MBA in China

Major events in India China diplomatic exchanges

2010-12-16T16:10:00.000+08:00

A summary of events during the last few years as detailed in China daily website

http://www.chinadaily.com.cn/china/2010wenindia/2010-12/15/content_11708719.htm

After USA, UK, France, Germany; now it's China's turn to come calling

2010-12-16T16:04:00.000+08:00

Chinese Premier Wen Jiabao is in India for a 3 day state visit. One aspect of the visit is the silence observed by media in India. There is not much buzz regarding the visit compared to that of Obama. However, Mr. Jiabao means business and is likely to walk away with larger business deals than Obama or Sarkozy did.

All alone in the nest!

2010-11-30T18:08:00.002+08:00

I realized that I had drafted the content of this post 3 years ago. One of my Chinese classmate has come to India on an consulting assignment and raised this topic again. She was greatly fascinated by our interwoven and intimate family culture. Here's a nice photo with Indianized Chinese classmates during my wedding

My post drafted in 2007:

I have often wondered at my chinese classmates, many of them grew up all alone in their family due to the single child policy. To some of them, it was a positive step to control the ever increasing population, to some it didnt matter. However, I could only sympathize with one of the girls who longed to have a sibling to share life with. She was quite curious to know about the family value system of India, how siblings engage in friendly fights, how we bath, eat, sleep and play together as children, and not to speak about the marriage ceremonies which turns out to be a child's delight.

Coming back to china, I can't agree more with the officials on the need to control population in china. However, this has a cascading effect on the overall society. A single child in the entire family means parents shower unmoderated love and affection on the child and sometimes and most of the times, tend to spread their control over the son/daughter even after they have grown up. This leads to natural tensions in the family as their cherished son/daughter want to be independant enough to take their decisions.

As they dont have a second child to dot on, this often results in an emotional state for parents.

Interview on MBA in China

2010-11-30T17:42:00.001+08:00

I was recently interviewed briefly by a leading news daily on value of pursuing MBA in China. This post can be useful specifically to Indians and generally to everyone. Here it goes:

1) Why did you chose the school? Did you have an intention of working in China/doing business with Chinese companies?

I chose the school acknowledging the importance of China in global business and economy as CEIBS is the best business school in China and one of the best in the World. I had the intention of working in China for couple of years and immerse in Chinese business culture. After graduation, I joined a Scandinavian firm based out of Shanghai though the role encompassed multiple geographies. During this period, I interacted with many Chinese companies closely and developed vital business relationships which can help in any future venture in/with China

2) What were the key lessons you learnt during the stint? In your view if you had studied in India versus in China, what would have been the advantages/disadvantages? What's the key differentiator at CEIBS?

That business relationships hold the key to success in China and one has to be very patient and work really hard at nurturing relationships

In CEIBS, my classmates came from over 25 countries with diverse functional and industrial background. Quite a few were entrepreneurs and over 30% constituted women. So, class discussions and group meetings were dynamic and multi dimensional. For instance, I became aware as to how life and business goes on in Denmark, Japan and Ireland through my classmates. In fact, one of my classmates was instrumental in helping me appoint a business partner in Denmark for our start up venture, ScanCorner.com. Another dimension is the diversity and international nature of CEIBS faculty and they take us through the Chinese and international case studies enriching our classroom experience. I personally benefited immensely from CEIBS network as I participated in several international competitions and symposiums.

The disadvantage from the perspective of Indians is on the employment front. In India, jobs are almost assured months before graduation as recruiters come with predefined job profiles. In CEIBS as in any top business school abroad, the students have to engage with companies to decide upon the responsibilities and career path as each person has different work experience. The school brings enough opportunities but students has to take initiative to measure up to the recruiter's expectations. In my case, I convinced the company to create a custom role based on my previous work experience and career objectives.

The academic standard of CEIBS and top Indian MBA schools are probably the same, but Indian business schools do not offer diverse student body and international faculty. Besides, for us Indians, it will be a great value add to gain rich exposure in China as I see the two nations prepare for more economic and political engagement. So, CEIBS differentiates in 3 aspects v/s Indian B schools: a) China business exposure b) More diversity and international immersion c) Cultural enrichment of living and studying in China

3) Can you share some anecdotes from your term at CEIBS -- (also do specify which course you went for - the EMBA or the MBA?). Was language an issue?

I opted for MBA program. Language was not a major barrier inside CEIBS and in my workplace. English is understood by many people in major cities. However, learning Chinese is highly recommended as it helps better communication and boosts employability immensely. I have shared an interesting experience of CEIBS mentoring program here. http://www.ceibs.edu/mba/mentor/28894_20.shtml

back after long time....

2007-02-19T01:18:00.001+08:00

I'd infact forgot about the blogging stuff till my friend reminded today! hope to update the exciting happenings....and there are plenty of those!

New beginnings!

2006-11-28T21:53:00.003+08:00

3 months into my new journey, and it has not yet daunted my enthusiasm a bit....china continues to amaze and challenge my wits, over and again....

Have I succeeded in learning mandarin? The plain and simple answer is no....
My boss always used 3 months as a thumb rule for evaluating progress on a new initiative. He used to jokingly say that if we can't bring about a change in 3 months, we probably will never....

