Opening Keynote Speech at the 4th China Week for the Ohm Hochschule MBA Students in Hangzhou. Internationalization Process of Chinese Enterprises - short introduction about China, (new) influences of China to the world, Chances and Challenges of Chinese Enterprises going Abroad.

1. By Prof.Dr.HoraTjitra
http://sinau.me
China and the World:
Internationalization Process
of Chinese Enterprises
Guest Lecture:Introduction to International Management
Nürnberg,Oct 6th 2010

2. Internationalization Chinese Enterprises/2010-09
Agenda
2
1 Snapshots of China 3
2 China and its (new) influence in the world 10
3 Internationalization Process of Chinese Enterprises 17
4 Challenges and Opportunities of Chinese Enterprises 27

3. Internationalization Chinese Enterprises/2010-09 3
14 years in Germany
7 years in China
Born and grew up as
Chinese Indonesian
Prof.Dr.Hora Tjitra - Cross-cultural and Business Psychology
Dipl.-Psych.,Technical University of Braunschweig
Organizational Psychology and Human Resource Management
Dr.Phil.,University of Regensburg
Intercultural Psychology and Strategic Management
Executive Education,INSEAD
HR Management in Asia

4. Internationalization Chinese Enterprises/2010-09 4
Quick Snapshots
of China

5. Internationalization Chinese Enterprises/2010-09 5
The People of Republic China - 中华人民共和国

6. Internationalization Chinese Enterprises/2010-09
Some Statistic on China before the 2009 Crisis - Dec 2008
6

7. Internationalization Chinese Enterprises/2010-09 7
The 2009 Crisis,Better than expected - healthy growth ??

8. Internationalization Chinese Enterprises/2010-09 8
China and its (new)
influence in the World

9. Internationalization Chinese Enterprises/2010-09
Recent progress and update on Economic,Business and Management in China
(The Economist,Feb 2010)
9

10. Internationalization Chinese Enterprises/2010-09 10
The new (bubble) world’s superpower ?
The world largest car’s market
The world largest export country
The world largest Forex reserve
(2.4 Trillion USD,30% of the world)
The fastest growing country in the world
The second largest economy in the world
Four of the top 10 Global Bank
(the first top 3,market value,FAZ 2010)
Rank first in Engineering Citation Index,
and rank three in Science Citation Index
The Republican to beat Obama?
Helping Pakistan
Thestrangesuccess ofGovernmentMotors
What to do about space junk
The politics of wind energyAUGUST 21ST–27TH 2010 Economist.com
Contest ofthe century
China v India

11. Internationalization Chinese Enterprises/2010-09
World’s Top Export Sources (1) and Destination (3)
11
sources: http://seekingalpha.com
by Erick van Dijk,Aug 15 2010
Combining the import and export
top twenty,we can indeed confirm
that China is as important as
the US or Germany are.

12. Internationalization Chinese Enterprises/2010-09
Continuously Top Destination for FDI since 2002
12
2010 A.T.Kearney FDI Confidence Index
The coming of the Lewis turning point for China has
been noticed since 2004,when the“shortage of labor”
was first faced by manufacturers in the southern
coastal area.Rising labor cost has already impacted
some aspects of the economy.
http://blog.worldbank.com
Jia,Jun 22 2010

13. Internationalization Chinese Enterprises/2010-09
Chinese Investment is mainly in Natural Resources and Finance
13
China invests abroad for many reasons,
including to support an expanding
industrial sector with a growing
appetite for natural resources,capital
inputs,and access to advanced
technology and foreign markets.
sources: http://frbs.org
by alan et.al.,Mar 22 2010

14. Internationalization Chinese Enterprises/2010-09
Australia has been the single most preferred destination
for Chinese non-bond investment
14
China has led the way,among the
BRIC in Africa,striking a series of
billion dollar minerals-for-
infrastructure deals

15. Internationalization Chinese Enterprises/2010-09 15
Challenges of Chinese Goes Global

16. Internationalization Chinese Enterprises/2010-09 16
Internationalization Process
of Chinese Enterprises

17. Internationalization Chinese Enterprises/2010-09
The Most Valuable Companies in the World
17

18. Internationalization Chinese Enterprises/2010-09
Five possible scenarios of China’s Future
18
By Professor William A.Fischer and Rebecca Chung,(October,2006)
http://imd.ch
Currently“the world’s factory”,we assume that
for the most part,China has acquired sufficient
ability to produce goods and services,which
will improve over time,legitimately becoming
“world-class manufacturing.”

