Essay on Business in China

1192 Words May 17th, 2012 5 Pages
Business in China

1. What challenges do foreign firms face when they seek to transfer their home management style to China? 2. Discuss the reform of Chinese state-owned enterprises and related government policy changes. Evaluate the impact within the state-owned businesses and the chinese society.

Chinese management

Doing business in China requires a throughout understanding of their management philosophy and practices. Their management style is different in many respects from mainstream Western Management and is characterized by a combination of a paternalistic approach and an intuitive, entrepreneurial, and fast-decision making style.

Challenges for foreign firms in China

MNEs generally start off with clear
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For example, Avon was unsuccessful until the time when the head of Hong Kong Bank of East Asia recommended it to Chinese government.
2)Guanxi is intangible and people who share it are committed to each other. Disregarding this commitment can lead to damage of one’s reputation.
3)Guanxi is social capital. It is an investment in a relationship and should be clearly distinguished from the Western conception of networking that is virtually associated with commercial-based relations. Many Western businesses are often in danger of overemphasizing the gift-giving of Guanxi relationship, thereby coming closely to bribery (взятночиство). Guanxi is not similar to a fee for service, it is given to strengthen personal relationship.
Organisational guanxi: Companies suffer when their Chinese staff leave because they take their valuable guanxi with them. To prevent such loss, one Chinese manager designed to transform individual guanxi into organizational guanxi. This was achieved through organizing regular meetings and social activities for the staff of two partner companies. Also, it is important to audit company’s guanxi with its outside stakeholders, such as customers, suppliers, and government bodies. Such an audit will allow to identify strength and weaknesses of guanxi network.

* Tough from local Chinese players competition

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