Have I made any progress? This is debatable. I can atleast say that now I have a clear idea of how to go about learning this language and blessed with all resources amassed over the last 3 months.

The discussion with my mentor Henrik (who's become a CEO of an MNC at Shenzhen) has renewed my determination to learn mandarin. As my aim is to jump into the business bandwagon revolving around china, it's more critical to learn the language. It was quite motivating to find him talking in mandarin so fluently (for a European, its nothing short of magic).

It's been quite a long time away from the blog, hope to write more often, maybe even on a daily basis.

adios

Every good thing comes to an end!

2006-10-10T01:54:00.001+08:00

Holidays ended finally! missed the marketing and statistics classes today as I skipped sleep yesterday and successfully submitted innovation challenge business plan. now keeping fingers crossed! now need to put efforts in infocomm and gap case study! and need to mug up lot of materials before we head for 'Confluence' in India. need to cut down the parties and chats which is taking much of the time! also need to allocate significant time resources for social venture club, inherited a great legacy, need to build on that and pass on the baton to my successor of MBA07 with great elan.

I found a wonderful book to read: Individualized Corporation by Sumantra Ghoshal and Christopher Bartlett. As with other activities, reading a number of books at a time has become a norm nowadays. Other books in my study are 75 Greatest Management Decisions and Blue Ocean Strategy. The first one is really interesting, it provides glimpses of great decisions which impacted great corporations such as Sears, Mckinsey, Ford, Apple, Microsoft, Toyota and many more. Also talks about interesting incidents such as Marlboro friday. Highly recommended for business school students and managers.

Interesting read... worth it

2006-10-05T12:55:00.000+08:00

When things in your life seem almost too much to handle, when 24hours in a day are not enough, remember the mayonnaise jar and 2 cups of coffee.

A professor stood before his philosophy class and had some items in front of him. When the class began, wordlessly, he picked up a very large and empty mayonnaise jar and proceeded to fill it with golf balls. He then asked the students if the jar was full. They agreed that it was.The professor then picked up a box of pebbles and poured them into the jar. He shook the jar lightly. The pebbles rolled into the open areas between the golf balls.He then asked the students again if the jar was full. They agreed it was.The professor next picked up a box of sand and poured it into the jar.Of course, the sand filled up everything else.

He asked once more if the jar was full. The students responded with a unanimous "yes."

The professor then produced two cups of coffee from under the table and poured the entire contents into the jar, effectively filling the empty space between the sand. The students laughed.
"Now," said the professor, as the laughter subsided, "I want you to recognize that this jar represents your life. The golf balls are the important things - God, family, children, health, friends, and favorite passions -- things that if everything else was lost and only they remained, your life would still be full.

The pebbles are the other things that matter like your job, house, andcar.
The sand is everything else -- the small stuff.

"If you put the sand into the jar first," he continued, "there is no room for the pebbles or the golf balls. The same goes for life. If you spend all your time and energy on the small stuff, you will never have room for the things that are important to you.

So...Pay attention to the things that are critical to your happiness.Play with your children. Take time to get medical checkups.Take your loved one out to dinner. Play another 18. . "Take care of the golfballs first -- the things that really matter. Set your priorities.The rest is just sand."

One of the students raised her hand and inquired what the coffee represented. The professor smiled. "I'm glad you asked. It just goes to show you that no matter how full your life may seem, there's always room for a couple of cups of coffee with a friend."

holiday blues!!

2006-10-04T17:10:00.000+08:00

i know i'm not doing any justice to this so called blog, but again life was on a roll these days. any mba school is full of activities, need to socialize and network till u drop dead! and ceibs is no different! u get invited to parties, ktv (karoake), clubs, housewarming....and on top of that i've also enrolled in couple of business plan competitions! lost count of time and date! then the last but not the least, assignments and group case discussions! anyone surviving the mba grind is sure to be made of some stuff! no wonder, corporates pay top $ to mba grads!! so between all the commotion, blogging was relegated to a corner. oops! need to call home! almost a month....need to set my priorities right, lest i'm damned!

hey, i'm the first club president of MBA2006. The Social Venture Club. tis the most active club in the school running lots of fund raising programs and charity works and also CSR stuff. all the previous club presidents enjoy iconic status now and i'll have my hands full all year round.

any leader is only as good as the people. so, first thing was to get an excellent cross functional and diversified team and all are pretty passionate about social venture club. see the photo of the executive committee.

tis me at the centre, with terry on the left (Exec VP), Evelyn on the right (Chief Mktg Officer). Standing L to R : Jim (VP Events), Kevin (VP CSR), Lily (CFO), Michael (VP IT), Alex (Media Director), Leon (VP Community programs), Masa (External Affairs Director). the last but not the least, linda, who is a member of the club and just came to cheer us.

meanwhile, also contested for the post of external affairs director of student committee and miserably lost. i'm happy it went to the right person Rafael. he's just amazing and resourceful.

thanks to chinese independence day, we're having holidays here, for 8 days. know what, even companies are closed, lucky guys!! i really fancy working in china now, so many holidays in the corporate world!!

