The Chinese Way
Chinese intertwine business and personal affairs much more deeply. They do things for their partners even if they are personal affairs.If you wander into any of China’s five floored bookstores, the first thing you notice right when you enter the store won’t be the newest hardcovered fictions. It’ll be management books written by successful American businessmen. On shelf after shelf, you could see copies of Jim Collins’s “Good to Great,” Jack Welch’s “Straight From the Gut,” Tom Peters’s “Re-Imagine!” and just about everything the late Peter Drucker ever wrote. One section you won’t find in Chinese bookstores is a section for management or human resources.
There’s a good reason for this. In the West (not to mention Japan and South Korea) management skills are a given. Graduate schools of management churn out M.B.A.’s, while instilling the basic processes and systems that virtually all multinational companies rely on. People who rise to the top of companies are the ones who have mastered the art of management. But there are also many first-rate managers who populate the middle ranks of companies. They are the lifeblood of most big companies.
That’s not the case in China. The shortage of managerial talent is huge. There just aren’t very many people here who have the range of skills you need in that position. Xiang Bing, dean of the Cheung Kong Graduate School of Business, said: “We Chinese are so willing to work hard for money. We are intelligent. We have the drive and the passion. But we put too much attention on technology and not enough on institution-building. And our soft skills are a real weakness.”
One issue with management is that most Chinese entrepreneurs hire friends and family because they don’t trust people they don’t know. And if they don’t get help fast, they are going to lose control of their rapidlygrowing businesses. Rapid growth, though, is only one of the issues these entrepreneurs are facing. Every bit as difficult are ingrained mind-sets and attitudes that can make it difficult for Chinese executives to adapt professional management techniques.
Many Chinese entrepreneurs (even those who have graduated from the executive M.B.A. program) don’t want to hire M.B.A.’s because they bridle at having to pay professional management salaries. Another problem is that many Chinese executives believe that because it is a Chinese business, professional managers won’t fit in the system.
When dealing with each other, the Chinese, quite simply, do business differently than Western companies do business. For one thing, there is a lot of petty corruption that is an ingrained part of business, especially among the state-run companies. Purchasing managers favor one vendor over another because they get a kickback. A sales rep buys customer loyalty with under-the-table payments. And so on. People also tend to put their own interests over the interests of their company — not a huge surprise, given that everyone worked for the state just a generation ago.
Finally, there is the gnarliest issue of all: the importance placed on the deep, intertwining set of relationships known as guanxi. Unlike the West, you don’t just have a business relationship in China; you have a relationship that interchangeably mixes the personal with the professional.
