China CEO

China CEO

Voices of Experience from 20 International Business Leaders

By Juan Antonio Fernandez and Laurie Underwood

CHINA CEO: Voices of Experience From 20 International Business Leaders is based on interviews with 20 top executives and eight experienced consultants based in China. Though this book was published way back in 2006, I think it still has certain relevance now in year 2011.

If anyone wants to move to China and work, then I think this is a very practical book to read. I have taken some information and quotes from the book that I really like.

There is saying among expatriate writers in China :
After you have been in China for a week, you can write a book. 
After you have been in China for a month, you can write a short article.
After you have been in China for a year, you keep silent”.

The point is, the more you learn about China, the more you realize there is simply too much to learn.

There are certain key professional and personal qualities essential to manage operations for an international company in China. Based on the author’s finding, there are 3 levels of critical success qualities for an expatriate manager to have to manage a company in China :

1) Professional Qualities

You must have solid technical and corporate expertise in your company. Preferably working a good number of years in your company before moving overseas. You must have international experience before posting to  China. An assignment in either another Asian location or another developing country, or both is preferred.

2)  Personal Global Qualities

You need to be very determined and can handle the ambiguity you find every day. You must have an adventurous spirit. You must take things in a humorous way, not too personally. You must be very open to new things, excited by new things – not someone who wants to preserve his own culture and identity. There is a need to display a commitment to learn and listen to those around you example your employees, your joint venture partners, clients and customers.

3)Personal China Specific Qualities

You must be humble and avoid using authoritarian style. Influencing and coaching are better to get the best out of your Chinese employees. You must also have strength, patience, speed and guanxi building (relationship building).

One of the biggest problem experienced by those CEOs interviewed was the lack of white-collar employees. China is seeing fast growth and high demand for professional staff among both international and domestic firms. On the other hand, the workforce  suffers from a gap in mid-level managers because the 45- and -older generation suffered from a disrupted education and work experience during the Cultural Revolution.

(The Chinese Cultural Revolution start from 1966  to 1976. Set into motion by the Chinese government, then led by Mao Zedong and the Chinese Communist Party, it was designed to further cement socialism in the country by removing capitalism  from Chinese society. In doing so, it involved major changes being made to the political, economic and social nature of China, often through violent means.)

The younger generation of Chinese professionals hold extremely high expectations for a fast-track career. Chinese employees tend to be more motivated by educational perks than Western staff. The Chinese love to receive training, no matter what their professional level. 

The book even provide tips to manage chinese employees. I am amazed that there is a need to create creative job titles to create more layers of positions, have “mini promotion” to retain the employees. Example a “division manager” may sound unimpressive to Chinese ears. The term “manager” may turn off many talented HR executives. A typical reaction among Chinese is “How can I face my friends when they are all directors and I am just a manager? We went to the same university and I work as hard as they do.”  In order to retain people, employers are encouraged to offer good career opportunities, an attractive work environment, and titles that portray a “very good social position” . There is the importance for the Chinese to have “face”.

Intellectual Property rights infrigement is a huge industry in China with a very long history. The ideas was : Buy one, copy it and go from there. If China can copy something, then they save themselves a great deal of foreign exchange by producing it here. With lack of jobs in mind, many government officials and law enforcers consider the local economy to be better off with piracy than without it. There are many vested interests protecting and preserving the counterfeiters, for many reasons – employing redundant workers, generating profits and paying the government tax revenues, and even developing export markets.

This book even provides tips to battle China’s intellectual property rights, having both internal and external measures.

External measures :
1) Work with the government – avoid taking a confrontational stance. Seek to help the government in its work to fight infringement.

2) Join forces with other businesses and associations to share best practises and present a common front to the government.

Internal Measures
1) Dedicate resources to protect intellectual property rights in house.
2) Focus on prevention. Let employees understand the importance of such protection.
3) Use contractual safeguards
4) Protective sensitive technologies. In some cases, companies may not want to bring critical technology to China.

China’s consumers have gained a reputation as tough customers – sophisticated, demanding, price conscious and fickle. Many have unreasonable expectations of perfection when purchasing foreign brands. China represents many markets, not one. Across the nation, consumer groups vary widely in demographics, educational background and international exposure. 

Many MNCs are under pressure in China to offer top quality products and services, but to keep prices lower than elsewhere worldwide. Consumer products such as flat-screen TVs, DVD players and digital cameras have raor-thin profit margin in China. According to one CEO, it is nearly impossible now for international makers to produce a profit-earning color TV in China for the domestic market.

Vast cultural gaps have developed between urbanities and rural residents, between northerners and southerners, and within the consumers population. For example, while the older generations tend to be quite price conscious and are generally cautious in making purchase decisions. Younger generations are often driven by appeals to “face” and prestige. Some young people puchase 2-3 mobile phones. These 20-somethings do not need 3 mobile phones; they simply want them. They want to show a new phone to others- it’s a question of image. That is part of Chinese culture.

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