BA APPLIED MANAGEMENT Y3 SEM1 BSMAN 3007: INTERNATIONAL BUSINESS MANAGEMENT

HOW DOES CRISIS MANAGEMENT IN CHINA

WERE DIFFERENT FROM THE WEST
COUNTRY? : A REVIEW OF LITERATURE AND
DIRECTION FOR THE FUTURE RESEARCH
AUTHOR BY YJING WANG AND DANIEL LAUFER

INTRODUCTION
International business state that contain of business transactions with third parties and it

involve with more than one country. And also, international business consist with trade of goods,

services, technology, capital or knowledge over national borders and at transnational or global

scale. According to Thomas Lindner, Jonas Puck and Alain Verbeke (2020), International

Business include some form of reversion analysis and this authors state that International

Business access to collect data through controlled the experiments whether that the participants

were randomly allocate to control the groups or other methods of make sure monitoring are

independent.

In addition, International Business involves many activities in the organization such as

exporting and importing, international investments, international licensing, international

Franchising and international management contract. In research based on International Business,

International Franchise is one of the system that contains the right of licensing to duplicate for

achieve a goal in business and also be successful in business. Moreover, International

Franchising state that the franchisee follows the order given by franchisor regarding the

appearance and company image that authorized the premises. Besides that, the franchisor agree

to the franchisee to have an exclusive power to distribute the products and services in initiation.

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PURPOSE OF BACKGROUNGD STUDY

The purpose of the research is to know the information about the China’s business tactics,

culture of the country and also their strategy to solve the crisis in their company. In this research,

I know that China’s multinational companies involved in many high profile crisis in past few

years such as McDonald have Sanlitun brand in Beijing were offence by some customer for

selling food after the expiration date in the China Television Channel in 2013. At the same year,

Shangxi Lihai Group who were KFC poultry suppliers also accused using growth hormones to

fed the chicken.

For the research, we know that China have crisis management and analysis whether the

crisis in China is different when compare to the West Country like United States of America. In

China, there were some serious factors that can impact on evolution and phenomenon of the

crisis management. In the article state that China management have some tactical to solve the

crisis and have some suggestion and also the way for the future research. For this assessment I

research there are hypothesis, methodology, implication and also have some recommendation for

apply in future organization. Besides, the strategy to solve the crisis were indicated from

assessing the literature which expanding a strong relationship business with Chinese government

to reduce public apologies and follow barnacle strategy to changing the topic to divert the

attention from the crisis.

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HYPOTHESIS

A COMPARASION OF THE
CRISIS AND SOLVING
CRISIS SOLVING
100 90
90 80
80
70
60 50
50
40 30
30 25
20 10
10
0
2013 2014 2015

Chart 1.1

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FACTORS THAT IMPACT THE EVOLUTION OF CRISIS IN CHINA MANAGEMENT

 Based on the chart 1.1, the factors that can impact the China management were related to

the political, cultural and social media. According to Dhanesh and Sriramesh (2018), the

cultural context were vital to understanding when inspect the effectiveness of the crisis in

the global environment.

1. Censorious views from the China public online news.

In this article state that, people in China uses social media platforms became extensive over

past few years. In 2016, researches said that there are over 600 million peoples were using

Internet more than users in United States of America. However, compare to United States of

America there are people using social media regularly to connect with others but in China

people using social media where humiliate the digital platforms to express their opinions.

Example, during the KFC in China having crisis in 2012 the company try to solve by

changing supply chain and they responded in the micro blog that the problem was a rumor

and there were no ethical evidence by their poultry supplier. However, 26 percentage of the

China’s people mocking the KFC blog widely. In addition, compared to United States of

America they state that the people in there responded in different ways. For example, in 2014

McDonald have the same crisis in United States of America but the people would not bother

the issues without any solid evidence based on this problem.

2. Government were regulated in media for crisis reporting

Based on this situation, the China government were engaged for one of the advanced social

media’s surveillance system in the global such as firewalls and monitoring system.

Furthermore, their systems used to shutting down the publications and websites such as

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Search Engine, Microblog and WeChat. China government would control the activities

against the social media and they have Internet Censorship to control the activities from

franchise like promos and offers.

 Based on the chart 1.1, it shows there are more criticism issues in 2013 and there are less

strategy to solve the issues. However, there are some barnacle strategy to divert the topic

or attention from the crisis. By using this technic, there are more issues reduced in 2014

and 2015.

