Of course the business environment is very different!
One of the most obvious and biggest differences is that it’s still a developing country with a growth rate of about 10% of the GDP that has been upheld for years. The development creates a very rapidly changing world to live, work and do business in. But it does not change the basic rules of capitalism or business.
The rapid developing market instead puts its own specific strains on organizations operating and its of course in many aspects different from Europe, but at the same time – very similar. It also creates many opportunities but that’s often the easy part, I will focus on some of the obstacles to overcome instead.
What are the biggest differences and similarities when building and restructuring an organization in China then?
The Speed Factor– Something that is hard to grasp is the actual speed that things are happening in. The market environment is changing quickly with new trends, competitors, improvement and regulations constantly challenging your company.
The speed of the job market - Due to the quick development there is basically not enough managers and workforce with several years of experience to go around. If not satisfied with the present situation, it’s more than easy to change job to someone paying better or with bigger potential. Entities are bought, sold, created and sometimes shut down in a very quick pace.
Keeping the organization up to date – Restructuring and Change management, one big issue in Sweden and Europe is often the inhabited resistance and fear of change. The Chinese society has in many ways a much higher tolerance towards change. This is of course a big generalization but I insist that this is the case.
It may be the mindset coming from Buddhist reasoning that the only consistent thing in life is that it will change, Yin and Yang that represents the constant change to keep balance in life in combination with the recent history. In short - The preparation and persuasion aspect of Change management is not as critical as the tolerance that things will change is high.
So, quick moving market and high acceptance to change – no need for restructuring and change management then?
Oh no – the exact opposite. The rapid movement instead puts a much higher strain on constantly supporting and looking ahead to keep up. If not attractive as an employer the talented staff will quickly find better jobs, if not competitive on the market, the customers will quickly find better products. As in any market, but just much quicker and without the resistance of changing job or product.
You need to keep wanted personnel, knowledge and structures in the company but at the same time be flexible enough keep up with a fast a moving market and new demands.
In China as anywhere in the world you need to have
- A sufficient flow of information to keep updated strategies and objectives as well as updated organizational structures
As well as- A flexible system handling rapidly growing and changing personnel, not loosing knowhow, important structures and company culture on the way
So yes – to keep up and be successful in China as in Sweden you need to continuously look over the organizational structures, divisions, personnel, strategies, objectives and information flows, but at a quicker pace.
If you have that right – you are safe!