KFS (KM) in China:

China has experienced a tremendous growth over the last decade and more and more foreign companies invest in the country of the middle. While in its beginning, investments were mostly focuses in the area of manufacturing, companies are seeking to create more value on-site. Creating value means innovation and is the only way a company can sustain competitive advantage in the long term. The shift from simply executing concrete work schemes such as a worker in a factory does to value added work such research and development, marketing, consulting, finance, etc. is also a shift in requirements to the employee. Nowadays, it is not sufficient to simply learn work patterns and execute them with ones hand but instead, employees need to learn, combine information, work in a team, create new knowledge and share it. The main tool of the employee now becomes the head. Every developed country has experienced this shift and many companies have developed strategies which they call knowledge management or knowledge focus strategies, that is have set up tools and procedures to maximize the value created from the intellectual resources the organization has. However, as we shall see, most of the thought leaders in this area are not Chinese, thus have not taken the cultural aspect of the people of this large country into consideration.

Thus, this shift undertaken in China means that foreign companies need to overcome a number of challenges which they might have faced in their home country before but not necessarily in the same gravity. These challenges result from the differences in the Chinese culture compared to Western(1) cultures . Problems are therefore not of technical nature, solvable by an engineer but people related such as conflicts due to different styles of communication, thinking patterns, values, etc which are psychological or organizational nature. If any undertaking in China is to be successful, one needs to be aware of these differences in order to identify problem sources or synergy effects a priori and implement measures.

1 by ‘Western’, the author refers to USA and Northern Europe