The Chinese Business Puzzle Summary

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The Chinese Business Puzzle Summary

  1. 1. The Chinese Business Puzzle Summary Chapter 1 – Business Environment Chapter 4 – Exchanging Gifts and FavoursThis Chapter presents an overview of the relevant back- This Chapter details the protocol for exchanging giftsground to the business environment in which foreigners and favours between the Chinese and foreignersmay expect and be expected to work with the Chinese,whether at home or in China, under four headings: Correct observance is based the underpinning influ- ences and behaviours described in previous chapters,n The logical starting point is the philosophical envi- and primarily generosity, as commended by Confucius ronment of Confucianism - which, albeit out of fa- Generosity takes many forms, of which two of the most vour at present, has so permeated Chinese life for obvious and tangible are: giving presents and doing fa- the last 2,500 years that its effect is subconsciously vours – or rather exchanging the same, following Confu- all-present, including in business cius’ Golden Rule of reciprocity and in the spirit of theo Next is the political environment that has margin- Chinese proverb that: “courtesy demands reciprocity” alised Confucianism to dominate China since 1949: Moreover, it is not the gift that counts, but the act of giv- Communism - which has evolved into “socialism ing, according to the Chinese saying that: “the gift is with Chinese characteristics” nothing much, but it’s the thought that counts”p Integral to her political environment is China’s eco- Business is no exception: hence, an integral part of the nomic environment - where “socialism with Chi- Chinese business scene (at home and abroad) is ex- nese characteristics” translates into a “market changing gifts for the purpose of building “guanxi” (re- economy with Chinese characteristics” and di- lationships) - for which reason: giving gifts is not a “one- rectly impacts on the opportunities for foreign busi- off”, but should be repeated from time to time nessq Last but not least is the legal environment - that Chapter 5 – Negotiating Techniques legislates how business should operate within the preceding three environments This Chapter: Chapter 2 – Social Environment ¾ outlines the protocol and suggests tactics for nego- tiations between the Chinese and foreigners - the correct observance of which should improve theThis Chapter presents an overview of the relevant back- chances of the latter securing a successful outcomeground to the social environment in which foreignersmay expect and be expected to work with the Chinese, ¾ assumes a basic knowledge and understanding ofwhether at home or in China, under three headings: negotiating techniques in general, onto which suchn specific protocol and tactics may be grafted ¾ First: the relevant aspects of her geography and history that have moulded China’s cultural heri- concentrates, therefore, purely on the aspects pe- tage culiar to Chinao Then: the domestic environment in which the Chi- Whilst the degree of formality may vary - according to the nature and importance of the occasion and relation- nese of today have been brought up ship between the individuals involved - the underpinningp Finally: the relationship that, consequently, the Chi- influences, behaviours and protocols are the same nese enjoy with foreigners Of these, the key is “guanxi” - since the Chinese may set greater store by building a working relationship with Chapter 3 – Underpinning Behaviours you than crossing every “T” and dotting every “I” of an agreement. For the Chinese, personal trust is more im- portant than paper-based contractual termsThis Chapter introduces the relevant behaviours thatunderpin the business dealings of the Chinese as a con-sequence of their Business and Social Environments Chapter 6 – Business MeetingsAlthough many Chinese are prepared to forgive yourlack of expertise - especially the younger and better- This Chapter details the protocol for business meetingseducated ones who may have travelled overseas and between the Chinese and foreigners - the correct obser-hence understand what it is like to be on the “other side vance of which should improve the chances of the latterof the fence” - there are those who still lay great store on securing a useful meeting and successful outcomeadherence to the rituals of gentlemanly politeness that Whilst the degree of formality may vary - according todistinguish the Confucian “Superior Man”; and for whom the nature and importance of the occasion and relation-outward form may be more important than inward motive ship between the individuals involved - the underpinningHence the reason for devoting so much space in this influences, behaviours and protocols are the sameand subsequent Chapters to the correct observance ofChinese business etiquette______________________________________________________________________________________ Page 1
  2. 2. The Chinese Business Puzzle Summary______________________________________________________________________________________ Chapter 7 – Business Entertaining Chapter 9 – Market Entry StrategiesThis Chapter details the protocol for business entertain- This Chapter:ing in general, and banquets in particular, between the ¾ briefly suggests various strategies for foreign busi-Chinese and foreigners - the correct observance of nesses still thinking or in the process of trying to en-which should help build “guanxi” ter the Chinese marketWhilst the degree of formality may vary - according to ¾ assumes a basic knowledge and understanding ofthe nature and importance of the occasion, and the the underlying business principles - such as: gov-number of and the relationship between the people in- ernment relations, marketing, sponsorship, strategicvolved – the underpinning influences, behaviours and thinking, JVs, due diligence etc.protocols are the same, and primarily generosity ¾ concentrates, therefore, purely on the aspects pe-Generosity takes many forms: one of the most obvious culiar to Chinaand tangible of which is entertaining The suggested strategies include:Business is no exception: hence, an integral part of theChinese business scene (at home and abroad) is enter- Political Profilingtaining, which normally takes the form of a banquet that Be recognised by the Chinese and your governmentsgives the host an opportunity to exercise generosity and and regulatory authorities as meeting the legal re-demonstrate prosperity by offering a wide range of quirements for an operating licence, and having thedishes served successively – to the extent of purposely technical competence to operate a business, in Chinaover-ordering Relationship ManagementThe common purpose is to build “guanxi”, for which Sign a joint venture agreement with an acceptablereason: constantly hosting and attending banquets is a Chinese business partnerregular feature of doing business with the Chinese Marketeering Chapter 8 – Handling the Media Be ready to operate in any market likely to be open to foreign companies in the short to medium term and offering long-term profitable growthThis Chapter: Human Resource Management¾ outlines the protocol for handling the media in Have an occupationally competent local work force China - the incorrect observance of which may eas- ily spell disaster, even if proper adherence might not necessarily have any beneficial impact Chapter 10 – Human Resource Management¾ assumes a basic knowledge and understanding of public relations in general, onto which such specific This Chapter examines the more important, but not all, protocol may be grafted Human Resource issues facing foreigners who manage¾ concentrates, therefore, purely on the aspects pe- or have management control over Chinese employees in culiar to China a foreign-owned or foreign-invested company, respec- tively, in ChinaWhilst the degree of formality may vary - according tothe nature and importance of the occasion, and the All the underpinning influences, protocols and behav-number of and the relationship between the people in- iours have already been addressed in previous Chaptersvolved – the underpinning behaviours and protocols are and many illustrated with examples and/or case studiesthe same centred on those issuesThe common purpose is the same as elsewhere, This Chapter, therefore, complements and expands onnamely: public relations, rather than and as distinct those examples and/or case studies – the majority offrom advertising – that is: to build and enhance market which are drawn from Chapter 3, as indicated above,profile, presence and reputation and mainly fall into the two categories of “face” and hierarchism – rather than repeat what has gone beforeAfter all: why should the Chinese do business withWestern “foreign devils” unless we can win them over? The Chapter also: assumes a basic knowledge and understanding of  To that end, we should clearly, appropriately and publiclycommunicate to the Chinese people via the press and Human Resource Management best practice – formedia the same messages as we do privately to their example: as espoused in the UK by “Investors inleaders at meetings and banquets People” or the Chartered Institute of Personnel and Development (of which the author is a Chartered Fellow) concentrates, therefore, purely on the aspects pe-   culiar to China______________________________________________________________________________________ Page 2

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