Managing the Mul,na,onal Corpora,on in China
Paul Gillis PhD CPA Professor of Prac,ce and Co-­‐director of IMBA program Guanghua School of Management Peking University 1 MNCs in China •  What are MNCs? •  Why are MNCs in China? –  480 of U.S. Fortune 500 are in China 2 Forbes Biggest Companies
3 Fortune Global 500
4 5 6 7 Paul Gillis & China GDP Shanghai in Roaring 20s By 1918: 6,930 foreign companies 244,527 expatriates 65% Japanese In 2010: 593,832 expatriates in all of China, 20% Korean and 12% American MNCs in modern China 1976 Nixon comes to China 1980s Explora,on stage 1989 Tiananmen 1992 Deng’s Southern Tour 1990s major expansion – manufacturing/export focus 2001 China enters WTO opening markets 2000s Focus shi`s to selling to China Drivers of China development •  1980s and 1990s –  Cheap labor •  2000s –  Cheap capital •  2010s –  Cheap intellectual property China has lost cost advantage Why China?
Source: AMCHAM 2012 Survey
Topics •  Issues important to MNCs –  Parent/subsidiary rela,onships –  Joint ventures –  Public and government rela,ons –  Sourcing and contract manufacturing –  Acquisi,ons in China –  Managing expatriate careers –  Localiza,on of human resources –  Securing intellectual property –  Ethics and corrup,on 14 15 This course •  We will use case studies to explore important issues for MNCs in China •  I am not expert in each of these areas, but I do have experience with each of them –  Be willing to challenge my views –  There are many ways to look at these problems. •  Guest speakers will bring deep exper,se in certain areas 16 Analyzing cases
•  Gefng oriented – Read opening sec,on – Flip through pages – Read and reread the assignment ques,ons – Define the problem in one or two sentences 17 Levendary Cafe
•  What is your evalua,on of the way Levendary Café has entered the China market? •  What changes (if any) should Mia Foster make? Specifically, what should she do about Louis Chen? And what changes (if any) would you propose at headquarters? •  Prepare a specific ac,on program for Foster to help her deal with the need for con,nued growth in China. What should be on the agenda for her mee,ng with Chen?
18 Analyzing Cases
•  Iden,fying problems – Read the en,re case carefully – Highlight the key material – What concepts are highlighted? – Revise your problem statement 19 Analyzing Cases
•  Performing analysis – What is fact and what is opinion? – What facts contribute to the problem? – How is quan,ta,ve data relevant? – Iden,fy useful informa,on, read between the lines – There are usually no correct answers – Have you defined the problem correctly? 20 Ac,on planning
•  List possible recommenda,ons •  What lessons are learned? 21 Case summaries •  Submit for each case we discuss –  Done in groups of up to four students. •  Maximum of four single spaced pages –  Format flexible, needs to adapt to assignment ques,ons •  Problem statement for each ques,on (but not always) •  Summarize key facts – perhaps consolidated for all ques,ons •  Recommenda,ons/lessons learned –  The ideal case summary resembles a report to senior management/board on the issues presented 22 Course requirements •  Wrimen case summaries for each case –  Done in teams of up to four •  Ac,ve par,cipa,on in case discussions •  Research paper & presenta,on 23 Research paper •  A research paper of not more than 3,000 words. –  About 10 double spaced pages •  Interview execu,ve with MNC in China –  Iden,fy key issue his/her company faces in China –  Review extant literature –  Make recommenda,ons on appropriate responses •  Advise me of execu,ve and MNC by October 15 •  Paper due on December 1(10% off grade each day late) •  Students should be prepared to give a brief summary of their paper beginning October 28 – you may bring execu,ve to class if you wish – just let me know when 24 Grades •  Class par,cipa,on •  Wrimen case summaries
•  Research paper 30% 30% 40% 25