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Globalization of Chinese Enterprises A Cultural Perspective

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Title: Globalization of Chinese Enterprises A Cultural Perspective


1
Globalization of Chinese EnterprisesA Cultural
Perspective
  • Dr. Warren J. Keegan
  • Distinguished Professor of Marketing and
    International Business
  • Ronnie Chen, DBA Candidate
  • Lubin School of Business, Pace University, New
    York, NY
  • December 1, 2006

2
Agenda
  • Background
  • Current Status
  • Achievement
  • Issues
  • Cultural Challenges
  • Future Research

3
Background
  • 1980s Open Door Policy
  • 1990s Go Out Policy
  • 120 National Teams of State Owned Enterprises
    in Strategic Sectors
  • High level of protection
  • Special Treatment
  • Financial Support
  • Management Autonomy
  • Profit Retention
  • Investment Decisions

4
Four Stages of GlobalizationA Countrys Path
Foreign Investor
Importer
Producer
Exporter
2000s
  • 1980s

1990s
5
Four Stages of GlobalizationA Companys Path
International
Multinational
Global
Transnational
6
Motivation of Chinas Outward FDI
  • Guarantee Raw Material
  • Circumvent trade barriers to exports
  • Acquire technology and management expertise

7
Chinas Outward FDIBy Geography
  • Chinas Outward FDI is in both developing and
    developed economies with concentration in South
    East Asia

8
Chinas Outward FDIby Sector
  • Trading Services was the initial focus other
    sectors have gained importance

9
Chinas Outward FDI
  • Chinas Outward FDI is growing but share in the
    world remains small.

10
Globalization of Chinese Firms
  • Industrial Policy
  • 30-50 large SOEs through public offering, MA
  • Growth
  • 1980s 1990s 13 per annum
  • 2000s 7-9 per annum
  • 2005 Fortune Global 500
  • 15 Chinese Firms

11
Globalization of Chinese FirmsChinese Firms on
Fortune Global 500 (2005)
12
Issues of Globalization
  • State Ownership
  • Protected Domestic Environment
  • An impoverished economy
  • Inconsistent Industrial Policy
  • Global Competitiveness
  • Branding
  • Efficiency
  • Innovation

13
2005 GDP Per Capita (PPP)
  • China was ranked 84 7,204

14
2005 Revenue ProfitTop 7 Oil Companies
  • Chinese large firms are still further behind
    global giants

15
Cultural ChallengeTheoretical Background
  • Hofstede (1980)
  • Individualism vs. Collectivism
  • Power distance
  • Uncertainty avoidance
  • Career success / Quality of life
  • Confucian dynamism

16
Cultural Challenge Theoretical Background
  • T-HT (1998)
  • Universalism vs. Particularism
  • Neutral vs. Emotional
  • Diffuse vs. Specific
  • Achievement vs. ascription

17
Cultural Challenge Theoretical Background
  • T-HT (1998) Corporate Culture
  • Family
  • Guided Missile
  • Incubator
  • Eiffel Tower
  • Adler (2002)
  • Diversity

18
Cultural Challenges of Globalization of Chinese
Firms
National Culture
Culture
Corporate Culture
Cross Cultural Communication
Diversity Management
Ideology
19
Implications for Managers
  • Management Challenges
  • Cultural Awareness
  • Cross Cultural Communication
  • Multicultural Team Management
  • Worldwide Learning

20
Future ResearchCultural Impact on Chinas
Outbound Investment
  • Ownership structure
  • Timing of entry
  • Performance
  • Size of investment

21
  • Q A
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