Social Networking and Chinese Indigenous Management: (Cases in Modern Chinese Business)

Many people want to do business with China but very few foreign business people have an understanding and appreciation of how business is actually conducted in China. This book offers insights into the history, philosophy and practice of business in modern China today. The author of this important new book begins by asking several key questions about business in China: Why is it a common phenomenon in China that one prefers being a leader in a small organization to being led in a big one? Why is it common in Chinese enterprises that within an organization, there is generally a bureaucracy to control a network of comparatively independent subunits? There are different forms of self-organized units within an enterprise, such as affiliated subsidiaries or self-directed teams, contracted out business units, independent local branches, profit-center departments or internal startup teams. Why do Chinese enterprises always network with each other to realize an all-win situation? There are regional business groups such as the one of Wenzhou-based enterprises, small enterprise networks such as the one built on the Yiwu Model, platform-based models such as MediaTek providing technology platforms to cottage mobile phones manufacturers and Taobao providing service platforms to online stores, network consolidators such as Li & Fung, and industry networks characterized by one town focusing on a single industry. Outside an organization, there is generally a network of cooperative partners. The above-mentioned structures –the independent subunits within and networks of cooperative partners outside an organization– are extraordinarily competitive in China.In contrast, large Chinese enterprises that consolidate the whole value chain generally operate inefficiently with exception to labor-intensive “blood and sweat” factories. In trying to explore and answer these questions the author examines the form and structure of Chinese social networks and indigenous management. He examines the origins and importance of Chinese management thought and the essence of Chinese management. The concept of “Guanxi” management is examined in great detail and from various dynamics and perspectives. “Guanxi” is a concept and practice crucial to understanding business in China and increasingly central to management teaching in China. Chinese managerial philosophies are also discussed. This book is based upon a series of lecturers given to management students at the prestigious Tsinghua University in Beijing. Therefore it is also an insight into what China’s business leaders of the future are learning. WenZhou is a county in which most people are businessmen and form various business groups to run business all over the world. YiWu is also a county in which many small factories generally run their own small stores so as to form a large network of value-chains. MediaTek is a Taiwanese firm providing IC technology solutions for all kinds of cheap mobile phones.