Globalisation and strategic managementof Chinese firms
Course design
This course unit analyses issues related to business environment, competition and business strategy in China at international, national, industrial and firm level. At the international and national level, it examines competitive pressures from foreign firms, motives for Chinese firms to invest overseas and the role of the governments in promoting foreign direct investment (FDI). It also examines issues related to human resource development, industrial policy, innovation, intellectual property rights, environment and corporate social responsibility that are linked to sustainable economic growth and social development. At the industry and firm level, more detailed discussions are given to analyse the dynamics of competition, characteristics of strategies and patterns of organisational practices of specific industries. Examples of firms are provided to illustrate the points at various levels.The course unit draws heavily on contemporary academic research and practical illustrations to investigate issues related to the business environment and strategies firms may deploy in China. While the focus is largely in the Chinese context, where possible, attention will be drawn to international trends and practices.
Eleven topical sessions will be taught in the course in addition to a review session for general queries about the course, as shown in the table below. These themes span across a number of sub-disciplines within business and management studies. These include, for example, corporate strategies, research and development (R&D) and technological innovation, corporate social responsibility, outsourcing, mergers and acquisitions, foreign direct investment, and human capital theory. Some of these thematic topics are revisited and expanded in other course units. As the course unfolds, students should develop an understanding of the topics and make connections between these topics and those that are taught in other courses of the degree programme. Throughout the whole course, students are encouraged to study each topic through a critical lens and challenge existing perspectives. Students are also encouraged to use their own experience of work to inform and make sense of what are discussed.
Teaching/learning Style
A variety of learning styles is employed for the course in which students are encouraged to participate actively. Each session will take a 2-hour lecture in addition to one hour seminar/group work. Some sessions will also require student-led group work during which students can discuss and debate certain topics through case studies etc. in order to reinforce their understanding on the topics and to develop team-working skills. The course seeks to develop presentation, analytical and teamworking skills in addition to providing a core of knowledge about business strategy and organisational management.
In order to benefit from these sessions and ultimately do well in the course, students should read at leasttwo items from the relevant reading list for each topic. Students, however, should not restrict themselves to reading two articles only and instead, should read much more widely to develop an understanding of the topics.
Theme for each session / Date & time- Business environment in China – an overview
Group work (preparation for presentation for Sessions 2, 3, 4, 6 and 8) / 7 hours, Saturday 18th May
Group work (preparation for presentation for Sessions 2, 3, 4, 6 and 8) / 3 hours, Sunday morning 19th May
- Industrial policy and competitiveness of Chinese industries
- Business strategy of leading Chinese firms
- Globalisation and outsourcing
- Business ethics and corporate social responsibility (CSR)
- Innovation, entrepreneurship and sustainable development
- International mergers and acquisitions (M&As) in China
- Chinese multinational firms abroad
- Organisational culture and diversity management
Group work (preparation for presentation for Session 11) / 4 hours, Sunday morning 26th May
- Managing HR in a global context
Course revision and tuition / 3 hours, individual arrangement
- Group debate – FDI decision making
Note: Each group presentation should be no more than 15 minutes long.
Descriptions of group work for some sessions
Learning on Chinese business and management issues at both macro and micro level is most effectively done through group work in addition to lectures and guided readings. Most topics covered in this course will involve group work. For some topics, student groups will be required to give presentations. To maximize group effectiveness, each group should be no more than 4-5 people. Each student should pull his/her weight and not hide behind others. While most of the group work exercises are not assessed, they provide valuable opportunity for you to learn the topic in depth and prepare you for your essay assignment.
Group presentations are normally made at the beginning of the lecture. Each presentation should last no more than 15 minutes.
Group work for Session 2: (Group 1 present)
Give a presentation on the challenges facing one of the Chinese industries of your own choice, but it should NOT be automotive, pharmaceutical, IT, retail or exhibition industry as these have been covered in Cooke (2008).
Group work for Session 3: (Group 2 and Group 3 present)
Two groups give a presentation each on a case study of a successful Chinese company of your own choice. Your presentation should cover a brief summary of the company’s history, its business strategy, key challenges/competitive pressure and key success factors. The two groups should not choose the same case study.
Group work for Session 4: (Group 4 present)
Give a presentation to critically analyse IT outsourcing in China in the context of globalisation. Assess the opportunities for, challenges to and prospects of the Chinese IT outsourcing industry.
Group work for Session 6: (Group 5 present)
Give a presentation on environmental problems in China and possible solutions. Provide a general overview, then use an industry or company of your choice to illustrate your points.
