China as a market is notorious for lacking leaders, and even though Cummins has emphasized local management it clearly has not cultivated local leaders. This means that Chapman needs to build the pool of leadership candidates more aggressively, tapping Taiwan, Hong Kong or his old contacts in Singapore to find leaders capable of managing in the Chinese culture.
Another issue is the changing structure of the international organization at Cummins. The ABOs are essentially going to marketing arms. This means that the plants in China are going to be folded into the global production unit, unless the company specifically decides to treat the Chinese market differently. Given that Cummins intends to sell Chinese-made engines around the world, this is unlikely. Thus, Chapman needs to make the transition with the joint venture partners. From the looks of things,...
They will need to adjust to changes in the market conditions, and this will mean that Chapman must work closely with the CPC leadership to ensure that they are on board with the new strategy and understand its benefits. In the past this has proven difficult, and Cummins may need to consider a new joint venture or a new facility in order to meet its growth needs.
Overall, Chapman faces considerable issues in China. He needs to build the leadership core, even if that means using more ex-pat managers (be they Asian or Western). He also needs to manage the political environment so that there is no local government resistance to the company's plans. If these challenges can be overcome, then Cummins will be better positioned to grow as it wants to in the country.
