China's Challenge: Moving From Copier to Innovator - Essay Example

CHINAS CHALLENGE: MOVING FORM COPIER TO INNOVATOR By Chinas Challenge: Moving Form Copier to Innovator Introduction Currently, China is arguably the second largest economy in the world boasting with the world’s single largest market for produced goods and services. In the year 1980 the Chinese government liberated business practices in the nation paving way for private enterprises to open business in a country that has been dominated by government-run enterprises for ages. It was from this point that the massive economic growth witnessed in the country begun that has seen it rise to global recognition. Essentially, the Chinese economy has been growing at double digits since 1980 making it the number one competitor to Western firms in the international market. Cheap labour force in China ensured the operational cost of Chinese firms was minimized thus handing them a competitive advantage in the global front. Conversely, at the time the economy begun to pick up China was miles behind other world economies thus it was its chance to spur massive growth to meet the standards set by other developed nations (Liao, 2009). Chinese firms face innovation challenges that are hampering them from being copiers. The government was willing to dispose of enough resources to government-run business that dominated the manufacturing industry to ensure the growth plan was in the course to match international powerhouses such as the UK, USA, and Germany. However, through the liberalisation of business operations to include private firms the government left regulation loopholes that led to the current problem of counterfeiting that is rampant in China. It is widely known that China is currently attributed to the home for all the world’s counterfeit goods (Alon, 2003). The authoritarian regime that has ruled China for decades only allowed government run agencies to operate in the primary sectors of the economy thus locking out any form of private practice. The move killed the culture of invention and innovation and the moment business was liberalised the private entities resorted to copying Western ideas mainly in mobile phones for sale in Africa and Middle East (Zhang, 2006). Shan Zhai is a standard terminology in China that literally means counterfeit products. Initially, when the Shan Zhai industries begun, they specialised in utilising foreign intellectual property to manufacture fake cellular phones for sale in lower tier markets such as South America, Middle East, and Africa. With time, the industries grew to clone digital cameras, game consoles and ultimately to everything including basic consumer products. It is prudent to note that the economic growth zeal that the Chinese government had left the industry unregulated thus encouraging the lucrative counterfeit business to prosper unwatched to the current situation where it is posing serious challenges to the government and other Chinese firms on the international platform (Orcutt and Shen, 2011). The education and business culture in China are structured in such a manner that it greatly discourages invention and innovation culture thus leaving the entrepreneurs with no idea but to copy other firms’ intellectual property. Most Chines companies specialise in the production of replica goods that are actually mirror products of Western ideas (Hope, 2015). It is a drawback since those very products are expected to compete with the genuine ones in the world market. Ideally, knowledgeable consumers will always go for the original stuff since the fake products are associated with numerous disadvantages thus pitting Chinese firms in jeopardy since they will certainly loose out in the market (Li-Hua, 2014). Marketing is founded on the perception that the consumers have the goods or services that they ought to purchase. Thus, the overall impression that Chinese firms and products receive in the global platform is discouraging since even the genuine companies that have been established from their ideas fail to convince consumers of the legitimacy of their products since they all generally stereotyped as imitators of real goods (Liao, 2009). The act of counterfeiting by Chinese firms possess great danger in the future of the economy since the nation has reached a growth level whereby further economic growth will be driven by innovation to enable them obtain a competitive advantage over its market rivals. To begin with the counterfeits pose a threat to the economy in the sense that infringing intellectual property of foreign companies will lead to a massive reduction in the amount of foreign investment in the country since the firms will be fearing losing their intellectual property to Chinese firms an action that will cut on their revenues (Zhang, 2006). It implies that the Chinese economy will miss out from potential capital and profits that would have been brought by overseas companies this will significantly slow the economic growth of the country since it will not be self-sufficient by depending entirely on its local firms. Furthermore, acts of intellectual property infringement are causing numerous foreign organisations to leave the Chinese market citing apathy as Chinese companies openly clone their products without any substantial government intervention to curb the vice. It discourages innovation since companies are investing billions of dollars on research activities to enhance their goods and services while others are taking the same efforts for granted through illegal use of other people’s ideas (Orcutt and Shen, 2011). Lack of innovation that is demonstrated by Chinese firms’ means they are not responding to the needs of the consumers out there since they do not produce what the customers are expecting (Hope, 2015). It is against the objective of a country that is termed the largest exporter of consumer goods as the global market is literally being infiltrated by sub-standard goods that are below the users’ expectations (Alon, 2003). It will ultimately reduce China’s competitive edge internationally since most countries will eventually burn counterfeits from their markets and also consumer education on genuine goods will make them shift to original products since they provide them with value for their money at the same time their safety is guaranteed (Liao, 2009). To successfully transform China from its counterfeiting culture to embrace innovation, a serious management shake-up has to be implemented by corporate firms (Hope, 2015). The manner in which companies are managed impacts on its operations as well as their objectives towards research and innovation significantly. Ideally the Chinese universities are significantly plagued with bureaucratic administrations that engage in massive infringement of intellectual property in their department of education. Graduates from most of these institutions are not equipped with the relevant skills to ensure they practically simulate knowledge learnt in class that is why a significant number of graduates opt to join foreign institutions of higher learning to further their knowledge, as well as conduct constructive research work. The situation above serves to affirm that the entire Chines systems are not living to their expectations in promoting the culture of research to generate innovative ideas that will spur economic growth in the nation (Liao, 