’s economic growth, its
development of domestic and foreign policy, and the environment. More specifically, the fact that
“…many in government and industry [were] asking…Is environmental activism stifling the business
climate?” in direct opposition to the environmentalists and resident’s question of “Is economic
growth worth pursuing at all costs?” evidenced the polarizing affect of FDI in Taiwan (Suh & Eyton,
2001, p.1).
Collectively, the findings led to the conclusion that Taiwan was the new land of economic
opportunity AND the dumping-ground for the toxic by-products of the Bayer Corporation’s
multinational pharmaceutical joint ventures.
Recommendations
As stated by Bauman (1998), “Globalization divides as much as it unites; it divides as it unites—the
causes of division being identical with those which promote the uniformity of the globe”(p.2). Yet,
According to Collins and Porras (1997), The Bayer Corporation need not “oppress themselves [or
Taiwan or Taiwan] with the ‘Tyranny of the OR’-the traditional view that cannot easily accept
paradox…”(p. 43). Indeed, with greater effort to align ideology, strategy, and corporate actions, the
Bayer Corporation can continue to be profitable for stockholders AND add value to the host country
thereby potentially achieve their goal of “Ecology and Economy in Harmony” in the PRC and Taiwan
(Bayer Annual Report, 2000, p.50; Collins & Porras, 1997, p.44). And thus, “…liberate themselves
with the ‘Genius of the AND’—the ability to embrace both extremes of a number of dimensions at
the same time. Instead of choosing between A OR B, they figure out a way to achieve both A AND
B” (p.44). Because “Profitability is a necessary condition for existence …but it is not the end in itself
… Profit is like oxygen, food, water…[or the environment]; they are not the point of life, but without
them, there is no life” (p.55).
Following are questions recommended for additional study:
1. What is the affect of globalization on host and home countries?
2. What is the nature of the Bayer Corporation’s relationship strategy with Taiwan and the People’s
Republic of Taiwan: symbiotic or parasitic?
3. Does the corporate culture of the parent company in cross-border strategic alliances affect the
host country’s corporate culture?
4. Does the national culture of the host country in cross-border strategic alliances affect the parent
company’s corporate culture?
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David L. Bevett, BS, MPH
May 2002
Introduction
The problem statement for study was “Is Taiwan the new land of growth, development, and
economic opportunity or the dumping-ground for the toxic by-products of multinational
pharmaceutical companies?” Granted, the magnitude of the question belied easy answers and was
ultimately beyond the scope of this study. Yet, the critical nature of the question remained and was
deemed viable for investigation. In part due to a Chinese economy, by many accounts, that was
growing and diversifying at a staggering and unprecedented rate, with significant economic
development attributed to the FDI (Federal Direct Investments) of multinational pharmaceutical
companies. Taiwan in particular has become the site of an increasing number of pharmaceutical joint
ventures established by multinational corporations seeking lower labor costs, tax incentives, and
opportunities for increasing profit margins and economies of scale. Thus, the question became
economic development at what cost?
The Bayer Group began conducting business in Taiwan in 1958, with the signing of a distribution
agreement with the Chung Teh Company in 1958 (Bayertaiwan.com). As stated in Bayer-Taiwan’s
corporate communications, “Chung Teh distributed products from Bayer's Chemical, Dyestuffs,
Fibers, Agrochemicals and Veterinary Business Groups. Encouraged by the success of this
arrangement, the Health Care Business Groups soon entered the market” (Bayertaiwan.com). And
sales and market-share for most of Bayer’s products in Taiwan have grown every year. In January
1989, Bayer created a direct subsidiary in Taiwan, Bayer Taiwan Co., Ltd. And Bayer-Taiwan’s sales
per employee are among the highest in Asia (Bayertaiwan.com).
As stated in corporate communications, the principle of sustainable development is fundamental to
Bayer’s philosophy, and the Bayer-Taiwan Group became a founding member of the Taiwan
Responsible Care Association (TRCA) founded in 1998, following years of strong promotion of the
international Responsible Care program (Bayertaiwan.com). Bayer-Taiwan “incorporates guidelines
for Responsible Care throughout all company operations, clearly demonstrating our commitment to
health, safety and environmental protection” (Bayertaiwan.com). Bayer-Taiwan promotes
“Responsible Care practices among company staff, in the community at large, and also take an active
role in environmental education”(Bayertaiwan.com). And in 2001, Bayer employed more than 300
people in Taiwan and achieved sales of over NT$ 10 billion on the island, making Bayer Taiwan Co.