Group work for Session 7: (Group 6 and Group 7 present)
Two groups give presentations on a real case of cross-border M&As. Each group should research and present a case study of a real (foreign-owned) company that has carried out a merger or acquisition deal with a Chinese firm in China. The two groups should not choose the same case study. In your presentation, you should, as far as possible, address the following points:
- Background of the foreign (parent) company that acquired the Chinese (subsidiary) business
- Background of the Chinese (subsidiary) business
- Motives for the acquisition deal from both sides
- Major challenges/issues in the acquisition process
- Major challenges/issues in the post-acquisition integration
- Impact of the acquisition for both sides and performance of the new business (measured by financial performance, market share, etc)
- Other issues that you wish to cover
Note: you may not have sufficient information to cover all the above points, but try to cover as much as possible by using websites, media coverage etc.
Group work for Session 12: (All five groups participate)
Grand debate on FDI decision making.
Students should divide themselves into six groups and each group carries out the following preparation for the Group Debate. The team of senior executive directors of ‘Chinese Auto’ will have five people in the group. The other five groups will be the representative team of each of the five bidding countries.
A Chinese multinational car manufacturing corporation (‘Chinese Auto’) is intending to open a plant in another developing country in order to reduce cost and to tap into the local/regional market. It is intended that the new car manufacturing plant in the developing country will employ 15,000 workers. While senior managers of the new plant will be expatriates from the Chinese Auto Headquarters, middle ranking and junior managers will be selected from the local employees.
A team of five senior executive directors of ‘Chinese Auto’ will be hosting an international bidding conference during which bidding teams from Malaysia,India, South Africa and South Korea will compete against each other to win the bid for their country. Each country representative team should highlight the advantages of the employment environment and human resources, as well as other business advantages, of their country and expose the weaknesses in the employment system, as well as other disadvantages, such as political instability, of other competing countries. In other words, each team should be familiar not only with the country they have selected to represent, but also business and employment conditions in other competing countries.
The team of the five senior executive directors from ‘Chinese Auto’ should have a reasonable knowledge of the business and employment environment of each country in order to give input in the debate and to make final decision on which country they should select to relocate the car manufacturing plant. The team should also decide a clear set of criteria which they would use to select the winning team from the four bidding countries.
This exercise is aimed to create a climatic ending to the course unit by bringing in all the knowledge that students have learned from the whole course and by making sure everybody has an active participation in the exercise.
Assessment
Assessment for this course is by group presentations (20%+20%=40%) during the course and two group essay assignments based on the group presentations (30%+30%=60%) at the end of the course. Each essay should be around 3,000-3,500 words long in English (not including references). All group presentation ppt slides and essays (in word format) should be submitted to the teacher by 2:00pm 27th May 2013. Late submission will not be marked.
Course Evaluation
Questionnaires will be circulated to students towards the end of the course for the purpose of evaluating particular aspects of the course. Students are encouraged to provide on-going informal feedback on the course, and we are always happy to discuss academic and pedagogic issues as appropriate. There will be an opportunity for a formal review of the course towards the end of the semester.
Learning objectives
The course aims to:
Provide an overview of China’s business environment by contemplating its political, economic, technological and environmental environment
Analyse the role of the state in shaping organisational practices and competition strategy
Explore the development of Chinese businesses as a result of the growing strength of the private sector, the entry of MNCs in China, and the global competition that the Chinese industries are increasingly facing
Outline major sources of competition, changes and types of business strategies, using a selection of Chinese industries and firms as examples
Analyse opportunities and key challenges for Chinese firms in internationalising their business
Raise students’ awareness of the likely impact of elements of business strategy on China’s environment and sustainability of long term development – economically, socially as well as ecologically
Highlight the importance of and challenges to effective management of human resources in the domestic as well as global context
Learning outcomes
By the end of the course unit, you should be able to:
Understand theoretical models of strategy
Identify benefits and pitfalls of different aspects of business strategy
Explain the major institutional factors in China for business operations
Assess the likely impact of global, national and industrial competition on firms operating in China
Provide advice on the application of different elements of business strategies to business organisations
Explain the role of HRM in organisations, particularly multinational firms
Assess the likely impact of HR policies and practices on individuals in different national cultural and labour market environments
Provide advice on the practicability and application of different HR practices in employing organisations operating in and outside China.
Recommended Readings
Business environment and organisational strategy in China is a vast topic. One set of textbooks alone will not provide sufficient reading for the themes concerned. Students are required to read extensively from various sources such as books, journals and professional periodicals in order to prepare for the taught sessions and the exam. They should read materials on business environment and organisational strategy in general, as well as those dealing with the Chinese context. The suggested reading list for each topic should provide a useful starting point.
Recommended books (* core readings):
*Cooke, F. L. (2008)Competition, Strategy and Management in China.Basingstoke: Palgrave Macmillan.
*Lasserre, P. and Schutte, H. (2006)Strategies for Asia Pacific: Meeting New Challenges. 3rd edition, Basingstoke: Palgrave Macmillan.
Chen, J. and Yao, S. (eds.) (2006)Globalisation, Competition and Growth in China.London: Routledge.
