Book Review: "Harvard Business Review on Doing Business in China"
“Harvard Business Review on Doing Business in China” gives an insight into how China’s rapid growth and changing business environment can impact companies there. A different aspect of China is dealt with in each of the eight chapters, from the difficulties with tapping into China’s domestic market to the importance of understanding the cultural and social differences there. Each of the chapters is actually a previous Harvard Business Review article and the aim is that these articles collectively can highlight the risks and opportunities present for businesses going into China. The book acts as a starting point for gaining an understanding of the world of business in China and as an initial source of information for managers. Upon finishing it the reader should be well versed on the unique characteristics of the country which can help or hinder business there.
The first article “The Great Transition”, after giving an account of China’s tremendous growth, deals with the various risks that are prevalent there. This leads on to discuss suggestions to CEO’s on how to deal effectively with these risks. “The Chinese Negotiation”, written be Graham and Lam, explains unique aspects of the Chinese culture and customs and how these emerge and play a part in negotiations. The next article is “The Hidden Dragons” which deals with four groups of Chinese companies, national champions, dedicated exporters, competitive networks and technology upstarts, and the way in which they are making inroads into the global market. “Short Term Results”, as the title suggests, stresses the importance of short term goals and being able to learn from your mistakes. The article “Entering China” offers an explanation of wholly foreign owned enterprises and the various advantages they possess over equity joint ventures as a means of starting up business in China.
One of the more interesting articles in my opinion was “To Reach China’s Consumers, Adapt to Guo Qing”. It deals with how best to capitalize on the increasing purchasing power of the Chinese. In doing this the importance of Guo Qing (National Characteristics) is emphasized. That is if one does not understand how to adapt their product and its marketing to the unique aspects of the Chinese system and culture it will be difficult for them to succeed. The notion of ‘same bed different dreams’ is expanded on in the article “Trouble in Paradise” while “The Forgotten Strategy” talks about the alternative strategy of seeking out differences as oppose to commonalities.
The fact that the book is sectioned by the individual articles has its advantages and disadvantages. The differing styles of the writers allows for transitions from a story telling format to a more formal, factual based account of matters. This can be refreshing and gives you the chance to view things from an alternative perspective. However the switching of authors and styles does mean that the book is quite disconnect at times and doesn’t flow all too well. Given that each article was written in isolation and without reference to the others some of the aspects discussed are repetitive, or worse still contradictory, in nature. An example of this is in the case of most of the articles, in one manner or another, reminding you that the Chinese have relaxed their regulatory restraints resulting in them opening their doors further to welcoming foreign capital. Also while the issue of guanxi, the development of personal ties, is important in China and can relate to business in China in many different ways it seemed to be over talked throughout the book.
As mentioned earlier the article “Trouble in Paradise” deals with the often diverging goals of the two parties entering into a joint venture in China. It suggests here that the Chinese side wants continuing expansion with the aim of building a ‘national brand’ and helping the local economy by maintaining employment. The U.S. side here however needed to increase the profit of their operations to show their headquarter offices back in the US. This conflict of goals led to many problems within the equity joint venture. Upon reading an earlier article in the book however one is given an opposing reason for the conflict which often arises from joint ventures. Here it the Chinese who are accused of seeking profits in the short run because of a fear that capitalism there may not last. Meanwhile foreign companies are content to suffer losses in order to reinvest profits for further expansion. This is just one example, and probably the most glaring, where having different authors in the book led to views and opinions which contradicted each other. However the more important lesson to be learned, the bigger picture aspect to be drawn, from both of these chapters is that without a clear strategic goal in place and an agreement between the Chinese and foreign side a successful joint venture will be difficult.
As a whole the book is well researched with the major points of each article being backed up through experience and evidence. I found the various tables throughout the book extremely useful in helping to reinforce and expand on statements made. The quality of writing was also outstanding. Clearly the authors are well experienced in their professions and in matters concerning business in China. It would have been nice if the book could have included a brief description of the authors prior to their article to explain their background in relation to China. Precluding each article there was an executive summary but these did little to enhance the book in any way.
