3. Transnational Governance at Geely Auto During Its Acquisition of Volvo

For automobile companies in the process of internationalization through cross-border mergers and acquisitions, how to carry out governance is a hot topic and worthy of study. This case study considers the situation faced by Geely, a top-10 private company in China’s auto industry. Through research into the background and process of Geely’s acquisition of Volvo, the company explores and analyzes pre- and post-acquisition governance and board executive decision-making during Geely’s acquisition of Volvo. As part of its internationalization strategy, and following years of preparation and careful stakeholder governance, Geely Automobile acquired 100% of the shares in Volvo, which was owned by Ford Motor Company. This set the scene for more innovative transnational governance. Through interest management, executive governance, board governance, and parent–subsidiary relationship governance, Geely facilitated the successful integration of its acquisition, and made a success of its ownership of Volvo. Of all aspects, stakeholder governance was the main manifestation of the effectiveness of its internationalization strategy. The establishment of an international operations team and new board of directors, changes in the decision-making procedures of the board of directors, and the establishment of the “Volvo-Geely Dialogue and Cooperation Committee” were all such innovations. The transnational governance mechanisms established by Geely had improved the strong–strong cooperation between Geely and Volvo, and had shown how “snake can dance with elephant.”