Doing business in China


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Doing business in China

  1. 1. Ningbo, China 中 国宁波 Doing Business in China !
  2. 2. Images of China <ul><li>When I think of China the first thing that comes to my mind is… </li></ul><ul><li>When I came to China, the first thing I expected to see was… </li></ul><ul><li>One of China’s greatest contributions to the world is… </li></ul><ul><li>One of China’s greatest weaknesses is… </li></ul><ul><li>Chinese are specially good at… </li></ul><ul><li>What puzzles me most about China is… </li></ul>
  3. 3. Entrée Reflections “ Human beings draw close to one another by nature, but customs and habits keep them apart.” Confucius “ No problem can be solved from the same consciousness that created it.&quot; Albert Einstein “ To feel at home, stay at home. A country is not designed to make you comfortable. It’s designed to make its own people comfortable.” Clifton Fadiman “ A tourist takes his culture with him; a traveler leaves his behind.” Anonymous “ He who knows others is wise; He who knows himself is enlightened.” Lao Zi “ The price of success is experience.”
  4. 4. What is Culture? <ul><li>All learned knowledge that people use to interpret experience and generate behavior. (Spradley/McCurdy) </li></ul><ul><li>Culture is the collective programming of the mind that distinguishes the members of one group from another. (Geert Hofstede) </li></ul><ul><li>All the knowledge necessary for living passed on from generation to generation. </li></ul><ul><li>In a few words, a culture HAS material objects, its members THINK values, ideas and attitudes and DO behavior. </li></ul>
  5. 5. What is Culture?
  6. 6. What is Success? <ul><li>The accomplishment of something that has been attempted. </li></ul><ul><li>To reach a favorable result </li></ul><ul><li> (your own target). </li></ul><ul><li>Give examples of </li></ul><ul><li> successful people… </li></ul>
  7. 7. Developing Business in China 中 国 : Intercultural Strategies Who? What? Why?
  8. 8. Living and Working in China Living and Working in China
  9. 9. Global Business Paradox <ul><li>The more global a company becomes the more reliant it must become on local resources- people, management and marketing talent- to distribute its products or services to new markets. </li></ul><ul><ul><ul><li>“ Think global, Act local.” </li></ul></ul></ul><ul><ul><ul><li>“ Live local, Work global.” </li></ul></ul></ul><ul><ul><ul><li>“ Simple Living , High Thinking .” Mahatma Gandhi </li></ul></ul></ul>
  10. 10. Global Business Paradox To be global you have to be locally strong
  11. 11. Free Trade Agreements <ul><li>Mexico has over 31 FTA`s around the world </li></ul>
  12. 12. Welcome to the PRC ! <ul><li>P atience R elationships C hallenges </li></ul><ul><li>How familiar are you with China and its culture? </li></ul>
  13. 13. Mini Quiz: China 中 国
  14. 14. China at a Glance <ul><li>Population : 1 .3 billion Capital: Beijing (800 years ) </li></ul><ul><li>Main Cities: Shanghai , Beijing, Tianjin, Wuhan, Shenyang, Guangzhou, Hong Kong </li></ul><ul><li>(over 600 cities with 500 million people) </li></ul><ul><li>Currency: RMB </li></ul>
  15. 15. Geopolitical Division <ul><li>23 Provinces </li></ul><ul><li>5 Autonomous Regions </li></ul><ul><li>4 Municipalities </li></ul><ul><li>2 SAR ’s </li></ul><ul><li>GMT +8hrs </li></ul>
  16. 16. Country Map <ul><li>Nations: 56 ethnic groups </li></ul><ul><li>Religions: Buddhism, Taoism, </li></ul><ul><li>Confucianism </li></ul><ul><li>Official Language: Mandarin (hundreds of dialects) </li></ul>
  17. 17. History Basics “ When China awakens the World will tremble.” Napoleon
  18. 18. 3 Generations of Leadership
  19. 19. Chinese Leadership <ul><li>Executive, Legistlative (Unicameral), Judicial Branches </li></ul><ul><li>Communist Party of China (CPC) </li></ul><ul><li>Pyramid Elections </li></ul><ul><li>3 Represents Thought </li></ul>
  20. 20. Elements in Chinese Business Developing a set of skills for Government or Company settings Chi = Eat, He = Drink, Piao = Girl, Du = Gamble.
