International Business- China Road and Bridges Corporation.

International Business- China Road and Bridges Corporation.

 

Introduction

China Road and Bridge corporation was initially China Road and Bridge (Group) Company with its high performance and qualifications, is a very large scale, wholly state owned corporation that targets foreign trade and the international market in economic cooperation and it deals with the construction of roads, dams, by passes, bridges, tunnels, port, and other infrastructures as the main operation and  general trade, investment, real estate and leasing services as the peripheral trading activities. CRBC (China Road and Bridges Corporation) is China’s largest construction and design company and is among the top 500 Global Corporations with over forty foreign branches worldwide.  China Road and Bridges Corporations has established relevant and significant independent coordination centers that manages and coordinates the activities of its foreign trade and other international transactions. These centers are found in Asia, Europe and Africa.

CRBC enjoys a high standard reputation domestically and globally as an international contracting company in road, ports/piers and bridges and has a famous trade-mark in the construction industry.

CRBC operations can be traced back to the initial years of the Peoples Republic of China. With its sporadic growth, development and reform of china’s social-economic system. After many years, CRBC has developed and acquired a respectable and almost prestigious label of international contractor after several years of restructuring under the Foreign aid office. It was known as the China road and bridge engineering company in 1979.After its approval in the same year, it later became the China Road Company in 1997 and eventually it became the China Road and Bridge Corporation in (CRBC) in 2005.

CRBC holds the national level qualification for contracting various professional contracting services and special road construction by the ministry of construction in the People’s Republic of china.

CRBC won its first contract as a foreign aid task on behalf of the the peoples republic of china in 1958, which was followed by the construction of a harbor in Mauritania in the 1970’s. CRBC has struggled to achieve its foreign strategic targets by winning tenders and participating in social economical activities in foreign countries that have cooperative ties with china.

CRBC has embarked on international marketing and globalization of its activities to achieve its objectives. Globalization is the process or action of extending social relations to different parts of the world. This process arises from the movements and transportation of people, items, services or ideas. Internationalization or integration is the outcome of globalization. Internationalization involves integration of religion, politics and economic activities. It describes the relationship across cultures of macro- social processes and its interplays. Internationalization erodes some cultural beliefs but also universalizes the characters and the traditions of the local communities and its environs.

Advances in the transportation systems, telecommunications infrastructures and its affiliated networks which include the internet are the major factors in internationalization which promote economic and cultural interdependence. In the year 2000, the international monetary fund (IMF) identified four major aspect of internationalization: trade and transactions, financial capital and investment movements, migration and the movement of people and the actual dissemination of knowledge. The change in climate, cross-boundary pollution in water and air, the overfishing in oceans are the environmental challenges associated with internationalization

Internationalization is a process or part of globalization which is affected and affects businesses and the work organization, economic, the socio-cultural resources, and the natural business environment.

CRBC, assisted by the people’s republic of china has used several strategies to internationalize. These strategies range from economic to cultural strategies. CRBC and PRC (People’s Republic of China) have pursued these activities and strategies to internationalize aggressively.

Internationalization led to the emergence of international network of social, cultural and economic systems. The intensification and integration of worldwide social and economic relations that link distant localities in a way that local events and happenings are shaped by the nature of events occurring many kilometers away.

CRBC and PRC have adopted social cultural strategies to facilitate their entry and eventual dominance of their economic and cultural activities globally.

The internet

It’s a product of internationalization as well as a catalyst; internet connects computer operators and users around the globe. From the year 2000 to the year 2009, the number of people using the internet has increased from 394 million to almost 2 billion. China Road and Bridges Corporation and the people’s republic of China have adopted the use of internet to facilitate its policies and objectives worldwide. The internet has a very wide and extensive client base worldwide that it’s capable of reaching literally every part of the world. For instance in 2010, 22 per cent of the entire world’s population had access to computers with one billion Google searches each day, 300 million users reading blogs and over 2 billion videos being viewed daily.

Health Improvement and Provision of clean water.

China Road and Bridges in conjunction with the PRC have partnered in developing health facilities and provision of clean water through drilling holes in many parts of Africa and the Asian continent. Most parts of Africa availability of clean water is only possible during the rainy season which is not adequate. The provision of water to these communities goes a long way to in building good and long lasting relationship between the two groups of people i.e. the Chinese and the Africans. This also promotes peace and acts as a unifying factor between the two communities.

Health facilities and medical assistance is limited to only a few people living in urban areas in most parts of Africa and Asia. The Chinese government in conjunction with the CRBC has already built many dispensary and medium size health facilities in Africa and parts of Asia according to its official website. Health problems transcend national borders and have global political, social and economical impact internationally. Global health is all about improvement of health worldwide, reduction of differences and disparities and protection against epidemics and global threats that overlooks or disregards the national borders.

