Understanding the Chinese Business Culture

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