Collaboration in China: Paths to profit

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Collaboration in China: Paths to profit is an Economist Intelligence Unit briefing paper, sponsored by the Cisco. It is the second in a series of reports focused on management issues in China, including innovation, collaboration and personalisation. The Economist Intelligence Unit conducted the analysis and wrote the report. The findings and views expressed in the report do not necessarily reflect the views of the sponsor.
The report is based on a survey of 183 senior executives in China, desk research, and in-depth interviews with senior executives from Chinese companies. The author was Lina Tornquist and the editor was Katherine Dorr Abreu. The Economist Intelligence Unit thanks all those who contributed their time and insight to this project.

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Collaboration in China: Paths to profit

  1. 1. Collaboration in ChinaPaths to profitAn Economist Intelligence Unit reportSponsored by Cisco
  2. 2. Collaboration in China Paths to profitPrefaceCollaboration in China: Paths to profit is an Economist Intelligence Unit briefing paper, sponsored by theCisco. It is the second in a series of reports focused on management issues in China, including innovation,collaboration and personalisation. The Economist Intelligence Unit conducted the analysis and wrote thereport. The findings and views expressed in the report do not necessarily reflect the views of the sponsor. The report is based on a survey of 183 senior executives in China, desk research, and in-depthinterviews with senior executives from Chinese companies. The author was Lina Tornquist and the editorwas Katherine Dorr Abreu. The Economist Intelligence Unit thanks all those who contributed their timeand insight to this project.June 2009© Economist Intelligence Unit Limited 2009 1
  3. 3. Collaboration in China Paths to profit Introduction China is a jumble of networks. The country has emerged as the world’s second largest manufacturer through an intricate system of interconnected enterprises, mostly small and medium sized, each specialised at managing a portion of the giant supply chain that snakes through China and churns out everything from plastic flowers to sophisticated computer chips. In manufacturing, new forms of collaboration-based innovation have emerged. Loncin, a Chongqing- based motorcycle maker, keeps costs low by managing its suppliers through what is essentially an open-source system. The company gives only broad specifications for each component, so suppliers must collaborate to design parts. But is China using this powerful tool effectively? To gauge how deeply the concept of collaboration has penetrated companies in China, the Economist Intelligence Unit, sponsored by Cisco, completed a survey Who took the survey? The survey covers a broad range of company size (% respondents) $100m or less 31 The online survey was fielded in Chinese and was answered by 183 $100m to $250m 14 executives in China. A total of 26 regions are represented, although $250m to $500m 13 most respondents are located in Shanghai (22% of the total), $500m to $1bn 9 Beijing (20%), Jiangsu (10%) and Guangdong (10%). The survey $1bn to $5bn 12 encompassed a variety of company ownership structures: 43% are $5bn or more 21 from private Chinese concerns; 24% from wholly-owned foreign operations; 18% from state-owned enterprises (SOEs) or those owned by provincial or municipal governments; 10% from joint ventures between Chinese and foreign concerns; and 5% from other Source: Economist Intelligence Unit survey, January, 2009. types of companies. Companies range in size. Thirty-one percent have annual and healthcare, pharmaceuticals and biotechnology for 6%. Forty- revenues of $100 million or less, 27% between $100 million and five percent are C-level executives and the others are executives and $500 million, 9% between $500 million and $1 billion, and 33% managers. They have a broad range of roles: 32% are responsible for more than $1 billion. marketing and sales, 30% for strategy and business development, They represent a broad range of industries. Manufacturing and 23% for general management. accounts for 37% of respondents, financial services for another 8%, For further information, see the appendix at the end of this report.2 © Economist Intelligence Unit Limited 2009
  4. 4. Collaboration in China Paths to profitof 183 executives in that country in January 2009. We found that while executives in China say they valuecollaboration, the concept is not always applied. And there are considerable discrepancies in how the C-suite and other executives view collaboration: the higher up in the chain of command, the more likely therespondent is to believe that collaboration is a common practice within the company. To get a better understanding of collaboration in China, we compared the results of the 2009 surveywith those of a similar, global survey, conducted in 2007, that culminated in a report, Collaboration:Transforming the way business works. Many of the findings of the China survey aligned closely with thoseof the global survey, which canvassed 350 senior executives worldwide. Significant differences arehighlighted in the paper.© Economist Intelligence Unit Limited 2009 3
