Conflict of Business Cultures

Above: Rene Magritte in National Art Museum of China, NAMOC in Beijing. Did Magritte manage to talk this Chinese boy? Photo gallery below.

EVER waken up by a revolutionary song?
Just happened, song came from Beijing street. Group of workers were starting their workday with this song:

Tuan Jie Jiu Shi Li Liang - Getting united makes us strong,
Zhe Li Liang Shi Tie - this strength is iron,
Zhe Li Liang Shi Gang - this strength is steel,
Bi Tie Hai Ying - it's harder than iron,
Bi Gang Hai Qiang - it's stronger than steel...

Western Business Logic vs. Chinese Way
IF MNC GETS INTERNALLY LOCALIZED, ITS EFFICIENCY IS AT RISK

Western rational business process has actually never succeeded in mainland China. After learning Guanxi, relations, multinational corporations in China have quickly adopted Chinese way for their external behaviour.

MNCs in China have about 5 million Chinese employees. Most MNCs have dedicated corporate resources for Guanxi, they use them as a routine to upkeep and boost business in China. But there is a risk, that if Chinese way gets into MNCs internal operations, it's impact will be opposite.

Artful Guanxi in not visible and brings business results in China. If MNC over-localizes deeper into Chinese way, what might be the impact of Guanxi on MNC's internal management? Would MNC's global corporate culture survive?

MORE QUESTIONS. How could MNC safeguard its global principles and management fundamentals in China? How should MNCs integrate their China business into their global operations, or simply, should they forget the integration in case of mainland China? What is the multi-culture reality?

SOEs - Chinese State Owned Enterprises operate in Chinese way, internally and externally. Their Chinese business managers have difficulties to accept or manage variety. Instead, SOEs value people who obey and have uniformed Chinese mindset.

Managers in SOEs need personal Guanxi, relations, to get support and for co-operation. Personal success and survival are matters of skillful Guanxi.

MNCs - Multinational Corporations in China want different kinds of mindsets to blossom. Their business management considers diversity as richness, platform for inventive business conduct.

MNC business managers take benefit of diversity via rational western business logic, processes and corporate culture. But getting internally mixed with Chinese way changes the rules and might be against MNC's global principles. Corporate culture statements in mainland China become easily just decoration.

CHINESE MARKETS
Higher product quality does not justify higher price in China. Scale products with high prices are commonly not valued, at least not yet. To be successful, MNCs must offer lower price. This is the situation now for scale markets, and in average in China.

Many MNCs have taken an approach to simplify their products for China, sometimes resulting lower quality.

To be competitive in China, MNCs need to adopt Chinese way of doing business externally: sales, partnerships, supply chain. But MNCs should rectify their internal processes in the western way.


Epilog
RISK: EROSION OF WESTERN BUSINESS LOGIC

What happens if Chinese way becomes MNC's internal way? If Chinese way replaces MNC's internal rational business processes? It would mean downward spiral in MNC's internal efficiency. No EMBA or MBA program prepares managers for Chinese way.

INTERNAL LOCALIZATION. If it happens, MNC's internal Guanxi would require management to focus balancing their internal relations in order to maintain operability. Performance would become secondary criteria in judging personal competences. HR criteria would change. Emotions take control of flow.

Personal responsibility would be replaced by group responsibility. Project managers would lose their ability to estimate as complexity gets multiplied. Indirectness becomes a norm. Trust erodes. Relation with truth becomes difficult.

CORPORATE CITIZENS. In China MNCs want to be seen as a local company and a good corporate citizen but their personnel don't start workdays with revolutionary songs on streets. If MNC's global corporate culture flips into mainland Chinese Way, into deepest format of Chinese business art, MNC's internal behavior begins to act like an SOE.

China has already cases where MNC=>SOE transformation is reality. New revolution song in making!


BeijingMan aka Kippo

List of BeijingMan Postings

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Above-1: National Art Museum of China NAMOC, also known as MeiShuGuan. This time they had Rene Magritte, 100th year anniversary of the birth of Ye Qianyu, ceramics from Jindezhen Ceramic College, big size oil paintings by Tu Zhiwei, and more. I used Canon 20D with EF-S 10-22mm.


Above-2: National Art Museum of China, NAMOC. Taking pictures is a Chinese hobby, too. Very soon I had seen 40+ visitors taking pictures of the works with their mobile phones or cams.


Above-3: National Art Museum of China, NAMOC. Rene Magritte was in Beijing. Did he manage to talk to Chinese?


Above-4: National Art Museum of China, NAMOC. Actually, Magritte got plenty of interest.


Above-5: National Art Museum of China, NAMOC. Magritte.


Above-6: National Art Museum of China, NAMOC. Building had major renovation a few years ago. For me its doors are art.


Above-7: National Art Museum of China, NAMOC.


Above-8: National Art Museum of China, NAMOC.


Above-9: National Art Museum of China, NAMOC.


Above-10: National Art Museum of China, NAMOC.


Above-11: National Art Museum of China, NAMOC.


Above-12: National Art Museum of China, NAMOC.


Above-13: National Art Museum of China, NAMOC.


Above-14: National Art Museum of China, NAMOC.


Above-15: National Art Museum of China, NAMOC.


Above-16: National Art Museum of China, NAMOC.


Above-17: National Art Museum of China, NAMOC.


Above-18: National Art Museum of China, NAMOC.


Above-19: National Art Museum of China, NAMOC. Click to enlarge.


Above-20: National Art Museum of China, NAMOC.


Above-21: National Art Museum of China, NAMOC.


Above-22: National Art Museum of China, NAMOC.


Above-23: National Art Museum of China, NAMOC.


Above-24: National Art Museum of China, NAMOC.


Above-25: National Art Museum of China, NAMOC.


Above-26: National Art Museum of China, NAMOC.


Above-27: National Art Museum of China, NAMOC. You say it!


Above-28: National Art Museum of China, NAMOC.
Afternoon June 17, 2007 one-third of MeiShuGuan was closed. To see Magritte, many persons had to wait an hour in corridors until some VIPs had finished their private tour. MeiShuGuan management should think harder. Thanks & Peace all.


National Art Museum of China
+ Building itself is very interesting, amazing doors
+ Can have several exhibitions by one go
+ For tens of years highest point of art in Beijing
+ Easy to find, not far from Wang Fujing shopping street
+ Many art shops around MeiShuGuan
- Management issues, camera usage
***** GOOD TARGET FOR A FEW HOURS VISIT *****


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© BeijingMan aka Kippo 2008, 2009