China CEO E-Book

Juan Antonio Fernandez

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 430

Veröffentlichungsjahr: 2011

Beschreibung

CHINA CEO: A Case Guide for Business Leaders in China Some Western business leaders are moving into China without any clear knowledge of the many pitfalls they will encounter: the weak rule of law, forceful governmental intervention, a scarcity of managerial talent, the likelihood of counterfeiting, the fast paced business environment and surprisingly aggressive local competitors. This book uses case studies to both illuminate and examine these key managerial challenges. Each case focuses on a specific topic and is complemented with commentaries from professors and executives who have extensive front-line experience in China. The cases are the product of three-year research and are well-tested in MBA and executive courses. The authors' philosophy is that readers can learn most effectively through the experience of others captured in real cases! The book includes a broad range of companies, such as Emerson, Eli Lily, General Motors, Peugeot, Carrefour, Daimler-Chrysler, Picanol. It also includes more personal experiences concerning the many challenges of expatriate-living in China , some of whom have started their own businesses. The book provides concise but insightful analysis to help readers to get the most from the case studies. As a result, this book will help you get better prepared to face the varied challenges you will find in China. These cases complement the material presented in a previous work, China CEO: Voices of Experience from 20 International Business Leaders, also published by John Wiley & Sons.

Leseprobe

Introduction

Acknowledgments

Chapter 1: Leadership in China: Putting the heart where the mind is

INTRODUCTION

CASE STUDY EMERSON ELECTRIC (SUZHOU) CO., LTD

CASE COMMENTARIES

Chapter 2: Human resources in China: Chasing the runaway bride

INTRODUCTION

CASE STUDY: ELI LILLY AND COMPANY, CHINA AFFILIATE, WAR FOR TALENT

CASE COMMENTARIES

Chapter 3: Joint ventures: Dancing the Chinese tango

INTRODUCTION

CASE STUDY GUANGZHOU PEUGEOT AUTOMOBILE CO., LTD

CASE COMMENTARIES

Chapter 4: Dealing with headquarters: The art of juggling

INTRODUCTION

CASE STUDY PICANOL CHINA

CASE COMMENTARIES

Chapter 5: Counterfeiters in China: Catch me if you can

INTRODUCTION

CASE STUDY: GM CHINA VERSUS CHERY, DISPUTES OVER INTELLECTUAL PROPERTY RIGHTS

CASE COMMENTARIES

Chapter 6: Chinese consumers: The new kids on the block

INTRODUCTION

CASE STUDY MERcEDES-BENZ AND WUHAN WILD ANIMAL PARK

CASE COMMENTARIES

Chapter 7: Government relationship: Playing Chinese poker

INTRODUCTION

CASE STUDY: CARREFOUR CHINA, REVAMPING BUSINESS TO FOLLOW LOCAL RULES

CASE COMMENTARIES

Chapter 8: Expatriates in China: Lost in translation

INTRODUCTION

CASE STUDY: THE LOLLYPOP THAT TURNED BITTER, THE EXPERIENCE OF AN EXPATRIATE COUPLE IN CHINA

REFLECTIONS

CASE COMMENTARIES

Chapter 9: Foreign entrepreneurs: Chasing the China dream

INTRODUCTION

CASE STUDY PERSONAL REFLECTIONS OF THREE FOREIGN ENTREPRENEURS IN CHINA

CASE COMMENTARIES

Index

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Cover design and page layout by Alicia Beebe

I want to dedicate this book to my parents, Laly and Eugenio, and my sister Laura. Despite the enormous distance between us, I want you to know that the heart can travel through time and space much faster than light.

Juan A. Fernandez

To those I love and those who love me.

Shengjun Liu

Acknowledgments

There are many people to thank. First, the companies that so generously allowed us to write cases about them. Second, the professors and practitioners who gave their time to work on the case studies. Dr. Jianmao Wang, Director of the Case Development Center and Associate Dean at CEIBS, gave us great support. We also thank CEIBS for allowing us to use the cases. Linda (Dongmei) Song, our extremely competent assistant, gave assistance that was fundamental to the preparation of this book. Finally, Joan Draper took the time to read the manuscript and make suggestions. Thank you all.