  5. 5. Collaboration in China Paths to profit Where China stands todayTwo golden rules The growing interconnectedness of companies worldwide suggests that future success is tied tofor successful collaborating across greater distances—physical and cultural—and across organisations. In Collaboration:collaboration? Transforming the way business works, the Economist Intelligence Unit concluded that “the future belongs“Don’t create to those who collaborate”.heroes and make China’s spectacular economic growth since the early 1990s points to a very bright future. But surveysure everyone has data indicate that the country is lagging in the global cultural shift that views collaboration as a necessarythe same goal.” business tool. Although respondents say that collaboration is widespread, the survey also indicates that itYin Weidong, chief executive is relatively limited across functions and geographies. This points to the need for increased collaborationofficer, Sinovac Biotech within China’s companies. Executives in China spend only about a quarter of their time working alone, no more than executives do elsewhere. A significant number of respondents in China—67 %—say they collaborate regularly and across a broad range of issues. Although less than the 77% who claimed the same degree of collaboration in the 2007 global survey, this response is in line with the overall positive outlook on collaboration of respondents in China. Generally, they say that employees trust their colleagues and management; companies promote an open, collaborative culture; and organisations actively encourage collaboration, even more so than in companies surveyed globally. While collaboration is viewed positively in China, the survey suggests that managers there still have a tendency to look upwards rather than sideways. Only about 40% of the executives surveyed in China collaborate with other functions within their organisations on a daily basis, compared with 55% of those surveyed globally in 2007. And in China, only 13% of respondents have ongoing day-to-day collaboration with co-workers across locations within their own organisation, compared with 35% who do so globally. Within China, the degree of collaboration varies by company structure. Fifty-two percent of Overall outlook on collaboration positive in China (% respondents) ”Strongly agree” and “Agree” Neutral “Strongly disagree” and “Disagree” Our company culture encourages sharing rather than secrecy 74 16 10 Senior management explains the mutual benefits of collaboration among colleagues 74 19 7 Employees at my company generally trust co-workers and management 68 22 10 0 20 40 60 Source: Economist Intelligence Unit survey, January, 100 80 2009.4 © Economist Intelligence Unit Limited 2009
  6. 6. Collaboration in China Paths to profitDaily collaboration less common in China than globally(% respondents who collaborate daily with the following constituencies) China Global DifferenceOther functions within my organisation 40 55Other locations within my organisation 13 35External suppliers 14 14External customers 23 28External business partners 10 15 Source: Economist Intelligence Unit survey, January 2009.respondents from joint ventures and subsidiaries of foreign firms say they spend 25% or more of their timecollaborating with teams in the same function, compared with only 38% in private Chinese companies.And 30% of respondents in joint ventures and wholly owned subsidiaries say they spend that amount oftime working with teams in the same location, compared with 21% in private Chinese firms. Despite China’s rapid economic expansion and the growing complexity of many Chinese companies,executives are less bullish about collaboration than their global peers, especially across departments andgeographies. When asked how they expect to spend their time three years from now, 21% of executivesin China say they expect to work more independently, compared to 17% who said so globally. They aregenerally less likely to foresee working more collaboratively outside of their function than their globalpeers were two years ago. Michael A. Witt and Gordon Redding, specialists in Asian business systems, point to entrenchedIn future, China’s executives less likely to collaborate outside their own functions than peers globally(Three years from now, which of the following do you expect to spend more of your working time doing, compared to today?) China GlobalWorking independently Difference 21 17Working with teams in the same function 55 34Working with teams in the different function 40 55Working with teams in the different locations 29 62Working with teams at other organisations 25 50Working with teams in the same location 21 28 Source: Economist Intelligence Unit survey, January 2009.© Economist Intelligence Unit Limited 2009 5
