Grow up, lower level, network of relationships, the three major organizational problems of Chinese e

             Grow up, lower level, network of relationships, the three major organizational problems of Chinese enterprises. 

    


      Chinese enterprises, Chinese enterprises and the world, due to the lack of organizational capacity in general face several major development issue. The first problem is not easy for Chinese enterprises to grow. "Forbes" Global Rich List 2004, global personal assets of $ 1,000,000,000 over 587 people, including 39 Chinese people, in sharp contrast to the "Fortune" magazine from the business point of view, according to global sales discharge of the 500 largest companies, non-state-owned Chinese enterprises are only one (recent death of Taiwan's richest man, Cai Wanlin of Cathay Life Insurance to turnover of 13.8 billion ranked 395). The second is in the global supply chain status. The third choice is the industry brings unique business risks. Chinese companies for organizational capacity constraints, they chose the industry is often a "relationship-intensive industries," when the personnel change occurs, companies often face significant business risks. Below we explain one by one start.

Problems grow up

      Lack of organizational capacity of Chinese enterprises to bring the primary problem is the lack of scalability and organizations reproducibility, and inability to grow up problems. Pecking order, differentiated, traditional Chinese society, everyone is a great social network of a node, the relative relationship between two nodes determines the way of dealing between the two. The special requirements of the cultural tradition of doctrine, each person has special circumstances, be treated differently. Use the terms and provisions of the statute requires each employee to equality tend to be startling, that the immature. Abstract, formal, rational thinking, here on behalf of stupid, stunned, pedantic. Companies need to spend a lot of people and time to address these special circumstances brought about by the distribution of benefits, internal conflicts, employee emotions, team cooperation. When a company large enough to not afford the cost of the time corporate boundaries will come, business will stop growing. Different industries will be different this boundary to the total, office workers, estimated between 500 and 1000, that is, most people said, to rely on the badge to know when colleagues. Total turnover of the enterprise, the same different industries, general manufacturing, steps should be between 100 million to 1 billion.

       Particularistic culture is not only the relationships outside of work into the company, but also in the company through interpersonal relationships to form  a variety of informal networks. Buddy child loyalty, cliques, small groups, small group, like germs, like corrosion formal organization began the chain of command downlink and uplink feedback chain. Leaking, small exchequer, rebates, dumb proxy (dummy Agents, that does not work, just take the agency fee), business transfer, false accounts and so flooded it pressed gourd dipper. When the organization is geographically widely distributed, only when the remote control, are particularly prone to this problem serious, was not in Wuhan branch manager absconded with money, that is, the collective share of stolen goods in Shenyang branch, keep track of. To try to rectify the boss or the head office, the more good movies opening: the darkness of the unknown path, both ways, blowing hot and cold, Collateral, Shajixiahou ... ... When Sanshiliuji spend all the time for infighting, the company also began to irretrievably spoiled.

      China sales channels within the scope of China to become a major issue in large part for this reason. Relatively strong organizational capacity of enterprises, often by a nationwide sales network to quickly succeed in the competition to become industry leaders, for example, TCL, and Gome women, which is by examples of successful national sales network. Related to this is a phenomenon that franchise business in China special difficulty. In theory, China, a huge domestic market, franchising as a business cost through the chain grew rapidly, expanding to provide a perfect path of development. McDonald's, KFC is the example we can see every day, it looks like nothing more than difficult. But in fact, the smooth implementation of the franchise one of the most important prerequisite is the need by establishing a formal system of rules very well, to ensure that branch operational procedures and quality standards, free-riding can not let any branch, jeopardizing the entire system brand value, otherwise, the entire system will collapse an amazing acceleration. It is in recognition of the problem, even the McDonald's franchise in China are abandoned in favor of the main joint venture to take, for example, Beijing's joint venture partner in Beijing agribusiness company, joint venture partner in Guangzhou was not long before the closure of Guangzhou, trust companies, only recently launched franchise. KFC's situation is similar stores in China, a long period of time all the self-oriented. Following that year, "Red Sorghum", after the company challenged McDonald's farce, people on the reality of franchising be some awareness, but from time to time, it will jump out of some people talk about the magic of the franchise growth model, from the organizational capacity point of view, the probability of growth model become a reality very small, investors still have to be careful, do not be deceived.

