Summary
McKinsey, to my great disappointment, recently put out this article on the "befuddling" and "invisible" power of the Communist Party branch committees (which are normally resident in large businesses) in China.
My response: It is nowhere near as complex as they make it seem, plus I have never seen any party committee within a business in China try to take anything more than token power. If you play it right, the existence of the party committees within your China business can be a big plus.
Analysis
McKinsey, to my great disappointment, recently put out this article on the "befuddling" and "invisible" power of the Communist Party branch committees (which are normally resident in large businesses) in China. I note my disappointment because usually McKinsey has quite interesting and accurate articles about China on their website. So I was surprised by the rather stereotypical-media-frenzy-style of this article, i.e. China is mysterious and no one can understand it, so you need to hire expensive consultants like McKinsey to figure it all out for you.
My response: It is nowhere near as complex as they make it seem, plus I have never seen any party committee within a business in China try to take anything more than token power. Sure, they want to stick their noses into various issues from time to time. Sure, they may want you to pay for new sofas for their offices so they can sit around drinking tea all day in comfort. Don't let it worry you. Buy them their sofas and keep them happy and comfortable, and you will rarely see them poke their heads out of their office door.
Is this strategy magical or mysterious? No! It's just common sense. You'd do the same thing if your doddering business-founder grandfather still had an office in your manufacturing site in the US...just keep him happy, make him feel like he still has some influence, give him "face", and everything will move forward smoothly. On the other hand, if you ignore your grandfather, show him no respect in front of the staff, and try to kick him out of your factory site...then you will learn a tough lesson and find out exactly how much power your grandfather has when he wants to cause trouble using his network of old connections...Beware!
Why I am using this "cute" grandfather analogy? To make it clear that handling an issue like the Communist Party branch is not really as complicated as it may seem (or as McKinsey may want you to believe). Just use your common sense. People are people, and you will find that the cranky old communist party branch guys are actually very similar to your cranky old grandfather. They want to be treated with some respect, and be given credit for what they did in the past, but deep down inside, they know that they are out of their league in this new business world.
In fact, if you play it right, the existence of the party committees within your China business can be a big plus. They normally handle the labor union and in some cases are actually the head of the union, so they can solve lots of sticky employee issues for you. Also they have good guanxi with the government (for obvious reasons) so when you have some "oops, we did not know about that regulation" problems, they can help you sort it out. Again, in order for them to do this, you need to have built a good relationship with them over time. Include them in issues of concern to them. And don't forget to order that new sofa for their office also.