  7. 7. Collaboration in China Paths to profit hierarchies within Chinese firms as barriers to collaboration. In their 2008 book, The Future of Chinese Capitalism, they argue that hierarchies block collaboration between workers and management. “If you were to go to any of the millions of small and medium enterprises in China…and asked who in the organisation is responsible for efficiency, learning and adaptiveness,” they write, “the average employee will point upwards and say ‘laoban’,” the boss. Such lack of delegation has profound implications for industry, according to the authors. With the majority of decision-making pushed up the chain of command, private companies often focus on Vaccine development in China: Dr Yin applies his golden rules—teamwork and Collaboration helps Sinovac take the lead focus on a common goal—to his research teams today. He says that too often in China, even in science, individuals are made into heroes, and treated with reverence, which strengthens hierarchies, halts Two golden rules for successful collaboration? “Don’t dialogue and stifles new ideas. create heroes and make sure everyone has the same Sinovac has been lifted by China’s rising tide of goal,” says chief executive officer (CEO) Yin Weidong. knowledge about infectious diseases. Work that took His company, Sinovac Biotech, is one of China’s leading 20 years when he started in 1984—isolating a virus, producers of vaccines and has been at the front of sequencing the virus and developing a vaccine—now vaccine research since China’s outbreaks of SARS takes only three. The company has successfully (severe acute respiratory syndrome) in 2003 and avian commercialised a number of vaccines including ones flu in 2005. for influenza, Hepatitis A and Hepatitis B Dr Yin started his research on viruses in the 1980s Collaboration has been important to Sinovac’s working as a doctor treating infectious diseases in success. The firm worked with an international network China’s northern Hebei province. Each village had of institutions and companies researching SARS, several people who were infected with Hepatitis A, a for example. It now benefits from the increasing cause of acute liver disease. In 1984, Dr Yin was among sophistication of China’s biopharmaceutical industry. the first researchers in China to isolate the Hepatitis A There are at least two organisations/companies, virus, a first step to producing a vaccine. At the time, started by returning Chinese expatriates, that can immunology in China had “no people, no funds and no sequence proteins in China. facilities”, he says. The company is also being helped through That changed rapidly when the outbreak of improved collaboration with the public sector. SARS paralysed China. Driven by a desire to help, Sinovac collaborates actively with several government researchers across the country set aside their projects institutions including China’s Centre for Disease to work on mapping the disease. After a delay, China’s Control and the Ministry of Health. government rallied behind them, providing funding, But even as China’s government dismantles many longer grants and stronger private-public partnerships. of the walls between public and private institutions, Sinovac, still a young company (it was founded in the surveys suggest that the country may still have 2000), took the lead in developing a SARS vaccine. a long way to go in building strong public-private By emphasising the greater goal—quickly providing a partnerships. Internationally, 74% of public sector vaccine—Dr Yin trumped traditional hierarchies and workers collaborate with private sector workers; took a leadership position that would normally have in China, only 37% say they do so. Such a lack of fallen to the heavy-hitters from the government’s collaboration could mean lost opportunities for Ministry of Health. reaching common goals, including better vaccines.6 © Economist Intelligence Unit Limited 2009
  8. 8. Collaboration in China Paths to profitindustries familiar to the top executive. They often diversify into industries that are easy to understand China is groomingor in which the leaders have personal connections. Meanwhile, China’s state sector is full of mid-level a set of “nationalmanagers who act more like conduits of decisions than decision-makers in their own right. champions” to The challenges affect external collaboration as well. According to the China survey, privacy rules be the global(37%), cultural and language barriers (30%) and the reluctance to share information with strangers multinationals(27%) are the largest external hindrances to collaboration. of tomorrow. A lack of “institutional trust” in China’s business system also holds back partnerships, according to DevelopingWitt and Redding. China’s legal infrastructure is not robust enough to ensure adherence to business collaborative skillsagreements, they write, and the economy suffers from a severe shortage of information. Professionals is an importantsuch as actuaries, accountants and surveyors are all still in short supply, often making it difficult to step towardsperform adequate due-diligence and to form business partnerships outside trusted personal ‘guanxi’ achieving thatnetworks. goal. A networked system of personal relationships can work well in manufacturing, but as China’scompanies move up the supply chain to produce high-value, complex goods, processes become moreintricate and require more specialised business models. The country is grooming a set of Chinese “nationalchampions” to be the global multinationals of tomorrow. Developing collaborative skills is an importantstep for these companies to compete successfully on the world stage.© Economist Intelligence Unit Limited 2009 7
