Business culture- China vs US

1
Business culture- China vs US

• Presentation Outline
• Foundation of US ethics- basic discussion
• Comparison of Business culture-China vs US
• Strategies and Managerial Implications

2
Cultural Foundation of American Ethics

• Foundation based on Judeo-Christian and Western
  socio-theological principles
• intrinsic underlying truth
• a sovereign moral authority--God
• God declines right or wrong
• Natural law -- inalienable rights
• life, liberty and pursuit of happiness
• Equality implies no prior claims against the
  rights

3

• American ethics (continued)
• Limits on individual freedom are either(1)
  voluntary(2) lawfully imposed
• Results -- individualism and contract
• Individuals right to choice is consistent with
  market economy
• The functioning of a free market economy can be
  described as nexus of contracts
• A business contract - spells out details of
  relationships and is enforced by law if violated

4
Comparison of Business CultureChina vs US

• Business culture - time-tested and conventional
  practices
• China and US have a different business culture --
  result of different history and practices

5
Notion of Harmony

• China
• Everything is in harmony
• Change is viewed as disruptive
• Reason -- too many people

• US
• Efficiency and effectiveness
• End result
• logical reasoning on facts
• change to get desired results

6
Importance of Relationship

• China
• 4 important social groups relatives,
  schoolmates, personal friends, and the indirect
  relationship from the 3
• Importance of guanxi (connection)

• US
• constitutions guarantee the rights
• a short history to inherit traditions
• stress on individualism for personal achievement

7
Relationship (continued)

• Agricultural state (small community mentality)
• privacy is not highly valued
• individualism is not singled out
• rule of man over rule of law

• Relatively few norms
• melting pot
• Increased tolerance on diversity
• separate personal and business relationship
• friendship can be formed and dissolved quickly

8
Subtlety and Explicitness

• US
• Frank and open

• China
• Build on subtlety
• Language based on abstraction of ideas
• Reduce confrontation
• Outspoken --not norm(read the tea leaves--
  observe body, words, tone)

9
Subtlety and Explicitness (continued)

• Courtesy (righteousness, ethics and
  honor)-virtues
• Saving face
• Do not say no easily
• Hint to get help
• Self-control makes people appear shy

10
Communication Style

• China
• Silence for reflection
• Not to exaggerate (implications on marketing a
  product)

• US
• uncomfortable with gaps of silence
• Some American feel ok to exaggerate
• fluency and gift of gab--admirable

11
Communication-continued

• Non-linear thinking
• pragmatic thinking
• rare physical contact
• no eye contact
• Yes means I am listening (not I accept)

• Linear thinking
• pragmatic and look for innovation
• normal touching
• eye contact is important (implying I have no
  harm)
• Hi- means friendly

12
Negotiation

• China

• US
• contract is the end in itself
• Americans think Chinese use banquet as the way to
  get upper hand
• discuss openly costs and benefits

13
Rule of Banquet

• China
• Much attention to eating and drinking
• Private rooms in restaurant
• round table with chopsticks
• Seats assigned
• Do not stretch arm for food

• US
• using club members

14
Taboos

• China
• Concerns with numbers (symbol for luck)
• Success factorsfate, luck, feng-shui,good deeds
  and knowledge

• US
• Hard work

15
Strategies of Resolving Conflict

• Avoiding
• Forcing
• Education and persuasion
• Infiltration
• Accommodation
• Negotiation and compromise
• Collaboration and problem solving