Meshing Chinese and Western business cultures

Cultural Insights — By on April 22, 2008 at 7:29 am

There was an interesting column by Joe Nocera in the New York Times business section a few days ago. It started by looking at the relative lack of MBA-type skills among Chinese managers, but then diverted into an examination of Chinese and Western business cultures and the difficulties that companies have in meshing the two. An excerpt:

When dealing with each other, the Chinese, quite simply, do business differently than Western companies do business. For one thing, there is a lot of petty corruption that is an ingrained part of business, especially among the state-run companies. Purchasing managers favor one vendor over another because they get a kickback. A sales rep buys customer loyalty with under-the-table payments. And so on.

People also tend to put their own interests over the interests of their company — not a huge surprise, given that everyone worked for the state just a generation ago. Middle managers tend not to take much initiative. “Somebody said to me the other day, ‘We are paid to obey,’ ” said one American manager at a Chinese company…

But there are also things that can seem straightforward to a Westerner that are anything but in China. “Take the word ‘accountability,’ ” said Liu Chijin, the chairman of Pan Pacific Management Institution, a management consulting firm he founded in 1999. “It is a natural concept in the West. Here, people know what it means, but it is not in their blood. If you give them an assignment, tomorrow they are likely to tell you that something else came up.”

Finally, there is the gnarliest issue of all: the importance placed on the deep, intertwining set of relationships known as guanxi. Unlike the West, you don’t just have a business relationship in China; you have a relationship that interchangeably mixes the personal with the professional.

“Most Americans would say that we have it as well with the old boys network,” said Mr. Chiang, the marketing professor. “But Chinese intertwine business and personal affairs much more deeply. They do things for their partners even if they are personal affairs. And it is very difficult to disentangle what is institution to institution and what is person to person.” On the one hand, this leads to a sense of deep mutual loyalty. On the other hand, it is at the heart of the petty corruption that is so prevalent.

So, if a Western company wants to utilize the best of its own culture, but also recognize the need to “retain at least some aspects of a Chinese business culture,” what would the end result look like? Matthew McDougall, an Australian who founded a company in Beijing, had this advice:

“We want to be viewed as a Chinese company. We deal with investors in the American way, but we deal with customers in the Chinese way. In the U.S., you talk to customers about your unique selling proposition. In China, you talk to them about schools, your family, your friends in common, and what you can do for them.”

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1 Comment

  1. Vitalka says:

    Yes, making business in China is pretty difficult, “if you are still who you are”… But, if you forget your own habits, business way and traditions and become at least to try do that in Chinese way of making business and conversation – then you make your first steps to success. The best result you can achieve is to become friends with your Chinese partner.
    Speaking about losing the best traditions… I don’t think so. Yes, time is going on and we are changing too. But our traditions and Chinese traditions still is too strong to be forgotten. In order to make the best – we should respect Chinese business culture, cause we are guests in their country.

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