However internationalization has its share of problems also. International travel has also contributed immensely to the spread of the world’s deadliest and infectious diseases. Modern forms and modes of transportation allow and accommodate more people and products to travel or be transported around the world at a much faster pace than the olden days but they also open the airway to the deadly transcontinental movement and transportation of infectious disease vectors. For instance the HIV/AIDS, Due to the immigration, approximately over 500,000 people in china are believed to be infected and among the foreign born Chinese in china have a much higher infection in tuberculosis rate than the locals.

Sports

Internationalization has led to promotion of sports and athletic activities in international competition worldwide. CRBC has sponsored Chinese teams to participate in the world arena, for instance in the FIFA world cup qualifiers and in the IAAF athletic competition. These provide an avenue for CRBC to promote its products and expertise. The recently concluded Chinese Olympic summer games in the year 2012 was a show case of the modern construction technology by the Chinese government whose majority were constructed by the CRBC.

Global natural environment.

CRBC has over the years engaged in Construction methods that sustain the environment and promotes a forestation and reduces the climate change. CRBC global natural environment strategy is the protection of the natural environmental. Factories and industries in the developing countries have also increased their international output and they too experience less environmental regulation and policy hence they have experienced increased pollution on air and also on the surface and underground water bodies.

The international foreign investment and development agencies of developed countries have finally led to a race to the bottom where countries lower their environmental and resource policies and protection laws to attract foreign investment and capital. The reverse of these concept is true where developed nations have maintained high standards of environmental protection policies and laws have experienced an upsurge in investment activities and have eventually created a race to the top phenomenon.( Held, et al., 1999).

The distances, due to internationalization are shrinking between the continents and countries and have prompted the developing and the developed countries to find ways of solving the problems internationally and not regionally. Big organizations like the United Nations are now part of the regulators of pollution and through international agreements like the Kyoto Protocol have undertaken policies like the clean air initiatives to determine monitor and reduce atmospheric pollutants. Global traffic, production, and industrial waste have increased global levels and nature of air pollutants.

Global workforce strategy

CRBC and PRC have embarked on global Chinese language sturdy programs through the internet online facility, Student exchange programs in the universities, award of scholarships to bright students to sturdy in china and many more programs targeting foreign nationals to learn the Chinese language.

The global workforce is made up of the international labor from the pool of foreign immigrant workers or those working in multinational companies and interconnected through the global networking system and production. In the 2005, the international labor pool of workers employed in multinational companies was estimated to be 3 billion workers. The global workforce is currently very competitive and due to specialized jobs becoming readily available worldwide due to the ease of the internet. Workers can be located half way through the world by use of the internet. Multinational corporations can find highly specialized workers that are very skilled, well informed and very experienced. The major problem with CRBC is the language barrier which they have taken measures to address in their strategic plan of internationalization and expansion plan. (Steger, M. 2009).

International migration.

CRBC and PRC have undertaken to allow foreigners to migrate into china with the sole reason of training them to understand and appreciate the Chinese culture and practices including the language.

Many countries have a certain kind of guest worker program with policies spearheaded to meet the countries objective goals and economic targets. CRBC has its own programs to assist needy students migrate to china to attend universities and other institutions of higher learning, meanwhile they also learn the Chinese language, customs, religious beliefs and sample even Chinese food. There is also a program that encourages brain drain to China. This is done by providing lucrative employment opportunities to professionals in order to lure them to work in China.

The following are the strategies that CRBC (China Road Bridges Corporations) can adopt to internationalize.

Adopting Multicenter models of organization

CRBC can break the compromise and settle for an organization structure between centralization and decentralization by shifting or moving some business and functions from their corporate headquarters to regional overseas centers. For example, the construction of roads is currently focused in Africa where the bulk of work is centered. The road construction division can be based in Africa where decisions can be made faster and operations plans can be reviewed without a lot of time wastage. Each section will be responsible for its decision to source,   design construct and market itself.

Ad Hoc collaboration.

In this strategic model the different sections share services as needed and at times coordinate some urgent media and governmental relations through the host country manager. Synergies are literally limited to ad hoc projects and maintain specific mandates. P & L(profit and loss) accountability and the daily operation and strategic decision making remain with the section heads. Success of this model tends to be based on the nature of the relationship dependent.

Dedicated Country-Based collaboration.

CRBC will need a permanent representative or a permanent coordination unit or team whose major role will be to identify synergies (both revenue and cost) that can be realized by directing and coordinating the activities of all the international business units. For instance, one large multi enterprise business industrial firm that has a dedicated and efficient country team of about forty to fifty full time permanent business employees, charged with the responsibility of understanding customer demands, preference and maintaining consistent and fruitful relationships across all business units. The teams overall strategy is on growing revenue by expanding internationally the current client’s accounts and winning other new ones.

