Management in China : the Lafarge experience

Should foreign companies which invest in China adopt the Chinese way of management and 'guanxi', the networks of contacts, it relies on, or should they (and can they) adopt Western management methods ? The way in which Chinese staff reacted to the method of management which Lafarge introduced in China highlights this question. The Lafarge style of management by a system is deemed to be more humane than traditional management by people, which is seen to be synonymous with favouritism. The concept is that power is fair and nurturing, that it cannot be challenged and it listens to people's opinions, all of which can be found in Chinese culture. Nevertheless, in China, Lafarge has been unable to make its method of managing disagreements by open discussion acceptable. Lafarge's experience shows that global companies should neither imitate local management methods nor export their own. They should carefully develop management practices which are in keeping with their own principles and simultaneously with the culture of the host country.