Managers in the People's Republic of China

Executive Overview Since many U.S. executives currently or one day will work with Chinese managers, it seems worthwhile to examine management in the P.R.C. This article—based upon interviews with 50 Chinese workers and 120 managers—examines the forces that press upon Chinese managers and subsequently looks at their management approaches. We find that Deng Xiaoping's “reform” program and inflation have the strongest impact upon managers. These, along with the Communist Party, 40 years of socialism, feudalistic values, guanxi (influence peddling), and the labor-intensive economy mold the management seen today. These forces tend to squeeze managers into “low-power” positions, from which they operate quite pragmatically. Specially, China's managers develop warm relationships with workers, offer favors, and loosen the operating rules. In addition, they shame workers, request assistance from the workers' families, and some attempt to reward productive workers. Finally, they rely upon their guanxi. Like it or loathe it, managers find the “back door” is required to get anything done in China. Consequently, they rely upon it to grease their management gears. This information on Chinese managers should enable U.S. executives to understand some of the problems they encounter when interacting with their Eastern counterparts. In addition, it underpins several suggestions—building guanxi, moving up the Chinese chain of command, negotiating general agreements, and negotiating deliberately but slowly—for successful interactions.