Microsoft CEO Satya Nadella joining the growing list of India-born chiefs at the helm of American companies has caused a “bit of a stir” in China, according to a media report.
The Wall Street Journal report titled ‘Why China Doesn’t Export World-Class CEOs’ also said Indians’ good command over the English language and their willingness to move gives them an edge over their Chinese counterparts to get the top jobs.
“Language and familiarity with Western culture are the obvious reasons why chief executives such as Indra Nooyi of PepsiCo Inc., Anshu Jain of Deutsche Bank and MasterCard Inc’s Ajay Banga have succeeded in the West. But headhunters also say Indians are more willing to move than Chinese, who see more opportunity and good pay at home,” it said.
The report said that Nadella’s appointment as CEO has “caused a bit of a stir in China, where people are questioning why Indians but not Chinese are getting top jobs in the US.”
The other reasons cited by the report are the high pay and advancement opportunities that are keeping many Chinese executives at home.
It said annual salaries for management positions at the director level in China are already at about USD 131,000, which is four times as much as in India, where executives at that level earn USD 35,000 on average.
The report said that while India remains a “tough” place to live, China has become more comfortable in recent years, offering a good lifestyle to expatriates.
“How do you get a Chinese to move to Brazil in a developmental sequence? That’s a big challenge,” said Emmanuel Hemmerle, a senior adviser to Korn Ferry, an executive search firm.
“China is such a high-growth market. Everyone sees that’s where the opportunity is.”
China, however, suffers from a “shortage” of top talent, despite its enormous pool of university graduates, with 7.3 million more expected in 2014, the report said, citing onsulting firm McKinsey that fewer than 10 per cent of Chinese job candidates would be suitable for work in a foreign company because of their “poor command of English and an education system that focuses on theory rather than practical skills.”
Another reason why Chinese executives do not flock to western companies is that state-owned enterprises and private companies are bidding for home-grown talent.
“With so much attention lavished on the most promising executives in China, many feel their opportunities are greater at home than abroad,” the WSJ report said.
In some cases, multinational companies also want to keep their best Chinese executives inside China because the market is so important to them.
A downside to being too attached to China is the risk that Chinese executives are overtaken in their careers by the next wave of Chinese managers, many of whom have better language skills and a broader world view.