2010-03-14 McCorn? (Rick post 7)

I slept very well at our accommodations, the four-star Broadway Mansions Hotel near Shanghai's scenic Bund district. After breakfast at the hotel, we began our Chinese company visits with a quintessential American corporation.

Nanzi outside of the McDonald's we visited in Shanghai

The Shanghai McDonald's was a great example of how a global organization has to reshape itself to compete in regional markets. We met with Operations Director Andy Wu as well as the store manager and several corporate representatives.

One of the first things we noticed was the menu is smaller than a typical American McDonald's and features different items, such as cups of corn, taro pies, grilled chicken burgers and spicy breaded chicken wings cooked fresh in the store.

There's a lot of chicken on Chinese McDonald's menus because Chinese people tend to eat more chicken than beef. In fact, Mr. Wu explained KFC is McDonald's biggest competitor in China and actually has more Chinese locations than McDonald's due to this cultural culinary preference.

Our hosts told us Chinese McD's restaurants place greater emphasis on creating a "hip" environment than U.S. McD's and that Chinese would be more inclined to think of McD's as a cool place to work. Chinese McDonald's also employ hostesses in a pink uniforms who welcomes guests and host special events like birthday parties.

But in many ways, the similarities in the Shanghai McD's to an American McD's were more striking than the differences. George, one of our class members, is a McDonald's corporate office employee and said if instructions on the machines in the kitchen hadn't been in Mandarin, he wouldn't have known he was in China. He said many machines were arranged the same way as in American stores and reflects that McDonald's uses a high degree of standardization at its facilities. He also said they used the same concepts, such as using just-in-time inventory techniques to reduce the needed amount of in-store supplies.

But I think the most interesting part of this trip was learning more about what it takes to really do business in China. The government plays a large role in the Chinese business world and our hosts told us maintaining good relationships with key government figures is a necessity.

This is one of the major concepts we learned in our course -- the idea of guan xi (GWAN-shee), or the Chinese culture's rules for social networks and doing favors. This is a very important part of Chinese business culture because who you know and being able to ask them for favors is extremely important in getting things done. Mutual trust is very important and these relationships can take years to build.

George related an anecdote about when McDonald's first tried to expand into China. He said McDonald's had already established its headquarters in Beijing but the government wanted to give the land to a different company as a favor. McDonald's tried to fight and lost its legal challenge. The government is truly top dog in China and even a corporate titan like McDonald's has to play by the rules if it wants to capitalize on this burgeoning marketplace.

The Shanghai McDonald's was the most fun I've ever had at a fast food restaurant and it was an easy way to begin our introduction to the Chinese business world.

After McDonald's, we toured a silk factory. We learned about how silk is made, saw workers harvesting silk from silk worms and got a chance to do some relatively cheap shopping for silk merchandise.

After our visits, we got to spend some time at the amazing Nanjiang Road district. We walked around and did some shopping and admired the Shanghai scenery.

Danelle, Brittne and Nanzi at Nanjiang Road