Last week while sitting around my mom’s table in Portland, I picked up an article in the local paper (The Oregonian) and had a bit of a laugh when reading the article
More firms hire snoops to get edge on rivals

Speaking about this growing industry in the U.S., the article looked at just what competitive intelligence professionals were doing to learn about new product launches, staff sizes, and other nuggets of data…. and what made this story interesting to me, after doing a lot of competitive intelligence in the U.S. and China, was (1) that the author made it seem very cloak and dagger and (2) the consultant interviewed showed just how fun the job could be

Competitive intelligence analysts like Neubauer collect inside information by simply talking to people who work for or are associated with companies that his clients want to learn more about. At the top of the list, firms want to know what products or services are in their rivals’ pipelines, so that they can plan counter moves.

The article makes out CI to be 100% about collecting insider info, and developing strategies to do so:

Competitive intelligence analysts like Neubauer collect inside information by simply talking to people who work for or are associated with companies that his clients want to learn more about. At the top of the list, firms want to know what products or services are in their rivals’ pipelines, so that they can plan countermoves.

What I have always found interesting about doing “competitive intelligence” is that I would say only 25% requires a different tool set than your average market researcher or consultant. Assuming that market researcher or consultant are (1) knowledgeable of the industry and (2) are in regular contact with others in the industry. In fact, if a researcher is both, then it is really a matter of reframing and redirecting their attention and data to form many of the opinions on an industry, or specific player.

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Heidrick & Struggles and Fudan University have just put out what is one of the best pieces I have seen on corporate governance and boards of directors in China. Part of its Asia Pacific Thought Leadership Collection the Benchmarking Corporate Governance in China report (PDF Here) highlights findings of more than 100 companies in China (State-owned, private, and foreign invested)…

The motivation for the study:

Corporate governance is a hot topic in China. As the nation opens to foreign investment and privatizes industries that used to be solely under state control, investors around the world are placing large bets on the country’s future. As the influx of capital grows, so does the pressure on Chinese corporate boards to make sure those investments pay off.

And like other markets worldwide, China has had its fair share of corporate scandal in recent years. Despite the growing importance of corporate governance, so far there has been little investigation into how Chinese corporate boards are formed and operated. A review of existing studies on Chinese corporate governance revealed little about the actual makeup of company boards among state-owned, private and foreign-invested companies.

So we decided to find out for ourselves.

and what they have found is very interesting.

One of the first things that caught my eye (see from the above image) is the underlying criteria by which boards are evaluated have some big differences. for SOEs, the primary measure of performance is return on assets/ equity where as both private and FIE are judged on profitability and market penetration… . More interesting than that though is the fact that while 50% of private enterprises are evaluated on public comments, SPE and FIE are in the 20s.

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Moving to China for many rests on their ability to save money, and as we all know the cost and availability of labor have been one of the key considerations for investing in China.

So, when the new labor law drafts were being reviewed, managers up and down the east coast began to sweat bullets…

For Beijing is not middle managers who are working a few extra hours, but college students who are paid less an a pittance in foreign fastfood retail shops, child slaves working in the mines of Shanxi, migrant workers who build China’s glimerring buildings without pay, and others.

According to Eric Ardnt’s post on Crossroads:

If appropriately enforced, the LCL will help reduce the abuses that are leading to labor unrest such as that which recently resulted in the deaths of migrant workers at the hands of strikebreakers. However, as with so many laws in China, enforcement of laws is far more challenging than enacting them. Only time will tell if the LCL is able to help curb the many problems plaguing labor relations in China.

However, up and down the east coast, there are still a lot of concerns about how this new law will impact operations, and as such I would like to open the floor to readers.

1. Will the new law have a significant impact on the operations of your firm?
2. What are the three biggest issues for your firm?
3. What did you do to prepare for the passage of the law?
4. Will the new law prevent further investments, or catalyze your exit?
5. Will these laws be enforced evenly across China’s regions?
6. Do you think that foreign firms need to be more careful and protect themselves more than they used to when documenting hiring/ firing and employee performance?

Leave your comments here

Originally hailing from Turkey, Devrim came to Shangahi via Phoenix and New York and has been in town for the last 2 years with a global logistics company (current assignment opening branch in Urumqi). Right now, the plan is for another 2 years, but his relationship with China has been “Love - Hate”, so sounds like anything is possible,

An active member of the AIESEC , Devrim is well traveled (over 50 countries under his belt), and was dropped into China with a corporate parachute

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HR in China is always a hot topic among myself, clients, friends, & employees, and it has been for everyday of my 5+ years in China. Last week, Shaun Rein of CMR expressed his opinions in the article How Multinationals Err In China

The essentials of the article are best summarized by Freight Dawg’s Eric Joiner

The article highlights three main reasons why multi-national firms have such difficulty in finding, attracting and keeping local talent.

1. Two Tiered Pay Systems with Little Opportunity for Advancement. There is a perception that a glass ceiling exists for local Chinese staff - Western companies often import senior managers from the head office or from Hong Kong or Taiwan to run their operations in China.
2. Younger Chinese workers have experienced three decades of Chinese economic explosion. As a result they want many of the same trappings of a comfortable life that those in the West enjoy.
3. Chinese employees want and need more advanced education that prepares them for the dynamic pace of business

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Brian has spent the last seven years in China, and is currently the Managing Partner of the Executive Search Group Orion China

Originally coming to China for business opportunities, he sees no end in sight to his stay in China… Defaintely a good sign for his business. He already has a significant amount of experience (10+ Years), and decided to take the leap without a parachute.

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With 1.3 billion people in China, it is hard to imagine that there could ever be a shortage of labor in China. just think about that… 1.3 billion people.

How can you run out of people?

Well, for some industries, finding people is becoming a huge problem, and more and more I am being exposed to this. To be honest, if you had asked me 6 months ago if there would be ever be a shortage of labor in China.. I would have laughed. Middle managers sure… but labor?

However, over the last year there have been signs of this, and it was in a place I never thought I would find it, and it wasn’t until this weekend that I recognized that the canary in the mine was on a respirator…

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