Home advantage for management consultants in China

"There are many differences here (in China). If you take the large State-owned enterprises, in the upper echelons of them an agement, you have professional managers but you also often have the involvement of Party officials. Often they have greater influence than the professional managers and the consultancies sometimes overlook that."

In his office on the 22nd floor of the Hang Seng Bank Tower in Shanghai's Lujiazuifinancial district, Johnson Chng, managingpartner of AT Kearney Greater China, a leading global consultancy that has been in China since the early 1990s, says China is different from other markets.

"China is pretty much the exception. I have lived and worked in North Americaand in Europe and have served more than 10 markets in Asia but China is by far the toughest."

The 46-year-old Singaporean says one of the differences is that many Chinese companies place a high value on experience rather than "how smart you are".

"In other markets, we might stress what business schools we went to. In China, we don't even bother since it is not seen as relevant. What is important is what experience you have had and what you have done before. The first thing they ask is whether you have previous experience of the topic they want advice on."

Chng says there is also a reluctance to think laterally, whereas in the West this is often the key to management decision-making.

"If you take a Chinese bank, they will always ask you how Citibank does a, b or c or how HSBC does x, y or z. This wouldn't occur to Citibank. They would perhaps be looking for ideas outside their industry, maybe from the fast foodindustry or whatever. That is because as a leading player they are playing top-up while the Chinese are playing catch-up.

"A Chinese company would typically tell you it is not interested in what is happening in another industry. It wouldn't see the connection."

Over at his 30th-floor office in Shanghai Central Plaza on Huaihaizhong Road, Gong Li, senior managing director and chairman, Greater China, of Accenture, another leading US-based global consultancy, admits there are aspects that make China a different market to operate.

"There are some characteristics that are very unique, like, for example, state-owned enterprises. They are companies but many of them are former ministries that give them a hierarchical structure, where people's grades correspond to the government structure.

"The No 1 or No 2 guys are appointed rather than recruited from competition. They can also be moved at any time to be the governor of a local province, for example."

The 55-year-old, who has wide international experience and worked in Argentina in the mid-1980s, says every market has its own idiosyncrasies.

"I was in Argentina at the starting point of reform and there was huge historical baggage, no investment and very little activity before privatization took place. So every country has its unique environment.