The paper "Business Culture of China" is a great example of a Business Case Study. Culture is commonly recognized as both art and the manifestation of human customs, civilization, and way of life that involves “ the collective programming of the mind” Hofstede (1980) as cited in. Business culture, therefore, should be understood as the culture of business in one country or part of the world that involves collective attitudes, values and norms, and behavior of people performing business activities. Moreover, according to, business culture interacts with environmental conditions, determines people's preferences, grows with the business environment, and influences by an economic and political system similar to China. China is now a global business power thus it is critical for business people from around the world to know more about China and the way they do business.
According to, there is a strong contrast between Western business culture and Chinese business. For instance, if individualism, rationality, and secularisms prevail in a Western capitalist market, China’ s market is marked by collectivism, familism, Confucianism. China according to cultivate a business culture that is strongly attached to Chinese cultural values and economic system marked by Confucianism, Taoism, and Buddhism. The following sections discuss the business culture of China, Guanxi and the importance of the personal social network in Chinese people, the role of government in developing China’ s business culture, the role of language, status and prestige in business, and some recommended solutions and alternatives for doing business in China. Business Culture of China Understanding business culture in China requires a complete understanding of Chinese culture thus it is necessary to use a scholarly approach to describe their cultures such as Hofstede’ s cultural dimension and differences framework.
A summary of the process of studying business culture is shown in Figure 1. Figure 1 – Summarised Process For Studying Business Culture of China The application of Hofstede’ s cultural difference framework suggests that there are differences between power distance or individual or group-orientation in China and the West. A cited in, Hofstede identified China as a country with the highest power distance and lowest individualism but with high long-term orientation compared to other Asian countries. Power distance by definition is the extent to which members of society recognized and accept the inequality of power, the difference in social classes, and the idea that the privileged class should exercise greater power.
For instance, age as a source of authority is hardly recognized in the West but in China’ s business culture such attributes should be highly respected. Similarly, unlikely uncertainty avoidance, masculinity, and femininity that are found irrelevant to China’ s business culture, long-term values such as thrift and perseverance are common. Personal Social Network Business strategies in China are heavily reliant on social connections such as mobilization of family and other personal ties and individual entrepreneurial zeal combined with access to bureaucratic power.
The reason according to is the fact that Chinese often want to deal with people they know and trust (Guanxi) and except preordained relations (ex. father and son), Confucianism provides significant freedom to Chinese businessmen in deciding whether they will enter into business relations with people outside the family structure. Confucian societies like China see themselves as a big family thus equal opportunity and collectivism as well as social goals are more important than individual interest (Schulz, 2006).
For this reason, it is critical for Western companies to make themselves known particularly at a personal level before they do business with their Chinese counterpart. More importantly, they should maintain the relationship in order to do more business in China. Guanxi is a one-to-one personal relationship giving more emphasis on long-term mutual benefit rather than short-term individual gain thus a necessary condition for doing business in China. (Clegg et al. , 2007). Role of the Chinese State in Developing China’ s Business Culture The Chinese government is influential in terms of business culture as it is engaged in central planning and domestic market protection such as setting institutional arrangements and creation of multi-layered bureaucratic system resulting to a business culture that gives emphasis on the cultivation and maintenance of personal relations with people who has control over goods and resources (Dahles & Wels, 2002). The Chinese government according to Chee and West (2007), is a key player in the pursuit of China’ s local and international economic interests.
In fact, the Chinese government allows foreign access to its huge domestic market so that both Chinese and foreign businesses can make money.
However, the Chinese government’ s participation and regulation of business activities is not only anomalous by the Western standard but making it difficult for the foreign company to operate in an environment characterized by bureaucracy and ever-changing regulations. The Role of Language, Status, and Prestige in China’ s Business Culture The Chinese people speak different dialects (ex. Cantonese, Mandarin, etc. ) and according to (Liaw, 2007), it is often a good practice to start a meeting with casual talk before introducing some business matters.
This is because as mentioned earlier, the Chinese are always interested in cultivating and maintaining a personal relationship (Guanxi) and highly responsive in everything they do. For instance, Chinese businessmen see it necessary to address them with their titles (ex. Chairmain, President, etc. ). In fact, many of them engraved their business card in gold as a symbol of status and prestige (Liaw, 2007). Solutions or Alternatives for Business Since the business culture of China is closely associated with the Chinese culture then businessmen or companies intending to do business with their Chinese counterpart should learn or become familiar with Chinese culture. One strategy is to know China more and understand the importance of doing business in China.
For instance, foreign companies should understand that China is a huge market with a population of over1.3 billion people, it is the fastest-growing market in the world, China is willing to accommodate foreign businesses, there is an unlimited supply of low-cost workforce in China, and active engagement in the China market can significantly improve and change the outlook of any foreign business (Shen, 2004). Alternatively, foreign businesses should ignore the myth about doing business in China and concentrate on the fact that China is ” westernizing” (Chee & West, 2007, p.
2) as Chinese businessmen are as keen on mutual benefit and also looking for win-win outcomes for both parties. According to a study conducted by Chee and West (2007), companies intending to do business in China should along with a strong brand reputation offer competitive prices as Chinese businessmen are never afraid of competition.
Moreover, since China’ s business culture is governed by its government, a new entry in China’ s market should develop political skills and knowledge of different perceptions and negotiation procedures. For instance, the focus of negotiation in Chinese business culture is process, means, and generalities while the outcome of such negotiation is trust (Chee & West, 2007). Conclusion and Recommendations China’ s business culture is complex thus the success of commercial businesses is highly dependent on how businessmen understand Chinese culture and business values. Chinese businessmen are highly reliant on a personal social network, Guanxi, and other Confucian principles.
The Chinese government has a significant influence on how business is conducted in China thus one should consider the bureaucracy and importance of political skills. This report, therefore, recommends establishing good business relationships with the Chinese by learning their cultural traditions, being respectful and polite, do business along with the principle of Guanxi, earn their trust, and make friends with people in power.
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