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Opinion / You Nuo
The role of international managers
By You Nuo (China Daily)
Updated: 2007-09-10 06:53
The London Financial Times is right in describing the departure of Phil
Murtaugh, former vice-president of Shanghai Automative Industrial
Corporation (SAIC), as a "blow" to the Chinese company.
Murtaugh is joining Chrysler, taken over by Cerberus Capital management
last month, to be the new head of its Asian operations. The announcement
came only one day after Chrysler enlisted Toyota's former North American
head to join its senior management team.
But what about SAIC, China's largest carmaker? What will happen, in
particular, to its ambitious international plans? Business observers are
eager to learn from SAIC's executive team about the necessary adjustments
it is going to make.
Rarely does one person's change of job arouse so much interest. It shows
how rules in the world of business have changed.
A successful regional operation, especially in a rapidly growing area of
global business, can be more important for an international company than
many of its other operations.
Extensive regional expertise, which Murtaugh gained from heading GM's
China operations in the 1990s and from facilitating SAIC's buying of some
of the assets of the British company, Rover, two years ago, and managing
its investment interests in the South Korea carmaker Ssangyong, will be
strategically important for a company that is considerably weak in its
Asian operations.
But what can SAIC learn from this development? It has nothing to regret,
of course. It did the right thing. By hiring a professional it made much
progress in building up its business. As reported widely in the Chinese
language press, it may be close to a merger deal with Nanjing Automotive
by relying on the strength it has gained from its acquisition of Rover's
assets.
If the company had one team of international executives, instead of just
one, it would perhaps be doing even better in international expansion.
This year has been an auspicious one, due to capital market fluctuations
and the cheap dollar, for foreign companies, including those from
developing countries, to buy assets in the United States. The Indians and
Arabs are doing it.
However, few Chinese companies, especially the private ones, are seen to
be as active as their counterparts in other parts of Asia.
One reason is that Chinese companies do not usually have a team of
international managers. Few of them have high-profile foreign executives
as SAIC, a State-owned enterprise, once had.
Indeed, except for Lenovo, China's largest computer manufacturer, very
little has been heard from the companies that are operating overseas
about their international management teams.
The most incomprehensible case may be TCL, one of China's largest
television and home appliance makers with its headquarters in South
China's Pearl River Delta.
Ever since its acquisition of some French corporate assets (supposedly
useful for expanding into the EU market), the company has yet to report
any progress in building up its international team. The information that
it has given to the public so far, other than discouraging financial
figures, is about frequent changes to its Chinese executive team.
To compete in the global market, Chinese companies need to learn to keep
not just one or two, but hundreds or thousands of international managers.
E-mail: younuo@chinadaily.com.cn
(China Daily 09/10/2007 page4)
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