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The image of MNCs being destroyed in China
Last Updated(Beijing Time):2005-04-11 09:24

By Wan Jianmin

As for the famous brands in many MNCs, it seems that the nearly past March has become a "black March" ¨CHeinz, KFC, Carrefour etc, are involved successively in the trouble of "Sudan1", P&G's SK¡ªII is charged for composing harmful components and effected till now. Johnson's baby oil and many other products are accused of containing the deleterious component of olefin oil in India; Uni-lever's Lipton instant tea is suspicious of containing too much dosage of fluorid¡­¡­

The "black March" makes us think twice: what's wrong with MNCs? What cause the "ship-overturn" in the foreign brands which have been famous for their high quality all the time before? Should we reevaluate the status of MNCs and the foreign brands?

In fact, the function of MNCs in any country is neutral. They are neither kind-hearted savers nor predatory exploiters. The problem is that Chinese government have paid much attention on political favorable treatment to MNCs and neglected the administration over them. Some officials in local governments just care about how much a project introduced can contribute to the GDP. Actually, the GDP growth brought about by the introduction of MNCs is transferred to their mother countries in great proportion. What is left to us is just a nice number.

In the past, MNCs are not only the investors and suppliers of high-quality products, but also the representatives of advanced management methods, advanced conceptions and even advanced living modes. With such an absolute cultural strength they tend to conquer the thinking circles, media, supervise department, consumers of the emerging markets easily and get some unfair advantages.

However, with the development of the Chinese society, the requirements towards MNCs from all circles of the society will be improved higher and higher. Consumers can protect their own rights and interests by laws and consensus much better than before. If some companies fail to advance with times, or even continue to adopt multiple norms in their global markets, the consensus may change sharply from extreme esteem to extreme disappointment and finally develop into holistic focus and retrospection on behaviors of such a group. The collective exposure of foreign products since March is just a turning message

After the exposure, most MNCs have shown that they are good at using the government relationship, authoritative organization relationship and handling the crisis legal business. So far as a series of latest events are concerned, P&G have made a very accurate judgment of the legal business from the very beginning. P&G and Johnson succeeded in their coordination quickly and asked the Ministry of Health to clarify the related technology issues. The clear declaration made for Johnson by the Ministry of Health gave the decisive word at the moment of truth.

In the former concept, MNCs are models in taking social responsibility. In fact, to be more exact, MNCs are models in complying with the law and making good use of it. A part of companies' morals is mainly from the awe to laws. If our laws are not consummate enough, or the supervision and enforcement of laws are not sufficiently effective, and great market profits can be got by "do in Rome as the Romans do", it is natural for the MNCs to change gradually.

Obviously, it is not a single event that so many MNCs have problems in product quality one by one in such a short time, among which we can find out some meaningful messages.

Firstly, this message indicates our change from the "foreign capital superstition" in the past to the present impersonal assessment of foreign capital. The degree of MNC superstition is decreasing. As a matter of fact, the fact that so many foreign brands encountered crises collectively can be taken a small symbol that our policies in the introduction of foreign funds have changed¡ªfrom now on, much attention will be paid to the quality in the introduction of foreign capital and the blind pursuit for quantity will come to an end.

Undeniably, foreign capital once played an important role. But as the economy develops to this stage, we need to reevaluate the function of foreign capital in the present situation. For example, excessive favorable treatments granted to foreign capital have caused a "crowding-out effect", which makes a lot of local enterprises feel great pressures in their development. Even many local enterprises with sufficient-advanced technologies are forced to seek for development in poorer developing countries. The economic development of a country depends on the mightiness of local enterprises and revival of their own brands. It should be highly recognized that the present foreign capital introducing policies do have some disadvantageous effects on the local enterprises' development.

Source:CE.cn