Ltd. one of the four largest subsidiaries in Asia.
As cited in corporate documents, “The aim of Bayer’s investment philosophy is to enable us to offer
our customers top-of-the-line products and services while at the same time achieving a sustained
increase in the company’s value. This means all projects have to promise long-term profitability.”
And “The yardstick is the cost of capital…” (Bayer Annual report, 2000, p.25). In addition,
“…before ground is broken for a project …the planners and financial experts have their say. Detailed
predictions of cash flows are made years in advance to ensure that the investment will in fact create
value for Bayer”(p.25). Yet, what “predicted” environmental impact would be created for the host
country? Was the Bayer Group’s business strategy focused on profit or the environment?
As stated above, the question of whether or not the host country’s economic development and
environmental impact were factored into the Bayer Corporation’s business strategy was critical to
framing the investigation. To limit the scope of the study, The People’s Republic of China (PRC) and
Taiwan were evaluated based on Bayer’s joint ventures and investments in both areas. Web searches
were performed on both Taiwan and the PRC to identify data sources relating to economic
development and the environment. Taiwan was selected for specific examples due to availability of
data, and therefore overall ease of study. Thus, the focus became, were Taiwan’s economic and
environmental concerns incorporated into Bayer’s business strategy. Indeed, would Bayer’s vision of
“Ecology in Harmony” hold true in application (Annual report, 2000, p.50-51)? Or would profitability
take precedence over the environment?
The problem statement for this case study was: “Is Taiwan the new land of economic opportunity or
the dumping-ground for the toxic by-products of the Bayer Corporation’s multinational
pharmaceutical joint ventures?” And the hypothesis was: ”The Bayer Corporation’s business strategy
affects Taiwan’s natural environment.” The independent variable was the Bayer Corporation’s
business strategy, and the dependent variable was Taiwan’s natural environment. The methodology
used was meta-analysis, incorporating the following research questions to test the hypothesis: 1. Is
there a relationship between the Bayer Corporation’s ideology and the environment? 2. Does the
Bayer Corporation adhere to its corporate ideology regarding the natural environment in practice? 3.
Does Foreign Direct Investment negatively affect Taiwan’s natural environment?
Operational Definitions
According to Collins and Porras (1997), the following definitions can be used to describe a visionary
company (p.47-75). These definitions also served as a guideline for analyzing the business strategy of
the Bayer Corporation (see appendix 1).
Core values need no rational or external justification. Nor do they sway with the trends and fad of the
day. Nor do they shift in response to changing market conditions. They are the organization’s
essential and enduring tenets and a small set of general guiding principles; not to be confused with
specific cultural or operating practices; not to be compromised for financial gain or short-term
expediency.
Cultural analysis was used as the primary method of analyzing the data based on Brake, Walker and
Walker’s “Cultural Orientations Framework.” The Brake et al.'s model was selected based on its
effectiveness in integrating “…the findings of the anthropologists, psychologists, communication
experts, and business consultants…as well as [their] own experiences in teaching cross cultural
seminars to thousands of executives and managers throughout the world…”(Brake, Walker, &
Walker, 1995, p.44). And the model’s “find our feet in another culture” practicality to assist business
people in “distinguishing between cultures and guiding key decisions” (p.44).
Ideological research indicated that the authenticity of the ideology and the extent to which a company
attains consistent alignment with the ideology counts more than the content of the ideology.
Profitability is a necessary condition for existence and a means to more important ends, but not an
end in itself. In visionary companies, profit is like oxygen, food, water, and blood for the body; they
are not the point of life, but without them, there is no life.
Purpose is the organization’s fundamental reason for existence beyond just making money—a
perpetual guiding star on the horizon; not to be confused with specific goals or business strategies.
Visionary companies don’t see a choice between living up to their values or being pragmatic; they see
it as a challenge to find pragmatic solutions that are consistent with their core values.