Some relevant journals:
Most international business and management journals contain some articles on China. Students are encouraged to browse through these journals to get an overview of issues of debate and empirical studies on thematic topics covered in this course in general and those that are related to Chinese business and management more specifically.
- Asia Pacific Management Review
- China Information
- Journal of Asia Pacific Economy
- Asia Pacific Business Review
- Management and Organization Review
- Journal of International Business Studies
- International Journal of Human Resource Management
- Journal of Current Chinese Affairs
- Journal of Chinese Economic and Business Studies
Session descriptions:
Session 1. Business environment in China – An overview
Themes: This session examines some of the macro factors as part of the business environment under which firms operate in China. In particular, we focus on the following: the role of the Chinese government, industrialization and the development of industries, technology and innovation environment and the level of human capital in China.
Recommended readings
Cooke, F. L. (2008)Competition, Strategy and Management in China.Basingstoke: Palgrave Macmillan, Chapters 1 and 2.
Garnaut, R. and Huang, Y. P. (2001)Growth without Miracles – Readings on the Chinese Economy in the Era of Reform.Oxford: OxfordUniversity Press.
Nolan, P. (2004)Transforming China: Globalisation, Transition and Development.London: Anthem Press.
Porter, M. (1990)The Competitive Advantage of Nations.Basingstoke: Macmillan.
Session 2. Industrial policy and competitiveness of Chinese industries
Themes: This session reviews thecharacteristics of key industries in China, using the automotive, pharmaceutical the IT industry as examples. It critically assesses the role of the government’s industrial policies in the development of these industries. Barriers to implementing a national industrial policy is analysed and the impact of market competition, particularly that from the MNCs, is considered.
Recommended readings
Cooke, F. L. (2008)Competition, Strategy and Management in China.Basingstoke: Palgrave Macmillan, Chapters 4-7.
Eun, J. and Lee, K. (2002), ‘Is an industrial policy possible in China? The case of the automobile industry’, Journal of International and Area Studies, 9, 2, pp.1-21.
Li, D., Davis, J. and Wang, L. (1998), ‘Industrialization and the sustainability of China’s agriculture’, Economics and Planning, 31, pp.213-30.
Linden, G. (2004), ‘China standard time: A study in strategic industrial policy’, Business and Politics, 6, 3, pp.1-26, electronic version produced by The Berkeley Electronic Press, 2005,
Perkins, D. (2001), ‘Industrial and financial policy in China and Vietnam: A new model or a replay of the East Asian experience?’ in J. Stiglitz and S. Yusuf (eds.), Rethinking the East Asia Miracle, The World Bank.
Thun, E. (2004), ‘Keeping up with the Jones’: Decentralisation, policy imitation, and industrial development in China’, World Development, 32, 8, pp.1289-1308.
Nolan,P. (2002), ‘China and the Global Business Revolution’, Cambridge Journal of Economics, 26, pp.119-37.
Child, J. and Tse,D. (2001), ‘China’s Transition and Its Implications for International Business’, Journal of International Business Studies, 32, 1, pp.5-21.
Group work
Group presentation on challenges to selected industries.
Session 3. Business strategy of leading Chinese firms
Themes: This session analyses the key elements in the competition strategy adopted by top performing Chinese firms.Key strategies that are perceived to be related to these companies’ success include business development strategy, innovation strategy, product and production strategy, marketing strategy and human resource strategy. The role of product branding and corporate social responsibility (CSR) is also assessed.
Recommended readings
Cooke, F. L. (2008)Competition, Strategy and Management in China.Basingstoke: Palgrave Macmillan, Chapter 3.
Parris,K. (1999), ‘The rise of private business interests’, in M. Goldman and R. MacFarquhar (eds.),The Paradox of China’s Post-Mao Reforms, Cambridge, MA: Harvard University Press.
Lasserre, P. and Schűtte,H. (2006)Strategies for Asia Pacific: Meeting New Challenges. 3rd edition, Basingstoke: Palgrave Macmillan.
C. K. Prahalad and G. Hamel,(1990), ‘The Core Competence of the Corporation’,Harvard Business Review, May-June: 79-91.
Johnson, G. and Scholes, K.(2002)Exploring Corporate Strategy: Text and Cases (6th edition).Harlow: Pearson Education Ltd.
M. Porter, (1980)Competitive Strategy. US: Free Press.
Khanna, T. (2007)Billions of Entrepreneurs: How China and India Are Reshaping Their Futures and Yours.Boston: HarvardBusinessSchool Press.
Group work
Group presentations on the case studies of selected successful Chinese companies.
Session 4. Globalisation and outsourcing
Themes: This session provides a summary of the driving forces of globalisation and the implications of outsourcing for national economies, industries, firms and individuals. It also examines the role of China as a major supplier country and the impact of globalisation on China’s economy and wellbeing of employees.