How does globalisation impact on the management of Chinese firms Essay

How does globalisation impact on the management of Chinese firms - Essay Example This research will begin with the statement that the Chinese society is generally considered to be guided by traditional norms and values. The Chinese business culture is unique, traditional and conservative by nature. Chinese business culture is large influenced by the ‘guanxi’ system. According to this system, ‘special relationships’ are given exceptional preference for establishing business connections. Therefore, very close relationships (such as family relationships) receive special attention in the business world, while the level of importance declines with distance in the relationship among networking individuals. However, the business environment is changing fast at the global level and the Chinese business culture is also changing fast along with the changing pattern of global business. Before the economic crisis of 2008, China’s economy grew at the rate of more than 11 percent. In this context, it is imperative to identify the key thrust tha t gears up the economy. In China, there are three types of firms; large private-owned firms, large state-owned firms and small family-run (private owned) firms operating inside and outside the Chinese border. Globalization has cast a significant effect on the economic activities of the Chinese economy. The biggest trend can be noticed in the form of international expansion of the small privately owned Chinese firms. Globalization is the intricate concept that covers a vast area including the economy, business, financial structure, culture and society and overall development of the small and large business corporations. It is the result of intensified of global networks that improve interconnectedness among the different economic agents and within the sectors. Since the effect of globalization is varied, it casts different effects on the different sectors of the economy. Hence any singular aspect of globalization cannot describe this gigantic phenomenon. Through globalization, intera ction takes place among diverse communities that leads to exchange of cultural and commercial attributes. Domestic cultures and businesses of the emerging economies evolve, adapt and modernize along with the incoming flow of foreign culture and practices. Six different aspects of globalization can be identified through in-depth study of the characteristics of the Chinese economy and business activities. These aspects are mentioned below: Faster rate of capital and information flow Improvement in modes of interaction and intensification of different connections Expansion and extension of cultural, social and political practices Greater level of interdependence between the global and local landscapes Greater effect of the western culture and practices on emerging economies of the developing countries Customisation of foreign ideas according to values embedded in domestic economies All these factors affect the small privately owned family businesses in China. The major benefits receive d by small firms as a result of globalization are increased technological knowledge, better ways of production and cheaper products. Rate of flow of capital and information, labour and goods has increased as a result of globalization. This is because, under globalization, channels of communication have increased and have become highly advanced.