      Of course, some people questioned why the first to grow up, businesses do not have to in order to grow up as a development goal, large enterprises are not necessarily good business. First clear is the relationship between big and strong, clear, big may not be strong, but certainly not weak, big and strong is a  necessary condition but not sufficient condition. More importantly, we explore the size of the enterprise, from the perspective of individual enterprises, or from a country or a regional economic point of view the body? From the perspective of individual enterprises, indeed, big is not necessarily better than small. However, if the overall national economy from a competitive point of view, the lack of ability of large organizations is definitely a big problem. Because of some strategically important industry can not develop without large-scale organizational capacity, determined by the characteristics of their industry, their needs for large organizations. Typical examples such as automobiles, aircraft manufacturing, large supermarket chains, banks, etc., these "organization-intensive" industries often is technology-intensive, capital-intensive and strategic industries, alarming, these see-saw year in China to return to WTO Type the focus of the negotiations, almost all of China, the weakest competitive industry. It is from this perspective, the Chinese enterprises grow up is a problem, a big problem, very practical problem. Some scholars have observed in some parts of Zhejiang, central corporate network based on the formation of some of the industry aggregates the successful experience of the so-called one-sided dog deduced zebra economy than the conclusions of the economy, subjective reasoning errors may be forgiven for objectively to an A Q arrogant style enterprise development in China cover the major issues.

In the world status of the value chain


      Lack of organizational capacity of the second result is that Chinese enterprises in global value chain status. As international competition intensifies, more and more Chinese companies come to realize and multinational competition, the strength of the two aspects can not be separated. A brand, one is research and development. So-called "smiling curve" at both ends. Chinese enterprises, Chinese enterprises and the world, the strength in these two areas but had quite weak. The core of the problem is based on abstract principles, non-official organizations for personal brand building and the importance of research and development, how to not be overstated. Analogy, sales managers can rely on commission, and other means to direct supervision of management, not the boss's cronies, have nothing to worry about, real money earned back is the last word, even a little bit what the transactions under the desktop, but also not prevent the overall . The marketing department is responsible for brand building because it is the spending departments, and there is no good assessment indicators, for money is good or bad largely depends on the loyalty of business decision makers, so the arrangement is often the owner of a small within the circle, his trust so-called "insiders." This arrangement led to two results. One is, after all, a limited number of their own people, companies grow to a certain size, there is no capacity for large-scale,  comprehensive, multi-site, long time, brand building programs. Another result of arrangements for their own people is the boss in order to prevent their own people have suspicions, often cautious when spending money are generally tend to be conservative, easily adversely affected by the timing of brand building. Here we do not consider their own people seemingly honest, in fact, use the boss's trust, the expense to eat outside the situation.

      Research and development of the situation is similar. R & D engineers work also can not rely on direct supervision of the commission and the like, or other simple means to manage. For many R & D engineers, the biggest incentive of their work environment is relaxed to bring the fun in the work itself. Relaxed environment, the work itself the incentive and a little peer pressure among the achievements (peer pressur), is successfully developed a simple formula, but for many Chinese enterprises, the threshold of R & D seem so unattainable The reason is very simple, because the cause of R & D is costly, requires trust, you need to go beyond a small circle, based on abstract principles of organization. This abstract principle, not a highly illusory concept, but a simple interpersonal core values such as equality, cooperation, sharing, etc., but these abstract principles of any R & D institutions is a fundamental condition for healthy functioning. For the direct supervision of relying on personal relationships or to run the company, carrying out these simple abstract principle, but extremely difficult.

      Weak research and development of Chinese enterprises and brand-building ability is a direct result of Chinese enterprises only in production, especially labor-intensive production based on the world market, the value chain in the world in a very humble position. China is the so-called "world factory" was actually a snapshot of that status. Although the materials come in a transport truck, finished out of a transport truck, looks prosperous, bustling, but factory workers could get paid, do not know is the central business district office in a suit from a fraction of the white-collar . Chinese enterprises in global value chain which is the position of the poor blue-collar workers. By the same token, Taiwan has become the world's largest electronics OEM industry base, is quite upset. Minutes were ticking products do make money, make a dollar a brand to make money, the reason everyone knows that, but she just do not recognize your brand, how do you do?

