Hire a consultant or order a market research entails significant costs, for sometimes as the only outcomes, meager information available to all.
To reduce costs, and avoid unnecessary spending, this article will clarify on the fundamental points at least, the Chinese business culture.
In many parts of the world, particularly in the Chinese culture, values related to the country’s history, its philosophy, its education system and changing mores in the society can be found in the practice of business, especially in negotiations with Western firms.
Talking to people from other cultures to do business is finally a commercial challenge and a human challenge aswell. Whether you outsource your shopping trading with the Chinese from your country, or you create a physical office structure type of purchase in China in which you must manage local employees, cultural differences appear to affect your daily life and usual way to manage your business.
So when you establish business relations with your partners, you must ensure that the impact of these differences is the lowest possible to control and manage your employees. We see here what are the major cultural differences and how they are ubiquitous and sometimes sources of pressure or tension in trade relations with China.
Differences in direct relationship to the person
In Confucian philosophy, all relationships are deemed to be unequal. Ethical behaviour demands that these inequalities are respected. Thus, the older person should automatically receive respect from the younger, the senior from the subordinate. This Confucian approach should be seen as the cornerstone of all management thinking and issues such as empowerment and open access to all information are viewed by the Chinese as, at best, bizarre Western notions.
(It should be borne in mind that many people in China – as well as in many other Asian countries – see the lack of observance of hierarchical values as the root cause of the ‘problems of the West.’ These problems include the twin Western diseases of moral degeneration and the anarchic idea that an individual is more important than the group to which they belong.)
Thus, in China, management style tends towards the directive, with the senior manager giving instructions to their direct reports who in turn pass on the instructions down the line. It is not expected that subordinates will question the decisions of superiors – that would be to show disrespect and be the direct cause of loss of face (mianzi) for all concerned.
The manager should be seen as a type of father figure who expects and receives loyalty and obedience from colleagues. In return, the manager is expected to take an holistic interest in the well-being of those colleagues. It is a mutually beneficial two-way relationship.
Senior managers will often have close relations to the Communist Party and many business decisions are likely to be scrutinised by the party which is often the unseen force behind many situations.
It is often said that China has a lack of good-quality, experienced managers – this is typical of a rapidly growing and modernising economy – and that the good managers who are available are very expensive (even by Western standards.) This places enormous emphasis on any company’s recruitment and retention policies – you have to be able to recruit the best and then keep them.
The « guanxi »
The Chinese are more committed than in the West at the so-called “guanxi” – relationships. Indeed, this principle of recommendation from one person to another because of their good “guanxi” is very common, or even the fact of rendering a service to a person who is the friend of the friend of the good “guanxi”. The danger is that in doing business in China is conducted mainly at two levels.
You can meet the case of the supplier who will recommend one another because both have good relations with each other or that one is indebted to another, but that does not attest to the quality of all new supplier, so act prudently. Another scenario that could pose more of a problem, if one of your employees that builds and maintains good relations with suppliers personally, and may be corrupted very quickly, either by being offered gifts, watered, and even monetary commissions on purchases evenings! So vigilance is recommended wherever there are “guanxi” a priori unsuspected.
People with a good network will be more influential than others. This can be an asset to have such people in your business.
Individualism and collectivism
Finally, the Chinese agree in their representation of the business and professional environment certain behaviors that could be described as inconsistent in our Western perspective. However, individually, these behaviors are obvious.
The difficulty therefore lies in our acceptance of their ability to think white and black at the same time, and their even more to make a combination of the white and the black that is as incomprehensible to our impeccable ability eyes.
How to design the fact that the Chinese are so individualistic but do yet still part of a group, or “unit of work”? How to design them seem to support the group and yet they practice very common denunciation? How to understand that there are still rewards systems for group work when they have a rare concept of team spirit in the effort?
In general, the Chinese see only his personal interest in the positive that a particular action to be taken would bring consequences. If a colleague has made a difference, he denounced if he has nothing to lose but as long to win back recognition of loyalty from his manager, saying it contributes to save the group. Similarly, a Chinese will not help his colleague at the task if it allows him to profit for himself, but by no means simply cooperate or improve a certain profitability of the group work or the business.
For more information concerning cultural differences and learn to better understand Chinese culture in business, you can read this article:
To communicate with the Chinese: some keys to succeed your negotiations
If you are a company that wishes to invest or export to China and asking questions about how to manage relations with a potential Chinese partner, please contact Wei Hsu (firstname.lastname@example.org) or see our services on this page: www.ins-globalconsulting.com/fr/services.