Veteran China hand, David Dayton, of Silk Road International, did a post a while back on the effectiveness of international management practices in China. The post is based on an article on Phys.org, entitled, “Multinationals in emerging China should stick to their own ways of managing,” and subtitled, “When it comes to breaking into the lucrative Chinese market, foreign multinational retailers should keep largely to their own, time-tested management techniques, according to new research funded by the Economic and Social Research Council (ESRC).” Dayton’s post is called “China–not so inscrutable after all.”
As you can probably tell by now, the gist of the article is that “whilst it may be necessary to adapt to some extent to local conditions, time-tested management practices actually translate well across cultures.”
Dayton concurs and says that he does not believe “there is a ‘Chinese way’ to do business,” though “there are characteristics about the Chinese business culture that are unique in their combination and influence.” I like and agree with that description.
Dayton goes on to note that this means that if you are “successful in your business at home you have a great chance of duplicating that success here in China” and there is no “secret to cracking the Chinese market”:
No magic bullet, no golden connection that will give you the country on a silver platter. If anything China just requires more of the same: more due diligence, more QC, more management on the ground, more training, more time invested into starting up, more patience, more “buy-in,” more cautions and legal protections.
He is absolutely dead on.
Dayton then lists out the following nine items (why nine? I always go with either eight — in deference to it being a lucky number in China — or with ten — in deference to our Western desire for roundness and symmetry) of which one should be aware to “adapt” to China:
1. Labor/people are more often the answer to problems than a tech or money solution.
2. Language is key–Learning Mandarin is a great advantage.
3. Regionalism–From differences in language and trust to manufacturing/industry to intra-province transport tariffs, China is more like a group of loosely federated states.
4. Scarcity mentality–there is not enough for everyone, there never has been and there are too many people. Throw in political turmoil and you’ve got the scarcity mentality that most business owners grew up in.
5. Change and irrationality–Local, Provincial and National government policies can be created, changed and/or (un)enforced for completely political motivations.
6. Nationalism–it’s very real and very active.
7. The personal nature of business and the converse lack of trust between strangers doing business.
8. The incredible numbers that are China.
9. Business is not M-F, 8-6. Its all day all night until the sun goes out.