  21. 21. Chinese Language 中 华 zhong 1 hua 2 上 海 shang 4 hai 3 高 山 gao 1 shan 1 福 fu 2 船 chuan 2 岛 dao 3 4 Tones, Characters & Pinyin
  22. 22. Chinese Holidays
  23. 23. Main Chinese Values Family Harmony Patriotic (Nationalism) Face Hierarchy Prosperity Guanxi
  24. 24. Main Chinese Values Family Nepotism Harmony Dishonesty/Conformity Patriotic (Nationalism) Xenophobia Face Concealment/Flattery Hierarchy Bureaucracy Prosperity Greed Guanxi Preferential Treatment
  25. 25. Chinese Proverbs Descendants of the Yellow and Yan Emperors. 炎 黄 子 孙 yan2 huang2 zi3 sun1 Harmony is priority. 以 和 为 贵 yi3 he2 wei2 gui4 White or black, whichever cat catches a mouse is a good cat. 白猫黑猫 , 抓到老鼠就是好猫 bai2 mao1 hei1 mao1, zhua1 dao4 lao3 shu3 jiu4 shi4 hao3 mao1 One country; two systems. 一 国 两 制 yi1 guo2 liang3 zhi4
  26. 26. Chinese Proverbs Heaven High, Emperor Far Away. 天高皇帝遠 tian1 gao1 huang3 di4 yuan3 Three common shoe repairers are better than one “Zhuge Liang” (the name of an ancient respected strategist). A team is better than any individual. 三个臭皮匠頂个诸葛亮 san1 ge4 chou4 pi2 jiang4 ding3 ge4 zhu1 ge3 liang4 The bird who sticks its head out of the group gets shot. 枪打出头鸟 qiang1 da3 chu1 tou2 niao3  
  27. 27. A Traditional Chinese saying describes the Chinese as…. <ul><li>“ Confucian in office, </li></ul><ul><li>Taoist in retirement, </li></ul><ul><li>and Buddhist as death approaches.” </li></ul>
  28. 28. Joharis Window (xiao wo, da wo)          
  29. 29. What is Intercultural Communication? Communication between people of different cultures.
  30. 30. Major Cultural Systems in the World <ul><li>1. Oriental </li></ul><ul><li>2. Indian </li></ul><ul><li>3. Arab </li></ul><ul><li>4. Altaic </li></ul><ul><li>5. Slavic </li></ul><ul><li>6. Western </li></ul><ul><li>7. African </li></ul><ul><li>8. Latin American </li></ul><ul><li>9. Pacific Islands </li></ul>
  31. 31. Cultural Variations MULTI ACTIVE 3.5 billion REACTIVE 1.8 billion LINEAR ACTIVE 600 million Hybrid 300 million
  32. 32. Multi Active people are… <ul><li>Relationships: WARM, people oriented interrelaters, charismatic, seeks key person </li></ul><ul><li>Communication: EMOTIONAL, loquacious, display feelings, body language, manipulate, speech for opinion, no face value </li></ul><ul><li>Tasks: IMPULSIVE, several at one time, Flexible at handling chaos, good at improvisation, relaxed about time </li></ul>
  33. 33. Reactive people are… <ul><li>Relationships: AMIABLE, respects age & experience </li></ul><ul><li>Communication: CORTEOUS, introverts, listeners, good at self-disparagement (humble), hides mistakes, speech for harmony, conceals feelings, little body language </li></ul><ul><li>Tasks: ACCOMMODATING, orderly, uses network </li></ul>
  34. 34. Linear Active people are… <ul><li>Relationships: COLD, separates business and personal life, uses official channel </li></ul><ul><li>Communication: FACTUAL, talks & listens, speech for information, discusses bad orders, defines & solves problems fast, frank & direct </li></ul><ul><li>Tasks: DECISIVE, task oriented, planners, highly organized, followers of rules & regulations </li></ul>
  35. 35. Cultural Variations by Countries or Regions Latin America Vietnam Switzerland Belgium Canada India Arabs, Turkey Africa USA Jap. HK Fin. UK China/ Korea Indonesia Philippines Norway/Australia/NL Russia Italy
  36. 36. Working with Translators and Interpreters <ul><li>Hire professionals </li></ul><ul><li>Make sure the interpreter is familiar with the topic </li></ul><ul><li>Look at your counterpart while you are speaking, not interpreter </li></ul><ul><li>State key points in different ways </li></ul><ul><li>Ask questions to make sure your meaning has been adequately conveyed </li></ul><ul><li>Avoid jargon </li></ul>
  37. 37. Communication Clarity <ul><li>Speak more slowly than usual. </li></ul><ul><li>Use words which have a clear meaning. </li></ul><ul><li>Explain major points in more than one way. </li></ul><ul><li>Announce a change in subject. </li></ul>
  38. 38. Communication Clarity (cont.) <ul><li>Check out assumptions. </li></ul><ul><li>Use active listening. </li></ul><ul><li>Both say and write large numbers. </li></ul><ul><li>Summarize what you have said. </li></ul>
  39. 39. Communication Cautions <ul><li>Avoid speaking louder. </li></ul><ul><li>Avoid telling jokes. </li></ul><ul><li>Beware of information overload. </li></ul><ul><li>Avoid using negative questions. </li></ul>
  40. 40. Avoid Using Slang & Idioms <ul><li>He’s tied up right now </li></ul><ul><li>It’s a piece of cake </li></ul><ul><li>No brainer </li></ul><ul><li>Get the ball rolling </li></ul><ul><li>Break the ice </li></ul><ul><li>Buy into it </li></ul><ul><li>Get to the bottom of it </li></ul>
