Title: Harvard Business Review on Doing Business in China
ISBN:1-59139-638-7
Overview
The Harvard Business Review on Doing Business in China is a compilation of previously published articles on as the title states—doing business in China. It begins with an etiquette and business negotiation process article before delving into strategies and advice in later articles.
Each article is written by an expert in the subject who has studied and/or has experience doing business in China. There are many real life illustrations of actual business success and failures. The authors describe the tactics used and why it was a good or bad strategy for the company. Also included is a hypothetical situation for a manager in China and four different perspectives on what the manager should do next.
Relevance
While the advice is very sound it is unclear how relevant some of the articles are since one dates back to 1994. In over a decade’s time the Chinese government may have changed regulation so much that the older articles may no longer be relevant. This is considering that in many of the articles authors have commented how fast business environment in China changes. Many of the articles are more recent with an original publication date of 2003.
The book is written for busy executives, thus gives great breadth but lacks depth that lower level managers need. For example, it gives many company examples of ones that enter China using joint ventures versus wholly foreign-owned enterprises. However, it does not go into detail of how to set up a wholly foreign-owned enterprise if that is the chosen direction of the company.
Each article is relatively short so a busy person can finish an article in one sitting. Since they are concise the reader does not have to worry whether he or she is wasting time on an irrelevant article. Also, each article has a different point with very little overlapping ideas.
The Good…
The fact that this book has great breadth makes it a good primer book before reading other books on more specific aspects of doing business in China. I found that one of the strong points was to use examples of actual companies instead of just theories. A variety of companies were used as examples instead of only American or multinational companies.
The most interesting article is the one about viewing Chinese companies as competitors. It warns against feeling “safe” because a multinational is larger, has more capital, or has a known brand. Chinese companies have shown that they can gain a significant market share in a short time. A table in “The Hidden Dragons” article shows a list of growing Chinese companies to look out for. These companies have captured a surprising market share in their respective niche market.
Another article that is beneficial is the case study in “Trouble in Paradise.” A manager in China is in a tough situation where his boss in America wants a higher ROI while his partners in China want to buy a fourth subsidiary, which would lower ROI for a few years. Four commentators offer advice as to what the American manager in China should do in evaluating his situation. This case study allows the reader to come up with his or her own advice and compare it with the advice in the book. The case study has more depth than the other articles and highlights problems that a foreign manager in China may be faced with.
Lastly, I like how the authors use key Chinese business terms and explain why they are important in business. The first article describes key terms in greater detail while later articles give a brief definition, unless the entire article revolves around the term. It is better to read the first article before the others.
… The Bad …
As with most business books this one is cut and dry. There is no humor to make it interesting, which is expected. At least the articles are short enough for the reader to not fall a sleep and real life examples were interesting. I doubt I would have stayed awake and finished the book as fast if it was a normal business book with longer chapters instead of short articles.
This book is not for someone who wants concrete plans and strategies for China. It has overviews of strategies and ideas but does not go further on how to implement them. Also, certain strategies mentioned are now being closely looked at by the U.S. government. The administrative arbitrage strategy in “The Forgotten Strategy” gives an example of using holding companies in the Cayman Islands to reduce corporate taxes. It is now a questionable strategy in today’s business environment. Some articles such as this particular one needs to be updated to match the current business environment.
The book does not go into details about how the Chinese doing business with non-Chinese. It would have been nice to know how the Chinese’s view of foreigners affects their business decisions or whether they bother trying to understand a foreigner’s way of conducting business. A Chinese perspective would have made the read even more interesting.
Lastly, it would be nice to have a quick reference section of the key Chinese terms with definitions and pronunciations. Not many people know the pronunciation of pinyin and the pinyin spelling do not make any sense phonetically.
… and The Recommendation
The Harvard Business Review on Doing Business in China is an excellent introductory text to read before starting on other books with more depth. Despite its dryness, the book does pique my interest in other books on business in China, particularly ones that use more detailed real life examples.