2009). Research and development are the most prevalent technique that companies are implementing to ensure they remain innovative to improve their products as well as come up with new concepts in their service delivery. Rigid management practices that do not give room for employees to contribute their ideas will not adopt the technique successfully. Failure to encompass the ideas of all the stakeholders in an organisation especially the employees will render the core activities of the firm to be useless since the custodians of those operations are not incorporated during their formulation (Alon, 2003). Similarly, Chinese companies are prone to bureaucratic management styles that allow the senior management to direct instead of leading the organisation. The entire firm will be run under the direction of a single man without taking any form of input from the rest of the employees. Counterfeiting is not a vice that can be said to be implanted in the Chinese culture since with the right management practices numerous firms have been able to come up with their ideas and become successful globally. For instance, Lenovo is the largest Pc maker in the world and by extension it is a Chinese firm. Over the years, the company has been able to come up with innovative technologies in its products thus creating a worldwide rapport as a manufacturer of quality computer products in the world. That notwithstanding, Shanghai Tai has also been able to position itself as the original Chinese fashion maker with global links. It is a testament that with the right managerial practices in place Chinese companies will move from the counterfeiting culture and embrace research and innovation to come up with genuine products and services (Zhang, 2006). It is prudent that Chinese firms can move from being imitators of other companies’ ideas and formulate their by being innovative. It is a matter of changes in management that ought to be effected to bring the much-needed change. Nevertheless, a shift from the cultural norms that often governed the manner in which businesses are run in China is a fundamental step towards achieving self-reliance in the industry. The world has significantly evolved thus, with massive globalisation operations on the noose Chinese firms need to incorporate foreign employees to be part of their management team so as to have a blend of cultures, skills and knowledge that will likely transform the enterprises to new levels of success (Li-Hua, 2014). People from various backgrounds will bring in a rich diversity of both talent and managerial skills; they will import viable practices from their environments that will serve to enhance the management of those firms to match international standards. Cultures of the West and Japan are research reliant in all their industrial operations thus incorporating personnel from these regions means the spirit of innovation will be getting into the companies and with time the act of counterfeiting will have been overtaken by research and innovation as the firms will be striving to be better than their competitors through technological enhancement in the manner in which production is conducted (Alon, 2003). Management is not an in-born trait that is with particular people it is a skill that people learn throughout life and with time they perfect it. Institutions of higher learning should invest in research activities that will encourage the students to venture into research and innovation to come up with industrial solutions that will ensure firms work on their proprietary ideas instead of poaching foreign ones. Conversely, there is a difference between managing an enterprise and leading it most Chinese companies are focusing much on the former hence failing to give crucial leadership direction that is required to streamline business operations. Managing is basically instructing people what they are supposed to do without giving room for their input it is ideally dictatorial in nature while leading is managing by example whereby the subjects are free to formulate individual ideas with the aim to better the manner in which activities are accomplished. The company leadership should provide an opportunity for invention and innovation to thrive from within the organisation before they ought for external research operation to be conducted (Alon, 2003). The business environment is very competitive and firms are using all means possible to gain competitive advantage over their market rivals, in that processes companies invest in advanced technology and human resource development by enhancing the skills that their employees possess to make them more productive thus improve quality in their output. The primary intention of human resource development in any organisation is to evaluate the needs and objectives of the firm and seek to align them with those of its employees. In so doing the personnel needs and the organisational needs will have been streamlined and thus conflict will not occur since both party’s needs have been harmonized. Once a firm has acquired new staff the role of human resource development kicks in as this is the program that is tasked with training development and retention of employees (Li-Hua, 2014). Conclusion It is prudent that implementation of efficient management practices can transform firms immensely as the right leadership will give direction in terms of the manner in which the company should conduct its operations. Incorporating personnel from various cultural backgrounds is viable since it will ensure various skills, talent and knowledge are assimilated to breed the spirit of innovation within a firm thus new ideas coming up that will assist the company to obtain a competitive advantage in the market. In a nutshell, the Chinese firms can successfully move from counterfeiting to developing their ideas if they implement management overhauls in those particular organisations that will give room for employees’ opinion to be heard at the same time encouraging innovation from within the companies. References Alon, I. (2003). Chinese culture, organisational behavior, and international business management. Westport, CT, Quorum Books. Available at: http://www.lib.sfu.ca/cgi-bin/validate/books24x7.cgi?isbn=1567205461. [Accessed on 7 March 2015.] Hope, K., 2015. Chinas challenge: Moving from copier to innovator. Available at: http://www.bbc.com/news/business-30983730 [Accessed on 7 March 2015.] Liao, C. (2009). The governance structures of Chinese firms innovation, competitiveness, and growth in a dual economy. Dordrecht, Springer. Available at: http://public.eblib.com/choice/publicfullrecord.aspx?p=478181. [Accessed on 7 March 2015.] Li-Hua, R. (2014). Competitiveness of Chinese firms: West meets East. Available at: http://www.palgraveconnect.com/doifinder/10.1057/9781137309303. [Accessed on 7 March 2015]. Orcutt, J., & Shen, H. (2011). Shaping Chinas Innovation Future University Technology Transfer in Transition. Cheltenham, Edward Elgar Pub. Available at: http://public.eblib.com/choice/publicfullrecord.aspx?p=631208. [Accessed on 7 March 2015.] Zhang, J. (2006). Technological innovation of Chinese firms [electronic resource]: indigenous R&D, foreign direct investment, and markets. Thesis (Ph. D.)--Public Policy, Georgia Institute of Technology, 2007. Available at: http://smartech.gatech.edu/handle/1853/11461. [Accessed on 7 March 2015.] Read More