Spirit, land, and energy
Creating value in China is becoming more difficult for all foreign companies.
A new Chinese management model will change the way business is done in the China, and possibly around the world
Creating value in China is becoming more difficult for all foreign companies. They are having to work harder in an environment that is becoming less and less like the American and European environments for business, and where the domestic competition is better adapted and growing stronger, smarter and more self-assured. But steering clear of or quitting the country because of a tough regulatory environment, a nationalistic industrial policy or tough local competitors is not an option.
Whether or not foreign companies (and their managers) prosper in this extremely competitive environment will depend not least on their intimate knowledge of a new management style rising in China, argues Charles-Edouard Bouée, Member of the Global Executive Committee of Roland Berger Strategy Consultants and President of Roland Berger Asia.
A new management model
In his book "China's Management Revolution", Charles-Edouard Bouée contends that this new Chinese management style, which started to emerge in 2008 as a result of the financial and economic crisis, is one of the most important issues for foreign companies to watch in present-day China.
According to Bouée, a long-standing expert on the Chinese and Asian markets, the new management style or model is fuelled by Chinese private sector entrepreneurs who have become skeptical about the applicability of Western-style management to Chinese companies and markets.
Creating value in China is becoming more difficult for all foreign companies. They are having to work harder in an environment that is becoming less and less like the American and European environments for business, and where the domestic competition is better adapted and growing stronger, smarter and more self-assured. But steering clear of or quitting the country because of a tough regulatory environment, a nationalistic industrial policy or tough local competitors is not an option.
Whether or not foreign companies (and their managers) prosper in this extremely competitive environment will depend not least on their intimate knowledge of a new management style rising in China, argues Charles-Edouard Bouée, Member of the Global Executive Committee of Roland Berger Strategy Consultants and President of Roland Berger Asia.
A new management model
In his book "China's Management Revolution", Charles-Edouard Bouée contends that this new Chinese management style, which started to emerge in 2008 as a result of the financial and economic crisis, is one of the most important issues for foreign companies to watch in present-day China.
According to Bouée, a long-standing expert on the Chinese and Asian markets, the new management style or model is fuelled by Chinese private sector entrepreneurs who have become skeptical about the applicability of Western-style management to Chinese companies and markets.
Spirit, land and energy! The new Chinese management model is derived from the interplay of this trinity
Spirit, land, and energy
These entrepreneurs are returning back to their cultural roots, a trinity of spirit, land and energy. China's culture contributes a spiritual component, the government provides the context and the environment – the land, as it were – and China's entrepreneurs and merchants are contributing the energy. Based on these pillars, the new and distinctively Chinese style of management perfectly fits the fast, unpredictable and volatile business world of today.
Their new style of management may still be inchoate and unformed, but it is already distinctive. Bouée identifies nine defining characteristics that are likely to distinguish it from other management styles: it's dynamic, adapted, flexible, synthetic, mutual, consensual, spiritual, disciplined and natural. Spirituality, mutuality, adaptability, flexibility, being able to process massive amounts of information in a simpler way – these are some of the ways the new model suggests for dealing with modern business environments.
The adaptive challenge
"In the West, people need to get ready for a new style of management that's going to last," says Bouée. "Not understanding what's coming up and not adapting to it will be a mistake." He urges international companies doing business in and with China to familiarize themselves with this new style, which is based on vision and tactics, flexibility, adaptation and caring leadership, and engage with it.
Rather than formulating strategies and milestones, Western managers need to watch and listen carefully, be ready to move quickly when opportunities present themselves, and engage effectively, both externally and internally. The adaptive challenge is theirs rather than China's, Bouée argues, and as China is changing all the time, so must they.
The familiarity of the new way of doing business in China is deceptive: It borrows ideas and principles from the West when they seem useful and don't violate the spirit/land/energy trinity. But ultimately, Bouée says, "the combination adds up to something original and new."
These entrepreneurs are returning back to their cultural roots, a trinity of spirit, land and energy. China's culture contributes a spiritual component, the government provides the context and the environment – the land, as it were – and China's entrepreneurs and merchants are contributing the energy. Based on these pillars, the new and distinctively Chinese style of management perfectly fits the fast, unpredictable and volatile business world of today.
Their new style of management may still be inchoate and unformed, but it is already distinctive. Bouée identifies nine defining characteristics that are likely to distinguish it from other management styles: it's dynamic, adapted, flexible, synthetic, mutual, consensual, spiritual, disciplined and natural. Spirituality, mutuality, adaptability, flexibility, being able to process massive amounts of information in a simpler way – these are some of the ways the new model suggests for dealing with modern business environments.
The adaptive challenge
"In the West, people need to get ready for a new style of management that's going to last," says Bouée. "Not understanding what's coming up and not adapting to it will be a mistake." He urges international companies doing business in and with China to familiarize themselves with this new style, which is based on vision and tactics, flexibility, adaptation and caring leadership, and engage with it.
Rather than formulating strategies and milestones, Western managers need to watch and listen carefully, be ready to move quickly when opportunities present themselves, and engage effectively, both externally and internally. The adaptive challenge is theirs rather than China's, Bouée argues, and as China is changing all the time, so must they.
The familiarity of the new way of doing business in China is deceptive: It borrows ideas and principles from the West when they seem useful and don't violate the spirit/land/energy trinity. But ultimately, Bouée says, "the combination adds up to something original and new."
Language
English | German
Go to the book's website
More about the author
think: act CONTENT
A summary of the book can be found in the latest edition of our think: act CONTENT series
More news
A world without agents?
Imagine a world without insurance agents - It is hard to picture, but some in the European insurance... >>
Pricing in wealth management
Times in wealth management have been difficult since the recent developments in the financial... >>
New restructuring study from...
German businesses have come out of the financial and economic crisis in good shape: 63% expect to... >>
Roland Berger Strategy...
As new Partner and Competence Center head, Martin Erharter has been working on pharma &... >>
IN DIALOG - Prof. Dr. h.c....
In an interview with Germany's "Top Career Guide Automotive", Roland Berger, Founder... >>
Have we whined enough? (Die...
In an interview with the German daily newspaper Die Welt, Burkhard Schwenker, Supervisory Board... >>
