Top insights into the risks of going global

Book review | Yeung, Xin, Pfoertsch, Liu

The rise of China has been widely accepted as a key development in the 21st century. As an indicator of this trend, many leading Chinese firms have started to show their muscle through the ambitious acquisition of global brands such as Thinkpad and RCA.

Nevertheless, most people in Western countries know very little about these "Barbarians at the Gate". Who are they? Will they change the global competitive landscape as Japanese firms did in the 1980s? How should Western companies react to these new challengers?

The rise of these ambitious Chinese companies on the global stage could offer both opportunities and challenges. In this book, you will see many convincing and in-depth case studies, first-hand interviews as well as useful frameworks to understand this next wave of globalization.

Leading professors from the China-Europe International Business School (CEIBS) address these key issues by utilizing cases from top Chinese companies such as TCL, BenQ, China International Marine Containers Group (CIMC), Trend Micro and Galanz.

The authors also draw upon the wisdom and experience of giant Chinese corporations including Haier, Huawei, and Lenovo; leading international conglomerates such as Sony, Samsung, and P&G, and rising stars in new markets such as the global operation of Tata Consultancy Service.

There are many insights from the authors and interviewees in this book, including:

how a company could choose to go global through mergers and acquisitions (M&A), organic growth or strategic alliances;

in terms of organizational capability, Chinese firms are globalizing from weakness rather than strength;

a global company should have not only a global employee competence but also a global employee mindset and global employee governance;

there are many quiet heroes in globalization such as Huawei, Galanz and CIMC that didn't make as much noise as TCL and Lenovo, but they are even more successful;

Chinese firms are very flexible and opportunity driven, which could be both a strength and a weakness for them;

very often, the M&A decisions of Chinese firms are driven by complex motivations, which could be political or economic, rational or irrational, personal or impersonal;

Chinese firms are leader-driver while Western firms are system driven and, as a result of this difference, the integration between Chinese and Western companies will be very challenging;

when going abroad, Chinese firms face not only political resistance but also distrust from local staff and labor unions.

This book provides readers with a constructive, enlightening and practical framework as well as tools for implementing effective strategies.

By showing readers how to analyze issues and think in a systematic way, it will give insights to China-based managers on how to understand the current development of aspiring global Chinese companies. It is an essential read for any manager wishing to break out of China and build a global business.

China Daily

(China Daily 05/30/2011 page17)