May 11, 2006. Review: Harvard Business Review on Doing Business in China

Harvard Business Review on Doing Business in China is a collection by several authors, and begins immediately by describing the transition China has made from being a closed economy to one that enjoys a 9% annual GDP growth. The opening chapter presents a historical context with which the authors describe China's attractiveness to multinationals, as well as the changes China implemented to become a global economy, from the infrastructure investments following the 1997 Asian financial crisis, to technological advancements that allowed manufacturing to shift from textiles to electronics.

Each chapter provides an executive summary that allows the reader to get a feel for what the ensuing chapter is all about. In juxtaposition to The World Is Flat and One Billion Customers, Harvard Business Review does a good job of being impartial and unbiased. The statistics the authors use to back their claims seem genuine, and very rarely is personal opinion apparent in the text. Particularly, I found the chapter on Chinese Negotiation to be of most interest for a businessperson contemplating doing business in China. The chapter does a very thorough job of describing the cultural differences between Americans and Chinese, and how to approach the negotiation process once in China. Mostly, the chapter stresses the importance of understanding Chinese culture, and being Americans in China, the importance of patience in the negotiation process. One theme in the book is "guanxi," which we have been discussing quite a bit in our predeparture meetings. The authors describe guanxi as forging long-term relationships, and to be successful in China, managers need to understand that reciprocity is paramount to making reliable networking contacts.

The strengths of this book include the executive summaries that allow the reader to develop a framework for the ensuing chapter, as well as the useful and interesting charts and graphs that, for instance, describe the differences between American and Chinese negotiation styles. The chapters are well organized, and the authors use examples of companies that have successfully entered the Chinese economy, which are very informative and interesting.

The major weakness of this book is that there are no personal experiences from the authors - if the strategies presented by the authors are as successful as they claim, then why haven't they pursued business opportunities in China themselves? Throughout the book, I was hoping there would be a few sections of the authors' personal experiences, sort of like One Billion Customers. However, the book does an excellent job of being what it is - a handbook of strategies from other companies that have been successful in China. Another thing I thought was frustrating is the lack of specific dates associated with many of the examples, and also some of the examples seem outdated and many go back to the 1990s. With the global marketplace changing so quickly, more recent examples would have been appreciated.

Overall, this book offers a very solid framework for businesspeople doing business in China. The advice and strategies are helpful and allow businesspeople to avoid some of the pitfalls of doing business in China. I would recommend this book to anybody interested in international business, especially the negotiation strategies presented by the authors.

May 1, 2006. Review: The World Is Flat, by Thomas Friedman

"The World Is Flat," by Thomas Friedman, is a thorough account of globalization from the businessperson's perspective. Throughout the book, Friedman emphasizes that globalization has made doing business a level playing field for all parties involved, and in his "10 Flatteners" describes historic events and technological advancements that have attributed to a flatter global marketplace. Each of these events are widely known, so it is not surprising to see that Friedman chose the evolution of Netscape and the Internet as one of the most important business and technological advancements. Just as important, Friedman argues that the fall of the Berlin wall marked the widespread acceptance of capitalism versus communism.

The key to American businesspeople in this book is understanding Friedman's analysis of the current US economy and how it compares to the rest of the world. The fact that much of the developing countries have superior education systems is a cause for concern. Friedman argues that the United States must get back to basics so that we are not overtaken in innovation and knowledge, though many US firms are complacent. Continual outsourcing and offshoring of services (such as auditing and other activities that require specialized and knowledged workers) will only make matters worse. For the American businessperson that is worried about having his or her industry outsourced or offshored, Friedman argues that specialization and innovation will prevail in keeping the industry domestic.

The major weakness of this book is the fact that Friedman does not go in-depth on current political instabilities in Eastern Europe and Asia that can cause unforseen consequences. He mentions that the tensions in Iran and North Korea are very real and can "unflatten" the world, but for the businessperson trying to tap into the global "flat" marketplace, he does not give any advice as to how to prepare for Iran and North Korea's ever-growing nuclear concerns. It is almost as if Friedman treats these rogue countries as constants, yet their actions could add to his "10 Flatteners." Future attempts at globalization will definitely need to take into account additional political tensions.

The most important parts of this book are the 10 events that Friedman describes. I would recommend that any businessperson reading this book to be as unbiased as possible. While Friedman presents both sides of the story, his emphasis on America's need to level the playing field points to his belief that America needs to remain the undisputed superpower of the world. Personally, I feel that globalization has just the opposite effect and makes the world "flatter," and while Friedman argues the same, he seems to want to make it round by keeping America dominant, yet contradicts himself by saying America's actions in the global economy make the world flat. Confusing to say the least. Overall, I thought the book was insightful in that it provided many perspectives. I think the goal of this book was to create confusion and lead the thought-process, and it is successful at doing that.