Localizing management in foreign-invested enterprises in China: practical,cultural, and strategic perspectives

The business case for the rapid localization of management has often been a rgued. This paper takes a critical look at the assumptions underlying such arguments. This exploration utilizes data gathered from a variety of Japane se, Korean, Hong Kong, and European ventures in China. Evidence from these case studies is incorporated within a broader exploration of Chinese cultur al values and attitudes derived from ethnographic research and approaches t o the strategic management of multinational enterprises. It is suggested th at localization is likely to proceed at a much slower pace than its main ad vocates may wish or anticipate, and that there are practical, cultural, and strategic factors which may, and perhaps should, inhibit rapid localizatio n. Such factors range from the lack of suitably qualified local managers, t o control and surveillance functions and expatriates' roles as trainers, co -ordinators, and relatively neutral 'outsiders'. It is proposed that the de velopment of a core of culturally literate expatriates can become a valuabl e resource for MNEs and that their selection, support, and compensation pac kages should be considered as an investment in firms' long-term strategic d evelopment.