  9. 9. Collaboration in China Paths to profit The disparity between C-suite and other executives A significant obstacle to increased collaboration may be a tendency of C-suite executives to underestimate the barriers to teamwork and overestimate the extent to which management addresses such barriers. In China, information hoarding is viewed as a barrier by just 17% of C-suite respondents, compared with 41% of respondents from lower tiers of management. Meanwhile, unwillingness to relinquish responsibility to partners and co-workers is considered a major problem by 40% of non-C-suite executives, compared with only 10% of C-suite respondents. There are also substantial differences between how C-suite respondents say they are addressing issues of collaboration and how less senior executives regard these efforts. For example, 76% of C-suite respondents agree that collaborative technology is available to every employee; only 40% of non-C-suite executives do so. C-suite and non-C-suite executives do not see eye-to-eye on collaboration in China (Comparison of percentages of C-suite and non-C-suite repondents who “Strongly agree” with the following statements) C-suite Other executives Difference My organisation has a formal, transparent and credible process for collaboration 44 12 People who collaborate well are rewarded with greater autonomy within the company 39 9 Senior management explains the mutual benefits of collaboration among colleagues 47 18 Employees at my company generally trust co-workers and management 46 18 Management publicises examples of successful collaboration 43 15 My organisation has metrics to track collaboration and its benefits 36 8 Senior management makes sure that collaboration technology is available to employees 41 15 We are interested in partnering with other organisations 44 24 Our company culture encourages sharing rather than secrecy 42 24 Through partnerships, we are able to accomplish tasks that we couldn’t do alone 47 35 Source: Economist Intelligence Unit survey, January 2009.8 © Economist Intelligence Unit Limited 2009
  10. 10. Collaboration in China Paths to profit Stronger, formalised processes to support and assess collaborative efforts, including better planning Stronger,and feedback mechanisms, are powerful tools to make sure barriers to collaboration are actually formalisedaddressed. In China, where the conflict-averse culture may prevent staff from presenting complaints to processes totheir superiors or allowing colleagues to lose face, such mechanisms may be particularly important to support and assessimprove teamwork. collaborative To address these types of problems, Lu Wenbing, chief executive officer of Little Sheep, one of China’s efforts, includinglargest domestic restaurant franchises, strives to ensure that complaints and ideas for management better planningimprovements reach him. He publicises his email address so all employees can communicate with him and feedbackdirectly. Additionally, the restaurant chain allows employees and franchisees to report problems through mechanisms, areanonymous channels, an effort Little Sheep hopes will allow more honest feedback. powerful tools to Our survey indicates that top management at China’s companies tends to isolate itself and could make sure barriersbenefit from an engaged approach. Just 38% of respondents in China report that they or their function to collaborationcollaborate regularly with general management, compared with 60% of respondents from the 2007 global are actuallysurvey. addressed.© Economist Intelligence Unit Limited 2009 9
  11. 11. Collaboration in China Paths to profit Making collaboration work If collaboration is important to growth, how can China’s executives make all parts of their organisation work together? One way is to make collaboration worthwhile, and to overcome obstacles to teamwork. The survey shows that the biggest barriers to internal collaboration at companies in China include information hoarding (31%), unwillingness to relinquish responsibility to co-workers and partners (27%), lack of buy-in (27%), insufficient resources and excessive workload (25%), and privacy rules and network security (24%). Haier, a diversified white goods and electronics manufacturer located in Shandong Province with 2007 revenues of $16.2bn, has sought to tear down barriers. It now connects performance reviews of managers, and by extension their bonuses, to the performance of other divisions within their organisation, by linking, for example, sales and manufacturing targets. Ma Yansong, founder of the Beijing-based architecture firm MAD, suggests that space can also play a large role. Open-plan offices have been popular in the West since the 1950s, but in China, members of management are often cosseted in closed-off meeting rooms and offices. A better solution, he suggests, is creating work spaces that balance the need for privacy with the need for openness and insight, through the use of small, glass-enclosed conference rooms and spaces that create interaction between different teams. Nokia, the Finnish mobile handset giant, realised the need for collaboration and re-built its Beijing headquarters in 2008 to house all its operational departments, including regional headquarters, R&D and design centres, and mobile phone production, as well as outside partners, on the same campus. It is Biggest internal barriers to collaboration in China (% respondents) Information hoarding (viewing information as a source of power) 31 Unwillingness to relinquish responsibilities or oversight to co-workers or partners 27 Lack of buy-in to benefits of collaboration 27 Insufficient resources/excess workload 25 Privacy rules and network security 24 Reluctance to share information with strangers 20 Source: Economist Intelligence Unit survey, January 2009.10 © Economist Intelligence Unit Limited 2009
