While there remains a strong emphasis on hierarchy in Chinese business culture, this is changing, and changing rapidly, due to two major factors - technology together with the influence of a highly educated Gen Y and the emergence of the tech-savvy Gen Z.

There is a widespread perception that China is resistant to change, because of its centuries-long cultural history, and because top-down management is the impenetrable norm, but this market and social giant is, like everyone else, changing to meet modern international business practices as it simultaneously undergoes social evolution. And it is doing this diligently, but with Chinese characteristics.

The two main elements specifically driving these changes in China are the Internet and unique structural demographics driven by the family planning policy.

China is by far the biggest global market and has the world's largest and most vibrant online community and, as much as anything, it is these sheer numbers that is driving this rush to embrace global business practices and management systems.

About 500 million Chinese citizens are online - that is a quarter of the world's social network users and double the number of Internet users in the United States. As with most countries, China's netizens are dominated by the younger generation - nearly 60 percent of 10-29 year olds are online while older demographic groups have been slower to adopt the Internet.

In line with the high rate of adoption of modern communications, and access to international best practice, China's 1.3 billion people have more than 900 million mobile phones in operation, 350 million mobile Internet users and 300 million registered micro-blog users, most of them very active on Sina Weibo and its competitors. Sites like Sina Weibo, Youku and Renren ensure a vigorous social networking culture in the country.

China's family planning policy, with a consequent focus on educational performance, which is at the heart of Chinese culture, has produced a generation of highly educated, highly motivated and extremely competitive professionals. The generation has grown up in an ever-expanding, always-improving economic environment and has never experienced a downturn or a crisis. With the surrounding family usually providing an environment with looser boundaries, this new generation is extremely ambitious, confident, independent and suspicious of hierarchical management systems. This inevitably leads to inter-generational friction when they are managed by more conservative Gen Xers.

For the Gen Ys, formulaic HR rules and processes are regarded as inappropriate and are often ignored or rejected. They think and act on the run, are resistant to discipline and regard due process as an impediment to achievement. It is not merely a matter of the younger generation trying to run before they can walk; many of this group are extremely gifted and corporate principals increasingly find they need to harness those abilities without constraining them.

They expect flat hierarchies that give them a role in decision-making. This represents a challenge for traditional companies where there is a long-established pecking order and a corporate infrastructure that values seniority as much as individual prowess.

Many of these Gen Y people have had their self-confidence reinforced by personal experience through overseas education and travel, and many have worked in multinational companies in China and other countries. This has led them to realize that China has become the most important market for many multinationals and that they can be part of a revolution: one that has transformed the country into the second-biggest economy in the world and that has brought a new and modern lifestyle to urban areas.

Changing cultural values are also playing a role in the changes that are sweeping through the corporate landscape. Traditional Chinese values are conservative, particularly in public discourse, socially and even in the field of management. As a result, social harmony is both the ambition of the nation and the rationale for much of China's behavior as a political and geopolitical entity. This is at odds with the aggressive nature of the corporate sector globally.

So it is the younger generation, those brought up in the computer age and with an understanding of the Internet, who are leading the way. And their high-tech skills are complemented by the ready online availability of management theory resources and modern corporate tools like collective intelligence for cooperative decision making and crowdsourcing for open collaboration.

Both international and local corporations are now beginning to embrace the resulting consequences of these seismic changes. It is clear from developments in corporate culture in China in recent years that there is an understanding and appreciation of the fact that conservative hierarchical structures have had their day and are being supplanted by an enterprise management system that is better aligned with the market economy, now an integral part of the market reforms that have come quickly to China in recent years.

The explosion of research and development centers in China is an attempt to tap into this new collaborative and highly educated generation. Foreign direct investment in China rose to a record $105.7 billion (81.5 billion euros) in 2010, which means that companies as diverse as Nokia, Novartis and Unilever have made a huge investment in the future of China. The number of independent R&D centers and R&D departments established by foreign companies is now more than 1,200. More than 400 of the Fortune 500 companies have launched R&D centers in the Chinese mainland.

Part of this fast-tracking into international management best practice is an increasing convergence between industrialization and informatization. Chinese companies are making a massive investment in informatization to raise the bar of management and operational efficiency. This involves the introduction of not just new technologies but also new management imperatives. Industry upgrade and transformation, a key element of China's 12th Five-Year Plan (2011-15), is creating opportunities for companies, and the convergence of industrialization and informatization is a critical part of this process.

The Chinese have learned well and very quickly how international management works. Chinese companies, such as Lenovo (IBM PCs) and TCL (Thomson DVD and Alcatel mobile), are going global by buying well-known international brands, although with mixed results.

In a transition economy, as China is, staying abreast of best practice international management education, structures, trends and skills is critical to maintaining leading-edge competitiveness. This is now being driven by tech-savvy Gen Ys who are for the most part highly educated and equally highly opinionated and questioning of established procedures, practices and protocols. They see hierarchies in a completely different way and have a different understanding of how to run companies more efficiently and therefore more effectively.

How this new, brash corporate interloper fares when he or she inevitably takes over the middle management role until now filled by their more traditionally minded, and trained superiors will become apparent in coming years. Whether it leads to sustainable leadership for both the individual corporate and the wider economy is yet to be determined. But it can be presumed, from this distance, that Chinese management structures will be radically different from those that have applied in the past.

The author is chairman of Ruder Finn Public Relations. The views do not necessarily reflect those of China Daily.