Issues across cultures: managing the differing perspectives of China and theUSAUS marketers know the US standard of ethics. However, that standard can lead toethical conflict when Americans encounter the emerging market giant, China. As smallerUS companies enter China, the potential for ethical conflict increases. Reducing thatpotential requires knowledge. Knowing the nature and history of the two cultures canlead to an understanding of the foundation of their ethical systems. Ethics and theexpectations within cultures affect all business transactions. It is vital for Westernmarketers to understand the expectations of their counterparts around the world.Understanding the cultural bases for ethical behavior in both the USA and China canarm a marketer with knowledge needed to succeed in cross-cultural business.Cultural factorsFocusing on the basics makes success in competitive markets possible. However,serious problems can materialize in business practice between the West and theemerging market giant, China. The difficulty lies in more fundamental issues thanproduct, price, promotion and place. With the transition from domestic-focussedoperations to a true worldwide view, other factors are essential for success. Onepervasive factor is culture. Culture and the expectations within cultures affect allbusiness transactions. It is vital for Western marketers to understand the expectationsof their counterparts around the world. Even at the threshold of the millennium, inabilityto master the basic cultural factors still leads to failure.Examples of differences in the cultures of the USA and ChinaChinese self-control - The Chinese typically give hints to others about what they reallywant. This contrasts with the frankness in American culture.Chinese people are pragmatic - Another difference between the two cultures is in theway the two peoples think. The Chinese people are pragmatic and take actions that fitthe existing patterns. Thus, they prefer the actions that are not too disruptive. Ingeneral, the Chinese do not think linearly. Americans look toward a solution, which maybe innovative, disruptive or revolutionary. Americans believe that most productivethinking is linear and rational.
Interpersonal relationsChinese and American societies place different emphasis on interpersonal relations, theindividual and the group. In the USA, the rights of individuals are safeguarded andindividual uniqueness and diversity are valued. In China, the individual is less important.In human resources decisions, Chinese managers may attach less importance toindividual rights. Conversely, Chinese managers may attach great importance to theirnetwork of connections. Outsiders may have difficulty in penetrating the network. Evenlower cost, higher quality, higher profit proposals, may not be accepted in China. Thismay lead to the impression of unethical favoritism. In business dealings, change,especially an increase in prosperity, is valued.In contrast, US culture values progress and change even at the expense of traditionalvalues. The implication is that US managers must respect the values of their Chinesecounterparts. This will require Americans to have great patience.SummaryCulture forms the foundation for ethical behavior and determines what is ethical andwhat is considered unethical. We have shown some of the crucial differences betweenthe business and ethical cultures of the USA and China. In China, the set ofconnections or relationships, form the context of business. When Chinese managersnegotiate a contract, they rely not on the content of the contract but the context in whichit was negotiated. What is important is the relationship among the individuals. If a stickydetail comes up, Chinese managers feel that communication and relationships will solveit. There is less concern about meeting contract conditions, since the contract is viewedas a symbol of the relationship among partners.In contrast, Western managers view the content of a contract as most important. Thespecific wording, the dates, the amounts, the responsibilities are spelled out clearly. Toan American manager, negotiating the details implicitly means striving to meet thedemands of the contract. Failure to do so would embarrass an American, a loss of face.Other potential ethical conflicts arise simply from the different values inherent acrosscultures.
Task 2THE IMPACT OF CULTUREWe suggests that an organizations culture develops to help it cope with its environment.Today, organizational leaders are confronted with many complex issues during theirattempts to generate organizational achievement. Many leaders, when trying toimplement new strategies or a strategic plan leading to a new vision, will discover thattheir strategies will fail if they are inconsistent with the organizations culture. Cross-cultural management concerns the interaction of differing cultures in a businessenvironment. When businessmen and women meet people from other cultures, varyingapproaches to this cultural management allow for enhanced understanding andcooperation.Effects of Culture ChangeWell-managed instances of culture change can have a positive influence on a particularculture. For example, The scope of business operations has changed drastically overthe past several decades. Run a successful, growing business has become nearlyimpossible without having to engage in the international market. Globalization hasconnected us all in ways we never could have imagined. However, this globalization hasalso brought challenges regarding intercultural communication and understanding."Intercultural communication" refers to communication between parties hailing fromdifferent cultural backgrounds. In particular, intercultural communication occurs whenthe communicating parties come from cultures with different communication practices,expectations and norms. In the business world, cross-cultural or interculturalcommunication occurs when business associates from different cultures mustparticipate in business exchanges, negotiations or partnerships. Different cultures value different components of these dimensions to varying extents,and as such, communication can become complicated. For example, Chinese culture,on the individualism scale, ranks low; the Chinese tend to put more emphasis on thecollective good. American culture, on the other hand, ranks high on the individualismscale, putting a large emphasis on individual success and prosperity. These culturalperspectives affect the way we convey messages, as well as the importance we placeon different aspects of business. These differences play a critical role in mutualunderstanding if we are to effectively tailor our business-related communications forsuccess.
Impact on ProfitabilityIn a globalized market, businesses have access to a much wider array of raw materials,supplies, human resources and potential consumer bases. As such, many companiesfind it appealing to expand their horizons into other countries. However, companiesmust often implement intercultural communication in order to accomplish this kind ofexpansion. Failure to take into account cultural differences can create costly mistakes.Take Wal-Marts abysmal failure in Germany, for example. In an effort to expand itsglobal presence, the store sank $1 billion into a German venture, giving the task of theexpansion to an American who did not even speak German. As a result, theAmericanized company culture did not mix well with German mores, and practices suchas greeters and grocery baggers repelled German consumers. The company eventuallyleft Germany, largely due to the countrys failure to take into account cultural differencesin business practices and communication.