  12. 12. Collaboration in China Paths to profit Collaboration is a two-way street president of software and services. He believes that as mobile phones become more commoditised, phone buyers will be less concerned with typical hardware features such as talk-time and design. Instead, Before Nokia launched its new 5800 XpressMusic phone in China in Nokia will be wooing customers—from farmers interested in grain the spring of 2009, the Finnish mobile phone giant disclosed the prices to hipsters looking for better music experiences—through device’s specific features to local software developers with which it better software. Tapping localised knowledge and the bustling collaborates. The 5800 would have a touch screen, a motion sensor creativity of young, local start-ups such as Simlife is a boon for Nokia. and plenty of features geared towards young music lovers, including To make collaboration on software easier, in 2008 Nokia moved a memory chip that could hold up to 6,000 music tracks. Armed with Forum Nokia, its division that deals with outside software developers, this information, Simlife, a game developer based in Fujian province, to its main Beijing headquarters. Bringing its partners inside the pitched X Dancery, a game that scores players on their ability to tap company was part of Nokia’s overall strategy to increase collaborative out a beat to the music from their own music library. Nokia, China’s efforts between its multiple divisions and partners such as Simlife. largest mobile phone maker, liked the idea, and included Simlife’s But much collaboration between Simlife and Nokia also occurs game on its new phone in the country. digitally—through electronic forums and emails. This allows Beijing- Although Nokia develops all its mobile phones for a global based Nokia to work day-to-day with firms that are located in distant audience, the company depends on local software companies, such provinces. as Simlife, to develop content geared to Chinese consumers. Gamers Mr Chen says that collaborating with companies such as Nokia in China, Nokia’s largest cell phone market, are often more interested allows his company to work on high-end innovative projects as well in narrative-driven games and networking, rather than “ball, gun as gain access to technical support and Nokia’s massive marketing and car” games popular in the West, says Junhong Chen, Simlife’s channel. Occasionally, Nokia even covers expenses for Simlife managing director. employees to attend corporate forums and conferences where both The pressure to attract consumers through “localised” software parties can gain exposure for their collaboration and attract new applications will only increase, says Dan Wong, Nokia’s China vice- partnerships.betting that physical proximity and spaces specially designed for collaboration will lead to more fruitfulrelations with partners and across divisions. External factors also contribute to collaboration. Survey respondents point to partnerships (81%),increased access to collaboration technology (79%) and competition (78%) as the top drivers ofcollaboration at companies in China. Clearly, both friends and rivals can bring about greater teamwork.Factors that contribute to collaboration in China(% respondents)Creation of partnerships 81Implementation of collaboration technology 79Competition 78Corporate strategy and policies 73Attitude of senior management 71Globalisation of the organisation 68 Source: Economist Intelligence Unit survey, January 2009.© Economist Intelligence Unit Limited 2009 11
  13. 13. Collaboration in China Paths to profit ConclusionCollaboration China’s economic star is ascendant, but could it shine even brighter if powered by greater collaboration?is often neither Government policies aim to help China’s companies move up the value chain and raise their profile in theeasy nor intuitive. international arena. Increasing collaboration will be a critical tool for organisations to achieve theseIf the future goals and help China maintain its momentum.belongs to those Though survey results indicate Chinese executives expect a more collaborative future, there are stillwho collaborate, cultural and organisational barriers to overcome. To make collaboration a reality, C-suite support isorganisations must essential. For collaborations to achieve the best possible outcomes, they require plenty of time andstrive to overcome planning. Strong C-suite commitment can help guarantee the needed resources.the obstacles that Support from the top is not sufficient, however. A misalignment in how upper and middle managementstand in its way. perceive teamwork within an organisation can create barriers to true collaboration. And overcoming institutional silos requires that all teams in a company—from operations to marketing to R&D—work together. Physical layout, incentives, collaboration technology and analytical