Cultural issues in international business

Content
Introduction
Chinese culture Chinese culture Hofstede Business culture in China Conflict resolution Conflict resolution in China Conclusion: dos and donts

Introduction
To do business in China or with Chinese people, it is first important to understand the Chinese culture. (R.Z.)
Globalisation
Think out of the box Emerging economy of China

Changing culture of China

Need for better insight in conflict resolution

Culture

Culture: artefacts and behavior

Architecture and design: no sharp or high buildings Rituals, physical proximity: distance Dress codes: mostly grey suits Symbols and expression of emotions: no expression of

emotions, save face

Culture: values and beliefs

Respect for hierarchy
Human-heartedness Moral discipline Integration: belonging to the community Accommodation: to give in when conflicts arise Uncompetitiveness Avoidance Confucianism

Culture: basic assumptions

External adaptation: Fengh Shui
Internal adaptation: human nature, interdependence,

Guanxi Linking assumptions: language, time & space High context culture
Language is often an obstacle in that sense that most Chinese people speak only Chinese and there are a lot of regionalisms, so not everyone in China can understand each other. (D.W.)

Chinese culture - Hofstede

Collectivism Individualism Power distance

Masculinity Femininity
Uncertainty avoidance Long term orientation

Collectivism
= dependence of a group, organisation or other collectivity
In China, the team is more important than the individual. For a Chinese person, the most important thing is the company or the institute he or she works for. They will always do the best for the company, not the best for themselves. (G.V.)

Power distance
= social equality or inequality in a society and the degree of acceptance of this inequality
There is a very big power distance between the boss and its employees. In Belgium you have a small boss who is almost equal to its employees but in china you have a big boss. Someone who stands clearly above you and can decide about your future in a whim. China has a dense culture compared to a coarse culture in the west. For example when a student meets a professor on the street the student will always walk closed to the traffic this is showing respect to the professor. (G.V.)

Masculinity - Femininity
= degree a society adopts the traditional model of male dominance in terms of achievement, control and power
I did business with male and female equally, but high positions are generally occupied by men. (D.W.)

Uncertainty avoidance
= a society prefers predictability and stability over uncertainty
In China, there are also unwritten rules. (R.Z.)

Long term orientation

= Confusianism = a countrys willingness to overcome problems over time and take risks
In china everything is long-term oriented. For example when a new company is founded they will first try to get a big marked share before thinking about shareholder revenue while in western countries this is mostly the other way around. (G.V.)

Business culture
Social business relationships where management is hierarchical and seniority has utmost importance Importance of Guanxi Face concept and avoiding Mianzi Hotel case

Meetings and business negotiations

If Chinese say 'they will think about it' or 'they will

see', it can be taken as a covert No The Chinese see punctuality as a virtue

 Gifts and Presents

Part of the ritual of business relationship development Seniority should be considered again Avoid giving objects that have negative symbolic

meanings in Chinese culture as a gift

Lunch&Dinner
Eating a little of each dish

is deemed polite It is customary to leave some food It is taken as rude not to drink with the Chinese in a formal dinner

Business cards

Cards should be held in both

hands when exchanging and then examined in detail The card should be treated with respect, as the card reflects its owner

Dress code
Smart business attire composed of good quality

clothes and accessories is recommended

Conflict resolution: framework of conflict handling styles (Thomas & Kilmann)

Conflict resolution in China

Less openly assertive, emotional and direct Avoid confrontation and competition
Live in harmony Role of Guanxi
Guanxi is very important, you have to have good relations with the government and with the people you do business with. It is very important in China since it provides a way to resolve conflicts. For example when a conflict occurs between two bosses they use Guanxi to solve the conflict. They do this by having dinner where they discuss their disagreements. (R.Z.)

Conflict resolution in China

Prefer compromising

and avoiding style

Save face
Chinese people do not talk about their conflicts: they try to walk around them, avoid talking about them. (G.V.)

Conflict resolution in China

Culture influences conflict resolution
Also: personality, corporate/business culture,
How we resolve conflicts, also depends on personality. Some people might report the problem to the boss which is often not a very clever idea, while others prefer to handle it within the group. (R.Z.)

Conclusion: dos
Be aware of the importance of Guanxi: Build strong

relationships. Giving and receiving gifts helps to foster relationships. Take gifts with you when visiting. Show respect to age, seniority and educational background. It can take several, very long meetings before any tangible progress is made. Patience is essential.

Conclusion: donts
Do not talk about taboes or delicate political topics. Do not embarrass a counterpart. Stay calm, dont lose

your temper. Do not make people 'lose face' in front of their group. Do not be too direct. Strive for diplomacy, consensus and harmony.