A Chinese Approach to Management

Reprint: R1409J

At first glance, China, which is known for large, often inefficient state-owned enterprises, might appear an unlikely source of fresh management thinking. Yet Chinese companies have a lot to teach the world about today’s business imperatives: responsiveness, improvisation, flexibility, and speed. To cope with their turbulent environment, the Chinese have developed those capabilities and learned to build everything—from skilled recruits to suppliers to capital sources—from scratch. They manage very differently, too: Eschewing Western-style matrix organizations, they favor flat, loose structures that allow them to jump on new opportunities and expand quickly. They roll out new products constantly and localize offerings with a vengeance. They’re also adept at nonmarket strategies, particularly navigating local politics and relationships with the state. Indeed, China’s entrepreneurial companies may well be the vanguard of an era in which the ability to adapt quickly, navigate messy environments, and use unproven talent yields a global competitive advantage.