Since the introduction of Market based economic reforms in 1978, China has become the world´s fastest growing major economy, the world´s largest exporter and 3rd largest importer of goods. Rapid industrialization has reduced its poverty rate from 53% in 1981 to 8% in 2001. However, the PRC is now faced with a number of other problems including a rapidly aging population due to the one-child policy, a widening rural-urban income gap, and environmental degradation. Moreover, China has been criticized for its human rights violations by governments and NGO´s, and for having a problematic record of interfering with press freedom.
China is a permanent member of the United Nations Security Council, as well as being a member of multilateral organizations including the WTO, G-20 and the Shanghai Cooperation Organization.
Major combat in the Chinese Civil War ended in 1949 with the Communist Party of China in control of mainland China, and the Kuomintang (KMT) retreating to Taiwan. On 1st October 1949, Mao Zedong proclaimed the People´s Republic of China. “Communist China” or “Red China” were two of the names of the PRC.
The PRC is regarded by several political scientists as one of the last five Communist states (along with Vietnam, North Korea, Laos, and Cuba), but simple characterizations of PRC´s political structure since the 1980s are no longer possible. The PRC government has been variously described as communist and socialist, but also as authoritarian, with heavy restrictions remaining in many areas, most notably on the Internet, the press, freedom of assembly, reproductive rights, and freedom of religion.
Since economic liberalization began in 1978, the PRC´s investment and export-led economy has grown 70 times bigger and is the fastest growing major economy in the world.
Its government is officially atheist, which viewed religion as emblematic of feudalism and foreign colonialism. Religious belief or practice was banned because it was regarded as backward and superstitious by some of the communist leaders, from Vladimir Lenin to Mao Zedong, who had been critical of religious institutions. But China´s traditional religions are Buddhism, Taoism.
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https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html
https://www.cia.gov/library/publications/the-world-factbook/maps/maptemplate_ch.html
ORGANISATIONAL CULTURE
A blend of Maoist bureaucrat in learning, Confucian gentleman, and Sun Tzu-like strategist is used in organizations across China.
Guanxi: It describes the basic dynamic in personalized networks of influence, and is a central idea in Chinese society. At its most basic, Guanxi describes a personal connection between two people in which one is able to prevail upon another to perform a favour or service, or be prevailed upon. The two people need not be of equal social status.
Government´s plans are crucial for doing business; people give first priority to China´s national interests and always mix business along with politics.
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1. http://guanxi.pbworks.com/
2. China, Class presentation, http://interactiva.eafit.edu.co/ei/
IS GUANXI STILL WORKING, WHILE CHINESE MNC´S GO GLOBAL ?. THE CASE OF TAIWANESE MNC´S IN THE UK.
Guanxi and HRM go hand by hand in Chinese communities. However, Guanxi may not be completely important anymore, this due to the fact that Chinese MNC´s are global executives that have started to cope with the Western MNC´s. But anyway, National culture prevails, being an important way to do business inside and abroad for the Chinese business men.
Recently, “a Chinese company bought IBM Personal Computers lock, stock and barrel. Chinese corporations have bought Thomson and RCA televisions, Dirt Devil etc”. The article goes over on Taiwanese MNC´s looking for a strategy of Internationalization, and also tells about how third world MNC´s deals with their international workers.
The article concludes that National culture is anyway a key factor that influences the international strategy in MNC´s in the developing world.
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James Dyson, 2005
QUESTION
Discuss in your blog the relevance of Guanxi and the existence of Chinese business networks as supporting factors to the internationalization process of Chinese companies:
Guanxi is still important ad alive. “Today Guanxi has become essential business enabler in Chinese market economy. It occupies the core of Chinese business culture. Products compete with features and prices, and then Guanxi directs the selection.”
The internationalization process of Chinese companies is very much like the Internationalization process of Colombian companies, where national culture still weights a lot in the way things are done and oriented. I say this because it should be as hard to a Chinese business man to abandon its Guanxi principles, as to a Colombian business man to abandon procrastination and leaving everything to the last minute.
Culture is culture and is inherent to the individual, it is not something we can take off with soap, and it is in our core of behaviour and will almost never abandon us.
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http://beijingman.blogspot.com/2009/01/guanxi.html
USEFUL SIMPLE ANALYSIS OF GUANXI
http://www.randomwire.com/wp-content/uploads/guanxi-diagram-500x318.png
In this picture we can understand how Guanxi human relations work and how difficult for strangers it is to access the trusted circle.
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