Despite the global economic and financial crises of recent years, corporate China continues its push for globalization. China now ranks third in the world for outward FDI (2012 data), with its fastest revenue growth over the period 2008‒2012 coming from operations in North America and Europe. The top Chinese multinational corporations (MNCs) are increasing their overseas assets and overseas employment at rapid rates, and seeing greater revenue increases from overseas operations than from their Chinese ones.
Moreover, today's Chinese globalizers have even more aggressive plans for geographic and functional expansion in the near future. A survey by the World Economic Forum and Booz & Company of 125 leading Chinese globalizers shows these companies planning to expand in the next five years in virtually every region of the world and to expand their functional footprints outside of China as well.
Our research on the success of leading Chinese globalizers has also found, however, that increased effort at globalization does not necessarily lead to increased output. Furthermore, companies with similar, perfectly sound globalization strategies do not necessarily achieve similar results. What distinguishes a group of companies the report identifies as Chinese Globalization Champions from the rest of the pack is their ability to systematically tackle various operational challenges in the globalization process.
In analyzing these challenges and how Chinese Globalization Champions overcome them, we developed a reference framework for a global operating model, a framework with four building blocks: Culture, Governance, Processes, and People. Successful execution in these four areas, in turn, allows Chinese Globalization Champions to address three sets of polarities or tensions that challenge all globalizing companies: Home country & Host Country, Consistency & Innovation, and Control & Empowerment.
Our research on how Chinese Globalization Champions successfully manage these three polarities in their operating models reveals several best practices in the areas of Culture, Governance, Processes, and People from which other Chinese globalizers can draw lessons.
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