the real work begins now, going to IIM ahmedabad in november for participating in confluence, CEIBS is the defending champion, real hard task to live upto the expectations, The Group : Rafael (Mexican), Jurn (Dutch), Julio (Spanish), Jared (Chinese) and me (Indian), a truly multinational team with diversified background. sure, will have lot of fun. others, watch out! (just kidding!!). the event has got business plan, essay and other on the spot competitions. last date for submission of essay : 5th oct, b plan : 8th oct

the next one, innovation challenge, this yr being organized by Darden b school. again, in a cross functional team. we've terry (american), larry (chinese), sheridan (australian) and katrina (chinese). the challenge is to increase revenues and bottomline of M&M choc candies by appropriate and creative "store within store" model. m&m is really a fun loving & iconic brand, a very practical and interesting challenge. we brainstormed for 3 hrs non stop and it took a toll on everyone. overall gud experience, pooled lots of creative ideas, never knew that i had so much creative juice left. last date for submission : 8th oct

the 3rd one, infocom essay. top 3 indian and international students gets honored by President of India Dr A P J Abdul Kalam! Wow! last date for submission : 15th oct

also need to submit the Biopure marketing case and write the Leadership story right after the break....need to catch up on accounting and statistics! these 2 classes are giving me nightmares now....

holiday is no longer a holiday!! but i'm not complaining!!

had to skip zao can(breakfast) and wufan(lunch). now hen jie(very hungry), going to kfc for a quick grub....

Zaijian (Good bye)

A short break

2006-09-05T10:30:00.000+08:00

I dont have classes today morning, so catching up with you guys !! Our classes commenced yesterday with Prof Ridolfo's Business writing & Presentation. I must admit that here's a laoshi (means teacher in chinese) who can amuse the students in an otherwise boring subject. Our dean introduced all faculty to us and they're impressive, and from different countries with PhD from top schools. Then we'd marketing and statistics classes during the later part of the day, had a tough time keeping awake (tis almost 7 yrs since participated in a class and it reflects). Oh, also managed to attend LEK consulting's PPT. A medium size firm, they're into strategic consulting (only touch points are with top management and the board), so they say (that's what all consulting firms say, anyway). Surprised to see very few people from 2005 batch, guess they're so impressed with LEK that they couldnt make it.

But the key learnings from the presentation is : man, you just need to be proficient in mandarin or else you're screwed. So planning to engage a private chinese tutor, it costs lot of money, but guess worth all the money and effort. So expect to find few chinese words in future entries.

Zaijian ! (Good bye !)

Shanghai blues !!

2006-09-01T02:01:00.000+08:00

so finally sort of convinced myself to update the blog. sometimes my time management just sucks !! anyways i landed in shanghai on 25th morning enroute bangkok. had a great massage at the bangkok airport, worth the money, but heard tis cheaper downtown.

initial impressions on shanghai and ceibs !!

well, u know chinese can be great hosts and so far havent seen a single person with a red face, gals are pretty cute and quite open, packed all my misconceptions for the time being !!

Ceibs enjoys good reputation in china and asia pacific and this year we have close to 33% international students out of 165 odd students (guess the final figures are still awaited), even if we discount overseas chinese, it should be close to 25 % international representation. we have people fm korea, taipei, singapore, japan, usa, ireland, germany, poland, switzerland, spain, argentina, chile, mexico, canada, italy etc etc (hope i addressed all the countries, if not dont find fault with me, 2 am in the early morning after a party isnt the best time to blog for any sensible human, but who cares ? am i really sensible ?)

we've been having non stop parties for the last 5 days and guess this is the way bschool life works. well, atleast here it does.

classes are yet to start and we're still undergoing the marathon orientation of 4 days and tomorrow is the last day of orientation followed by the barbeque. and u know what, i'm going to the chinese karoake and plan to sing a chinese song, the chinese way....wonder about the state of audience....anyway Ivy was bold enough to invite me and admire her guts for that....

more later, now going for sleep. Ooozzzzzzzzzzzzzzzzzz

me and my guesthouse at kabul !!

2006-08-08T21:29:00.000+08:00

see the constant vigil !!

Grand Hyatt in dubai

2006-08-08T21:17:00.000+08:00

hi this is where i stayed in dubai, lovely view

more more kabul !!

2006-08-08T21:09:00.000+08:00

some snaps inside kabul airport and also from the sky !!

more kabul !!

2006-08-08T21:00:00.000+08:00

I am back !!

2006-08-08T20:46:00.000+08:00

v

I am back after a hilarious and exhilarating trip. guess where ??

Dubai and Kabul (Afghanistan) !! Oh migod, why in earth ?? in later posts. now few snaps....

my beautiful cousins !!

2006-07-26T15:13:00.000+08:00

with my cute and beautiful cousins !! one a Ms India, one future Ms India and last one potential musical ruffian !! all mumbaikars !!

Finally the docks are cleared !!

2006-07-26T15:11:00.000+08:00

Yep !! my loan is sanctioned and i cant wait to be in ceibs !! tomorrow going to delhi to apply for student visa and guess what ?? also planning to explore rajasthan (have never been to rajasthan !!) over the next few days....for starters, rajasthan is one of the north western provinces of India, very famous for its royal palaces and beautiful heritage sites, this is the very place where "The Palace on Wheels" runs....

promise to post some fab snaps !! stay tuned !!

more....

