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How multinationals in China and Chinese companies expanding overseas pursue high-performance finance
In the new multi-polar world of multiple centers of economic power and activity, China is becoming a key player—both as a market for multinationals and as an economics player in its own right. Accenture surveyed both multinationals coming into China and expanding Chinese companies to understand how these companies are reaching for high performance to compete successfully.
The globalizing world is becoming multi-polar—and China is center stage of the new world order.
Globalization is shifting into a new phase, one that Accenture calls "multi-polar." By this, we mean that there are now multiple centers of economic power and activity—no longer do the United States, Europe and Japan rule the roost. In this environment, globalization is a two-way process, with emerging centers of power no longer just providers of low-cost services and products but also active shapers of global economics.
China is a major power in the multi-polar world, offering tantalizing opportunities for multinationals while Chinese companies are expanding beyond their borders. Accenture undertook a survey to understand how both groups of companies were navigating this multi-polar world. In particular, we asked them how their finance function—a key enabler of high performance according to Accenture High Performance Business research—was helping them to meet their objectives.
Accenture surveyed more than 260 companies. One group of companies was multinational and Asia Pacific companies already in, or planning to go to, China; another was Chinese enterprises already operating overseas or planning to do so.
Multinational and Asia Pacific companies already in, or planning to go to, China were asked eight questions relating to their operations in China and specifically about their finance function.
Among these questions were:
Chinese companies operating overseas—or planning to do so—were asked a similar set of questions.
While both groups of companies are experiencing slightly different challenges when it comes to expanding beyond their normal markets, both must meet those challenges while remaining competitive. How to do so means pursuing high performance through excellence in the finance function.
Both companies report that the markets they are entering are highly complex and competitive. Their finance functions—key enablers of high performance—are required to do multiple things. These include getting the operating environment standardized and controlled; and undertaking performance management and analyzing how the company is competing against its peers.
The companies realize this. The multinationals coming to China are pursuing more advanced finance initiatives, and the Chinese companies plan to do the same in the next two years. For many, leveraging shared services or outsourcing forms an integral part of the strategy to use the finance function to help the enterprise as a whole become a high-performance business in the new multi-polar world.
March 5, 2008
Outlook from Accenture
Outlook is a journal of high-performance business.
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