By Jonathan Geldart of Grant Thornton
“People misunderstand China. Usually they have an opinion on one extreme or the other. Some demonise. Others mythologise. Both perceptions are limited and distorted. China is neither as terrible and chaotic as some allege, or as great as others assert. The reality is in the middle.”
So said He Fulong, chairman of ITG Group. Based in Xiamen in southeast China, ITG is one of the country’s largest diversified trading companies. It is typical of the local state owned enterprises that have provided the solid underpinning of China’s phenomenal growth since the period of opening and reform from 1978 under Deng Xiaoping.
Close your eyes. Picture the most innovative, most entrepreneurial, and most customer-driven company in the world. Got it? Now open your eyes. What company did you have in mind?
Chances are slim you were thinking of a company that makes refrigerators, air conditioners and washing machines. But according to the authors of “Reinventing Giants” it’s exactly this industry’s global leader, Haier of China, that carries all the above-mentioned titles.
What makes HTC different from all the other struggling tech companies around these days?
Despite its falling sales, management at the Taiwanese smartphone maker has not been shaken up. The same chief executive has held the job for more than six years and the chairwoman has shot down local reports suggesting rifts in the leadership. That sets it apart from its peers, including Blackberry, Nokia — even Apple. So why have top management kept their jobs despite recent performance including a 98 per cent fall in profits in the first quarter?
Forget IQ. And while you’re at it: forget EQ as well. If you’re looking for an executive to lead your emerging market operations in 2013 and beyond, it’s all about CQ – the cultural quotient. Or so says Kevin Kelly, CEO of executive search firm Heidrick & Struggles. He spoke to beyondbrics before heading to the World Economic Forum in Davos this week, where the issue of how to capitalise on the relative strength of emerging markets over developed ones will be a major theme.
By NV ‘Tiger’ Tyagarajan of Genpact
The core of a business is the talent underpinning it. As the global landscape changes, emerging as well as advanced economies are faced with a scarcity of employable talent. Lack of such talent can impact businesses and pose grave challenges to every industry, but particularly for those in fast-growth economies.
While average wages in emerging markets have increased in many countries, especially China, they are still well behind those in developed nations.
But not at the top. Over the last decade, senior salaries in EMs have caught up with those in the west, and in many cases surpassed them, according to a report by management consultancy Hay Group.
One might normally assume that big multinational companies hold a lot of advantages in emerging markets. Besides the financial clout and extensive supply chain options, they have access to the fabled global talent pool and management strategies honed through decades, perhaps even centuries, of experience.
However, research by management consultants Hay Group suggests that multinationals may be putting themselves at a disadvantage to domestic companies in emerging markets through their reluctance to decentralise management responsibilities, and let go of cherished strategies that work in home markets.
While beyondbrics has a healthy scepticism for consultants’ surveys, they do sometimes throw up the odd nugget. Here’s one from Accenture:
Forty percent [of executives] do not believe that their companies possess the strategic and operational capabilities to fully grasp the opportunities in emerging markets.
That’s not a confident place to be. And it gets worse.