For Chinese companies setting up global operations for the first time, the first challenge has always been overcoming cultural divides, stereotypes, and mistrust between Chinese and foreign personnel to create a harmonious and effective work environment. Another important cultural issue for many Chinese globalizers involves innovation, which has been a hallmark of their success in domestic markets that they want to transmit to the global organization. Best practices in Culture are developing globally consistent values and behaviours; making strong local commitments; and implanting innovation genes.
Governance—essentially the art of balancing control and empowerment—is a critical aspect of any operating model, and managing a globalized company adds much complexity to the challenge. Critical issues include maintaining sufficient control over a far-flung global organization while empowering the overseas management team, designing the organization for these purposes, and executing them at the operational level. Best practices in Governance are empowering the overseas management team, building channels for rapid communications.
A major challenge in global operations, which have much more complexity and uncertainty than domestic ones, is to strike the balance between consistency and innovation, and between empowerment and control, to enable adaptation and responsiveness to overseas markets with minimal risk. Globalizing companies face decisions about to what extent processes should be standardized or made flexible, and how to guard against the risks of too much flexibility. Best practices in Processes are pushing for standardization on a global scale, allowing for flexibility in a controlled way; and implementing rigorous risk control mechanisms.
Along with Culture, no component of the global operating model framework we are describing here is more important for managing the tension between home country and host country than People. This poses important questions about assembling global and local management teams, the right balance between local and expatriate employees, and issues such as compensation and career development. Best practices in People are developing global teams from the very top; hiring and incentivizing local talent; and providing development for expatriates and deploying them on local teams.
Today’s Chinese globalizers face certain collective challenges arising from the unique historical context of their globalization efforts. Yet every Chinese globalizer also faces its own unique set of operational challenges that it must address in its own unique ways. Thus it is important for companies to customize their solutions to their major operational challenges while also taking a holistic approach, implementing the full range of best practices designed to deal with the particular operational polarities that pose the biggest challenges in their business context and stage of globalization.

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