tools can all be brought to bear to encourage teamwork. In an increasingly globalised and networked business environment, organisations must reach outside their borders as well. Finding the “right” external partners is a critical task. By trying to cover too many areas in-house, or by choosing to work only with companies within established guanxi networks, China’s companies run the risk of losing out on opportunities. To broaden the pool of potential partners and ensure that the best ones are chosen, a structured, formalised process for selecting collaborative partners is key. Collaboration is not a zero-sum game. To make sure all parties win, partners should identify opportunities where both benefit. Advantages may extend beyond merely monetary gain: they can include added opportunities to work on innovative projects, training or positive PR. Collaboration is often neither easy nor intuitive. If the future belongs to those who collaborate, organisations must strive to overcome the obstacles that stand in their way.12 © Economist Intelligence Unit Limited 2009
  14. 14. Collaboration in China Appendix Paths to profit Survey resultsAppendix: Survey resultsHow often do you or your team collaborate with the following constituencies?(% respondents) Daily Weekly Monthly Quarterly Yearly Rarely or neverOther functions within my organisation 40 40 14 3 11Other locations within my organisation 13 34 25 12 2 14External suppliers 14 20 24 14 12 16External customers 23 22 24 11 9 11External business partners 10 23 24 17 11 14How much of your working time do you spend doing the following?(% respondents) 0% <5% 5-10% 10-25% 25-50% >50%Working independently1 6 14 26 28 25Working with teams in the same function1 10 16 31 30 13Working with teams in the same location 2 14 27 33 17 7Working with teams in different functions 5 29 27 25 10 5Working with teams in different locations 11 31 31 17 6 4Working with teams at other organisations 13 34 24 17 7 5Do you collaborate with peers in other functions of Three years from now, which of the following do you expect toyour organisation? spend more of your working time doing, compared to today?(% respondents) Select all that apply. (% respondents)Regularly and across a broad range of issues 67 Working with teams in the same functionIrregularly, but across a broad range of issues 55 19 Working with teams in different functionsOnly on selected projects or issues 40 13 Working with teams in different locationsI rarely or never collaborate with peers in other functions 291 Working with teams at other organisations 25 Working independently 21 Working with teams in the same location 21Economist Intelligence Unit 2009 13
  15. 15. Appendix Collaboration in ChinaSurvey results Paths to profit Do employees in your function regularly collaborate Do you work for the private or public sector? with employees in other functions? If so, which do they (% respondents) collaborate with? Select all that apply. Private sector (% respondents) 81 Government/public sector (state-owned enterprises) Finance 13 57 Government/public sector (national) Marketing and sales 1 56 Government/public sector (state/provincial/regional) Customer or constituent service 3 52 Government/public sector (local/city) Operations and production 1 48 Government/public sector (non-profits and other) General management 1 38 Strategy and business development 36 Procurement (Government/public sector respondents only) 34 Which part of the government/public sector do you work for? Information and research (% respondents) 32 Human resources Economic development 31 31 IT Social services 31 21 Legal Education 21 7 R&D Environmental services 21 7 Risk management Transportation 16 7 Other Military 2 3 Public safety 3 Emergency services Which groups are most likely to be collaborative at your 0 organisation? Health care Select up to three 0 (% respondents) Legal system 0 Senior management/executives Other 45 21 Process owners (people in charge of processes that cut across functions) 28 Marketing 27 (Government/public sector respondents only) Sales With which sectors does your organisation collaborate? 26 Select all that apply. Note: If you collaborate within your own sector, Knowledge workers (people producing and analysing information) please check that sector as well. 26 (% respondents) Programme or project workers 23 Private sector Finance 37 20 Government/public sector (state-owned enterprises) Business partners 57 16 Government/public sector (national) Service delivery personnel 40 14 Government/public sector (state/provincial/regional) HR 40 13 Government/public sector (local/city) Don’t know 40 2 Government/public sector (other) 1414 Economist Intelligence Unit 2009
