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China Business » Information » Management Problems in China Management Problems in ChinaThe increase in business activity in China, especially by foreign companies, has provided many jobs for Chinese managerial professionals. This new source of jobs for Chinese citizens is welcomed by the Chinese government, of course.Since the beginning of outsourcing in China, companies in the western world have needed managers for their representative offices and partnership operations with Chinese companies. Since Chinese citizens understand the local business methods in their homeland, it seems natural to use them to represent foreign companies' interests.  The use of Chinese people as managers in a foreign-owned company has had some problems, however. Among the problems is a lack of loyalty to the foreign company. If a man wants to make more money than the foreign company pays him, there are options that he can use to increase his income. He can use privileged information such as manufacturing plans to begin making similar products on the side to sell for himself. As well, he can try to find Chinese companies to whom he call sell the privileged information, companies which will become competitors to the company for which he is working. Some local Chinese managers for a foreign company may continue to collect money to purchase high quality material to manufacture the company products but actually use only part of that money, buying lower quality material. The Chinese government is working toward protecting foreign investors from such types of Chinese managers, but the problem is difficult to control completely. Government agencies are aware that they must keep the foreign investors content with their investment in China or they will lose them. A more recent problem concerning Chinese managers is the tendency to jump from job to job as better opportunities open for them. In only one year, the average tenure for a manager in China fell from three to five years per company to a low of one to two years per company. This rapid loss of having a consistent management team is damaging for the foreign businesses. They find they need to train new managers far too often. Related to this job-hopping tendency is an activity which smacks of blackmail. Managers who have become valuable to a foreign company can apply for a job elsewhere. If they receive an offer of employment from a competitor, they tell their present employer about the offer and ask for a better employment contract with higher pay and better benefits. It is not easy to find qualified Chinese managers to hire. Although there is a gigantic work force available in China, few of those workers are competent to manage a foreign company. Technical know-how, language skills (English and Mandarin), and people skills are basic requirements. Few Chinese workers have all of those elements. For many companies, the remedy which makes the most sense is to bring their own team to China to manage the work. This, too, is not easy since few of their employees have those elements mentioned above. They would have to offer a higher salary and better benefits for those who were qualified and willing to move to China. As in most areas of the world, good managerial staff are valuable resources in China. Written on: 26th September 2007 Written by: R. Harris |
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