Economic Transition and Management Skills: The Case of China

A secondary effect of China’s economic transition will be increased demand for management personnel, particularly those with a strong appreciation of managing in a market-based economy. Traditional Chinese management approaches have been primarily shaped by experience under a centrally planned economy. We argue this has led to a lack of understanding of market-oriented management approaches. As the Chinese economy has evolved and developed, the shortage of management personnel able to understand and master Western management skills in marketing, financial management, inventory control, human resources, and international business rules has become increasingly evident. This paper presents an assessment of likely skill deficiencies within four key sectors: the SOE sector; the private sector; foreign-owned and joint venture firms; and the emerging ‘high technology’ sector. The assessment identifies the most deficient skills as effective HRM, financial management, intellectual property management, marketing and strategic planning. Potential sources of the supply of management skills are discussed. The paper concludes with some implications of the analysis for international business educators.