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Strategies for Companies Doing Business in China


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Table of contents:
- Management strategies
- Expats in China
- Strategies for engaging clients
- Special offer

Published in: Business, Career

Strategies for Companies Doing Business in China

  1. BRIC Country Series: China Strategies for Companies Doing Business in China 1 © 2013 ITAP International, Inc. All Rights Reserved. 1
  2. Table of Contents Management Strategies Expats in China Strategies for Engaging Clients Special Offer 2 © 2013 ITAP International, Inc. All Rights Reserved. 2
  3. Management Strategies 1. Currently, the most important business issues for managers ( ti (natives and expats) i Chi are: d t ) in China • • • • • • Staff retention Obtaining financing g g New contract law Transfer pricing Finding markets locally Protecting intellectual property 3 © 2013 ITAP International, Inc. All Rights Reserved. 3
  4. Management Strategies 2. Effective l d hi in China includes the following 2 Eff ti leadership i Chi i l d th f ll i behaviors: • • • • Respect for Chinese history and culture p y Even temper Patience Making the distinction between “what works in (home what in… country)” and “what works in China.” It is important to recognize that the management practices in one’s home country are not necessarily superior! 4 © 2013 ITAP International, Inc. All Rights Reserved. 4
  5. For Your Information Information… Business i not conducted d i th f ll i ti B i is t d t d during the following times and or occasions: • • • • • • • Chinese New Year Qing Ming Festival Labor Day Dragon Boat Festival Mid-Autumn Festival National Day New Year's Day 5 © 2013 ITAP International, Inc. All Rights Reserved. 5
  6. Motivating Employees • • • Employers welcome new employees i a welcoming or initiation E l l l in l i i iti ti event. The employer organization is likened to a family. During this event, new employees are introduced to their colleagues, managers, managers and the organization as a whole whole. A uniform and/or some practical gifts for office use with company logo and/or book bag would be an appropriate welcome gift. For factory workers safety goggles gloves relevant tools and/or workers, goggles, gloves, tools, educational materials would be more appropriate. In China employers need to spend much more time with their employees than would be the case in the West To motivate West. employees, some employers invite them for lunch, even though this tends to embarrass employees. 6 © 2013 ITAP International, Inc. All Rights Reserved. 6
  7. Expats in China 1. Wh t 1 What are the most important issues for expat th ti t ti f t managers in China to get right? • • • Respect for China Using proper channels to hire and fire workers Understanding the laws 2. How are expat managers typically perceived? • • Many expat managers are regarded as aloof and not in tune with their Chinese employees. Mainland Chinese tend to think that managers from Hong Kong and Taiwan look down on them. 7 © 2013 ITAP International, Inc. All Rights Reserved. 7
  8. Expats in China 3. 3 If an expat doesn’t give th proper respect t China, td ’t i the t to Chi he or she can be perceived by the Chinese nationals as arrogant and insensitive. g 4. Some actions and behaviors are appropriate for locals, yet should not be adopted by expats who are not completely fluent in Chinese practices and culture. Here are a few examples: – Spitting – Criticizing the government – Causing the Chinese party to lose face (by embarrassing them or not showing sufficient respect, for example). g p , p ) 8 © 2013 ITAP International, Inc. All Rights Reserved. 8
  9. Strategies for Engaging Clients 1. To build 1 T b ild rapport with potential clients i Chi b . . t ith t ti l li t in China by. • • • • Understand that identifying and selecting the right partner in China is key. Try to understand the Chinese point of view. Don't assume that business practices in the home country can automatically be transferred and used in China. y Be patient and understand that signing a contract can be perceived by the Chinese as a prelude to serious discussions. 9 © 2013 ITAP International, Inc. All Rights Reserved. 9
  10. Strategies for Engaging Clients 2. When i iti 2 Wh visiting a prospect or a client. . . t li t • • • Spend some time at the beginning of the meeting in “small talk” rather than launching straight into business. Address the counterpart by title and name (General Manager Wang, etc.). Have a proper business card in Chinese and your native p p y language to give to your Chinese counterpart. Give the card with both hands and a small nod of the head. 10 © 2013 ITAP International, Inc. All Rights Reserved. 10