  16. 16. Collaboration in China Appendix Paths to profit Survey resultsWhat would you say are the most important objectives for How has your organisation attempted to measureyour organisation? collaboration?Select up to three. Select all that apply.(% respondents) (% respondents)Increasing revenue growth Map who communicates with whom, and to what extent, 58 inside and outside the companyIncreasing operational efficiency 42(eg, process improvements, faster speed to market) Measure the economic value of collaborative efforts 35 39Increasing productivity Measure the level of collaboration among different functions, 35 locations or organisationsImproving problem solving 39 29 Measure the quality of collaborative effortsImproving competitive differentiation 38(eg, better product design, more customer loyalty) Other measurement initiatives, please specify 27 5Lowering costs None of the above 27 8Extending our global reach to customers and/or partners 20Communicating more efficiently across the organisation 13 Has your organisation attempted to measure the influence ofImproving service for customers or constituents collaboration on any business objectives? 12 (% respondents)Improving knowledge sharing within the organisation 9Other1 Yes 54 No 46Which of the objectives you chose in the previous questionwould benefit the most from collaboration, in your view?(% respondents)Increasing revenue growth 26Increasing operational efficiency(eg, process improvements, faster speed to market) 16 In which of the following areas has your organisationImproving problem solving tried to measure the influence of collaboration? 14 Select all that apply.Increasing productivity (% respondents) 13Extending our global reach to customers and/or partners Increasing revenue growth 9 40Improving competitive differentiation Increasing productivity(eg, better product design, more customer loyalty) 27 8 Increasing operational efficiencyCommunicating more efficiently across the organisation (eg, process improvements, faster speed to market) 5 26Lowering costs Improving problem solving 5 23Improving service for customers or constituents Improving competitive differentiation 3 (eg, better product design, more customer loyalty)Improving knowledge sharing within the organisation 20 1 Improving service for customers or constituentsOther 160 Lowering costs 14 Communicating more efficiently across the organisation 13 Extending our global reach to customers and/or partners 10 Improving knowledge sharing within the organisation 5Economist Intelligence Unit 2009 0 15
  17. 17. Appendix Collaboration in ChinaSurvey results Paths to profit Overall, how have the following factors influenced the amount of collaboration internally at your company or externally between your company and outside entities (customers, partners and other organisations)? (% respondents) Has decreased collaboration No effect on collaboration Has increased collaboration Don’t know/Not applicable Globalisation of the organisation 11 12 68 9 Decentralisation of the organisation 36 16 35 13 Competition 5 12 78 5 Cost savings/operational efficiency measures 12 20 58 10 Enhancement of the distribution/supply chain 3 16 66 15 Creation of partnerships 2 11 81 6 Implementation of collaboration technology 3 10 79 8 Corporate strategy and policies 4 16 73 7 Attitude of senior management 3 18 71 8 Please indicate your level of agreement with the following statements. (% respondents) 1 Strongly agree 2 3 4 5 Strongly disagree Don’t know Employees at my company generally trust co-workers and management 30 36 21 4 5 2 Our company culture encourages sharing rather than secrecy 32 41 16 6 3 2 We are interested in partnering with other organisations 33 39 18 3 3 4 Through partnerships, we are able to accomplish tasks that we couldn’t do alone 40 39 12 4 2 3 Senior management explains the mutual benefits of collaboration among colleagues 31 40 18 4 3 3 Senior management makes sure that collaboration technology is available to employees 27 29 34 6 1 4 Management publicises examples of successful collaboration 28 28 30 8 3 3 People who collaborate well are rewarded with greater autonomy within the company 22 31 28 7 7 5 My organisation has a formal, transparent and credible process for collaboration 27 29 29 7 5 3 My organisation has metrics to track collaboration and its benefits 20 25 28 13 6 716 Economist Intelligence Unit 2009
  18. 18. Collaboration in China Appendix Paths to profit Survey resultsWhat are the biggest barriers to collaboration within your Which of these tools do you think would be or are most helpfulorganisation or between your organisation and others? in facilitating collaboration at your organisation?Select up to three barriers for each. Select up to three.(% respondents) (% respondents) Barriers to internal collaboration Barriers to external collaboration E-mail 77Privacy rules and network security Instant messaging 24 37 49Reluctance to share information with strangers Intranets 22 20 27 Web conferencingLack of buy-in to benefits of collaboration 20 27 Online chat/instant messaging 14 19Inability to find potential collaborators Workflow systems 9 13 22 Online project management systemsInformation hoarding (viewing information as a source of power) 9 31 Document management tools 10 9Unwillingness to accept solutions not developed Shared calendarswithin the group (“not invented here” attitude) 7 9 11 Document collaboration 6Unwillingness to relinquish responsibilities or Discussion forums/ message boardsoversight to co-workers or partners 5 27 14 WikisInsufficient resources/excess workload 2 25 Blogs 14 1Lack of shared goals Collaborative design tools 19 0 16 OtherLack of top-level support 2 12 11Legal issues 10 22Cultural and language barriers 16 30How broadly has your organisation addressed barriers to collaboration?(% respondents) Throughout organisation In some areas of the organisation Not at all Don’t knowCommunicated clear and compelling reasons to collaborate 49 36 9 6Marshalled data and publicised success stories to convince sceptics 27 44 20 9Engaged in team-building exercises 40 40 15 6Publicised support for collaboration from senior management 40 37 18 6Measured the amount or depth of collaboration 29 37 26 9Measured the results from collaboration 27 41 25 7Solicited collaboration champions 23 40 19 18Set up training programmes to teach collaboration skills 37 33 23 7Rewarded individuals and teams who have engaged in successful collaborations 32 33 24 11Economist Intelligence Unit 2009 17