2006-07-22T21:12:00.000+08:00

hey more, the better, and this time with a variety.... those not familiar or exposed to pastoral religious/cultural traditions may find the second snap amusing. the first one offcourse is the famous chinese fishing nets at cochin. Kerala is one of the places to come if you like exotic sea fish with the yummy curry....

outcome of theory of constraints !!

2006-07-22T20:49:00.000+08:00

some govt official wanted to censor blogs spreading malice post mumbai blasts and issued directives to all ISPs.... and out goes access to all the blog sites fm India !! damn !! anyways thank god and others for allowing us to blog again in life !! yep man, blogging is freedom and vice versa !!

as promised here are more photos of my dear kerala, hope you guys like these as well !!

Theory of constraints

2006-07-18T16:25:00.000+08:00

I look upto the "Theory of constraints" to help me escape from this predicament. Gained admission in ceibs, resigned from the job and serving notice period, waiting for the bank loan approval, nothing much to do for the next one month....my boss is not likely to relieve me before august 1st week, trapped in hyderabad and counting my days.... called the bank manager yesterday and had a tough time talking to him without sounding desparate. anyways he needs another week to gain approval from his boss, so much for the red tape....if the bank loan is not approved, then DING....(big bye to my international ambitions, tut tut, hope hope will take you to your dreams), so I HOPE....

anyways lets go back to the theory of constraints : Theory of constraints (TOC) is a methodology for resolving issues related to system performances. TOC states that constraints slowdown any system. To enhance performance, these constraints must be eliminated. As the system improves its performance, higher levels of constraints emerge. They they have to be eliminated. The cycle repeats until the system reaches its ideal state.

More details on TOC in the next post. Gotta Go !!

Miss Beijing

2006-07-16T14:04:00.000+08:00

Some clips of Miss Beijing contest. china guys, how i envy you !! very pretty people around....anyways just a month, and i'm with you all !! Ms Liu Changwen wins the crown, congrats !!

Water splashing festival in China

2006-07-16T13:58:00.000+08:00

Flocks of kids and their parents take part in a happy Water-splashing Festival to get rid of the high temperature in the summer in Hebi, Henan Province, on July 15.

appeal to terrorist brothers

2006-07-15T19:55:00.000+08:00

Here's an appeal to all terrorist brothers. I've got this letter from an internet usage group and is doing my bit by posting in the blog !! The spirit of Mumbai is intact and thriving !! Watch out !!

For the uninitiated and for my international friends, the city of mumbai was targetted by some nasty terrorists on 7/11 with 7 simultaneous bomb blasts, that too in the most crowded MRTS system in the world : Mumbai Western Railway which cost 200 people their lives and also more than 700 people were injured.

THE LETTER

Dear Terrorist,

Even if you are not reading this we don't care. Time and again you tried to disturb us and disrupt our life - killing innocent civilians by planting bombs in trains, buses and cars. You have tried hard to bring death and destruction, cause panic and fear and create communal disharmony but everytime you were disgustingly unsuccessful. Do you know how we pass our life in Mumbai? How much it takes for us to earn that single rupee? If you wanted to give us a shock then we are sorry to say that you failed miserably in your ulterior motives. Better look elsewere, not here.We are not Hindus and Muslims or Gujaratis and Marathis or Punjabis and Bengaliies. Nor do we distinguish ourselves as owners or workers, govt. employees or private employees. We will not allow you to disrupt our life like this. On the last few occassions when you struck (including the 7 deadly blasts in a single day killing over 250 people and injuring 500+ in 1993), we went to work next day in full strength. This time we cleared everything within a few hours and were back to normal - the vendors placing their next order, businessmen finalizing the next deals and the office workers rushing to catch the next train. (Yes the same train you targetted)Fathom this: Within 3 hours of the blasts, long queues of blood donating volunteers were seen outside various hospital, where most of the injured were admitted. By 12 midnight, the hospital had to issue a notification that blood banks were full and they didn't require any more blood. The next day, attendance at schools and office was close to 100%, trains & buses were packed to the brim, the crowds were back.The city has simply dusted itself off and moved one - perhaps with greater vigour.We are Indians and we live like brothers in times like this. So, do not dare to threaten us with your crackers. The spirit of Mumbai is very strong and can not be harmed.Please forward this to others. U never know, by chance it may come to hands of a terrorist and he can then read this message which is specially meant for him!!!

With Love,
From the people of Mumbai

Well, Mumbaikars, I salute your spirit !! hope shanghai guys are equally great, if not more !!

bottom of pyramid

2006-07-15T13:54:00.000+08:00

managed to finish the book "the fortune at the bottom of the pyramid" written by Professor C K Prahalad. a very interesting book, reaffirmed my faith in BOP markets. would recommend to anyone even remotely interested in business management, and tis also quite fun reading with lots of live cases.

for the uninitiated, the bottom of pyramid represents poorer sections of society who were much ignored by earlier generation of businessness as a consumer segment because they were not perceived as profitable segments. But now, just because of the sheer size (estimates peg BOP segment between 60% to 80% of developing world population), BOP market is arising out of slumber and many companies have formed core strategies to develop and exploit the potential of this segment.

