Rising multinationals in China should stick to their own management techniques

Washington, Jan 20 : Multinational companies breaking into the profitable Chinese market should stick on to their own management techniques rather than adapting Chinese cultural environment, management experts have advised.

In a recent study, Dr Jos Gamble, principal investigator, Royal Holloway, University of London suggests that rather than struggle to adapt Chinese cultural environment, firms from the UK and elsewhere are better advised to hone and refine existing managerial and technical expertise.

While conducting the case studies, Dr Gamble interviewed management and staff in eight Chinese cities, including Beijing, Shanghai and Chengdu, as well as key people in the UK and Japan.

He also observed how these global organisations transfer management practices and retail concepts to their overseas subsidiaries.

The findings dismissed the claims that foreign retailers offer only 'dead-end' jobs in their Chinese subsidiaries.

He said, such organisations could provide workers with significant opportunities to prosper and improve their skills.

In China, the Japanese and UK firms were trying to imitate the store procedures, employment relations and customer service standards of their parent company.

However, the study found that, in some ways, retailers did deviate from practices back at home.

"These findings indicate that while it is possible to transfer culturally innovative practices, those that run counter to institutional features - such as the nature of the local labour markets - are much harder to implement.," said Dr Gamble.

For instance, Japanese firms employed far more women supervisors in China compared to their stores in Japan while Britain multinational followed local practice with its use of large numbers of sales staff employed by product suppliers rather than directly by the stores.

"The Japanese approach to customer service was particularly innovative in the Chinese context. Whilst, initially, local customer response was quite negative, it rapidly achieved acceptance as a form of 'best practice'," she added.

Contrary to expectations, a UK firm examined for the study provided at least as much opportunity in this respect as Japanese companies.

"Most of the world's major global retail firms are desperate to grab a slice of the largest and most rapidly growing emerging market.

"All the evidence suggests that, whilst it may be necessary to adapt to some extent to local conditions, time-tested management practices actually translate well across cultures," he said.

The research was funded by the Economic and Social Research Council (ESRC).

ANI