How can we make corporate strategy for a country as complex, and multifaceted as China? many business people ask. An answer to the question requires us to look at a much broader canvas than we conventionally do when we consider business strategy. Conventional business strategy divides conveniently into three parts, like Caesar’s description of Gaul: what’s going on inside the corporation, what is happening in terms of competition in the firm’s markets, and by deduction what both inquiries hold for the firm’s future.
Why is this conventional approach inadequate in the case of China? Indeed, we may ask why such an approach is inadequate—to say the least—anywhere in the world? We can provide an initial answer by asking the question of business that the Prussian theoretician, Clausewitz, asked of war: what, asked the student of Napoleonic war, is the essence of war. “Frictions” was his answer, all the unexpected events which make the experience of battle one of chaos unleashed. So what is the essence of business? My reply is that the essence of business activities, very different to warfare, is to have to deal with a future about which we know little, because that is where risk and reward lie. The future of the firm is going to be shaped, yes, by firm-level decisions and competition in its specific markets, but the firms’s leadership will also know that its activities will be conditioned by the dynamic contexts in which it operates. As I have argued in The Frontiers of Fortune (Pitman’s, 1999), business, markets and politics dance forever together. It follows that the activity of corporate strategy is to make the world as it is the stuff out of which policy is made.
So when a Fortune 500 CEO suggested that I write a straightforward book on how to go about business in China, I decided to take on the challenge. Things in China are changing day by day, so a book describing how to set up operations in China will be out of date before it has even arrived in the bookshop. Instead of yet another set of instructions to follow, you need to know how to think about China, and this book is designed to show you exactly that. To borrow an old saying, I’m going to teach you how to fish.
I have been watching China since the early 1980s, and have interviewed countless CEOs of companies large and small who have gone into China. Some have been burned, some have been defeated, but others have found the secret of operating successfully in China. Unfortunately for you, that secret is different for every company and every location. But what is universal is an ability to learn and adapt, an ability to execute and, above all, a clear understanding of how the China operation fits into the global organisation.
Each chapter of the book outlines topics that can help executives and board members learn new strategies and uncover answers about doing business in China such as:
• STRATEGY: How to ensure your strategy reflects the pace of change, the unusual risks of operating in China and the business realities of this dynamic market.
• VISION: Why you should think of your company learning its way to doing business in China as a ‘work in progress’.
• GOVERNMENT: Why government relations must be a core part of your business and how to make your relationships with officials productive and beneficial.
• LOCATION: How to make the critical choice of location, taking several factors into account, from access to the attitudes of local authorities.
• CULTURE: How to understand and act on the cultural differences in order to get the all-important ‘people issues’ right.
• COST AND DELIVERY: Getting company priorities right on quality, delivery, cost control and knowledge transfer.
• SALES: Developing capabilities to promote sales, enhance customer relations and solidify a platform for exports.
• BRAND: How to use your brand to keep ahead of competitors.
• POLICIES: How to craft corporate policies to local conditions, using a method which can be applied all around the world.
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TABLE OF CONTENTS
Chapter 1. Transformation: why operating in China is 30% plan, 70% trial and error.
Chapter 2: The organisation: a work in progress.
Chapter 3: Government relations.
Chapter 4: China choices: business structure and location.
Chapter 5: The people problem.
Chapter 6: Climbing the ladder in the right order—setting up operations.
Chapter 7: Understanding and supplying the China market.
Chapter 8: Promoting the brand.
Chapter 9: Choosing China
* Paperback: 248 pages
* Publisher: Financial Times/ Prentice Hall (4 Feb 2010)
* Language English
* ISBN-10: 0273708279
* ISBN-13: 978-0273708278 Read the rest of this entry »