Organizational leadership vs dynamics

DeWit and Meyer (2004) describe two dimensions of organizational perspectives: leadership supporting a controlled system creating strategy and implementing it top-down, and dynamics, creating disorganization to achieve strategic renewal. Both dimensions have their value and an organization should consider which perspectives it utilizes in its strategy and operations, or if it can benefit from both - experimenting from new or different ways of working and innovating.

International corporations have grown so big that it is purely impossible to lead purely based on authority and control. Companies are affected by new working methods, new media and generations, who require and impose a less authoritarian way of working. There are demands for new communications tools, virtual collaboration and self management. Time differences and cultures bring new elemnets to having new perspectives.

Sustainability is affecting people´s behaviour and social expectations in respect to travel, production methods and collaboration. New working methods bring cost savings, employee satisfaction and efficiency. It also creates frustration since letting go of the old and learning new is always difficult.

Elements of organizational leadership bring some assets to having a clear direction. It is important however that in a top-down organization strategy is implemented by involving teams in the creation process and encouraging initiative.

Community based business in China

Director William Toh from Chia Tai Group of Companies explained how Chinese business works. One example is a community created around the business. A transportation company might have their own schools, nursery and social activities to form a community among the employees and their families. Building a relationship with the community is key to doing business. Things are bought within and with the community, not as individuals. Even corruption can be addressed to help the communities and the poor.

Director Toh´s bet on successful consumer goods would be in the range of attractive design and products that appeal to groups or societies. I was thinking, could social networks and eCommerce be developed to take advantage of the already existing communities - or rather nurture them? Usage of internet is mostly in pockets. Number of mobile devices is much more significant than number of PC´s. eCommerce in China will grow but main consumption will still be done through retail. Community thinking applies to planning retail. Feeling and touching are important and that can be best experienced physically.

Individualistic brands such as Nike and Apple, luxury fashion brands do well because Chinese community is about comparison. Best for your family.

Regarding b-to-b the set-up is the same. Make sure you have a network of local partners. Make sure you network with Chinese community in your home market. Bring your wife or husband to meetings. Take care of human resources.

I visited Kirnu

Our eMBA class spent a day as Shanghai World Expo. We visited different pavillions and joined a seminar at the Finnish pavillion Kirnu. There was endless discussion on what the expo is all about and who is it for. If 96% visitors are Chinese, is it too focused on China. Or isn´t it fantastic to have focus on Chinese market and having awareness in China.

Focus for different markets varied. Some countries presented a more touristic approach whereas others took a business or educational perspective presenting future opportunities within technology, science, medicine, design, fashion, industry.

Comparing Kirnu to other countries pavillions was difficult. I was excited but not impressed with any of them. In general I felt there were too many things in the pavillions and overall impression was lost to thinking what the message is. Africa was my favourite with a lively bazaar atmosphere. But mostly the messages were unclear. Norway had a good promise: nature as a source of energy. Expectations were built around a forest trail. First impression worked: "take a breath of fresh air". But after the entrance the atmosphere vanished, drowning the original idea and again filling the space with industry, tourism etc related content.

My expectation on Kirnu was a design experience with Finnish simplicity and brightness of the North. What I saw: images displayed on Kirnu walls focusing on green cities. Small display windows on various elements of Finnish culture and industry: sauna, lakes, childrens playrooms, fashion, design, technoloy, santa. I lacked a clear positioning and interaction. Visitors were trying to touch display screens but some of them were not to be touched. Helsinki design capital message was on a small sign at the end of the route. For me the most positive detail was from Nanso. They provided purses for sale with tigers on them (in honour of the year of the tiger, having done their homework).

Though I wanted to see a clear theme - be it Moomin valley, Punavuori design district or a Finnish catwalk, I heard Chinese themselves liked Kirnu. At least our queue was longer than the one at the Swedish pavillion.

Transformation of inter-city transport in China

High speed trains - faster than 350 km/hour - have a future in China. From Hong Kong to Shanghai predicted future trip would be only six hours. Equally - if not more relevant will be the lines between coastal cities adn mainland China. A wide coverage of high speed train network is planned for all of China by 2015, approved early this year in congress.

The high speed train will transform business in China. Cities will be accessible easier and faster. Impact for trade is huge. Chinese will be more exposed to consumption and service economy. Expectations for local retail will increase. Marketing and sales will have an impact.
WalMart has already opened business in China through a joint venture. Opportunities for retail business will increase through the transformation of transport and the expected increased purchasing power of the Chinese.

And yes, I had a chance to take a train with 430 km/hour. Smooth ride!

Report from eMBA study trip in Hong Kong - Shanghai.

Role of OEM´s in China

Challenges for original equipment manufacturers (OEM´s) in China the past years have been following:
* Cost of resources and energy have increased
* Value of RMB has gone up by 25%
* New employment law makes it mandatory to buy an insurance for each employee. Also compensation has changed in terms of layoffs.
* Environmental protection requirements have increased after the Copenhagen summit. This causes a 5-10% investment increase for businesses.
Altogether - cost of operations in China in the past has increased 15% at least. China is still world´s manufacturer but this equation creates a problem.
How should the problem be tackled and what does this mean for OEM´s?
To start with, it is crucial to transform China from a manufacturing market to a service based economy. The improved standard of living will enable higher income and exposure to a wider international taste.
The support for OEM business will decrease. In the future, development strategy will support a new kind of development within services and technology, and coordination of regional economy. One of the examples is the Yangtze river region around Shanghai. Covering approximately 11% of China´s population, it accounts for 24% of the economy. Within a few years, this area is expected to have a population of 250 million people - same as in USA. Professor Sheriff from Hong Kong Polytechnic University´s bet for multinationals is to go for the three growing regions: Hong Kong / Guangdong, Yangtze and Beijing / Tianjin.

Report from eMBA study trip in Hong Kong - Shanghai.