From the Publisher
By the book
Heading to China on business? Then it's worth considering the skills needed to manage business operations there, the secrets to forming successful joint ventures and business partnerships, and the best ways to manage employees on the mainland, where staff turnover is now at a record high.
But that's not all both multinationals and aspiring entrepreneurs need to think about how they can attract China's fickle consumers, and how expatriates and their families can lead a satisfying life in the world's most populous country.
Juan Antonio Fernandez, a professor at the China-Europe International Business School, and Laurie Underwood of the American Chamber of Commerce (AmCham) in Shanghai, have collaborated on a book offering a number of insightful answers to these pressing questions. China CEO: Voices of Experience is required reading for those ready to take the plunge.
But instead of speaking from their own experiences, the authors have interviewed 20 top international executives working in China for Fortune 500 companies such as Airbus, Coca-Cola, General Motors, Microsoft, Sony and Unilever.
The book was an instant hit in Southeast Asian bookstores, selling more than 10,000 copies since its release in late February. It was the March "Book of the Month" in Hong Kong, Singapore, Malaysia, Indonesia and Thailand. Last month, the book was released in the Chinese mainland, European and US markets.
"While there are many excellent books on business in China, frequently the emphasis is on what can go wrong and how to avoid problems. Our focus, however, is what can be done not to go wrong and what to do to achieve success," says Fernandez.
China CEO is full of such sound advice, such as "when selecting an executive for an overseas posting, look for a person with an adventurous spirit, a sense of humour, and an open mind".
Business leaders are advised to "be humble and avoid using an authoritarian style. Influencing and coaching is the way to get the best out of your Chinese employees".
Other core topics include managing Chinese employees, working with local business partners, facing competitors, dealing with intellectual property rights issues, winning over Chinese consumers, and negotiating with the Chinese Government.
The book also has a chapter on helping families survive the China assignment. Dissatisfaction among family members is a problem many expatriate businesspeople must deal with, so the book explains the steps companies can take to ensure that both their employees and their families adjust well to life in China.
Among the core topics in the book, the authors rate the chapters on managing Chinese employees and negotiating with the Chinese Government as probably the most important to most average readers. AmCham rated these two issues as the top two business challenges in a 2005 survey.
"To succeed in China, every international company needs to have a very strong, well-managed, and happy Chinese workforce. Human resource issues especially the 'war for talent' among companies seeking to hire and retain white collar workers are the top concern for multinational companies in China right now," says Underwood.
Though the overall quality of the professional workforce is high and internationally renowned multinationals still enjoy an advantage when recruiting in China, there is a professional staff shortage that is the result of four factors, the authors say. These are fierce competition from international and domestic firms, the rapid growth of China-based multinationals, the lack of Chinese middle managers, and the high expectations of Chinese employees. The fourth factor in particular leads to frequent staff turnover, rising as high as 20 to 30 per cent between 2003 and 2005.
"One of my frustrations is that when you hire smart people who graduated from Tsinghua University or Jiaotong University, they come to your desk and say, 'In three years, I want your job.' It took me 25 years to get here," Philip Murtaugh, chairman and chief executive officer (CEO) of General Motors China tells the authors. "There is such a thing as learning the business, and you don't do that in three years."
After summarizing workforce issues, the book then lists a number of human resource strategies. The chapter on negotiating with the Chinese Government follows a similar framework, spelling out key observations and then offering advice and suggestions.
"A traditional saying in China is: 'No one man can approve a project, but any one man can veto it.' You have to interface with officials at various levels of government to make sure they understand what your project is and that they buy into it," Norman Givant, of Freshfields Bruckhaus Deringer China Practice, tells the authors.
Strategies in the book include involving top executives, hiring locals with government knowledge, understanding the government mindset, winning support at all levels of government, doing your homework and following the rules, and standing your ground in negotiations.
"It's very simple: get a great local to do the work for you," Alan Brown, chairman of Unilever China, tells the authors.
Co-author Fernandez says he was inspired to write the book by his MBA students, who suggested he use China-specific cases in his teaching, instead of borrowing all cases from Western business schools.
"My students helped me see the need to develop China-specific materials for business education," says Fernandez, who now uses the book in his classes, both in and out of China. "The book was eventually geared at a general readership."
Underwood, a veteran business journalist and one of Fernandez's students, was soon brought into the project.
"What surprised me, as a journalist, is that nearly everyone we tried to interview said 'yes'. And all of the 20 CEOs are top executives for major Fortune 500 companies. Best of all, each of them gave us long and detailed interviews, so the book is filled with their insights," says Underwood.
More of the same
Yet China CEO is merely one volume in a flood of China-themed business books, initiated by the success of British businessman Tim Clissold's Mr China, published by Collins in 2004.
Unlike China CEO, which is a collection of insights from approximately 20 business executives, Mr China is a personal story about doing business in China, told in the form of a novel. It has since sold 100,000 copies in ten languages.
The following year saw a number of similarly themed books, all taking different approaches. One Billion Customers: Lessons from the Front Lines of Doing Business in China, by former Wall Street Journal correspondent James McGregor, was perhaps the highest profile release last year. By presenting a series of case studies relating to specific areas of the Chinese economy, the book paints a candid picture of why it is difficult to do business on the mainland.
The China Ready Company, by Shanghai-based consultants Steven H Ganster and Kent D Kedl, is by comparison less story-oriented and more analytical. It discusses a number of ways to measure how whether a foreign company is ready to enter the Chinese market. Asian Brand Strategy: How Asia Builds Strong Brands, by Singapore-based branding consultant Martin Roll, takes a similar analytical approach and presents a set of market-tested guidelines for effective brand management in Asia, including in China.
This year, Shanghai-based advertising executive Tom Doctoroff released his China marketing guide, Billions: Selling to the New Chinese Consumer. The China research team at Credit Suisse have also published their findings in The Rise of the Chinese Consumer: Theory and Evidence.
Palgrave Macmillan, the publisher of Billions, says they received approximately eight book proposals related to Chinese business practices last year. By LI XIAOWEI(China Daily)