Guanxi, Communication and Competition in Post-Crisis China
There’s a very good post in the Harvard Business Review Blog this morning titled “How to Get Promoted in China” by Andy Molinsky. His main idea is:
“The overall message — no matter which foreign culture you find yourself in — is to “go local. Do your best to find out how self-promotion is handled in that local culture and adjust your behavior accordingly. By doing so, you are enhancing your ability to move seamlessly across the global economy and increasing the chances of creating positive impressions in any cultural setting.”
Molinsky presents an illustrative case and offers readers four very astute take-aways:
- Tip 1: Be patient
- Tip 2: Develop your networks
- Tip 3: Adapt your own communication style
- Tip 4: Find a better fit
Two points he doesn’t mention explicitly, however, are also important to international managers approaching the China market in search of profits, not promotions.
1)Guanxi / network-building is a function of power and hierarchy. Americans and Europeans are used to two types of guanxi-building. The most familiar situation is exemplified by Chinese salesmen and potential partners trying to curry favor – often offering guanxi and connections as their only significant asset. International managers are also accustomed to banquets, gift-exchanges and relationship-building events with potential partners or clients. This kind of networking is horizontal between parties of roughly equal status. There is however a third type of guanxi relationship, where an outsider or lower-status individual must work to gain admittance to a group or win the approval and cooperation of a higher-ranking actor. While this type of networking is increasingly important in post-crisis China, it remains a persistent mystery to many western deal-makers. A decade ago, international managers had a cache and status that opened doors and leveled every playing field. Those days are gone.
2) More and more MNCs in China are finding that they compete directly with local firms not only for raw materials and customers, but also for talent. In pre-crisis days, American and European firms had their pick of the best & brightest young executives in China, be they homegrown, returning Chinese or expat. Nowadays international managers can’t take anything for granted. Top Chinese grads are said to prefer jobs at steady SOEs or bureaucratic posts to all but the most famous MNCs. Mr. Molinsky seems to be hinting that up and coming young western managers are starting to see private Chinese firms as viable career options as well.