According to C K Prahalad, "By virtue of their numbers, the poor represent a significant latent purchasing power". "If we stop thinking of poor as victims or as a burden and start recognising them as resilient and creative entrepreneurs and value-concious consumers, a whole new world of opportunity will open up". atleast i know that tis more true in case of mobile telephony. a significant portion of customer portfolio consists of customers who pay less than $6 per month !! can you believe it ?? still we managed to grow YoY topline by over 75% and bottomline by 102% !! dear, tis only becos of sheer volumes and geographical spread and i assert here that whoever plays the volume game and appropriate value card will emerge victorious in future....ofcourse, some casualties are always natural, darwin scores here - may the best mobile companies survive and thrive !!

well, am i not game !! BOP Ahoy !!

battleground

2006-07-14T15:50:00.000+08:00

how i miss my battleground !! now i battle with all this mis, while you guys play ball !!

beautiful monsoon of kerala

2006-07-14T15:31:00.000+08:00

how i miss kerala during monsoon !! anyways few photos for the "monsoon lover of kerala", hey all these are from hometown palakkad. see, how shhmart and cuuuute he looks !!

Travel to India

2006-07-11T20:26:00.000+08:00

How safe is travelling within India ?? Take advise fm US Govt website....tis so obnoxious !! i protest Mr/Ms US Govt !! wonder what you guys expect of travel !! if so comfort conscious, why move the a** !! sit at home....

"Travel by road in India is dangerous. A number of U.S. citizens have suffered fatal traffic accidents in recent years. Travel at night is particularly hazardous. Buses, patronized by hundreds of millions of Indians, are convenient in that they serve almost every city of any size. However, they are usually driven fast, recklessly, and without consideration for official rules of the road. Accidents are quite common. Trains are somewhat safer than buses, but train accidents still occur more frequently than in developed countries.

On Indian roads, the safest driving policy is to assume that other drivers will not respond to a traffic situation in the same way you would in the United States. For instance, buses and trucks often run red lights and merge directly into traffic at yield points and traffic circles. Cars, auto-rickshaws, bicycles and pedestrians behave only slightly more cautiously. Indian drivers tend to look only ahead and often consider themselves responsible only for traffic in front of them, not behind or to the side. Frequent use of one's horn or flashing of headlights to announce one’s presence is both customary and wise."

so much for safety of indian roads, but believe me or not, am a diehard fan of driving by road, my car has suffered for almost 45 k kms, still living !!

To JV, or Not to JV - How MNCs Choose Local Partners?

2006-07-11T15:17:00.000+08:00

A interesting post fm Ceibs website. have fun reading

"In choosing a JV partner, some people may want [first] to make sure the partner has business experience. But if I am the person choosing, trust is very important. This basically means that we can share the same vision. Character is very important -- more than business experience. A JV is like a marriage."
Seiichi Kawasaki, Director and President, Sony China

