EuroBiz magazine is the internal journal of the European Union Chamber of Commerce in China, published monthly for Chamber members by SinoMedia Ltd. Distributed to over 20,000 China-based company decision-makers.

Cover Story: Localising Management

There’s fierce competition for China’s small pool of upper-level managers. Developing leaders inhouse may be a solution for some companies
By Dominique Patton

Watching teams of blindfolded senior managers fumbling with different components of a tent is the fun part of Angela Low’s job. But team-building exercises like this often reveal serious problems that are dragging down efficiency back at the office, says the Beijing-based corporate trainer.

“Often in cross-cultural groups, the boss is American or European. The Chinese managers underneath look upon him as God and won’t make decisions on their own. But Western companies are looking for people who bring their own ideas.”

Western companies want a lot more, too. Most foreign firms list “localising” senior management – that is, increasing the proportion of Chinese managers on their China team – as a goal. The advantages of this strategy are clear enough. Local knowledge that often eludes managers brought in from other countries is becoming more and more valuable as companies’ strategies increasingly shift from production for export toward targeting the domestic market. And expatriate pay packages, which often include housing, school fees and annual home leaves, are an expensive burden at a time when cost pressures are rising.

But are there enough qualified local candidates to match demand? The answer, for the time being, appears to be a qualified “no”.

Human resources professionals say directing operations for an overseas headquarters takes a particular category of person they call “global leaders” – that is, those that not only have expertise and management skills, but who are also bilingual and able to operate in multiple cultural environments (see: Sea turtles vs. ‘true locals’, page 56).

China currently has a dire shortage of these leaders. In sectors where foreign companies have not been allowed to operate in China until recently, such as the financial sector, there is a severe lack of managers with a deep understanding of both Chinese and Western culture.

That’s a major problem in today’s rapidly changing Chinese market, where the management of fast-expanding companies can include people from different cultures, regions and generations. ...

Download EuroBiz Magazine, May 2008

PDF format, 14.8MB, 104Pages.

COLUMNISTS

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52 Real Estate David Chan
Useful tips for investing in the China property market in the Year of the Rat

Visit The European Union Chamber of Commerce in China Official Website

The Chamber was formed with the support of the EU Delegation in Beijing on 19th October 2000. It is a non-profit membership fee-based organisation with offices in Beijing, Shanghai and Nanjing, Guangzhou, Tianjin and Chengdu.

Today, the Chamber is the leading exponent of European business interests in China creating a continuously growing business forum. It comprises of over1090 members, from global companies to small-medium enterprises. Its mission is to serve member companies by being the Voice of European Business in China.

It is built around a core of some 30 Working Groups,  which meet regularly to discuss business issues in their respective industries. The Working Groups contribute to an annual Position Paper on Business in China, which the Chamber presents to the Chinese and European governments.

The Chamber is managed by a National Executive Committee made up of representatives from various European Member States. The Supervisory Board and the Advisory Council provide strategic input for the National Executive Committee. Each Chapter is managed at the local level by a Local Board which reports directly to the National Executive Committee.

Executive Committee members, the Supervisory Board and Local Boards are elected at the Spring Annual General Meeting.

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