Baosteel Group Essay Example

10-million-ton steel-making base in Zhanjiang City. This new base was advantageous as it would address the lack of steel-making facilities in Guangdong, provide savings from closer proximity to Australian iron ore sources, and meet the demand from Honda's and Toyota's manufacturing facilities for flat rolled steel. However, the enterprises needed to be modernized by eliminating outdated capacity and shutting down environmentally harmful operations. While the Guangdong project had positive effects, it also raised challenging governance issues. One issue was how to handle minority investors in the Baoshan listed subsidiary who questioned why the project was pursued by the Group instead of the listed company. Baosteel officials ultimately decided to develop the project under the group to avoid negatively impacting the performance of the listed subsidiary, Baoshan.

Since the project may not be advantageous from the start,