Stay Single or Marry (to JV, or Not to JV)?
If your company does have a choice concerning partnering, the first rule in deciding which route to take is: don't rush. So says General Electric China's Steve Schneider. He advises foreign companies entering China first to spend time understanding the business environment. "If you don't know the market, it won't make a bit of difference whether you operate as a JV or WFOE," he says. "The reason we've been pretty successful [in China ] is that we spend a tremendous amount of time understanding our customers before we commit anything." Only after clarifying the areas in which your company may be weak can you determine whether or not a joint venture is the best choice. GE operates 12 JVs and 24 WFOEs in China . In determining which method to adopt, Schneider keeps in mind the three factors he considers responsible for the fact that each of GE's divisions is profitable: understanding the market, controlling costs, and building cost effective facilities.
Another test for whether a JV makes sense for an MNC is the scale of the planned China operations. BP China's Dr. Gary Dirks, who leads 22 JVs and one WFOE, explains how he determines whether or not to form a partnership. "It all depends on the complexity of the [operations] and how it fits into the notion of national interest or provincial interest. For something that is deeply fundamental, with far-reaching consequences, I still feel much better having a Chinese partner." Of BP's large-scale chemical complex in Shanghai , he says: "Frankly, I wouldn't even conceive doing a project of that scale and of that complexity without a Chinese partner." The domestic partner company, which owns 50% of the venture, helps in handling special interest groups, working with PRC government officials, and providing insight into the market and the industrial environment in Shanghai . For such a massive project, Dirks says, "You just need a Chinese partner."
But smaller-scale ventures, he says, are often best undertaken alone. For example, BP China prefers to operate its LPG terminal and distribution points as independent entities that are managed directly by BP's global operations. For LPG operations, he says, "I would choose 100% owned by us every time. It's so much simpler and so much easier to be on our own. There is nothing a partner could offer strategically to assist in that activity."
Unilever China's Alan Brown uses a simpler method of determining whether or not to form a joint venture. "If you are working in a highly regulated industry, then JV partners are almost essential," he says. "If you are working in a highly de regulated industry, they can be a damn nuisance."
One helpful characteristic of today's business environment is that many MNCs can now alter the structure of their existing partnerships. International managers advise monitoring regulatory changes constantly to see if you can, and should, adapt your business structure.
A look at Alcatel China illustrates the value of adaptability. One of the first foreign investors to enter China after its economic reforms, ITT (acquired by Alcatel in 1986) began negotiating with the Chinese central government in 1977. Six years later, the company won approval to form one of the earliest foreign?Chinese JVs: Shanghai Bell, minority owned. Today, Alcatel has regrouped the majority of its operations into a company limited by shares, Alcatel Shanghai Bell, in which it owns 50% +1 shares. Ten-year China veteran Dominique de Boisseson says Alcatel's primary strategy is: be adaptable. In some instances, companies still face stiff restrictions. For example, one interviewee explained that for his operations in central China , his company was forced to
form a JV with a government-recommended partner. "The government said, 'You either choose this company or forget it'," the CEO says. "The location wasn't ideal, the partner wasn't ideal, but that was the only chance. We accepted the JV; otherwise, we would have lost the market."
But Alcatel has been able to restructure its operations in China . The company has switched at least one JV to a WFOE and another JV to a company limited by shares. The new structure better suits the telecom business, says de Boisseson. "Before, all the decisions in the JV had to go to the board. It was far too slow, especially for fast-moving products, as they are out of the market in one year. If we lose time, we lose the market."
The overriding advice from our interviewees on JVs is that international managers should assess each China venture case by case against current regulations. In addition, China operations should be reviewed regularly, and perhaps restructured, as regulations are constantly changing.
Partner Selection, Partnership Terms
If you have decided to (or must) form a joint venture in China , the challenge is to find the perfect partner. As Sony China's Seiichi Kawasaki points out, a JV is like a marriage: selecting the right mate is the most important step.
The advice of our international manager interviewees on finding the ideal match can be boiled down to five messages:
Choose a weak, silent partner, or
Choose an active, value-added partner
Know your partner
Align your goals
Set the correct "marriage" terms
The process of forming a JV begins by determining which type of partner best suits your needs in China . Our profiled top executives described two ideals: (a) a weak, silent partner that won't interfere with operations; or (b) a stronger, more active company that brings to the venture valuable government-relations savvy, business connections, and/or industry knowledge. Our interviewees were divided on which type makes the best Chinese JV partner, but the tide seems to be turning away from weak partners toward stronger, value-adding ones.
Finally, a word on the importance of financial health in potential partners: one difference in searching for a JV partner in China is that the criterion of financial strength (or at least financial stability) is not generally considered to be as important as it would be in a developed economy. In China , other qualities are very often more important -- and more available. Even so, several interviewees did warn against working with a partner that is in serious financial trouble. They also stressed that MNCs can and should demand to see full financial records of any potential partner.
Strategy #1 : Choose a Weak, Silent Partner
From the mid-1980s to the mid-1990s, when most foreign enterprises were forced into JVs, international managers assumed that their Chinese partner could not contribute much to the partnership. Thus, the best match was a company that would at least not hinder business operations.
One option was to form a short-term partnership that could be dissolved after its initial mission was accomplished. This was the modus operandi used by L'Or??al's Paolo Gasparrini in setting up operations in China in 1997. L'Or??al formed a partnership giving 5% ownership to the Suzhou Medical Hospital . Gasparrini says the hospital was "not an active business partner" but did allow L'Or??al to "understand China better" and to acquire some useful relevant expertise (medical information on the characteristics of Chinese skin). After three years, L'Or??al bought back its 5% shares, the JV was dissolved, and both partners had accomplished their goals. Gasparrini sums up the situation this way: while foreign companies entering China in the early 1990s tended to "feel more secure with a JV," such a need is diminishing now. Today, he says, MNCs generally benefit from operating independently.
Other MNCs have maintained long-running partnerships in which the domestic company is not directly involved in the JV business. The Shanghai Hilton, for example, operates with a local partner that owns the property but does not interfere with day-today operations. Hotel general manager Volkmar Ruebel says the primary means of communication is via a monthly report issued to the property owners. Only rarely does the Chinese partner want to approve decisions. "The owner trusts us as an international
company; we are the custodian of the property," says Ruebel. "It is relatively smooth. We don't have any operating problems." He adds that the partnership gives Hilton "relatively strong autonomy in the way we deal with personnel and quality standards."
Carrefour China's Jean-Luc Chereau also partly attributes the successes of the hypermarket chain to its policy of choosing relatively passive local partners. The company entered China in 1995 and now operates 19 JVs and one WFOE. Chereau oversees local ventures according to Carrefour's corporate-wide policies -- some of which have evolved over 40 years of trial and error. During the chain's first 20 years of international operation, Chereau says, Carrefour "made a lot of mistakes" in selecting business partners. In the last 20 years, the company has followed a policy of not "sharing" the management with a local partner. "In China , when we establish a new JV, we share the investment but never the management," he says. "You cannot have two bosses." Even weak partners can bring value to the JV, insists Chereau, who demands several characteristics from the Chinese side, "First, all of our partners in China must have a long-term view. If they just buy shares and sell them within two years, what's the use? Second, the company must have some cash. Third, the company must have a very good network at local level. To succeed in Shanghai , your partner should be Shanghainese. To succeed in Guangzhou , your partner should be Cantonese."
