Extending the Service Business in China? Experience of Swiss Companies
Journal
Singapore Management Review
ISSN
0129-5977
Type
journal article
Date Issued
2007-02-05
Author(s)
Gebauer, Heiko
Abstract
Few Chinese subsidiaries of Swiss manufacturing companies are reported as making profits. Our analysis indicates five main difficulties: strong competition, cultural differences, establishing a profitable service business, availability and education of Chinese workers and managers, and differing goals among collaborating partners. The existing literature is very profuse when it comes to explaining the rising competition in the Chinese market, the cultural problems between western and Chinese managers, and the availability and education of Chinese workers and managers. However, there seems to be a lack of discussion on the challenges and guidelines for extending the service business in China are concerned. Swiss companies generate a major share of total revenue through the service business. In Europe they earn 23.2 per cent of total revenue through services, while their Chinese subsidiaries achieve only 10.3 per cent. The main reason stems from problems associated with managing the service business in the context of Chinese culture. We analyse these effects and offer some guidance on increasing service profitability.
Language
English
HSG Classification
contribution to scientific community
Refereed
Yes
Publisher
Singapore Institut of Managemen
Publisher place
Singapore
Volume
29
Number
1
Start page
59
End page
72
Pages
14
Subject(s)
Division(s)
Eprints ID
34576