Introduction

Welcome to China CEO: A Case Guide for Business Leaders in China. The book that you have in your hands is the result of more than five years of work with companies in China. It includes a collection of cases on international companies doing business in this country. These cases have been used in the course Managing in China that Juan has delivered to international executives from all over the world.

The objective of this field guide is to complement China CEO: Voices of Experience from 21 International Business Leaders, my previous book with Laurie Underwood, published in February 2006 by John Wiley & Sons. While China CEO introduced a number of important themes and was based on interviews with CEOs of multinationals in China, this new book presents case studies on the same topics.

Every chapter in the field guide follows the same structure:

1 A short introduction to the topic covered by the chapter.

2 A case study tailored for that topic.

3 Commentaries on the case studies by a professor at the China Europe International Business School (CEIBS) and at least one practitioner with years of work experience in China.

Our purpose with this new book is to offer new information not included in China CEO. The case studies included in the collection are:

CASE STUDY 1: EMERSON ELECTRIC (SUZHOU) CO., LTD

This case deals with the communication problems experienced between US and Chinese management on the operation of the multinational company in Suzhou (China). The general manager from Taiwan resigned after one year in the position, leaving the new general manager with the difficult task of regaining control of the organization. He will need to create a culture of trust and open communication among its members.

CASE STUDY 2: ELI LILLY & COMPANY, CHINA AFFILIATE, WAR FOR TALENT

Eli Lilly and Company is a global, research-based pharmaceutical company with a history of over 126 years. Lilly China had more than 50 representative offices and about 500 medical representatives in 2003. Compared with its key global competitors, Lilly's presence in China is still very small. To facilitate Lilly's expansion strategy in China, Lilly China had an urgent need to recruit and maintain a pool of top medical representatives. However, Lilly China had high employee turnover for three consecutive years. Obviously, the company needed to strengthen employee retention. Should Lilly maintain current recruiting practices or switch to better options? Human Resource Director Mary Liu decided to ask a consulting team to help out with the whole problem. The case describes Lilly China's background, its human resources concept and structure, and the Chinese labor market.

CASE STUDY 3: GUANGZHOU PEUGEOT AUTOMOBILE CO., LTD

In 1985 Peugeot established a joint venture in South China. Peugeot introduced its management system into the joint venture, controlled key decisions and helped Chinese employees learn French and Peugeot culture. Before 1992, the joint venture enjoyed glorious days. With the increase in competition, however, many problems emerged, including unsuitable car designs, outdated car models, high prices, bad quality and poor service. Its production dropped so quickly that it almost ceased operation by 1996. Moreover, the serious cultural conflicts and interest fights dimmed the future of the joint venture. Finally, the Chinese partner lost patience until the joint venture ended in divorce.

CASE STUDY 4: PICANOL CHINA

Picanol was founded as a family business in 1936. It manufactures weaving machines for the textile industry and is headquartered in Belgium. Picanol hired a new CEO with the mandate of preparing the company for the competition in the global market. As part of the changes, the new CEO introduced a new business unit structure. Picanol China, under the leadership of expatriate manager Hans, is in a dilemma as to whether to implement the new structure rigidly or to be more flexible. The case traces the development of the new organization, together with the problems that ensued. It also discusses how an expatriate manager works with headquarters.

CASE STUDY 5: GM VERSUS CHERY, DISPUTES OVER INTELLECTUAL PROPERTY RIGHTS

Chery, a Chinese domestic car maker, launched a new mini car model, the QQ, in July 2003. This was several months earlier than the planned launch date for General Motors' (GM's) new mini car, the Chevrolet Spark. The QQ looked very similar to the Chevrolet Spark, but was much cheaper. GM claimed that the Chery QQ was a knockoff of the Matiz, a model owned by GM Daewoo. The QQ turned out to be a real hit with consumers, while Chevrolet Spark sales were much lower than expected. To make matters worse for GM, Chery was aggressively expanding into other countries where GM had a presence. Intellectual property rights (IPR) disputes were common in China's automotive industry; several multinational car makers had also brought infringement cases forward. GM had its hands full: it had to compete with Chery head to head in the market while deciding what actions to take with regards to its IPR infringement claim.