Strategic alliances are a type of cooperative agreement that has become increasingly popular”
(Barger, 2000, p.1). Indeed, “The old paradigms of organizational structure, management, and
competition are no longer functional given the nature of pressures created by globalization”(p.1).
Among the many forms of strategic alliance, the joint venture was found to be a common vehicle in
cross-border cooperation. The “Strategic alliances and joint ventures provide a strategic competitive
advantage for global corporations today…in part…attributed to rapid changes and uncertainties in
technology development and the need to compete in a global marketplace”(p.2). Yet “…a significant
number of alliances show or have shown serious managerial and financial trouble within the first 2
years of their formation (Bleck & Ernst, 1991). Several sources cited that up to 60% of all alliances
end in failure, and a significant number of these alliances have suffered from serious managerial and
financial difficulties within the first 2 years of their formation. Thus, the questions became: “Why
were success rates so low?” And “Are differences in cultural orientation contributing factors in the
failure rate of cross-border strategic alliances?”
Question 1: What is Germany’s national cultural orientation?
Conducting an analysis of Germany’s cultural orientation using the Brake et al. (1995) Cultural
Orientation Framework revealed that the German cultural value orientation tends to reflect the
following views: 1. People can dominate their environment and change it to meet their needs, 2.
People concentrate on one task at a time and are highly committed to schedules, 3. Punctuality is
defined precisely, 4. High value is placed on the maintenance of tradition, 5. People are relationship
centered and focus on working in the moment, 6. Information is provided primarily through words
and explicitly expressed, 7. Preference for explicit one or two-way communication and conflict is
managed, 8. People tend to be less unemotional and impersonal in their communication style, 9. High
importance is placed on following rules and social customs, 10. There tends to be a group orientation
in the use of physical space, 11. Value is attributed to power differences between individuals and
groups, 12. Independence is highly valued, 13. Emphasis is placed on rules before relationships, 14.
Achievement, assertiveness and material success are valued, 15. There is a high need for
predictability and rules and conflict is considered threatening, and 16. Reasoning tends to be based on
experience and experimentation, and 17. There is a preference for holistic thinking or big picture
thinking that focuses on the relationships between things (Brake, Walker & Walker, 1995, p.47).
Question 2: What is Taiwan's cultural orientation?
Conducting an analysis of Taiwan’s cultural orientation using the Brake et al. (1995) Cultural
Orientation Framework revealed that the Taiwanese cultural value orientation tends to reflect the
following views: 1. People believe they should live in harmony with the world around them, 2. People
focus on multiple tasks and relationships rather than deadlines, 3. Punctuality is defined precisely, 4.
High value is placed on the maintenance of tradition, 5. People are relationship centered and focus on
working in the moment, 6. Shared experience makes certain things understood without being stated
explicitly, 7. People prefer implicit communication and avoid conflict, 8. People tend to be less
unemotional and impersonal in their communication style, 9. High importance is placed on following
rules and social customs, 10. There tends to be a group orientation in the use of physical space, 11.
Value is attributed to power differences between individuals and groups, 12. Individual interests are
subordinate to group interests and identity is based on the social network, 13. Emphasis is placed on
rules before relationships, 14. Achievement, assertiveness and material success are valued, 15. There
is a high need for predictability and rules and conflict is considered threatening, 16. Reasoning is
based on theory and logic, and 17. There is a preference for holistic thinking or big picture thinking
that focuses on the relationships between things (Brake, Walker & Walker, 1995, p.47).
Question 3: What were the areas of conflict and synergy between Germany and Taiwan?
Based on the analysis of the data, there were four dimensions where potential cultural conflict could
occur between the national cultural orientation of the Bayer Corporation and Taiwan: Environment,
Time, Communication, Individualism, and Thinking.
Environment
The Environment variable has three orientations: Control, Harmony, and Constraint. Although both
Germany and Taiwan have a Constraint mix, it was their respective dominant Control and Harmony
opposites that were the source of potential conflict. More specifically, the paradox between the yang
German view of human beings dominating the environment to fit human needs in contrast with the
yin Taiwanese view that humans should live in harmony with the world around them.