     Transformation of the famous Cambridge economist Peter • Nolan (Peter Nolan) recently proposed a global cascade waterfall industry trend towards concentration (The Cascade Effect), that is, a lot of industry around the world, from the end products (such as aircraft), to level providers (such as aircraft engines, aircraft seats), two vendors (such as aircraft engine rotor, the aircraft seat cushions), even to the three, four suppliers, vendors have appeared concentrated to a small number of trends, this concentration process to   multinational corporations led to funding for the engine, the R & D and brand wheels, has formed a Western-led, they match exactly, closely guarded industrial pyramid system. Enterprises in developing countries like China, even fortunate enough to enter the pyramid, often only at the bottom of the pyramid. Where to go? Nolan is in fact more than two decades of economic reform in China, a fervent followers, and those who poured cheap tacit praise to China in exchange for material and non-material benefits of Western-based scholars, politicians, compared to his theory it is not so easy way out , but had to admit, good name, this is the next stage of development of Chinese enterprises must face the grim situation.

The special relationship between the risk-based industries


      The third organizational capabilities result of a lack of focus on specific industries to specific business risks. "Forbes" Global Rich List 2004, the Chinese accounted for 39 of those 587 people, shows the hard work and talent of Chinese business. However, careful observation of development chosen by the Chinese industry, the first category of people is through a special relationship with the senior government monopoly of tobacco, gaming and other special industries, such as Malaysia's Lim Goh Tong rounders, Philippines, Great Wang Chenyong tobacco plant, Cai Daoxing Indonesia and other tobacco king. The second category is real estate or real estate-based diversification, such as the Li Ka Shing, Robert Kuok (owner of Shangri-La), Cheng Yu-tung (New World Group, owner) and so on. Two types of people occupy the vast majority of Chinese billionaires. Industry is characterized by their choice, these are personal relationships can rely on to develop the industry, may be named as "relationship-intensive industries."

      Here the "relationship", one is used to implement a variety of internal management and control personal relationships. The particularity of the industrial chain, internal matters relating to the needs of the small number of decision-making, or, even if the overall number of the larger decision-making, a greater impact on the main decision-making businesses less, can rely on the boss and owner of several trusted to control the situation, not based on abstract principles of building a formal organization. However, dependent on personal relationships within the organization running the risk that changes in the company's control over who will inevitably bring changes in the company, given the lack of stability and continuity. Shopping on the Civil war many business owners, nine refuses to repent, but are often most worried about his most trusted men for their betrayal. Personal relationships in the organization run by the circumstances, this betrayal is often lethal due to the most likely fatal.

      The one hand, the relationship between intensive high-level personal relationships with the government. Internal relations changes will bring some risks, but there is still a certain limit. Relationship-intensive business risks, and more from outside the organization, personal relationship with the government high-level changes. "American Economic Review" There is a famous essay-style papers, indicating the condition of former Indonesian President Suharto and his direct influence on how close the stock price of several integrated consortium. More closely related to him, fell the more powerful. The best example of Chinese history may be the rise and fall of the famous Jin. Generated power and capital alliance inevitable result of crony capitalism, the power and capital of a prospering, a loss for both sides. The Xing has suddenly Yan, Yan of death has suddenly, "look at him from the tower, and look at his building collapsed," This is history, generation after generation of business class able to escape the fate.

     Lack of organizational capacity among the three outcomes are related to each other. Because there is no large-scale Chinese enterprises and the implementation of brand building the capacity of large-scale research and development, resulting in their intensive industries in the organization's competitiveness is limited, which also led to their choice of relationship-intensive industries. Abstract principle is infinite, personal relations are always limited, select the relationship-intensive industries is not only limited room for business growth and lead to additional business risks, with the result can not be bigger. Relationship to the organization from the intensive-intensive process, that is, business opportunities to enterprises from the process, from the opportunist, shot for a place, to proceed step by step, training the core competitiveness of the process, from diversity to the relevant multi blind of, and again to the professionalization process. Many of China's new generation of entrepreneurs fully understand the necessity and inevitability of this transformation, but still could not escape the old way of doing business, not that I do too, but not too.