CASE STUDY 6: MERCEDES-BENZ AND WUHAN WILD ANIMAL PARK

In the morning of December 25, 2001, many people in Wuhan, a large city in middle China, were surprised to see a Mercedes SLK230 sports coupe being towed by a water buffalo in the street. The next day the car was wrecked by five strong men in Wuhan Wild Animal Park (WWAP); this publicly humiliated Mercedes. After the negotiations between WWAP and Mercedes failed, WWAP threatened to smash another Mercedes car. Why did such a terrible incident occur? What makes the car owner resort to such an extreme solution? How will Mercedes handle this situation? Could Mercedes avoid this incident happening again? No matter what Mercedes plans to do, the threat of another incident means that they have to act fast. This case will be particularly useful in discussing the company's public relations strategy and crisis management skills.

CASE STUDY 7: CARREFOUR CHINA, REVAMPING BUSINESS TO FOLLOW LOCAL RULES

China was a market that tempted the MNCs (multinational corporations). However, it set strict restrictions to protect domestic retailers. Though China did have a plan of opening the domestic market to foreign retailers step by step, it seemed to be beyond the patience of retail giants like Carrefour. As a result, many foreign retailers managed to expand in a secret but illegal way in China. Carrefour found that local governments had a strong motivation for introducing foreign retailers for the sake of employment and taxation benefits. With the help of local governments, Carrefour quickly established footholds in China's major business cities and developed into the No. 1 foreign retailer. It was not hard to imagine that the illegal expansion irritated local retailers and the Central Government. After this the Central Government issued circulars and regulations to warn foreign retailers and local governments, who just turned a deaf ear to the warnings. In 2001 rumors spread that Carrefour would be shut out and the Central Government would not appease it any more. Carrefour would have to do something to solve the crisis.

CASE STUDY 8: THE LOLLYPOP THAT TURNED BITTER, THE EXPERIENCE OF AN EXPATRIATE COUPLE IN CHINA

This case describes the experience of an expatriate couple in China. Alain, the husband, decides to take a challenging assignment in China. Montse, the wife, follows, but has to give up her own career. Once in China, things don't go as expected.

CASE STUDY 9: PERSONAL REFLECTIONS OF THREE FOREIGN ENTREPRENEURS IN CHINA

In this case three real stories are told by foreign entrepreneurs in China. The first protagonist was an expatriate who became a supplier to his previous employer. Later, he started a successful new company. The second protagonist started her China experience as a diplomat. After trying a low-risk, small business, she made a new move with help from a venture capitalist. The third protagonist went to China attracted by its culture. He learnt the language and even studied in a Chinese university. He later founded several companies with his classmates. Though these three foreign entrepreneurs had different growth paths and met different challenges in their ventures, they did share a lot of best practices and lessons for doing business in China.

Each case study covers one specific topic that is connected to the previous book China CEO: Voices of Experience. The relation between the two books is presented in the following table:

The case guide includes a Chapter 9 that has no corresponding chapter in China CEO: Voices of Experience. This chapter covers the topic of foreign entrepreneurs in China and it caters to the request from several readers for us to include a chapter on small companies and their challenges in China.

The guide can be used in two ways:

1 As a self-study book. We recommend that our readers follow the following steps:

read the corresponding chapter in China CEOread the cases and try to decide what you would do in such a situationcompare the commentaries in the cases to your own reflectionsread the introduction to the corresponding chapter in the field guide.

2 As course material. You can follow the same procedure used for self-study, except that you can add group discussions after your own reflections on the case study. Basically, the steps to follow would be:

use the corresponding chapter of China CEO as pre-readingrefer to the cases in the corresponding chapters of the field guideparticipate in a group discussionask the participants to read the case commentaries and see if they can add something new to what they have discussedrefer to the introduction to the chapter in the companion case guide as the conclusion by the instructor.

We wish to thank the commentators who so generously shared their experiences with us. Each case study received comments from a professor and at least one practitioner. A big thank you for your generosity.