  41. 41. Cultural Dimensions <ul><li>Universal (Rule) vs Particular (Relations) </li></ul><ul><li>Individualistic vs Group Oriented </li></ul><ul><li>Direct/Explicit/Low vs Indirect/Implicit/Low </li></ul><ul><li>Monochronic vs Polychronic </li></ul><ul><li>Tasks vs Relationships </li></ul><ul><li>Equality Oriented vs Status Oriented </li></ul><ul><li>Comfort with Uncertainty vs Need for Certainty </li></ul>
  42. 42. 5 Business Dimensions * <ul><li>Each dimension has a very real effect on how people process </li></ul><ul><li>information and interact, either personally or with business colleagues. </li></ul><ul><li>These dimensions are the following: </li></ul><ul><ul><li>Individualism vs. Collectivism </li></ul></ul><ul><ul><li>Large vs. Small Power Distance </li></ul></ul><ul><ul><li>Strong vs. Weak Uncertainty Avoidance </li></ul></ul><ul><ul><li>Masculinity vs. Femininity </li></ul></ul><ul><ul><li>Confucian Dynamism (Long Term Orientation) </li></ul></ul><ul><li>*by Geert Hofstede </li></ul>
  43. 43. Confucian Dynamism <ul><li>Later work with Bond (see Hofstede & Bond, 1987), produced a fifth dimension found in Asian cultures (using Chinese cultural values) and meant to explain the rapid economic development of many Asian countries. This dimension refers to the long or short-term orientation of different cultures and to the selective promotion of particular set of ethics found in Confucian teachings. Particular teachings that lead to economic development include thrift, perseverance, a sense of shame, and following a hierarchy. Other Confucian teachings are less emphasized such as tradition, and protecting face. </li></ul>
  44. 44. Strategies to preserve… Face Guanxi Harmony
  45. 45. Face <ul><li>Saving face: avoid losing face before others </li></ul><ul><li>Giving face: openly praise others </li></ul><ul><li>An old Chinese saying: </li></ul><ul><ul><li>“ You return to your hometown in silk robes.” </li></ul></ul>
  46. 46. Preserving Face... <ul><li>Always defer to older and more senior </li></ul><ul><li>Be considerate and beneficent to those younger and more junior </li></ul><ul><li>Don’t ask your Chinese associates to act outside of their group norms, even if you are merely trying to get them to respect your “rights” or opinions </li></ul>
  47. 47. Preserving Face …(cont.) <ul><li>Do not act in any way that disrespects your Chinese associate’s standards and expectations of rights and wrong </li></ul><ul><li>Never show anger; avoid all public confrontations </li></ul><ul><li>Criticize only in private, and do so “sandwiched” in between many positive statements </li></ul>
  48. 48. Preserving Face …(cont.) <ul><li>Professional criticism will or professional praise will be taken personally </li></ul><ul><li>Say “no” in an indirect way </li></ul><ul><li>Be keen in understanding and indirect “no” for an answer </li></ul>
  49. 49. Understanding Guanxi <ul><li>The personal and social relationships by which things are accomplished </li></ul><ul><li>Stress duties and obligations, as opposed to rights </li></ul><ul><li>Individuals are identified and defined by their personal as well as social relationships </li></ul>
  50. 50. Understanding Guanxi <ul><li>“ Being Chinese….is a commitment to one another - billions of small relationships becoming one great whole.” </li></ul><ul><li>“ One Billion: A China Chronicle” </li></ul><ul><li>by Jay & Linda Matthews </li></ul>
  51. 51. Displaying Hierarchy (Titles) <ul><li>Shu Ji Party Secretary </li></ul><ul><li>Dong Shi Board Member </li></ul><ul><li>Cong Jing Li General Manager </li></ul><ul><li>Zong Jian Director </li></ul><ul><li>Zhu Ren Director/Chief of department </li></ul><ul><li>Bu Zhang/Chu Zhang Minister/Division Manager </li></ul><ul><li>Yuan Zhang President of Institute </li></ul><ul><li>Xiao Zhang President of School </li></ul><ul><li>Jing Li Manager </li></ul><ul><li>Zhu Li Assistant </li></ul><ul><li>Mi Shu (Zhang) Secretary </li></ul>
  52. 52. Building Trust as Leader <ul><li>I honor my word; keep promises and commitments; do not over promise </li></ul><ul><li>I listen well; promote dialogue </li></ul><ul><li>My behavior match my words </li></ul><ul><li>I mentor/coach others; help them learn from mistakes; do not criticize </li></ul><ul><li>I keep confidentiality; do not engage in rumors </li></ul>
  53. 53. Building Trust as Leader (con’t) <ul><li>I celebrate others success; I share responsibilities (success and failure) </li></ul><ul><li>I have high expectations </li></ul><ul><li>I share information </li></ul><ul><li>I have a team perspective </li></ul><ul><li>I am humble and keep good sense of humor </li></ul><ul><li>I am patient </li></ul>