Research On Conflict Management Of Foreign Enterprises Involved With Public Utilities Management In China

Starting from1980s, public utilities, just like other businesses in China, entered the era of Reform and Opening-up. Local governments, particularly those of medium and large cities, hoped to develop new market-oriented system and mechanism of public utilities management through privatization and such system and mechanism would contribute to the overall development of the city as they were supposed to improve economic efficiency, advance development and enhance social equality. In the context of privatization, many foreign enterprises got involved with public utilities management in China. Water distribution was one area that privatization happened most frequently, followed by public transport and urban gas distribution. However, due to differences in culture, management philosophy and management model between Chinese and Western companies, foreign enterprises faced with many conflicts and challenges when they participated in public utilities management. Whether and how these foreign enterprises achieved effective management of the conflicts was not only a concern about the survival and development of foreign enterprises involved with public utilities management, but also a concern about the success or failure of China’s reform on public utilities management. More importantly, it was a concern about public interests.Since there were abundant research on public utility reform from the perspective of governance, policy and regulation but the research from the perspective of foreign enterprise was nearly non-existent, this paper will initiate study on foreign enterprises’ conflict management after their participation in public utilities management. The paper will examine both external and internal conflicts defining the company itself as the boundary for external and internal. For external conflicts, conflicts over different interests of regulator, the public and stakeholders will be reviewed while for internal conflicts cross-cultural conflicts and conflicts over different enterprise systems in day-to-day operation and management of the company will be analyzed. The paper then put forward recommendations for foreign enterprises’conflict management in China.