Contributing professors

Bala Ramasamy is Professor of Economics at China Europe International Business School (CEIBS), Shanghai, China.

Dingkun Ge is Professor of Strategy and Entrepreneurship at CEIBS.

Dongsheng Zhou is Professor of Marketing at CEIBS.

Gerald E. Fryxell is Professor of Management at CEIBS.

Howard Ward is Professor of Management at CEIBS.

Per v. Jenster is Professor of Management at CEIBS.

Thomas E. Callarman is Professor of Operations Management at CEIBS.

Willem P. Burgers is Professor of Marketing and Strategy and Bayer Healthcare Chair in Strategy and Marketing at CEIBS.

William H. Mobley is Professor of Management at CEIBS and the Founder of Mobley Group Pacific Limited.

Contributing practitioners

Angeli Kwauk is Area Director of Human Resources of China Grand Hyatt Shanghai.

Bettina Ganghofer is Deputy General Manager of Shanghai Pudong International Airport Cargo Terminal Co. Ltd (Lufthansa JV).

Doug Ho Song is Managing Director of Doosan Leadership Institute, Doosan Group.

Gary An is General Manager of Amphenol East Asia Electronic Technology (Shenzhen) Co., Ltd and Amphenol Commercial Products (Chengdu) Co., Ltd.

Guosheng Zhu is Operation General Manager of BOC China.

Hans-Peter Bouvard is Business Development Director of Northern Asia Reichle + De-Massari Far East (Pte) Ltd.

Sergiy Lesnyak is Chief Representative of Ferrexpo Group in China.

Shaun Rein is Managing Director of China Market Research Group (CMR).

Wei Joo Chai is Factory Manager of Shanghai Kerry Oils & Grains Industries Ltd.

Xiaotong Li is HR Director of Shared Service Organization at Henkel (China) Investment Co., Ltd.

Xuezheng Li is Global Sales Director of Beijing BOE Optoelectronics Technology Co., Ltd and former Chief Public Relation Officer of BOE Technology Group Co., Ltd.

Yufeng Zhao is General Manager of Progress Strategy Consulting Co., Ltd.

Most of the cases have been written by the two co-authors of this case guide, sometimes in cooperation with others. We want to thank all of you:

George Chen, former Research Fellow at CEIBS.

Jacqueline Zheng, HR Manager of Eli Lilly China.

James G. Clawson, Professor at Darden.

Linda (Dongmei) Song, Research Assistant at CEIBS.

Wei (Wendy) Liu, Darden MBA 2003.

A special thanks to Lydia J. Price, Professor of Marketing and Associate Dean at CEIBS, and Dr. Junsong Chen, Research Fellow at CEIBS, for allowing us to use their case Mercedes-Benz and Wuhan Wild Animal Park.

Finally, we want to thank all the companies that have contributed to the case studies. Without them, this book would not have been possible.

Chapter 1

Leadership in China: Putting the heart where the mind is

INTRODUCTION

One question frequently asked by foreign managers in China is whether there is a most appropriate leadership style to use with the Chinese staff. Behind that question there is some expectation of a silver bullet or magic formula. Unfortunately, that formula does not exist. In our experience, most of the things that work elsewhere also work in China, with certain differences that we will explore later in this introduction.

Leadership is basically about influence, and influence rests on two pillars: results and respect for people. John C. Maxwell in his bestselling book Developing the Leader Within You1 presents a model of leadership based on the development of influence.

The first step in this model is influence based on position, at the lower level of the stairs. This clarifies a frequent confusion between power and leadership. In a certain way, leadership is also power, but it is a power that emanates from the person and not so much from the position they occupy. Actually, you can have leaders with little position power but a great influence in the organization. The next step up is that of relationships: people follow because they like you. Results is the next step: people follow you because you get things done. Now, when you combine relationships and results, you start getting the influence that makes others want to follow with their hearts and minds. Development follows; this means that you help the people around you to become leaders themselves - you develop other leaders. Finally, on the last step is respect: people follow because of who you are. This is the top level of the model where true leadership is placed. According to Maxwell, real leadership is achieved after a life of helping others and organizations. We could not agree more.