Communication
The Communication variable has eight orientations: High context vs. Low context, Direct vs.
Indirect, Expressive vs. Instrumental, and Formal vs. Informal. The differences between Germany
and Taiwan are found in the High vs. Low context, and Direct vs. Indirect orientations. The Low
context German culture that tends to view communication in the context of the exchange of facts
stands in opposition to the Taiwanese view that shared experiences make certain things understood
without needing them to be stated. The yang Directness of the German communication style overlays
a preference for explicit one or two way conversations where conflicts are managed whereas the yin
Taiwanese mode of communication stresses implicit communication and conflict avoidance.
Individualism
The Individualism variable is linked to two orientations: Individualistic vs. Collectivist, and
Universalism vs. Particularism. The potential for tension between the German national cultural
orientation and the Taiwanese view emerges from the dominant “I” versus “We” orientation. The
yang “I” German culture assigns high value to individual achievement opposes the yin Taiwanese
“We” tendency to highly value individuals who subordinate their own interests to serve group
interests.
Thinking
The Thinking variable relates to two orientations: Deductive vs. Inductive, and Linear vs. Systemic.
Interestingly, while both the national cultural orientation of both the German’s and the Taiwanese
tends towards systemic thinking, they differ in the problem solving or reasoning facet of the thought
process. The German tendency for Inductive, experience and experimentation-based reasoning
contrasts the Taiwanese theory and logic-based method of Deductive reasoning.
Literature Review
Research Question 1: Is there a relationship between the Bayer Corporation’s ideology, business
strategy and the environment?
The Bayer Group in Taiwan is an affiliate of Bayer AG, Germany, and is considered one of the largest
diversified international chemicals and health care groups in the world. Bayer has maintained ties with
Taiwan dating back to 1882. Bayer’s business presence in Taiwan was established in 1958 with the
founding of its independent trading entity, Bayer Taiwan Co., Ltd. in Hong Kong (Sinofile.com). The
Bayer-Taiwan group, with its four offices in Taiwan, “has been the engine of growth for Bayer’s
core business sectors—Health Care, Polymers, Agriculture and Chemicals.” And “It is responsible for
managing Bayer’s sales and overall activities in Taiwan”(Bayer.com). In 1993, a “comprehensive
cooperation agreement with the Ministry of Chemical Industry served as a catalyst for the
establishment of “Joint Ventures in Taiwan.” The Bayer-Groups Corporate goals “…are to steadily
increase corporate value and generate a high value added for the benefit of our stockholders, our
employees and the community in every country in which we operate.” And “…our technical and
commercial expertise involves responsibility to work for the common good and contribute to
sustainable development” (Bayer.com). The driving force behind these efforts was brought about
because “Bayer’s corporate vision to change the world with great care also defines our environmental
vision.” And ”…minimizing our environmental impact is an integral part of every product, process or
development we initiate” (Bayer.com). By 2001, the Bayer Group had established over 11 production
entities in the life sciences, polymer and chemical sectors in Taiwan and Taiwan: with goals to
increase profit and protect the environment.
Research Question 2: Does the Bayer Corporation adhere to its corporate ideology regarding the
environment in practice?
According to Bauman (1998), “Alongside …business, finance, trade and information flow, a
‘localizing,’ space-fixing process is set into motion…as globalization for some means localization for
others; signaling a new freedom for some, upon many others it descends as an uninvited and cruel
fate” (p.2). Bauman (1998) also states that, “Globalization divides as much as it unites; it divides as it
unites—the causes of division being identical with those which promote the uniformity of the globe”
(p.2). Yet on the surface, “For Bayer and the Taiwan government, it is a perfect match. The German
chemical giant has chosen the western port city of Taichung to build a $1.8 billion plan...[that] would
spin-off $2 billion worth of economic benefits”(Suh & Eyton, 2001, p.1). The project, if realized,
“…would also give a boost to Taipei’s vision of the island as a major industrial and technological
center in the region” (p.1). However, “The environmentalists look at the issue from a different angle.
