To succeed in China, multinational corporations must turn the aphorism “think global, but act local” on its head. Although they have to master the art of local operation, their behavior must match their global standards, as expected by the Chinese.
The place of multinational corporations in China has rapidly changed since the 1970s. No longer expected to bring cash and management expertise to China, the authors argue that MNCs have taken on a new role as teachers and role models. However, recent high-profile mistakes including a McDonald’s Corp. (of Oak Brook, Illinois) ad that over 80% of Chinese surveyed found offensive, show that MNCs are not entirely up to this task. They illustrate the consequences of this inability to cope and suggest eight strategies for improving MNC’s success in China: Think local-act global, don’t apply double standards, don’t bend the rules, avoid making “symbolic” acquisitions, avoid employing aggressive tactics over intellectual property rights, guard against management insensitivity, don’t “strip mine” profits and don’t use China as a lab. The authors then go on to show how these strategies can be executed to increase MNC’s profits and standing in China.