China’s Latest Import: Senior Management

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There was a time (not very long ago) when Chinese companies would rarely be found employing highly-paid foreign managers. However, there is an increasing demand (see “Talent Squeeze, Bottom and Top”), and a couple of recent reports may amount to the start of a new trend in recruitment.

In moves designed to modernise management, attract top talent, and make leading companies globally competitive, SAIC Motor and Bank of China have both made bold moves:

    • Bank of China (whose foreign Chief Credit Officer recently left) has launched a “global recruitment search for top credit risk and financial officers” (according to the South China Morning Post, “SCMP”).

    • SAIC Motor has hired former GM executive (and head of China operations) Philip Murtaugh “to run its overseas operations from its Shanghai headquarters” (according to a report on biz.yahoo). Other car-makers hiring foreign talent include Chery, Brilliance, Geely. The report adds that, in relation to salaries at Geely, “they don’t blink at six figures” (and that is in US dollars).

While the decisions to invest in global talent – and to be globally competitive – is interesting, it will also be interesting to see how such senior foreign managers will fit in with established interests and cultures. SCMP reported that the Bank of China’s Chief Credit Officer, American Lonnie Dounn, “tendered his resignation in April after just 13 months on the job…[with reports that this was due to] language barriers and frustration with China’s ‘opaque corporate culture’.”

Foreign managers will need to adapt to these challenges, as will the world of business schools – which turn out lots of skilled managers (in theory) who could run into problems in China (in practice). The International Herald Tribune points to one top school that is already adapting:

    “Insead…opened an Asian campus in Singapore six years ago. This autumn, if all goes according to plan, it will take an additional step into the Asian market, with the introduction of an executive MBA program in China, offered jointly with Tsinghua University, of Beijing.”

The programme (and several others being developed) should have a lot of demand if a report from McKinsey is anything to go by. The firm projects that Chinese companies “will need 75,000 leaders who can work effectively in global environments over the next 10 to 15 years, compared with the 3,000 to 5,000 that they have now”.

Mandarin classes, anyone?

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4 Responses to “China’s Latest Import: Senior Management”

  1. Razib Ahmed Says:

    well it is definitely a good move from the chinese companies as they are now more interested to compete in a global level. The main challenege for the high officials is to learn and respect the chinese values, culture and customs and work in that environment.

  2. Jeremy Gordon Says:

    No doubt this will be a challenge – both on commercial and cultural levels, but I also think it is the start of a trend that will be a big benefit to Chinese companies.

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