China Business Contributions to the Business Management Profession (Part 1)
China business has important distinguishing features. It is not the same as running a company in the western world, or in countries that are content to use US and European templates for their commerce and industries. Human resources of enterprises and organizations have subtle but pervasive influences on functioning and outcomes. That is why culture, social norms, and language, have such large roles in transnational operations. Formal business management is a largely Anglo-Saxon phenomenon. It has taken substantial shape only in the second half of the 20th century.
China business is strongly influenced by its culture, politics, and form of national governance. Deep seated misunderstandings and mistrust may develop in joint ventures between China business and executives fashioned in the business school mold of the United States or the European Union. Commercial or industrial activity cannot endure under duress, so neither China business nor western capitalists can impose their wills on each other.
China Business, Organization Management, and Society
A joint venture is not the only form of global trade. It is possible sell goods and services to China business on outright bases. It is not a concern of a supplier to sit in judgment on customers, so a business house that exports to China business or to its citizens need not bother about what happens downstream.
Such a hands-off relationship can also prevail peacefully when someone sells a company or a brand outright to a China business entity. There are two key developments during the first decade of the current Millennium, which open possibilities of China business owning enterprises that have been western bastions for decades: one is the steady accumulation of dollar reserves by various arms of China business. The other is the depreciation of the US dollar. China business is also a major accumulator of Euros. Therefore, we may expect many instances of China business owning decisive shares in many ventures of western capitalism, during the years to come.
Owners have unquestionable rights to deploy their assets as they wish. It is now more than a decade since the British returned Hong Kong to its rightful heritage. China business has shown exemplary commercial acumen in the management of this erstwhile western colony. So may it be with all companies and brands that are taken over by China business entities!
There must be voluntary, considered, and mutual reasons for people and entities from other countries to form joint ventures with China business. The latter makes no secret of its eager interests in such constructions, because Beijing is clear about the needs and roles for foreign capital, technology, and know-how. There are any numbers of cases in which outright transfers of titles to material assets and to services are contracted without associations of internal organizational processes. Joint ventures are different because they imply mutual desires to merge each other’s internal systems. A joint venture between an American, European, or Australian firm and a typical China business entity must take cognizance of the oriental way of conducting commerce and industry: this is distinct from the western model.