CDG: Managing in China's Economic Transformation
Posted: 18 Mar 2012
Date Written: October 19, 2010
China Data Group (CDG) is a leading business processes outsourcing company based in Beijing, China. Roc Yang, Chairman of CDG had to confront a dilemma when he discovered that one of his senior managers gave a gift to a potential client in an effort to win a large business deal. Although this practice was pervasive in the China business context characterized by heavy reliance on personal relationships or guanxi, it went against the founding principles of CDG - professionalism and service quality. Yang had to decide where to draw the line between adherence to principles of professionalism and local norms in a country caught in the midst of rapid economic transformation.
Learning Objective: This case illustrates a key challenge of globalization - how and where do companies draw the line between global business practices and deeply ingrained local cultural norms. As students debate and discuss what the protagonist should do, they should appreciate the various sources of the tension faced by companies operating in emerging markets. The case also allows for specific discussion on the dynamics of relationships and networks (guanxi) when doing business in China.
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