Asians in general don’t like foreigners working in audit and compliance. We tend to investigate too deeply and question relationships that are part of their business mores.
Even in an “international” business your chances of being promoted are far lower in Japan or China. If you are good enough to be promoted in China or Japan, why stay and fight entrenched xenophobia? I’m sure you could be making more money in Europe or in the US. I guess this is a reason I’m hesitant to return to China. A distant business pal of mine thought as much:
I worked on the nominations committee of an “international” firm in Japan for 1 years as a non-executive director. I was only imported because I was already established in the UK, where I was an executive director on one board and a non-executive director on another board (audit committee) until both companies went under during 2008/9.
While I was in the remuneration committee, I did recommend promoting a white guy, but the other Japanese on the board immediately shot down my recommendation with striking xenophobic/almost racist comments about the guy being too loud-mouthed/not understanding company culture, etc etc. It’s really how unabashed this xenophobia is and how much it’s tolerated that is surprising.
Basically, in Japan, the “Oh I don’t want to work with him because he’s a gaijin” line is an automatic reply and not frowned upon. At least that was my impression. Even in Japan, a lot of the members of international companies who decide whether you rise up or not are mostly Japanese and are mostly men who simply do not want a foreigner on their team.
I know Japan is very different to China, and is much more developed, but I did experience enough of that xenophobia for it to be a problem. Another basic assumption in China is “guanxi”. There’s material there for another post, but “guanxi” is/are your “connections” – your specific social cachet with a specific person. It works like a series of favours, that are sometime implicit, and that get developed over time. You swap favours for favours. A Chinese friend is really a friend – they’ll do anything for you. But they expect the same, and they expect much more than a Western friend would. And when you’re a foreigner, your “guanxi” always comes second to a Chinese person’s.
When I was in China, I worked in a compliance role for a European electronics company for a quarter. The data the European headquarters were getting back from China was poor – which meant that assessing governance risks, regulatory compliance and projecting growth was a dark art.
When I began, I was tasked with migrating their East China operation’s governance and compliance from an ad-hoc Excel workbook system to Sage’s SAP, a continuous monitoring tool for customer relationship management. This improved data would be used internally and externally for forensic data analysis, assessing governance risks, regulatory compliance and growth projections. My position in the company required me to train 5 regional teams across East China in the use of this new software , and then monitor compliance on a weekly basis.
None of this was immediately apparent at the interview: I was 20, and I expected to be making coffee and photocopying, and then rolled out to be the token attractive foreigner at meetings. The last part was true, at least.
When I got there, I sat in on board meetings, was given guided tours of model factories, then banqueted. Excel spreadsheets were later released to me, and I wasn’t allowed to investigate manufacturing or sales in person. The team I helped run trained 5 provinces, who collectively sold about a quarter of a billion USD every year, but, despite the obvious problems in dealing with that volume of data on adhoc spreadsheets with no security, I encountered a lot of resistance from the sales teams who fed the data into us. If you had a good thing going, a cozy relationship with buyer or government official, maybe some “immaterial” kickbacks, you really don’t want someone investigating every step of your sales. Especially not if they are a foreigner, and don’t “understand” Chinese business mores. Towards the end, I was told a lot that I didn’t understand how things worked in China, despite Europe wanting specific standard in place to avoid legitimate problems. At the time, the new headquarters they moved into at the previous period was falling apart, because it wasn’t built to European standards, and the air conditioning failed as a result. This caused the glue used in the tiling and carpets to degrade rapidly, which meant that the building had to be gutted floor by floor and rebuilt.
Not everyone knew how good my Chinese was, so I was able to “overhear” and identify some governance risks, and I reported these to management. I don’t know if the information made it back to Europe, but I led my team well, and we came top of the rankings all across China, despite being the largest in terms of numbers overseen and sales volume. The system I helped set up caught a few sales people who were non-compliant, but dealing with that was definitely outside my remit. Once sales kept coming in, and graft didn’t rot the place, I don’t think management cared. That was the Chinese way. Like the HQ building: once it was done, it was fine.
I finished the project in a quarter, ahead of schedule, but left China earlier than the full year. Things got less pleasant in the office when non-compliance was investigated, when previously it had been let slide. Sales people were a lot less welcome when I went from “handsome foreigner” to “auditor”. I knew something was up when people started coming in for interviews for a compliance role, and I was obliquely asked my opinion on them. I wasn’t staying forever, as I had to return home to finish college. Eventually, as I was due to finish, I was called in for a review. They were pleased with the project, but wanted someone Chinese to take over.
I wanted to be kept on, as I planned on working more and doing some traveling, but they weren’t open to that, because taking on someone Chinese was a priority over a foreigner. As Chinese as I hoped I sounded, I would never truly fit in with them. I guess it aroused resentment that I was paid more than some experienced, older staff too.
Over the week, I dumped the last of my whiskey and Irish junk on them, and they called me in for one more meeting with the Chinese big boss. He advised me in a gnomic fashion to “know myself and how I appear.” I thanked him for his time and mentorship while I was there, and he said he’d act as a reference for me. Which was nice of him, and saved face for everyone involved. His English was terrible, and I don’t think he was ever called on to provide a reference for any interview I’ve ever had since.
The whole experience made me appreciate working back home in a country that was more individual and cosmopolitan.