This thesis deals with the characteristics required of the leader of an international European company’s outpost in China. It provides a synthesis of current theories, builds context based on supporting literature, and is complemented by a survey of the different experiences of local managers to identify contemporary issues.
In the past, companies expanded operations to China first and foremost to profit from the cost advantage that China offered. Meanwhile, increasing consumer purchasing power and a developing preference for brand name and luxury goods make the Chinese market a dynamic one that offers international companies substantial potential. This market sales potential has become the main driver.
Different forms of market entry are available for specific company strategies. The most common are the representative office, a joint venture, and the wholly foreign owned entity. In spite of the positive developments in the Chinese market, numerous challenges await companies planning to establish a local business unit. The labour market exhibits weaknesses in the Chinese education system. Job applicants often lack creativity and general communication skills, as well as competent English skills. Although its importance is on a decline, the issue of intellectual property remains a concern whereas the problem of corruption persists. The standards and concepts used to recognize and label corruption are still deeply linked with the local cultures making their reconciliation a challenge that companies need to overcome.
The human resource management strategy has to take cultural differences into consideration. There are two main point of focus. The first originates with Confucian values. Status, money and career perspective are aspirations that any attractive employment opportunity has to address. Western leaders also have to be aware that Chinese social hierarchy dictates that interaction between managers and subordinates can cross the traditional western line between private and professional matters. The second point of focus, the posting of expatriates including preparation, onsite support during the stay abroad as well as reintegration upon repatriation, is integral to the project. Careful and detailed planning and exe-cution are of utmost importance to ensure the successful completion of the Chinese office setup.
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Inhaltsverzeichnis (Table of Contents)
- Executive Summary
- Acknowledgements
- Table of Contents
- List of Abbreviations
- List of Figures
- List of Tables
- 1. Introduction
- 1.1. Background
- 1.2. Problem
- 1.3. Objective
- 1.4. Methodology
- 2. Literature review
- 2.1. Strategy
- 2.1.1. Strategy definition
- 2.1.2. Internationalisation strategies
- 2.1.3. Organisational management
- 2.2. Cultural aspects
- 2.2.1. Definition of culture
- 2.2.2. Values and behaviour principles in China
- 2.2.3. Communication
- 2.3. Chinese market characteristics
- 2.3.1. China terminology
- 2.3.2. Development of China
- 2.3.3. Labour market
- 2.3.4. Consumer market
- 2.3.5. Intellectual property
- 2.3.6. Corruption
- 2.4. Management and leadership
- 2.4.1. Skills required for management and leadership
- 2.4.2. Decision making process description
- 2.4.3. Strategic human resource management
- 2.1. Strategy
- 3. Research design
- 3.1. Research objectives
- 3.2. Research methodology
- 3.3. Underlying philosophical assumption
- 3.4. Data collection technique
- 3.5. Development of questionnaire
- 3.6. Sample population
- 3.7. Conducting
- 3.8. Data analysis
- 3.9. Critical assessment and limitations
- 4. Analysis and presentation of the data
- 4.1. Interview statistics
- 4.2. Market findings
- 4.2.1. Market characteristics
- 4.2.2. Education system
- 4.2.3. Environmental factors
- 4.2.4. Plagiarism issues
- 4.2.5. Corruption issues
- 4.2.6. Conclusion
- 4.3. Cultural aspects
- 4.3.1. Comparison of Chinese and German culture
- 4.3.2. Communication principles
- 4.3.3. Cultural influences on company
- 4.3.4. Gender treatment
- 4.3.5. Open cultural questions
- 4.3.6. Conclusion
- 4.4. Company aspects
- 4.4.1. Companies in China
- 4.4.2. Company strategy for China
- 4.4.3. Human resource management aspects
- 4.4.4. Conclusion
- 4.5. Decision making
- 4.5.1. Organisational impact
- 4.5.2. Share and distribution of positions and power
- 4.5.3. Role of the manager
- 4.5.4. Conclusion
- 5. Conclusion and recommendations
- 5.1. Summary
- 5.2. Conclusion
- 5.3. Outlook
- Appendix
- A. Societal clusters and leader styles
- B. Comparison of culture models
- C. Questionnaire (blank)
- D. Interview 1
- E. Interview 2
- F. Interview 3
- G. Interview 4
- H. Interview 5
- I. Interview 6
- J. Interview 7
- K. Interview 8
- L. Interview 9
- M. Interview 10
- N. Interview 11
- O. Interview 12
- P. Interview 13
- Q. Interview 14
- Bibliography
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
The objective of this thesis is to identify the contemporary issues facing managers of European companies in China. It aims to analyze the relevant circumstances of the Chinese market for leaders, particularly the opportunities and risks regarding the delegation of responsibility and the necessary adjustments in leadership style and behavior. Additionally, the thesis will assess how responsibility is typically split between the head office and the local unit, as well as how to integrate the local unit into the overall company organization. Key themes explored include:- Cultural differences between Europe and China
- Intellectual property rights and plagiarism in China
- Corruption in China
- The role of the leader in a Chinese subsidiary of a European company
- The impact of the Chinese market and cultural factors on company strategy and human resource management.
Zusammenfassung der Kapitel (Chapter Summaries)
Chapter 1 introduces the topic of European company expansion into China, highlighting the growing importance of the Chinese market and the challenges faced by western managers. It outlines the problem of cultural misunderstandings, plagiarism issues, and different market characteristics. The chapter concludes by detailing the objectives and methodology of the thesis. Chapter 2 reviews relevant literature, covering strategy, cultural aspects, Chinese market characteristics, and management and leadership. It delves into various theories and models, including Porter's five forces, SWOT analysis, the Uppsala model, Hofstede's cultural dimensions, Trompenaars' seven dilemmas, the GLOBE model, and strategic human resource management. Chapter 3 presents the research design, including research objectives, methodology, philosophical assumptions, and data collection techniques. The chapter focuses on qualitative research using semi-structured interviews and participant observation. It explains the development of the questionnaire, the selection of the sample population, and the data analysis approach based on grounded theory. Chapter 4 analyzes and presents the data collected from interviews with managers of European companies in China, comparing these findings with existing theoretical frameworks. The chapter explores the Chinese market characteristics, cultural aspects, and company specific issues, emphasizing the role of the decision maker in managing cultural differences and organizational challenges.Schlüsselwörter (Keywords)
This thesis primarily focuses on the international expansion of western based companies to China, analyzing the issues, opportunities, and risks associated with the delegation of power in a Chinese subsidiary. Key keywords and concepts include:- Internationalization
- Cultural differences
- Leadership styles
- Decision making
- Human resource management
- Market characteristics
- Intellectual property
- Corruption
- Confucianism
- Guanxi
- Mianzi
- Quote paper
- Sebastian Hindelang (Author), Dominik Hedrich (Author), 2013, Expansion of western based companies to China, Munich, GRIN Verlag, https://www.grin.com/document/274129