Cross-Business-Unit/Management independent council

Under this strategy CRBC has to establish a business council which would include all the local business unit managers and headed by one local country manager. The business council makes all decisions on the cross border business unit engagements in order to capture all synergies and then pulls resources to implement the projects.

Continuous Talent Development

Virtually all international companies operating in foreign countries face significant challenges in the management of the human resource department. While the need for highly trained and experienced, internationally capable and locally computer savvy managers who are particularly rare and scarce Most companies, including CRBC, have short histories of global economic activity and therefore have not yet employed a sizeable cadre of locally based managers with long experiences in Asian oriented management skills and practices in the Asian business practices. The difficulties is not only in employing such people but also in training, developing, rewarding, motivating and retaining them and in creating and achieving alignment with the companies objectives, values and targets.

One of the methods of dealing with this issue is establishing a pipeline of internationally capable locally based managers. Though the local talent pool is expanding most internationally based corporations are still managed by foreign expatriates. Some companies relate this inadequacy to the fact that it’s difficult to find the right talent and experience for the top job. The job description is very demanding as the foreign companies need managers who can communicate effectively with their head offices, control special situations and liaise with the head office for advice in investment procedures, financial returns and soliciting for resources and expertise locally and internationally.

The potential manager should also possess local skills, knowledge and networks so that he can get issues done. In addition he should also have the skills, interest and ability to adapt to the local and global cultures, religion and beliefs. The manager must also be capable of leading a fast growing business in an environment that’s has insufficient and inadequate infrastructure.

Identifying, managing and Grooming High Potential local talent

Effective practices in this field include planning for the Human resource requirements at least twelve to eighteen months having in mind the organization’s growth potential, attrition and staff development needs. Successful companies need all top managers to identify and develop high potential employees in their management or organization, having active teams which are effectively coached and developed with equally talented high potential managers and also to limit the number of expatriates both in top management and middle level management positions.

CRBC also should limit the number of years their expatriates should stay in their host countries to a maximum of three years, in an effort to develop local talents and also to cut down on costs. During the three year period, the expatriates have three clear and defined objectives: to set up the organization, identify, train and develop the local staff and find the successors for their positions. Expatriates managers who fail to achieve their objectives and who can’t find the right successors should forfeit their bonuses in their final year.

Develop leaders with global perspectives.

CRBC should train potential managers who have a broad and global perspective. It’s very important to assist high potential local employees understand the nature of the company and how the company’s center operates and functions to allow them to develop some relationship with the head office which some day they may need in case they are to replace the expatriates.

Capturing the Benefits of localization.

Manufacturing and trading in foreign developing countries means huge savings in terms of cost savings as well as operational advantages and strategic locations. Companies can employ highly trained, skilled and flexible low cost labor rates in place of very expensive and less flexible manpower. The presence of raw materials and other amenities which are available locally makes the foreign branches more profitable and better placed to achieve their objectives and strategic goals.

Forging Effective Alliance and Partnerships

CRBC has to reach out to other external parties for immediate resources and local expertise. CRBC has to view their suppliers, its distributors and other partners in the construction industry as valued members of their organization. Offering them free training, consultation services, and providing basic financial motivation and incentives such as a way of participating  in profit sharing mechanism and also providing a limited number of distributors in order to achieve more control and influence.

Its imperative for CRBC to be seen as committed to its developing partner for the long haul. A company that’s not willing to invest in facilities, plants and infrastructures in a country that’s it’s operating in, projects a clear message that the company is only there for a short term period and maybe interested only in its business operations only and later after maximizing its profit return back to their home country. It’s obvious the suppliers would have no reason to deal with such a company fairly as they would feel short changed and would have no reason to treat the company as a long term partner. There would be fears that the company may just pull out if the market fails or if their profits dwindles. Investing in developing countries demonstrates long term commitment.

CRBC believes that there are many untapped opportunities than threats to better leverage partnership and alliances.

 

References

Lodge, G (1995). Managing Globalization in the Age of Interdependence. Kuala Lumpur.

Golden Books Center

Weatherford, J. (2004). Genghis Khan and the Making of the Modern World, NY: Three Rivers Press.

Hobson, M. (2004), The Eastern Origins of Western Civilization. Cambridge: Cambridge University Press,

Steger, M. (2009). Globalization: A Very Short Introduction. New York: Oxford University Press.

Saggi, K. (2002). Trade, Foreign Direct Investment, and International Technology Transfer:  World Bank Research Observer

Held, D. et al. (1999). Global Transformations Cambridge: Polity Press

Larsson, T. (2001). The Race to the Top: The Real Story of Globalization Washington, D.C.: Cato Institute

Giddens, A (1991). The Consequences of Modernity Cambridge: Polity Pre

Albrow, M., King, E. (eds.) (1990). Globalization, Knowledge and Society London: Sage

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