ABSTRACT
As weil as the increase in strategic importance that companies give to the Chinese market, it can also be observed that many companies have adjusted their strategies in order to improve their performance. Indeed, the Chinese market always presents significant challenges for multinational companies. Cultural difference, regional economic disparity, insufficient managerial talent, and distinct consumer behaviour can be obstacles for the success of MNCs in this specific market. Management localization is one of the solutions
Management localization is not a recent phenomenon. This trend was started several years ago. While the increasing ftows in direct foreign investments and the proliferating number of foreign transactions in China are pushing up the absolute number of expatriate employees, the relative ratio of expatriates to local managers is declining noticeably and steadily. Most foreign companies, in effect, do not plan to increase the percentage of expatriates in the next five years (Tian 2004). In some areas, the localization phenomenon is even more pronounced. A survey conducted by Consulting Hudson shows that 87% of companies based in Shanghai are not planning on integrating new foreigners. Local talents are beginning to assurne top management posts (ChinaBiz 2005).