( Note: In December 2004, WTO-related regulations opened up the retail sector and many aspects of distribution to WFOEs. Despite the fact that relatively few MNCs were approved to enter these sectors during 2005, and many were frustrated by the government's slow approval pace and confusing procedures, retail and distribution are two of the most promising sectors formerly closed to direct foreign investment.)
Strategy #2 : Choose an Active, Value-added Partner
Not all MNCs seek meek and mild local partners. In recent years, more MNCs are forming partnerships with active domestic companies that bring real value to the partnership.
A look at the JVs formed by Bayer China illustrates this trend. Company CEO Dr. Elmar Stachels says that in years past, Bayer had little choice but to form JVs with government-selected partners. "The contribution of this partner to us was very often just the land and the building -- no real contribution to marketing, services, technology, or production," he says.
Today, Bayer selects its partners according to its own criteria and standards. "We not only look at the activities, assets, and performance of a company, but also at the management, the people," says Stachels. He points out that, in recent years, Bayer has begun recruiting management personnel for the holding company directly from the top executives of its Chinese JVs. Thus, if the management of a potential partner company does not impress Bayer, Stachels keeps looking. Also, following deregulation, Bayer has recently (for many reasons) restructured some of its JVs into WFOEs.
At British Petroleum China , which operates 22 joint ventures, Dr. Gary Dirks looks for JV partners that truly contribute toward the corporate goals. "No matter where you go in the world, the key to success for partnerships is the alignment of your strategic interests, your ability to maintain the alignment over a significant period of time, and making sure your partner can contribute to those strategic interests. If both parties are perceived to be contributing as well as expected, then it can go very well."
Dirks rejects the JV model based on a say-nothing, do-nothing Chinese partner. "Where you tend to have problems is when there is a perception on the Chinese partner's side that their contribution ends the day the JV is formed -- you contribute your technology and your know-how and the Chinese partner just sits around."
Today, companies that do form JVs advise looking for partners that offer these benefits: skill at negotiating with the Chinese government, business connections, insight into the local business culture and environment, an established workforce and operations, or a strong existing client base.
Our interviewees explained that many Chinese partners can offer real value to a JV. Thus, if you are going to form a partnership, it is possible -- and often beneficial -- to demand that the local company contribute toward your goals.
Strategy #3 : Know Your Partner
No matter what type of partner an MNC is seeking, it is critical to fully assess potential partners before committing. International managers warn that while MNCs often face pressure to establish in China quickly, spending more time up-front can help to avoid serious trouble later. Says GE's Steve Schneider: "Part of the learning I would offer for folks coming in [to China ] and setting up JVs is: spend a tremendous amount of time getting to know your partner first. It's better than any due diligence on the financial records."
Charles Browne of Du Pont China gives similar advice. "The key for a successful JV is that you spend a lot of time in partner selection," he says. "Some companies rushed in and picked what was available without doing enough research about the value of the partner -- whether their interests are aligned with yours, what they can contribute to the JV. We put a lot of time in partner selection to make sure the values are there."
Knowing your partner entails reviewing detailed information and records, making site visits to see the operations and facilities first-hand, and spending time gathering impressions from industry insiders.
Strategy #4 : Align Your Goals
International managers warn that many JVs fail because they fall victim to the Chinese idiom, "same bed, different dreams," which refers to a husband and wife with divergent hopes and ambitions. Du Pont's Charles Browne says that many failed JVs are victims of "split vision" between partners -- for example, if the MNC's primary objective is to build market share for its goods within China , but the domestic partner expects to focus on overseas sales. Browne has seen several of Du Pont's China ventures end in failure. "In many cases, the major reason was that we had different interests and different ways of doing business," he says.
Most problems that arise are innocent misunderstandings rather than malicious efforts to cheat an MNC, stresses Ekkehard Rathgeber of Bertelsmann Direct Group Asia. "Ninety percent of [Chinese] JV partners are very serious with their time," he says. Still, problems arise simply because the two partners have "very different targets, different ideas, and different mindsets," he says. As an example of the gap, Rathgeber explains that while many MNCs focus their operational goals tightly on profits, the Chinese partner may place a higher priority on other goals, such as impressing government officials by adopting advanced technology. Problems can also arise when the MNC introduces the Chinese partner company to operating procedures used globally. One common rough spot: the domestic partner may balk at the salaries offered to foreign managers in China . Working through such issues can be extremely time-consuming, Rathgeber warns.
Strategy #5 : Set the Correct "Marriage" Terms
Setting the best terms of the partnership is, of course, extremely important in alleviating problems once the joint venture starts operating. During negotiations, both sides typically struggle to obtain the largest percentage of ownership possible, and to protect their rights while limiting their obligations. Our international managers offered several bits of advice on surviving this process in China .
Microsoft China's Jun Tang, who oversees two JVs and one WFOE, advises establishing the JV as an entirely new entity. "If you do want to set up a JV, it is better to start from scratch," he says. Starting from zero allows both partners to adopt a new mindset, rather than continuing operations according to established methods. For example, in staffing, both partners can choose key personnel to send to the new company. This avoids a mindset of "outsiders" and "insiders"; everyone is an outsider in the new venture. "With a new entity, you can create a new culture, a new business model, a new atmosphere," Tang says. "To change an existing organization is very difficult. That is why we see a lot of JVs fail." Tang insists on establishing a new company even if nearly all members of the partner companies are hired into it.
One rule of thumb which attorney Norman Givant of Fresh-fields Bruckhaus Deringer shares with international clients in China : steer clear of 50?50 joint ventures. "That just builds gridlock into the structure," he says. Unless regulations require 50% Chinese ownership, Givant encourages MNCs to demand a majority share.
Givant also advises considering alternatives to straight joint venture models, as more options are opening for MNCs as regulations liberalize. Givant expects MNCs to undergo more mergers and acquisitions in the future as foreign companies take equity interest or procure stakes in listed Chinese companies, or buy companies outright. He also predicts that foreign companies will become more active in China's financial markets as regulations are liberalized. "You will see a growing sophistication both in terms of acquisition and participation in financial markets," he says.
Meanwhile, two of our international managers mentioned the benefits of establishing as a joint stock company (or "company limited by shares") in which the Chinese partner company is given a minority interest in the company. This allows the MNC to retain management control. Both Unilever and Alcatel have used such a method. Regulations were changed in 1994 to allow MNCs to register as joint stock companies, although relatively few have been approved.