19. Internationalization Chinese Enterprises/2010-09
Chinese Enterprises Dominates the Fortune 500,...
19
• International Sales / Market /
customers
• Production / Factories abroad
• Foreign Talents
• Global Top Managers
• ...
...,but

20. Internationalization Chinese Enterprises/2010-09
Globalization Strategy and its impact on organizational design
Transnational
Multinational
GlobalDomestic
International
Export
Multinational decentralized
Approach
International
coordinated Approach
Global
centralized Approach
Adapted from Bartlett & Ghoshal,1998
20

21. Internationalization Chinese Enterprises/2010-09 21

22. Internationalization Chinese Enterprises/2010-09
...Chinese brands are unlikely to be dominant anytime soon
22
Many economists argue that competitive nations’
trade relationships foster strong global brands by
exposing homegrown products to foreign markets.
That would position China to become a brand
powerhouse—but the fast-growing economy has no
brands on Interbrand’s global top-100 list.
Sources:HBR Jan 2010,Willem Smith & Michael Sorell

23. Internationalization Chinese Enterprises/2010-09
From the Low-Cost Manufacturer to the High-Tech at a Low Cost
23

24. Internationalization Chinese Enterprises/2010-09
The essence of“Made -in-China”
24
sourcehttp://blog.chinatells.com/2010/08/4575

25. Internationalization Chinese Enterprises/2010-09
Globalization challenges for the HR partners and champions
25
Challenges for Chinese companies
(% of respondents from companies based in China,n=63)
What barriers,if any,has your company faced to undertaking activities outside mainland China?
Potential customers have concerns about the quality of Chinese
products
Our company does not have enough managerial talent
We lack sufficient capital
We have an inadequate understanding of legal and/or
reputation risks in other countries
Cultural barriers make the business difficult to manage
Customers are unfamiliar with Chinese brands
Governments or other stakeholders in other countries had a
negative reaction to our proposed activities
Funds have been difficult to find outside mainland China
Logistical barriers make the business difficult to manage
Potential employees in new geographies are not familiar with
our company
Other
Our company has faced no barriers
44
25
24
22
21
19
19
3
5
10
11
14
Three big challenges for Chinese
companies’globalization
• Developing Managerial Talent
• Managing Cultural Barriers
• Attracting International Talent
Survey from McKinsey Quarterly
• Most executives at Chinese companies say
the biggest obstacle to the global growth of
their companies is a lack of managerial
talent.
• During the globalization,most Chinese
companies face the challenge of combining
Chinese and Western forms of
communication and cultural norms.
• 88% of the Chinese executives said that their
globalization efforts were hindered by the
scarcity of people with real cross-cultural
knowledge or experience managing foreign
talent.

26. Internationalization Chinese Enterprises/2010-09
Challenges and Opportunities of Chinese Enterprises
26
Opportunities for Globalization
• Huge home market with strong growth
• Very Competitive and increasingly Innovative
• Lots of Cash (in particular the SOEs)
• Excellent infrastructure (and partly policy)
• Culture and Values (hardworking,learning etc.)
Challenges for Globalization
• Lack of International Experiences
• Building Global Brands / International Marketing
• Moving-up the Value-China / Innovation
• Management and International Talents
• Culture and Values (In-Out groups,hierarchy etc.)

27. Excellence through Culture, Talent and Change
Tjitra,2010
Thanks You
Any comments & questions
are welcome
Contact me at htjitra@zju.edu.cn
Follow me at twitter@htjitra
27
http://sinau.me
Guest Lecture in International Management
Nürnberg,Oct 6th 2010