U.S. Operations in China Train Own Management Pool
Motorola’s sales in China have rocketed from zero to 10% of its global total in just four years. Now the U.S. company has hit a bottleneck--management.
Lack of local managers may be the greatest single problem facing foreign multinationals in China.
More than concerns about Deng Xiaoping’s health, or trade tensions across the Pacific, or even China’s weak legal system, the dearth of trained Chinese professionals is turning into a major drag on operations.
“Managers have become if not the most important problem, then certainly one of them,” said Jan Borgonjon, director of the European Community-funded China-Europe Management Institute in Shanghai.
“Applied knowledge is missing across the board,” said David Hendrickson, who heads Motorola University in Beijing, a branch of the communication company’s global in-house training program that opened last year.
Chinese colleges churn out an abundant supply of technicians but few accountants. It is almost impossible to find good sales and marketing people. Lawyers are scarce. Hardly anybody has international experience.
Motorola is tackling the problem by starting from scratch. Hendrickson’s classes range from social graces to software engineering.
Students are recruited from Chinese colleges, where promising candidates are spotted and subsidized starting in their second year.
“The investment is very, very substantial,” said Hendrickson. “We’re pouring it in because we believe in it. Our goal is localization of management.”
In addition, Motorola University will pluck 60 students each year from its own work force and send them all over Asia and to the United States for on-the-job training. That will cost around $1 million a year.
“We couldn’t bring over enough American, Taiwanese, Malaysian and Hong Kong managers,” said Hendrickson. “We’d just drain the rest of the world dry.”
Even so, Motorola has around 100 expatriates in China.
Unilever, the Anglo-Dutch consumer products giant, has 80 expatriates in China, half its total in the entire Asia-Pacific region. That represents a massive cost since Chinese cities are among the most expensive in the world for housing and schooling.
What has brought China’s management crisis into focus is the arrival in the past several years of most of the world’s biggest multinationals, making huge investments for the long term.
Motorola plans to pump in $1 billion over the next five to 10 years. Unilever has come in with $100 million and plans to add another $100 million each year until the end of the decade.
