Chinese Business Culture
Modern companies have to expand globally in order to maintain their competitive positions in the world’s market. However, American companies do not always have a deep understanding of the customs and traditions of people in foreign countries. China is attractive to foreign investors as it offers the high-qualified workforce that can be attracted by comparatively low wages. On the other hand, the company wants to specify the potential of Chinese consumer pool. The report evaluates the reasonability of the expansion plans as well as outlines the major steps towards their implementation. The report has both theoretical and practical significance. It can clarify the major cultural aspects of Chinese society as well as provide companies with effective instructions regarding the optimization of their economic and financial strategies. The report concentrates on Chinese social customs, family life, attitudes, religions, education, and values. Although China is a unique country that is very different from the United States, it is reasonable to invest resources in the market and collaborate with it through different business projects.
The business people in any country do not make their decisions automatically. They consider a large number of interrelated factors including cultural ones. The role of culture is crucial in the contemporary world because it demonstrates the ability of a given company to understand the demands of its clients and partners (He, 2012). The correct addressing of the cultural needs of the company’s partners may maximize both its revenues and its international reputation. If cultural needs and peculiarities are not addressed properly, numerous misunderstandings may emerge, and the demand for the company’s products may decline. It is especially applicable to China, where the role of customs and traditions is more important than in Western countries.
First of all, it is necessary to describe Chinese social customs. Chinese companies prefer having business relations with organizations familiar to them (He, 2012). Therefore, it is reasonable to use the services of intermediaries while entering the Chinese market for the first time. The entire system of business relations is highly formal. Thus, American managers should not rely on an informal communication style, especially at the initial stages of interacting with Chinese business partners. Chinese customs respect the social rank of all individuals and parties. Thus, American business people should organize their communication accordingly. As the positions of Confucianism are very strong in China, its key principles especially in the field of the ruler and subject should be respected. The oldest person should be greeted first regardless of his/her business position. Moreover, handshakes are the most common non-verbal elements when Chinese business people work with foreigners. Chinese are often reserved with foreigners if they do not know anything about them; and friendly if they are familiar with a given company (Wang, Khoo, Nakatsu, & Cheok, 2014). Touching is not welcome, and all formal rules should be followed.
Despite the formal style, Chinese people have a good sense of humor although their funny patterns are different from American ones. Chinese individuals are ready to laugh at themselves as it allows evaluating the situation objectively (Kang & Feng, 2013). Thus, their business partners should be ready to do the same and recognize one’s shortcomings through humor. In the majority of business situations, the person’s title and last name are used. The gift etiquette should also be taken into account. In fact, gifts are typically given at weddings and the New Year, although birthdays are also a legitimate cause for making a present in the modern business environment. Clocks and flowers are associated with funerals, and they should not be selected as gifts (Wang et al., 2014). They should be presented with two hands and the maximum respect.
The Family Role
The company’s managers should also be aware of the role of family for Chinese people. They attribute a higher significance to family than in many Western countries. Therefore, if the business conversation includes mentioning the family of Chinese partners, the highest degree of respect should be demonstrated. The US managers should also be aware that the oldest members of Chinese families can substantially influence the decisions of other relatives. It should not be viewed as the imposition of one’s will, but rather a fact that comes from Chinese norms and traditions. Moreover, the implication of the One Child Policy results in the majority of modern Chinese families having only one child. The government tried to regulate the population dynamics through law imposing. Thus, many young Chinese people are more self-centered than the previous generations due to the government policy (Kang & Feng, 2013). The basic unit is the extended family as many Chinese people live with their parents. Women work outside the home in different occupations. Today, many women are employed in the production sphere, such as electronics especially in the export-oriented companies.
It is difficult to analyze the Chinese class culture as it is presented in a hidden form. The reason is that Communist ideology advocates classless society. However, the actual facts demonstrate that several social classes exist in modern China. The first one is the privileged class that consists of bureaucrats of different levels (Kragh, 2012). They control the political power and have a more opportunities in comparison to other people. The second one is Chinese business people, who tend to increase their role in society. The third one is the general Chinese population that is mostly occupied in export-oriented spheres. The fourth one is the underclass. The underclass individuals have a very limited set of social and economic opportunities.
It is also reasonable to concentrate on the attitudes of Chinese people. They typically demonstrate highly positive approach to all people, and it is necessary to maintain the balance between the positive attitude and adherence to the basic formal rules and requirements in China. It seems that the major difference between China and the United States is the combination of collectivist and individualist elements. The US is typically considered as an individualist society, while China is a traditional collectivist one. Although the modern global environment contributes to the existence of collectivist and individualist elements in all countries of the world, it is evident that traditional Chinese values are centered on collectivism and the sense of harmony (Kragh, 2012).
In order to ensure success in the foreign country, it is necessary to explain the role of Chinese religion for the US managers. The Chinese religions are more complicated than that of Western countries. The first reason is the long history of their emergence and development. The second one is the existence of various religions and traditions that are different from Western patterns. The major religions in China include Confucianism, Buddhism, and Taoism (Guang, 2013). Confucianism pays the major attention to ethical values and beliefs. In particular, it stresses the respect to older people, the existence of moral duties, and self-control (Mingzheng & Xinhui, 2014). Buddhism is centered on liberation that can be achieved through spiritual practices (Guang, 2013). Finally, Taoism promotes living in harmony with the law of the universe. Therefore, the suggestion is to specify the religious beliefs of Chinese partners in order to be prepared to their preferences and views. It is necessary to demonstrate loyalty to the representatives of all religions.
China has a well-developed system of education, although it is completely controlled by the government. Chinese students demonstrate high results especially in spheres of Math and IT. The situation with humanitarian subject is more difficult, as some ideological elements in education are still present. Currently, numerous business people aim for American higher education for them and their children. It makes the understanding of their traditions and worldview easier as they are also more open to American values (Kragh, 2012). In any case, it is reasonable to collect some information about the education obtained by Chinese partners. It will demonstrate both their training level and closeness to American principles.
The dominant Chinese values are based on the country’s long history and perception of religious principles. The principles of loyalty and duty are among the central ones for Chinese people (Fann, 2000). One the one hand, they are very loyal to different points of views and usually do not express their disagreement in an open way. On the other hand, the Chinese understand the role of moral duty and demonstrate their respect to older people and foreigners. In general, Chinese partners can support favorable conditions for all parties if they also demonstrate loyalty to Chinese values.
Chinese companies organize their relationships on the basis of trust. They want to be familiar with the major guiding principles of their partners. They also value the corporations with established reputation and reliable partners. The majority of Chinese companies have are risk-aversive, and they prefer the known mechanisms of realizing their business goals. Cooperation is more prized than competition (Fann, 2000). Therefore, it is reasonable to concentrate on the mutually beneficial cooperation between companies. Women do not typically manage business, but the role of females in business projects tends to increase. Chinese may consider Americans to be very open; however, in some cases, they may perceive Americans as disrespectful to their culture. Thus, it is crucial to be positive and respectful to Chinese values and principles.
The Chinese market is potentially attractive for investments and expanding business operations, although the traditional Chinese culture is very different from Western perceptions and worldview. Moreover, the Chinese market is considered a source of the workforce and as a new consumer market. In order to maximize the potential positive effects, it is reasonable to formulate the following recommendations for cooperating with businesses in China.