Category Archives: Cultural

Seven Major Differences Between Chinese and American Business Cultures

Understanding cultural difference is the key in building lasting relationships with your business partners abroad. China has a long and rich history and culture that has built a business environment that is markedly different than U.S. business culture:

1. Relationship-based versus transaction-based

Relationships come before economics in China whereas in the U.S. economics generally take a front row seat to relationships. Chinese people do business with people they know and trust.

Rather than getting into business discussion immediately once you meet, take time and get to know your potential partners abroad; invest now for payoff later. Once trust has been built, Chinese business people will gladly share their thoughts with you and will give you honest feedback. One way to build the trust and rapport is to hang out outside the office hour, for instance, invite them to lunch or dinner.

2. Face to face interactions versus doing business without meeting in person

Most of Chinese business activities and deals are made through face-to-face interactions. To successfully launch in China, you will need to visit China and build relationships with your partners through frequent face-to-face interactions. To accommodate Chinese business culture norms, many American companies have opened offices and hired locals in China to facilitate business in this foreign market. Other American companies form partnerships with local companies to bypass the need to establish a branch or office abroad.

3. Negotiations: prepare to haggle

There is a huge difference in the way negotiations take place in the U.S versus China. Chinese people tend to haggle and to believe that there is room for negotiation on every deal. U.S companies need to make a padded proposal. Always start with a reasonable proposal regardless and expect multiple rounds of negotiations.

4. Entertaining is a part of business

In China, entertaining (hosting) is an integral part of the business culture. In most instances, inviting potential partners or employees to dinner is appropriate and considered an informal meeting. A dinner with potential business partners may be used as a way to build trust and deepen a relationship. It may be used as a way to solicit feedback that you may be unable to obtain during the standard workday or in the typical work setting. A dinner or other social outing is also an appropriate way to follow up with deals informally agreed upon.

5. Communication style

Chinese people tend to be quiet and reserved in business settings while Americans tend to be outspoken and eloquent. This cultural difference may make it challenging for U.S. companies to obtain the information they seek such as concerns, feedback, outright rejections, etc. Many times it may take a series of formal and informal meetings to reach your desired goal.

6. Closing a deal

Unlike in the U.S., in China the signing of a contract does not mean immediate business. After a contract is signed, understand that this is the beginning of the arrangement; follow up with your new partner and look for actions. Actions taken on the Chinese company’s or partner’s parts indicated commitment. Do not hesitate to suggest specific actions such as having a detailed discussion on next steps or suggesting a trial purchase order.

7. Gifting

Exchanging gifts has a long history in Chinese social and business culture. The good gifts include something representing the city or state you are from or things with your company logo. Gifts do not have to be expensive. It is something special that this person may not have. When you present a gift to an individual, it should be done privately. You should state that this gift is a gesture of friendship rather than business. When you gift to an organization, it should be presented to the leader of the organization. Gifts to avoid include scissors, clocks, handkerchiefs and others with negative meanings in China. Please run your gift ideas by several Chinese friends, family members, or co-workers before sending them to your current or potential business partners.

Understanding the Culture-Fit Requirement on Job Seekers (2)

To succeed on a job you aspire to win, it won’t suffice to have great credentials alone; you also need to have what it takes to fit into the mainstream of that workplace community. What it takes is no more than the core values inherent in that workplace. These core values are rarely mentioned in job ads unlike job descriptions. You’ve got to research them, and then ask yourself if in all frankness, you believe in them. Do they, for instance, accord to your sense of fairness? How does the core value of collective responsibility at the success or failure to attain a team’s goal come down to you? Do the core values align with what fuels you to attain stupendous goals for your employer? Is your personality such that only personal recognition and reward of your effort energize you to give your best to them? How does the core value of compensating and promoting staff on seniority instead of performance basis, go down well with you? And how, the practice of an immediate report by-passing you with an information or idea, and directly disclosing it to your boss? Would you be at home with a core value that discourages bold risking-taking to break new grounds?

If you are honestly okay with the values of the organisation you have researched, it means you’re culture-fit. When you get on board the organisation on the basis of your culture fitness, you’ll hit the ground running, swiftly acclimatise, and thus easily add value to it through your job performance. If however you aren’t culture-fit, your inclusion into the organisation either through an error of judgement on the part of the hiring manager, or by some deliberate false pretences that beat the culture-fit requirement, will be a disturbance to yourself, your colleagues, boss and reports, and in fact, the established order prevalent in the community.

Check out this scenario. Suppose a candidate has a First Class degree in Accounting, with an MBA degree and ACCA certification. He should naturally be a great candidate for finance, accounting or finance-related vacant position in an organisation. If however, the hiring manager or any other member of the interview team gets salient evidence-based clues during the interview session that the candidate has an attitude problem, is egoistic, takes official disagreement personal, carries grudge against a past colleague, subordinate or boss, is individualistic, and has many other such tendencies that are evidently against the culture in-house, the candidate will be rejected. If he is hired, situations will arise in the course of his job where he will exhibit those tendencies with the net results that the job will suffer. And no Chief Executive Officer wants the job-any aspect of it-to suffer.