Going global by acting local
Updated: 2013-07-19 17:33
By Zheng Yangpeng (chinadaily.com.cn)
Chinese construction machinery manufacturer Zoomlion has not dispatched a single Chinese employee to work at an Italian company it acquired five years ago, said company chairman and CEO Zhan Chunxin, showcasing how localization works when Chinese companies expand overseas.
Speaking on Thursday at a forum, themed "Chinese companies going global" and organized by the China-Europe International Business School, Zhan said not a single Chinese employee has been dispatched to work at Compagnia Italiana Forme Acciaio S.p.A. (CIFA).
CIFA is a concrete machinery manufacturer that was acquired by Zoomlion in 2008. At the time it was the world's third-largest concrete machinery manufacturer.
Zoomlian had been able to manage the company by sending a team to conduct a comprehensive audit of CIFA and make recommendations for improvements every year.
CIFA's profit has grown more than 50 percent in the first half of this year compared to the same period six years ago, according to Zhan.
He explained that the company has been able to make the acquisition a success by following five fundamental rules, which he believes are essential for Chinese companies who want to go global:
- Tolerance and inclusiveness;
- Sharing both risks and rewards;
- Taking responsibility for employees and the future of the company;
- Following the rules of both universally accepted best business and corporate governance practices;
- 'Dancing in the Circle Together', which refers to a collaborative work environment.
He emphasized the importance of universally accepted business rules by saying that though he had twice changed the CEO of CIFA, he followed global business rules by talking to the leaving CEO and asked him to recommend a successor.
"When the second one did not work out very well, we asked the company's management team to recommend candidates, and through this process we got to know who can manage the company the best," he said.
He cautioned that Chinese companies who want to go abroad must have both a global and a local mindset, and be open to the customs and cultures of other countries, treating itself as a fully local company.