Why China Matters

“China is a hill worth dying for.”

That’s how Guo Xin, managing director at Mercer Human Resource Consulting for mainland China, Hong Kong and Taiwan, describes what’s at stake for companies when it comes to their Chinese operations.

    What he means is that for company after company, China’s potent domestic market of 1.3 billion consumers represents a chance to reverse past losses and grab the top spot in global market share.

    Already, many multinational firms are competing fiercely in the country and going great guns. But their very growth, combined with a lack of homegrown management talent, has led to serious problems surrounding leadership in Chinese operations. Chief among the difficulties is the dubious practice of prematurely promoting junior managers—either from within or poached from a competitor. Firms are turning to expatriates to help shoulder the leadership load. But foreigners can find China a tough assignment amid major cultural differences. And ethical pitfalls remain, despite efforts to clean up corruption.

    Given all the hurdles, human resource departments in China play a vital role. They have their own internal challenges. Many are far from operating as strategic business partners, and turnover is an issue: HR execs themselves are heavily headhunted in China. Western-based consulting firms are eager to help with leadership issues and are quickly expanding Chinese operations. But questions arise about how much value they can provide in the country.

    During a three-week reporting trip in China, Workforce Management explored these issues in depth. The resulting stories can be found in our March 12 print edition and on this Web site. If China is a hill to die for, then the leaders in the battle are vital. Capable, consistent, culturally attuned executives in China matter not only to companies, but to the country overall and, ultimately, the broader world.

Workforce Management Online, March 2007 — Register Now!