lazy sunday afternoon

2006-07-09T17:49:00.000+08:00

i've always felt that had i shown more commitment and justice to studies or work when it was required, my entire life would have been different. from childhood itself i never had to work too much in my grades and still i used to finish at the top almost always. probably my math has always been good and has a role to play in quicker understanding of other subjects also. and i was a very fast learner and could get away with last minute preparation. believe me, i was always the last guy to enter the exam class (fighting with books and classnotes till last minute)

this strategy worked well till the predegree, again managed to get admission in one of the regional engg colleges. some of my class mates who had put in much more effort and long hours and enrolled in multiple coaching classes, barely managed to get admission in state engg colleges, is still a surprise to many. this all points to the age old wisdom :> if your basics are strong enough, all that matters in a game is how you perform during that few hours, irrespective of what effort has gone on preparation. this applies to real life situations too, whether exams or big contract negotiations, the odds are always on your side.

while my intention is not to bore the audience with childhood heriocs, these are universal lessons which benefit everyone. well my apologies for not updating my blog for the past few days....

been to bangalore for the quarterly review !! i was literally f***ed since my region occupied the unenvious penultimate position in revenues last month. no excuses, my boss roared - Gurrr Gurrr !! yes boss, next quarter we'll show our colors !! in reviews you're only as good as your last month....but boss i had done extremely well earlier, oh yaah, thats your bloody job and thats why company pays you $$$$ either get performance out of your team or move your a** to training dept !! now thats the mother of all threats !! i get nightmares at the thought of moving to training, its a great job - infact no job at all, who'll pay top $$ for doing nothing, but then your entire career is screwed, literally !! so i pick up my cell and shout and yell at all my managers and download the same trick (infact we can learn good tricks from bosses also, not all of them are dumb, actually !!), perform or migrate to training :> i'll not be surprised if we end up the top zone this month

all the more work talk....still waiting to hear from canara bank on ceibs loan....

tick tick tuck tuck, mr manager are you listening....

now, let the audience not feel my anxiety....This joke won an award for the best joke in a competition organized inBritain and was sent by an Indian.Banta Strikes Back!!! Banta Singh walks into a bar in Ludhiana & orders three glasses of Beerand sits in the back of the room, drinking a sip outof each one in turn. When he finishes them, he comes back to the bar and orders three more.The bartender asks him, "You know, beer goes flat after I fill it in the glass; it would taste better if you bought one at a time." Banta Singh replies, "Well, you see, I have two brothers.. One is in Dubai, the otherin Canada, and I'm here in Ludhiana. When they left home, we promised thatwe'd drink this way to remember the days when we drank together."The bartender admits that this is a nice custom, and leaves it there. Banta Singh becomes a regular in the bar, and always drinks the same way: He orders three Beers and drinks them in turn. One day, he comes in and orders only two Beers. All the other regulars notice and fall silent. When he comes back to the bar for the second round, the bartender says,"I don't want to intrude on your grief, but I wanted to offer mycondolences on your great loss." Banta Singh looks confused for a moment, then a light dawns in his eye andhe laughs. "Oh, no," he, says, "Everyone's fine - both my brothers are alive""Only thing is, I just quit drinking"..

2006-07-05T17:57:00.000+08:00

Can't find anything better to do, so again back to blogging....

managed to get a health certificate from director of a medical institute in hyd. he doesnt even look like a peon, but what the hell, i have my cert !!

knock ! knock ! Mr Bank manager, canara bank, is my loan ready ????
knock ! knock ! Mr/Ms Adcom, Ceibs, is my jw202 ready ????

tis like eternal waiting, is there an award for testing patience limits....
anyways, waited for 5 yrs to drive myself out, few more days no harm....
so the waiting continues, so oooozzzz....

2006-07-04T17:33:00.000+08:00

its quite strange to write an account of happenings around. is it beneficial to someone ? lets see....
perhaps if i can let my life take a u turn after 28 yrs of useless life, many novelties are just hiding under, more to come, blogging is just tip of iceberg....

U turn ?? yep, with a mech engg degree from a reputed school (perhaps wasted one merit seat, i'm still coming to terms as to why i opted for that firsthand !!), safe and posh career in telecom, one of the most eligible bachelors in the family and extended family....still not content with life !! dont be a greedy monster after all....

i'm now listening to my innervoice and decided to pursue a 'phoreign' mba, that too in china main land, shanghai. however, this was not a sudden decision, a lot of episodes and colorful flashbacks should precede this story, so hang on till i get time to post more.....

2006-07-03T18:57:00.000+08:00

hi

this is my first post. welcome bloggooworld !!