UMD LSBE Study-in-China 2008

Tuesday, 27 May 2008

Chen Wei is the Vice President of Affiliated Computer Services, Ltd. (ACS) www.acs-inc.com located in the Tianjin Economic Development Area (http://en.wikipedia.org/wiki/TEDA or http://www.teda.gov.cn/cms/html/5/index.html if you would like to translate the Chinese) about an hour and half from our Hanting Hotel which is situated north of the west gate of Nankai University in Tianjin. She currently earns about $70,000 per year in this position while her entry-level employees earn about $3,800 to $5,500 per year depending upon their software or operations expertise. She referred to a “passive acceptance� (with respect to the pay disparity between team members from abroad (however, we could more than double [I estimate 217%] the figures above given the increased purchasing power in China). This acceptance is perhaps an example of the Chinese phrase of “eat the bitterness�--they are taught at a young age to suppress their emotions (McGregor 19).
She began her career journey many years ago when she was placed into the scientific tract at her secondary school. She learned “scientific English� and advanced math? In college and was placed into a state-owned enterprise that produced “fork lift trucks� (this was her assigned ‘work unit’); she had no choice as her school-teacher parents had no connections to counteract the centralized planning of the state. This enterprise then engaged in a joint venture with a company from Denmark. She had attempted a transfer to this joint venture, but again she was not allowed to exercise her will as the government controlled the “head counts.� She managed to be placed in a Coca Cola Joint Venture as a translator/secretary, then somehow spent 2 years in Denmark while her son remained behind with her parents. She worked (’99-’00) on an integrated platform for HR at the various locations of Motorola in China, India and England. In 1993, she had joined Motorola in China and stayed with them for 8 years. ACS had signed a contract with Motorola in 2002.
Her unit is a $2,000,000 cost center with 120 employees, 90% being university graduates at an average age of 27 years; her unit is evaluated on a cost per employee basis with additional employees approved by corporate in Dallas as business requires. Their business is growing significantly. Currently their business is split 50/50 between government and corporate businesses with 26% of revenues coming from Information Technology outsourcing (ITO) and 74% from Business Process outsourcing (BPO). Clients include the states of Texas and Iowa, the US Air Force (though the US branch handles that account due to security concerns), and many other large companies like GM Global (procurement and payments) who have disaggregated their business processes and information processes sufficiently to allow lower-cost outsourcing. She reported a meager 15% turnover rate to be significantly below that of India to which she claims to have a cost advantage; the Chinese government is really pushing to diversify from manufacturing into services and thus is doing much to facilitate these businesses.
They have 750 locations in 100 countries (including Bangalore, India as one of the 17 outsourcing branches) and 50,000 employees with around $6 billion in sales. Their sales and marketing function remains in the USA along other functions such as legal, facilities management, IT networks, HR, SBU’s, and leadership. In 2005, they acquired Mellon Consulting in the US thus adding a lot of HR services to their offerings. Her most challenging leadership challenge is managing their matrix structure, SBU’s and subsequent dual reporting, etc… Given that sales and marketing is in the US and does not call on Chinese companies AND given that Chinese companies are interested in ‘getting bigger and stronger’ as opposed to reducing costs like US companies, ACS does very little to no revenue-generating business in China as these companies have not taken the time to disaggregate their information or business processes sufficiently to outsource them. The only reason that a Chinese company might use the services of ACS is if ACS could help ‘make the Chinese firm bigger and stronger’ (even at greater expense). This local branch of ACS had 17,000 square feet, 150 cubicles, a conference room, a training room, 4 breakout rooms, and a cafeteria. The VP’s office had a Chinese phrase on the wall that read something along the lines of fresh breeze and breath, suggesting that if you take time to breath and appreciate the breeze that you will come up with fresh ideas (Dahui Li).

The Tianjin Economic Development Area was started on vacant land in 1984. It is now the core of the Bin Hai (Shore of the Sea) economic zone of 33 square kilometers. Tianjin has 600 years of history as the “harbor of the heavens (or emperor, who was the son of the heavens)�. The rivers were used as arteries of transport for years thus increasing Tianjin’s importance, along with its proximity to Beijing.

Lunch was at the cafeteria located at the Nankai University campus for first-year students. I sat with a couple workers: one who worked in Marketing for China Mobile and the other in something technical for Tianjin TV downtown. They had both graduated from the Tianjin Institute of Technology together. We talked about Chinese society, culture, communication styles, differences and similarities. They both seemed to prefer the American direct style of communication to the nuances of Chinese.

The conversation continued via cell phone text messaging as we moved onto the TEDA soccer stadium that was opened in 2004 after 2 years of construction. Tickets range from 50 RMB (6.9RNB/$) to 180 RMB for the RED VIP seats (red is a great color for the Chinese). It was reported that the seat colors randomly alternate between red, orange and grey so that if there aren’t a lot of people in the stadium as the camera pans, it will not be that obvious. Though there may be a few fights, fans aren’t that roudy. Beer is sold in paper cups only.

There was a lot of construction going on around the stadium. New buildings, roads, etc… I noticed a fair number of vacant, yet new, buildings as well. The sky there was bluer than hazy Tianjin. The streets were less dense (though those of Tianjin seemed to be less dense than Mysore or Banglore in January 2008).

We have observed no students with physical handicaps. According to Dahui Li, this is because they must pass a physical exam prior to being accepted into schools in China.

The Tianjin Coco-Cola Beverage Co., Ltd. Relies on the phrase “make yourself happy by making your mouth happy� as the loose translation of Chinese Coca Cola. Sprite translates to “snow jade� while Fanta translates to “scent reach� (per Dahui Li). Pepsi, on the other hand, translated to “hundred things� which sounds very close to a way that Chinese think about how to make a fortune in business. The plant has 300 people working the production line (100 per shift). There are two warehouses with one there and the other near our hotel in Tianjin. We observed the water treatment plant, the syrup mixing, the sugar dispensing, the movement, filling, and capping of glass and plastic bottles… Very little Diet Coke is present here. Apple soda is, however.