Methodology

Serious views from the Chinese public express online news.

FACTORS THAT
CRITICIS IN CHINA
Government were regulate media in crisis
MANAGEMENT

Intentional
Accidential
CRISIS TYPE

Barnacle strategy
Changing topic
STRATEGY Developing strong relationship with China government.

STRATEGIES THAT USE IN CRISIS MANAGEMENT BY COMPANIES IN CHINA

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About this article state that the researches use some relevant key theories that used in

United States of America were related to crisis management and this theory worked

successfully and this theory involves in some framework visualize how the peoples interpret

and react to crisis. There are some strategies were created by China’s company to solve the

crisis.

Barnacle strategy and changing topic

According to the review of the literature, barnacle strategy and changing topic can distract the

people’s attention from the crisis that happen. The purpose of this strategies are use in China for

unique characteristic of China’s people and it involves Marxism. In 2017, Gross Domestic of the

Product were increase over 50 percent represent by company in China and the China’s economy

were different from the United States of America. Moreover, the barnacle strategy refers to help

to cover up the critical issues that face by higher authorities.

Developing strong relationship with China government

China researches create Guanxi technic that refers to the good relationship society with

other individual. In other word says that, persons connections in social networks. This technics

involve regular agreement and reliable and many importance of relate to one to another person.

Based on this article, China’s government was seen as a key factor for resolving the crisis in

China. Example, in 2010 after the media was report that employees attempt suicide because they

been accused of operating manufacture electronics as a sweet shop. However, China government

used Guanxi technic to develop the image of the country and centralized political system that

driven by three factors.

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BA APPLIED MANAGEMENT Y3 SEM1 BSMAN 3007: INTERNATIONAL BUSINESS MANAGEMENT

According to this theory, the laws and regulation of China were different compare to the

West Country and the legal regulations are relevant to the business are subject to understanding

in China. In addition, benefits of this Guanxi technics, government can help to deal with the

companies such as how to government respond to the companies action.

IMPLICATIONS TO THE ORGANISATIONS

Based on this article that I research, there are some uncover factors that make crisis in

China whether different crisis management strategies when compare to the United State of

America. In terms of this implications, the high authority companies need to rethink using crisis

management strategies often in China. Example, developing strong relationship with government

known as Guanxi strategy. In this research, I analyze that the crisis management strategies is

particularly useful to the multinational company because it helps to make quick decision and

prepare for next crisis.

The key component of the crisis phase include organizational learning which the vital for

researches to identify ways to learn easily from the crisis. Moreover, there is one way to learn

from the crisis to conduct through investigations. For example, the companies invest regularly to

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turn up third parties to conduct the investigations of the crisis. However, the advantages of the

external investigation were increased that the stakeholders agree to execute the recommendation.

CONCLUSION

In this article I analyze that the political and the social media system in China need to

rethink systematically because the factors that I analyze known more crisis management happen

in China. However, China had biggest and advanced surveillance system but they must support

companies during crisis. More than that, I learn many strategies can use to implement in

organization whether they face some crisis and also must understand the crisis process because

they have to identify the main problem by using crisis strategies to reduce the crisis. Finally, I

prefer they might use barnacle strategy to divert the big impact of the issues and help to avoid the

number of crisis from increasing.

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REFERENCES

Dhanesh,G.S.,andSriramesh,K.

(2018).Cultureandcrisiscommunication:NestleIndia'sMagginoodlescase.JournalofInternati

onalManagement.doi.org/https:// doi.org/10.1016/j.intman.2017.12.004.

Xin,Z.,2017.NumberofcentralSOEsnearing100.ChinaDaily.

Retrievedfrom.http://www.chinadaily.com.cn/business/2017-03/22/content_28633883.htm.

Waddell,K.,2016.WhyGooglequitChina and why it’s headingback. The Atlantic

Retrievedfrom. https://www.theatlantic.com/technology/archive/2016/01/ why-google-quit-

china-and-why-its-heading-back/424482/.

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Lindner, T., Puck, J. & Verbeke, A. Misconceptions about multicollinearity in

international business research: Identification, consequences, and remedies. J Int Bus Stud

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Driffield, N., & Munday, M. 2000. Industrial performance, agglomeration, and

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Enright, M. J. 2009. The location of activities of manufacturing multinationals in the Asia-

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