For them, and an increasing number of residents, the question should be: Is economic growth worth
pursuing at all costs?” ”(Suh & Eyton, 2001, p.1). And although corporate communications state that
“Bayer has succeeded in using resources more effectively and reducing emissions over the past
decade, mainly by applying the principle of in-process environmental protection,” in Taiwan it was
not enough (Bayer.com, 2001). Indeed, “…what brought local residents out into the streets …to
protest against the project was the prediction of catastrophe in the event of an accident… [When]
…warned that phosgene—a poisonous by-product of TDI production…was used as a chemical
weapon during World War I …would devastate the area if it escaped” (Suh & Eyton, 2001, p.1).
Research Question 3: Does FDI affect Taiwan’s economy and environment?
Based on a recent report from the Organization for Economic Cooperation and Development,
“Taiwan is increasingly interested in further advancing its investment co-operation with the OECD,
This is in part due to the fact that Taiwan wants to attract more ‘quality’ foreign direct investment
(FDI)…”(OECD). FDI, according to the report, “…has been one of the most significant features of
Taiwan’s economic reform and opening up to the outside world” (OECD). During the last two
decades Taiwan has become progressively more liberal in its FDI policies, addressed barriers to FDI,
and taken steps to improve the investment environment in general. Foreign direct investment, in fact,
“has been playing an increasingly important role in Taiwan’s economy in terms of capital formation,
employment creation, labor training, export promotion, technology transfer, productivity growth,
competition and integration with the world economy”(OECD). Taken together, “Taiwan has become
one of the most attractive destinations for FDI in the world. The total amount of incoming FDI rose
from almost zero in 1978 to a high of about $360 billion in 2000” (OECD). And “…Taiwan has come
to terms with the rest of the world because it is so dependent on it”(Rohwer, 2001, p.1). In the year
2000, for example, Taiwan’s “Exports…were more than 20% of GDP and imports about 12%”(p.1).
And FDI has been rising by $45 billion a year, and foreign-owned companies account for nearly half
of Taiwan’s export (p.2). And Bayer in particular “is highly committed not only to trading with
Taiwan but to investing substantially in [Taiwan’s] economy”(Sinofile.com). In effect, the increasing
level of FDI is fueling Taiwan’s economic growth, and thus has become less independent and more
influenced in its development of domestic and foreign policy: to include environmental policy.
Methodology
The research design was based on the exploratory case study model due to time constraints, and
desire to investigate potential areas for future research in the subject area. The data required for
answering the hypothesis was in three basic areas: the Bayer Corporation’s business strategy, FDI
(foreign direct investment) and environmental studies in the PRC and Taiwan, and information about
Bayer’s corporate ideology. The information was collected primarily through the World Wide Web,
literary reviews, and previous research. A brief summary of the data collection process follows: 1.
Conduct web search on the specified population (multinational pharmas) 2. Select five cases from the
results to be considered for inclusion in the study, 3. Conduct searches combining each case AND
the selected region (Taiwan), 4. Review each case using breadth and quality of information available
as a guideline, 5. Select top two cases and perform detailed searches based on topics of interest, 6.
Select top candidate based on best fit between availability of data and topic of interest, 7. Draft
problem statements and hypothesis to refine research efforts, 8. Expand research to include literature
reviews, proprietary databases to collect data relating to the problem statement and hypothesis.
The theoretical perspective guiding this study was based on Collins and Porras’ (1997) “More than
Profit” concept of a visionary company constructed utilizing Collins’ et al. framework for identifying
best practices identified in visionary companies (see appendix 1). The model was used to establish a
range from low to high level of fit between best practices and the Bayer Corporation’s business
strategies. The primary method used to analyze the data was meta-analysis (appendix 2). The
secondary method for analyzing and cross-referencing the data was the triangulation method
(appendix 3).
Limitations
The research was based on qualitative analysis following a case study format. Therefore, the
limitations of the research include researcher bias, lack of generalizability, and limited data collection
due to time constraints and relative scarcity of academic research on the direct environmental impact
of the Bayer Corporation’s pharmaceutical production facilities in the PRC and Taiwan. Thus data
collection was largely limited to systematic Internet searches, database searches, and literature
reviews. In addition, the sources were second party references and many were not derived from
academic research data, hence the information provided was considered subjective. The interpretation
and analysis of the data was likewise considered subjective. As a result, the research should be
evaluated in light of its subjectivity; therefore the findings may be questionable in terms of the degree
of academic rigor applied, and its general applicability, reliability and validity.
