作者：Nick Palmer, Bruno Lannes
Without doubt, managing a foreign joint venture in the mainland involves acknowledging cultural differences and adjusting management approaches. The goal is to develop common goals, forge strong, enduring relationships and establish systems and controls that enable the partnership to ride out the hot-button issues that typically surface in mainland joint ventures. But what are the practical lessons that can be applied to ensure these goals are achieved?
Focus on building loyalty. Stable management starts by building strong personal relationships between multinational and mainland partner employees. Too many fledgling partnerships have suffered when the multinational, over-reliant on home-office personnel, rotates these expatriates too quickly. In many cases, personal bonds are a key reason locals stay and ignoring them will boost the already typically high rate of local attrition. Whenever possible, make sure there is a long-term expatriate commitment and a progressive transition plan. And begin the process of building a talented local workforce early.
Recognise the importance of staying abreast of rising compensation levels. Many of the best mainland employees are carrying considerable education-related debt and in today's heady job market who can blame them for following opportunities? But don't overlook the importance of non-monetary inducements such as overseas travel and further training which are highly valued and help build loyalty. As a multinational, don't hesitate to deliver on promised capability transfer programmes which typically focus on sharing best western practice in technical, operating or sales areas. Measuring their direct success and value may be difficult but the indirect benefits to employee loyalty are clear.
Be realistic - recognise and accept the limits of your position. As a minority shareholder or one of several parties, it's important to acknowledge your limitations with respect to the venture itself and the government.
Influencing staffing levels is a case in point. The mainland's tradition of long-term employment is hard to break. Consider the aerospace joint venture in Shaanxi that saw its orders drop by 50 per cent after the 9/11 terrorist attacks on the US. When the foreign partner proposed a 40 per cent cut in staffing, the mainland team resisted. Fortunately, the multinational had a solid enough relationship with its partner and reached a compromise that kept everybody satisfied: Employees who agreed to resign were offered a buyout worth up to 30 per cent of their salary.
In many cases, it is normal practice for the Communist Party to make senior appointments. It's important to understand who is a party member but don't try to get involved. Maintaining relations means starting at the municipal level; going direct to Beijing with a complaint is typically counterproductive.
And understand that, just like in your home market, although the mainland is an enormous market, it's still a small world when it comes to business and people will talk. Be straightforward in your discussions and avoid saying things that might embarrass or compromise you.
Manage the home office. It's easy to believe that managing the coalface is all that matters. But for the local head of a multinational, managing the home office can be a time-consuming but important exercise which entails two roles. The first is ensuring that realistic expectations for targets and timeframes are set and shared. The second is ensuring your messaging is well co-ordinated. This is especially important when senior officials fly in for a visit. Expect the typically more hierarchical mainland counterpart to treat these meetings with a degree of formality. Off-the-cuff remarks or promises by uninformed senior executives can undermine the hard-earned authority of the local multinational chief.
Joint ventures in the mainland are a tough business with the rate of failure more than double the rate of success according to one study. But following these guidelines can help a multinational master the tricky balancing act and make the most of the booming mainland economy.
Nick Palmer is a partner in Bain & Co's Hong Kong office. Bruno Lannes is a partner in the firm's Shanghai office