‘No great difference’ between expat and local managers in China
New research published by the LSE investigates the pros and cons of multinational companies using local versus expat managers in China.
13 January 2017
The benefits of multinationals using local managers rather than incurring the expense of expatriate assignments has been investigated in a research summary published by the London School of Economics on Friday.Author Zhongxia Chen, senior marketing manager at Wolters Kluwer - a global a global information services company headquartered in the Netherlands - argues that the difference between expat and local management "may not be as pronounced as many companies believe".Mr Zhongxia, who has an Executive Global Master’s in Management degree from the LSE Department of Management, says: "Any multinational seeking to build a strong base in China will inevitably confront the question of how ‘local’ an approach to adopt, particularly when it comes to management."Foreign firms active in Asia’s biggest market have pursued a wide variety of strategies, from flying in supervisors from head office for a transition period to train up local staff, to instituting a permanent expatriate management layer."Along with the need for expertise and training, one of the key arguments for maintaining expats in senior roles has been cultural; that is, that the more participatory Western management style has a positive impact on employee motivation and retention versus the traditionally more hierarchical, top-down local approach."New research I’ve conducted in this area has found this is broadly true – but that the differences between Western and local management may not be as pronounced as many companies believe. Given the costs typically associated with expatriate postings, multinationals in China may want to take note."
Mr Zhongxia's research focused on the differences between having a Western versus a local manager on local employees’ satisfaction and turnover at multinational firms in China. His research was based on a survey of 123 local Chinese employees of wholly owned foreign companies or joint ventures in China.
He said the survey results "clearly supported" the assumptions about the beneficial impacts of Western management styles. But he added: "More surprising to me was that whilst ‘power distance’ is more evident with Chinese supervisors, the survey showed no significant difference between Western and Chinese managers in terms of adopting participative management styles and applying procedural justice in promotion decisions. The Chinese managers were just as likely to utilise these management styles as Western managers."This could be the result of the Chinese managers being exposed to the multinational environment and adopting the parent company’s practices, or a reflection of China’s increasing internationalisation, but is a clear indication managers at multinationals will adapt and adhere to these norms regardless of nationality."Of course, the survey I conducted was limited and the issue warrants further research, not least into whether the same practices are taking hold at Chinese firms. Nonetheless, the study points to the so-called ‘Western’ management style becoming increasingly global, and enjoying high levels of understanding and acceptance by Chinese managers as well as employees."This should give more multinationals the confidence to make the shift from expatriate to local management at a relatively early stage – which given the expense and cultural risks associated with employing expats long-term, should come as something of a relief."Access hundreds of global services and suppliers in our Online Directory
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Mr Zhongxia's research focused on the differences between having a Western versus a local manager on local employees’ satisfaction and turnover at multinational firms in China. His research was based on a survey of 123 local Chinese employees of wholly owned foreign companies or joint ventures in China.
He said the survey results "clearly supported" the assumptions about the beneficial impacts of Western management styles. But he added: "More surprising to me was that whilst ‘power distance’ is more evident with Chinese supervisors, the survey showed no significant difference between Western and Chinese managers in terms of adopting participative management styles and applying procedural justice in promotion decisions. The Chinese managers were just as likely to utilise these management styles as Western managers."This could be the result of the Chinese managers being exposed to the multinational environment and adopting the parent company’s practices, or a reflection of China’s increasing internationalisation, but is a clear indication managers at multinationals will adapt and adhere to these norms regardless of nationality."Of course, the survey I conducted was limited and the issue warrants further research, not least into whether the same practices are taking hold at Chinese firms. Nonetheless, the study points to the so-called ‘Western’ management style becoming increasingly global, and enjoying high levels of understanding and acceptance by Chinese managers as well as employees."This should give more multinationals the confidence to make the shift from expatriate to local management at a relatively early stage – which given the expense and cultural risks associated with employing expats long-term, should come as something of a relief."Access hundreds of global services and suppliers in our Online Directory
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