  11. Strategies for Engaging Clients 3. Vendors should avoid. . . • • Never put the Chinese counterpart’s business card straight into your pocket. Look carefully at it and keep it visible until the end of the meeting. ti NEVER fold the card. 4. When negotiating with prospects or clients from China… • • As the circumstances change, so would the terms of the agreement – even after a contract is signed. Patience is key. Developing “Guanxi” (a relationship) with the Chinese partner is the period that takes the longest time and is therefore unsettling for negotiators who lack experience in China. 11 © 2013 ITAP International, Inc. All Rights Reserved. 11
  12. Strategies for Engaging Clients 5. Recognizing and h dli conflict 5 R i i d handling fli t • • Conflicts can arise out of what western managers might consider a very trivial thing which in the West would be resolved by an apology. Formal apologies bring “shame” on the Chinese party (even if they are in the wrong) and should be done in private or handled by a third party, neutral to the conflict, who would ensure that no one loses face. 12 © 2013 ITAP International, Inc. All Rights Reserved. 12
  13. Strategies for Engaging Clients 6. To 6 T maintain a relationship (f the purpose of i t i l ti hi (for th f getting follow-on business) . . . • • • Call or visit on a regular basis. g Send New Year’s greeting cards (and possibly a small gift or chocolates, cookies, etc.) Send moon cakes for the mid-autumn festival. mid autumn festival 13 © 2013 ITAP International, Inc. All Rights Reserved. 13
  14. Hofstede Scores for China 1. Individualism: 20 (Group Orientation) 2. Power Distance: 80 (Hierarchical Orientation) 3. Certainty: 30 (Tolerance for Ambiguity) 4. 4 Achievement: 66 (Achievement Orientation) 5. Time Orientation: 87 ( (Long-Term Orientation) g ) The graph above provides a snapshot of the culturally based values in China The graph shows that the China. Chinese tend to accept and respect hierarchy in the workplace. They also believe that the interests of the group take precedence over the interests of individuals, and intend their actions to have consequences for the future. 14 © 2013 ITAP International, Inc. All Rights Reserved. 14
  15. Cultural Disharmony Undermines y Workplace Creativity “Managing cultural friction not only Managing creates a more harmonious workplace, says professor Roy Y.J. Chua, but Y J Chua ensures that you reap the creative benefits of multiculturalism at its best.” SOURCE: Blanding, Michael, W ki K SOURCE Bl di Mi h l Working Knowledge, H l d Harvard B i d Business S h l 09 D 2013 R School, Dec Research & Id h Ideas 15 © 2013 ITAP International, Inc. All Rights Reserved. 15
  16. Special Offer – ITAP’s GTPQ 1. 1 If you already suspect that there is a cultural misalignment l d t th t th i lt l i li t among and between team members… 2. If you want to examine the gaps in work-related values within your t team.. 3. To bridge gaps to motivate employees, work more effectively with colleagues, successfully engage clients… 4. If it would help focus the team by comparing your team’s culture with the culture of the 5 best teams in ITAP’s database… …ITAP’s Global Team Process Questionnaire™ (GTPQ) identifies cultural misalignment as well as other areas that need work so you can focus on team improvement. The tool measures change/improvement over time. h /i t ti 16 © 2013 ITAP International, Inc. All Rights Reserved. 16
  17. Measuring Cultural Disharmony ITAP measures human process interactions on teams which include: • Executive overviews • Both quantitative answers and qualitative insights • Automated diagnosis • Customized with questions that address your team goals… © 2013 ITAP International, Inc. All Rights Reserved. 17 17
  18. Avoid Ambient Cultural Disharmony… PROMOTION: Buy 1, get 1 FREE (GTPQ team analysis) Buy 1 iteration of ITAP’s Global Team Process Questionnaire (GTPQ ) Questionnaire™ (GTPQ*) at $1000 and receive 1 iteration free and 1 hour of virtual debrief with each iteration. Email me ( and enter PROMOTION CODE C14GTPQ i the subject line in th bj t li *GTPQ (Premium version) retails for $1,000/team plus debrief or delivery of interventions for the team @ $350/hour 18 © 2013 ITAP International, Inc. All Rights Reserved. 18
  19. Questions? Please email or call me… Catherine Mercer Bing CEO, ITAP International, Inc. ITAP International, Inc. 353 Nassau Street, 1st Floor Princeton, NJ 08540 USA (W) 1 215 860 5640 1.215.860.5640 Remember! Put your PROMOTION CODE: C14GTPQ in the subject line of your email. …thank you… 19 © 2013 ITAP International, Inc. All Rights Reserved. 19