I would recommend this book as a basis for those starting to understanding the different business culture present in China. In this respect for students such as myself it is useful however I do not think that it is sufficiently in-depth for the needs of a manager attempting to move their operations into the country.
The first article “The Great Transition”, after giving an account of China’s tremendous growth, deals with the various risks that are prevalent there. This leads on to discuss suggestions to CEO’s on how to deal effectively with these risks. “The Chinese Negotiation”, written be Graham and Lam, explains unique aspects of the Chinese culture and customs and how these emerge and play a part in negotiations. The next article is “The Hidden Dragons” which deals with four groups of Chinese companies, national champions, dedicated exporters, competitive networks and technology upstarts, and the way in which they are making inroads into the global market. “Short Term Results”, as the title suggests, stresses the importance of short term goals and being able to learn from your mistakes. The article “Entering China” offers an explanation of wholly foreign owned enterprises and the various advantages they possess over equity joint ventures as a means of starting up business in China.
One of the more interesting articles in my opinion was “To Reach China’s Consumers, Adapt to Guo Qing”. It deals with how best to capitalize on the increasing purchasing power of the Chinese. In doing this the importance of Guo Qing (National Characteristics) is emphasized. That is if one does not understand how to adapt their product and its marketing to the unique aspects of the Chinese system and culture it will be difficult for them to succeed. The notion of ‘same bed different dreams’ is expanded on in the article “Trouble in Paradise” while “The Forgotten Strategy” talks about the alternative strategy of seeking out differences as oppose to commonalities.
The fact that the book is sectioned by the individual articles has its advantages and disadvantages. The differing styles of the writers allows for transitions from a story telling format to a more formal, factual based account of matters. This can be refreshing and gives you the chance to view things from an alternative perspective. However the switching of authors and styles does mean that the book is quite disconnect at times and doesn’t flow all too well. Given that each article was written in isolation and without reference to the others some of the aspects discussed are repetitive, or worse still contradictory, in nature. An example of this is in the case of most of the articles, in one manner or another, reminding you that the Chinese have relaxed their regulatory restraints resulting in them opening their doors further to welcoming foreign capital. Also while the issue of guanxi, the development of personal ties, is important in China and can relate to business in China in many different ways it seemed to be over talked throughout the book.
As mentioned earlier the article “Trouble in Paradise” deals with the often diverging goals of the two parties entering into a joint venture in China. It suggests here that the Chinese side wants continuing expansion with the aim of building a ‘national brand’ and helping the local economy by maintaining employment. The U.S. side here however needed to increase the profit of their operations to show their headquarter offices back in the US. This conflict of goals led to many problems within the equity joint venture. Upon reading an earlier article in the book however one is given an opposing reason for the conflict which often arises from joint ventures. Here it the Chinese who are accused of seeking profits in the short run because of a fear that capitalism there may not last. Meanwhile foreign companies are content to suffer losses in order to reinvest profits for further expansion. This is just one example, and probably the most glaring, where having different authors in the book led to views and opinions which contradicted each other. However the more important lesson to be learned, the bigger picture aspect to be drawn, from both of these chapters is that without a clear strategic goal in place and an agreement between the Chinese and foreign side a successful joint venture will be difficult.
As a whole the book is well researched with the major points of each article being backed up through experience and evidence. I found the various tables throughout the book extremely useful in helping to reinforce and expand on statements made. The quality of writing was also outstanding. Clearly the authors are well experienced in their professions and in matters concerning business in China. It would have been nice if the book could have included a brief description of the authors prior to their article to explain their background in relation to China. Precluding each article there was an executive summary but these did little to enhance the book in any way.
I would recommend this book as a basis for those starting to understanding the different business culture present in China. In this respect for students such as myself it is useful however I do not think that it is sufficiently in-depth for the needs of a manager attempting to move their operations into the country.
posted by Deirdre @ 3:54 PM
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