Analysis and Discussion
Research Question 1: Is there a relationship between the Bayer Corporation’s ideology, business
strategy and the environment?
As cited in the literature review, Bayer’s “…goals are to steadily increase corporate value and
generate a high value added for the benefit of our stockholders, our employees and the community in
every country in which we operate”(Bayer.com). And “Bayer’s corporate vision to change the world
with great care also defines [their] environmental vision.” Yet, these statements stand in contrast to
“The aim of Bayer’s investment philosophy …to enable us to offer our customers top-of-the-line
products and services while at the same time achieving a sustained increase in the company’s value” ”
(Bayer Annual report, 2000, p.25). And “The yardstick is the cost of capital… [Thus]…before
ground is broken…the planners and financial experts have their say…[and]…Detailed predictions of
cash flows are made years in advance to ensure that the investment will in fact create value for Bayer”
(p.25). Therefore, Bayer’s efforts to “…set up 10 joint ventures and two wholly owned subsidiaries
in Taiwan, all of which operate production facilities” were driven by a strategy of “Market presence
through joint ventures,” to “create value for Bayer” (Sinofile.com, 2001; Bayer Annual Report, 2000,
p.25). And the construction of the production facilities were linked to Bayer’s belief “…that taking
into consideration and minimizing our environmental impact is an integral part of every product,
process or development we initiate” (Bayer.com). However, in Taiwan the strategy to build a $1.8
billion plant met with resistance due to “…predictions of catastrophe in the event of an accident”
caused by the escape of poisonous by-products into the environment (Suh & Eyton, 2001, p.1).
Research Question 2: Does the Bayer Corporation adhere to its corporate ideology regarding the
environment in practice?
As stated above, Bayer’s believes “…that our technical and commercial expertise involves
responsibility to work for the common good and contribute to sustainable development”(Bayer.com).
Thus, one could argue that the construction of pharmaceutical production facilities would be linked to
this ideology. Yet, in Taiwan, Bayer’s proposal “to build a $1.8 billion plant that would manufacture
toluene diisocyanate (TDI)…[that]… If realized… would spin off $2 billion worth of economic
benefits” was protested by environmental activists (Suh & Eyton, 2001, p.1). And “…many in
government and industry [were] asking a question that [was] reverberating around the region: Is
environmental activism stifling the business climate?” (p.1). However, for “The
environmentalists…and an increasing number of residents, the question should be: Is economic
growth worth pursuing at all costs?” (p.1). The catalyst for resident protesting in the streets against
the proposal was “An ‘Anti-Bayer Action Group’ [that] warned that phosgene—a poisonous by-
product of TDI production that was used as a chemical weapon in World War I—would devastate
the area if it escaped” (Suh & Eyton, 2001, p.1). Yet, “Regarding such a scenario, Bayer Taiwan
Chairman Horst Muck [had] two words: ‘Total nonsense.’ The firm insists that only one thing could
rupture the system: and explosion”(p.1). But Shi Hsin-min, coordinator of the Taiwan Environmental
Protection Union, was “skeptical.” Thus, the overall scenario appears in contradiction with Bayer’s
ideology of “Ecology and Economy in Harmony” and its “very high score for its social commitment
to the communities around the world…” (Bayer.com; Annual Report, 2000, p.50).
Research Question 3: Does FDI affect Taiwan’s (Taiwan’s) economy and environment?
As cited in the literature review, “Taiwan has become one of the most attractive destinations for FDI
in the world…from almost zero in 1978 to a high of about $360 billion in 2000”(OECD Report).
According to Rohwer (2001), FDI has been rising by $45 billion a year, and foreign-owned
companies account for nearly half of Taiwan’s export (p.2). And “As this process unfolds, Taiwan
will face dislocations, political risks, and business opportunities all at the same time. Consider what is
happening to its state-owned enterprises”(p.2). In fact, “For decades they have been…employing up
to 120 million people in jobs and factories that were notably unproductive” (p.2) The government did
not address the issues: “Now, these factories are…being dismantled”(p.2). It was estimated that, “By
2005 some 75% of Taiwan’s industrial economy will be in private hands”(p.2). And Bayer, in
particular “is highly committed …to investing substantially in [Taiwan’s] economy”(Sinofile.com).
