Understanding the Chinese Business Culture
As president of Global Plastics Inc., I have been in strategy
meetings with upper management and we have decided that in order to take our
company to the next level we will need to expand our market. We have decided to
to market and distribute our product’s, which consist of plastic toys and
furniture, in China. We have an initial meeting with a Chinese company, CEKG,
to see if they will take on your product, and not only distribute it, but help
you market it in China as well.
The Chinese culture is very different from our culture and it is
important that we understand their culture in order to have successful dealings
in this endeavor. Confucianism is the primary philosophy behind the Chinese
culture and it is necessary to understand what guides them.
With Confucian principles openly flourishing in China, the
Chinese’s traditional philosophy applies a constructivism perspective, dealing
with intricacy and ambiguity by way of a clear procedural guideline and roadmap
for both scholars and practitioners (Ning, 2011).
“The framework of Western and Eastern work ethic studies is very
different, the differences and similarities are resulted from the different
origins and core components of both systems. The similarities are that both
promote thrift, hard work, and sense of shame. Confucianism highlights
humanity, righteousness, proprieties, wisdom, trust, harmony, loyalty, the
family life and personality development; whereas the western principle
underscores that the individual should take responsibility” (Ning, 2011, Year).
In the traditional style of western management, scientific research methods
like optimizing, algorithm, and operation research are applied to solve
multifaceted problems, while cultural, behavior, and psychological aspects of
human behavior are less measured. In contrast, Chinese Confucian philosophy,
explores the fundamental power of human beings in order to deal with unexpected
things and rising complexity.
Chinese business people behave differently from their European
counterparts – the way they speak, the way they think, and the way they treat
their clients. To successfully enter the Chinese market, you need to put aside
your preconceived notions and embrace what is there. Acknowledge that things
are different and try to understand why such differences are important to your
business and your success in China and how you can deal with them in an
efficient way. (EUSME Center, 2013)
Relationships are essential for effectively conducting business
anywhere, this is especially true in China. “The Chinese concept of guanxi
encompasses a network of personal connections, such as with family members,
friends, classmates and relatives as well as with close business associates. It
is based on deep mutual understanding, feeling, trust and respect. Understanding,
building, using and maintaining such a network remains one of the biggest
challenges for foreign business people in China.” (EUSME Center, 2013)
Negotiating in China is a slow process. The first few meetings
usually involve unrelated conversations as participants share information about
their personal lives, such as: families, home towns, and leisure activities
These meetings are not unimportant, they begin the process of forming
connections that are essential to Chinese business. The rule is “friendship
first, business later”.
Conflicts and disputes are an a part of doing business in China.
When negotiating, people test the boundaries of where their counterpart is
willing to go in order to get the best deal. In a culture where people are used
to bargaining, tense negotiations are normal. Yet, for an array of reasons,
most conflicts do not end up in litigation.
The most important thing is keeping face, it is extremely
important in China. Chinese people don’t like to expose their troubles to the
outside world. They are guided by the belief of “turning big problems into
smaller ones, and small problems into no problems at all” (da shi hua xiao,
xiao shi hua liao). (EUSME Center, 2013)
Second, harmony is an preferred state to reach according to
conventional Chinese philosophy. Therefore, Chinese business people are
predisposed to avoid conflicts, make concessions and glossy things over so that
they can stay on good terms.
In conclusion the Chinese culture is very complicated and the
utmost care must be made in understanding the differences and similarities
between our two cultures. I propose the negotiating team complete a class on
Chinese cultural studies to strengthen the opportunity that the expansion into
the Chinese market would create for
Global Plastics Inc.
References
Ning, H. (2011,
June 29). Case study on the influence of Chinese traditional philosophy to the
enterprise management [School of economics and management, xi’an institute]. Journal
of Management and Strategy, volume 2(issue 3), 73,74,75.
EUSME Center. (2013). Negotiating and dealing with
Chinese business partners. Retrieved from
http://www.ccilc.pt/sites/default/files/eu_sme_centre_guideline_negotiating_and_dealing_with_business_partners_en.pdf
