Business Strategy in the Age of Globalization Part 2
Business Strategy in the Age of Globalization (Part 1)
How the Chinese Perceive Business Strategy
China, the most populous nation on earth, has been forecast to overtake the U.S. GDP and to become the largest economy on earth by 2020 (Roy, 2006). It is also a country with strong cultural roots and a directive political system. Therefore, its perspective of business strategy is bound to be substantially different from western democratic and capitalist conventions of free enterprise.
Some telling indicators of the direction which China’s government seeks can be gleaned from the fact that about 23% of its rapidly growing exports come from high-technology manufactured goods (Roy, 2006). The standard of living for both urban and rural communities has improved considerably since the 1980s, and continues to rise steadily as well; poverty is clearly on the decline. China has also achieved 91% adult literacy (Roy, 2006). This is a country, which merges governance and national development in a most business-like way, resulting in a helpful environment for partners and associates from all over the world.
Universal Principles for Your China Business Strategy
Perhaps you hope to supply goods and services to China, or source them for your own operations abroad. You could also be based in the country, and dream of joining your compatriots in venturing beyond your vast national borders. You could be an ambitious executive in a major corporation, hoping to win accolades for improving your organization’s business links with China, or you could have an enterprise of your own, which you want to grow profitably and in sustained manner. Many aspect of business strategy depend upon your perspectives and aims. However, there is a set of common truths that apply to organizations of all sizes and natures-the human factor (Barger, and Kirby, 1995).
Doing business in, from, or with China inevitably involves frenetic changes. The country’s deep cultural roots, differences from western civilization, an entirely different language, and unique atmospherics, all add up to shake strategy at its very roots. All stakeholders of a company, as well as the organization as a whole, are fundamentally affected by the China factor. This is not a China-specific factor since cross-cultural influences exist in many other countries. However, the sheer size of the China opportunity has its own type of effects on individuals and on teams as the country begins to take center-stage in operations and planning. Preparing people for change (Barger, and Kirby, 1995) should be central to all China-related business strategy.
Barger, N, and Kirby, L, 1995, The Challenge of Change in Organizations, Davies-Black Publishing
Hamel, G, and Prahalad, C, 1994, Competing for the Future, Harvard Business School Press
Krugman, P, 1994, Location and Competition: Notes on Economic Geography, Fundamental Issues in Strategy, Rumelt, R, Schendel, D, and Teece, D (eds.) Harvard Business School Press
Roy, K, 2006, Economic Reform in India and China, Edward Elgar Publishing