The increasing level of incoming FDI was fueling both Taiwan’s economic growth its development
of domestic and foreign policy. As stated in the literature review, “Taiwan is increasingly interested
in…advancing its investment co-operation with the OECD…in part due to the fact that Taiwan wants
to attract more ‘quality’ [FDI]…”(OECD). Yet, “…Taiwan does not outperform other developing
countries on average after controlling for the market size and other independent factors. Therefore,
the potential for Taiwan to improve it FDI performance is large”(OECD). In fact, “Taiwan expects
significantly increased inflows over the next five years following its WTO accession…and is on the
threshold of crucial …policy decisions concerning FDI”(OECD). However, as in the Bayer-Taiwan,
scenario:”Is economic growth worth pursuing at all costs?”
Conclusions
Research Question 1: Is there a relationship between the Bayer Corporation’s ideology, business
strategy and the environment? Based on the findings of this study it appears that there is a relationship
between the Bayer Corporation’s ideology, business strategy and the environment. Indeed, it was
clear that Bayer’s goals of increasing corporate value and generating value-added for the benefit of
stockholders…and the community…” were linked to “Bayer’s corporate vision to change the world
with great care” which also defined their environmental vision”(Bayer.com).
Research Question 2: Does the Bayer Corporation adhere to its corporate ideology regarding the
environment in practice? The paradox of Bayer’s ideology of “Ecology and Economy in Harmony”
and the TDI scenario in Taiwan led to the conclusion that there was a questionable degree of
alignment between Bayer’s ideology and its actions regarding the environment in practice (Bayer.
com; Annual Report, 2000, p.50).
Research Question 3: Does FDI affect Taiwan’s (Taiwan’s) economy and environment? The
increasing level of incoming FDI clearly appeared to affect Taiwan’s economic growth, its
development of domestic and foreign policy, and the environment. More specifically, the fact that
“…many in government and industry [were] asking…Is environmental activism stifling the business
climate?” in direct opposition to the environmentalists and resident’s question of “Is economic
growth worth pursuing at all costs?” evidenced the polarizing affect of FDI in Taiwan (Suh & Eyton,
2001, p.1).
Collectively, the findings led to the conclusion that Taiwan was the new land of economic
opportunity AND the dumping-ground for the toxic by-products of the Bayer Corporation’s
multinational pharmaceutical joint ventures.
Recommendations
As stated by Bauman (1998), “Globalization divides as much as it unites; it divides as it unites—the
causes of division being identical with those which promote the uniformity of the globe”(p.2). Yet,
According to Collins and Porras (1997), The Bayer Corporation need not “oppress themselves [or
Taiwan or Taiwan] with the ‘Tyranny of the OR’-the traditional view that cannot easily accept
paradox…”(p. 43). Indeed, with greater effort to align ideology, strategy, and corporate actions, the
Bayer Corporation can continue to be profitable for stockholders AND add value to the host country
thereby potentially achieve their goal of “Ecology and Economy in Harmony” in the PRC and Taiwan
(Bayer Annual Report, 2000, p.50; Collins & Porras, 1997, p.44). And thus, “…liberate themselves
with the ‘Genius of the AND’—the ability to embrace both extremes of a number of dimensions at
the same time. Instead of choosing between A OR B, they figure out a way to achieve both A AND
B” (p.44). Because “Profitability is a necessary condition for existence …but it is not the end in itself
… Profit is like oxygen, food, water…[or the environment]; they are not the point of life, but without
them, there is no life” (p.55).
Following are questions recommended for additional study:
1. What is the affect of globalization on host and home countries?
2. What is the nature of the Bayer Corporation’s relationship strategy with Taiwan and the People’s
Republic of Taiwan: symbiotic or parasitic?
3. Does the corporate culture of the parent company in cross-border strategic alliances affect the
host country’s corporate culture?
4. Does the national culture of the host country in cross-border strategic alliances affect the parent
company’s corporate culture?
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