Relationship Mapping from Technomic Asia
Many businesses have entered into relationships in China that have quickly soured, in part because they did not know their partners well enough. Assessing a potential alliance or business partnership in China is particularly difficult where Chinese government and business structures often lack transparency, obscuring the business situation or the players involved. Often, lack of accurate documentation, the inaccessibility of information in the public domain, and questionable accounting practices obscure a candidate’s operations. Even determining which individuals have the authority to make a deal can be a major challenge. Technomic Asia’s Relationship Mapping process cuts through this confusion, providing clarity and insight to support good decision making.
The Relationship Map
Relationship mapping is a method of visualizing, describing, and analyzing all the relationships (individual and organizational) of an existing or prospective Chinese business partner by establishing a dynamic “map”. This map provides background on the target company by showing direct, indirect, as well as business and social relations among individuals within the organization and of the company as a whole. Relationship mapping allows companies looking at potential partners to go beyond financial statements and the contradictory bravado of many of the stakeholders to assess the real story behind the scenes and to better measure the off-balance sheet risks and benefits of a business arrangement.
The Relationship Mapping Process
Technomic Asia builds the relationship map through probing, objective and anonymous research among stakeholders, management, suppliers and customers. The end picture is an assimilation of these inputs.
Foreign companies aiming to explore acquisition or alliance opportunities in the emerging Chinese market need to understand, cultivate and use relationships. The insights gained through the process itself and the resulting map will contribute directly to deal evaluation, approach and even structure. This exercise is often done in tandem with the acquisition due diligence process.
According to one Chinese saying, “If you have a relationship, you have a road” (有 关系有路, You Guanxi, you lu).