For students entering today’s complex, cross-border global marketplace, it’s necessary to understand the vast influence of China — a fact made clear most recently amid the coronavirus pandemic, according to Regina Abrami, director of the Lauder Institute’s Global Program. “That it was impossible for the U.S. to rapidly ramp up to produce something as simple as a face mask has made people realize how enmeshed the world economy — not just the U.S. — is with Chinese supply chains,” she says.
But navigating corporate China can be daunting for professionals who are used to doing business according to U.S. rules. Last fall, Abrami launched a new course, Managing & Competing: The Case of China, to help undergraduate and MBA students understand the opportunities there as well as the potential political, social, and regulatory hurdles. In addition to case studies on companies such as Foxconn, JD.com, and Ant Group, Abrami relies on a range of articles and videos to explore the intricacies of Chinese business.
This New Yorker article follows a U.S. family’s efforts to sell wine in the country. Like other cases Abrami draws on, Donald St. Pierre Jr.’s run-in with Chinese law — part of a broader government investigation into the value of wine imports — introduces students to the unique environment that many ventures in China deal with. “People initially make it in private business in China because they operate in the gray zone,” says Abrami. “St. Pierre is a good proxy for understanding the ways in which companies constantly have to pivot to come into alignment with shifting government regulations if they intend to survive in China.”
“The Real Reason Uber Is Giving Up in China”
This article published by Harvard Business Review details similar challenges, this time faced by Uber, that ultimately led to that company’s demise in China. Amid a lack of national regulation for ride-hailing businesses there, Uber was helped in its early days by its ability to abide by a patchwork of local regulations. That benefit ended when China put into place new rules for the industry, eventually forcing Uber to sell its Chinese arm to local competitor Didi Chuxing. “Although we could debate whether it’s a story of unfairness — whether regulations were set such that a foreign firm could never succeed — it’s certainly a story about what happens when the government introduces more regulatory oversight,” says Abrami.
“Dolce & Gabbana Ad (With Chopsticks) Provokes Public Outrage in China”
Fashion brand Dolce & Gabbana failed lesson number one in international business when it launched a series of commercials condescendingly teaching viewers how to eat foods — pizza, cannolis, spaghetti — with chopsticks. The culturally insensitive videos, released in 2018 ahead of a company runway show and detailed in this NPR article, provoked resounding backlash and ultimately resulted in the show’s cancellation. “It’s a perfect case of culture clash around values and stereotypes,” says Abrami. “This shows clearly a failure to understand the sophistication of the Chinese consumer.”
“China’s New Revolution”
Part of the battle of understanding business in China is grasping the country’s political landscape. Abrami uses this Foreign Affairs piece as part of a crash course on the subject during the semester. Of particular focus are President Xi Jinping’s moves to tighten the government’s political, social, and economic power since he took office in 2013: “He came in with a platform that meant to change the rules of how China does business, namely trying to crack down on corruption, but at the same time working diligently through new industrial policies to advance Chinese private and state-owned firms as well,” says Abrami.
Abrami closes out her course with this Oscar-winning Netflix film to emphasize the importance of personal relationships in any business operation. The documentary details a Chinese company’s move to reopen a shuttered General Motors plant near Dayton, Ohio, and the differences in workplace culture that arise. “At the end of the day, a successful manager manages people-to-people relations well,” says Abrami. “If I can end the class with students saying, ‘What I’m learning more than anything here is that I need to understand and empathize with the people I work with,’ then I’ve done my job.”
Published as “Dancing With the Dragon” in the Fall/Winter 2020 issue of Wharton Magazine.