  19. 19. Appendix Collaboration in ChinaSurvey results Paths to profit Which collaboration tools do you personally What is your primary industry? use for professional purposes? (% respondents) Select all that apply. (% respondents) Manufacturing 37 E-mail Financial services 96 8 Instant messaging Healthcare, pharmaceuticals and biotechnology 67 6 Intranets with shared online data on employees, clients, vendors and projects Professional services 38 5 Web conferencing, with live audio and video sent across a computer network Chemicals 36 5 Document management tools (allowing people to collect, Transportation, travel and tourism organise, and manage documents in a central location) 5 33 Energy and natural resources Online chat/instant messaging (allowing people 4 to exchange simple text messages instantly) Logistics and distribution 32 4 Document collaboration (allowing people to Consumer goods collaborate on documents in real time) 4 32 Automotive Workflow systems (allowing people to track progress of a work process) 3 27 Education Discussion forums/message boards (allowing people to 3 post messages or questions on a specific topic) Government/Public sector 18 3 Shared calendars (allowing people to post events, IT and technology meetings, or time-sensitive tasks) 3 16 Retailing Online project management systems (allowing people to schedule 3 and track activities required to complete a project) 13 Entertainment, media and publishing 2 Blogs (allowing people to publish an online chronological journal) 11 Construction and real estate 2 Collaborative tools for designing products 9 Telecoms 2 Wikis (allowing multiple authors to post and edit articles, building up a body of knowledge) Agriculture and agribusiness 8 1 Other 3 How would you define your company’s structure? (% respondents) State-owned enterprise 15 Enterprise owned by provincial or municipal government 3 Partially privatised company with significant state ownership 4 Joint venture between Chinese foreign concerns 10 Wholly owned foreign operation 24 Private Chinese concern 43 Other 118 Economist Intelligence Unit 2009
  20. 20. Collaboration in China Appendix Paths to profit Survey resultsWhat are your main functional roles? During your career, have you worked in the following typesPlease choose no more than three functions. of companies or held government positions?(% respondents) Select all that apply. (% respondents)Marketing and sales 32 Government positionsStrategy and business development 9 30 Mostly state, provincial or municipal enterprisesGeneral management 12 23 Both in government and state-owned enterprise positionsInformation and research 17 16 In joint venture between Chinese foreign concernsCustomer service 21 15 In wholly owned foreign operationsOperations and production 30 13 In private Chinese concernsFinance 42 11IT 10R&D What are your organisation’s global annual revenues 10 in US dollars?Risk management (% respondents) 7Human resources 6 $100m or less 31Legal 4 $100m to $250m 14Supply-chain management $250m to $500m 13 4Procurement $500m to $1bn 9 2 $1bn to $5bn 12Other 4 $5bn or more 21What is your educational background in management?Select all that apply.(% respondents)Undergraduate degree in business administration from Chinese university Which of the following best describes your title? 39 (% respondents)Practical on-the-job training 21 Board memberOngoing education provided by the company 2 20 CEO/President/Managing directorGraduate degree in business administration from Chinese university 6 20 CFO/Treasurer/ComptrollerGraduate degree in business administration from foreign university 5 10 CIO/Technology directorUndergraduate degree in business administration from foreign university 8 9 Other C-level executiveOther 23 5 SVP/VP/Director 6 Head of Business Unit 10 Head of Department 19 Manager 10 Other 10Economist Intelligence Unit 2009 19
  21. 21. Appendix Collaboration in ChinaSurvey results Paths to profit In which region of the Chinese mainland are you personally located? (% respondents) Shanghai 22 Beijing 20 Guangdong 10 Jiangsu 10 Zhejiang 9 Shandong 7 Hubei 3 Fujian 3 Jilin 2 Liaoning 2 Sichuan 2 Anhui 1 Chongqing 1 Hebei 1 Hunan 1 Tianjin 1 Gansu 1 Guangxi 1 Guizhou 1 Jiangxi 1 Neimenggu (Inner Mongolia) 1 Qinghai 1 Shaanxi 1 Shanxi 1 Yunnan 1 Xinjiang Uygur 120 Economist Intelligence Unit 2009
  22. 22. Whilst every effort has been taken to verify the accuracyof this information, neither The Economist IntelligenceUnit Ltd. nor the sponsors of this report can accept anyresponsibility or liability for reliance by any person onthis white paper or any of the information, opinions orconclusions set out in the white paper.
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