China is the third world economy, the most populous country, the fourth in extension and the fastest growing economy. In the past years China has become one of the most important actors in the world.
China has a very traditionalist culture, which has existed for about 5,000 years. There are important factors that explain why people today behave the way they do; this behavior is present in each day’s life, including how they run and how the manage organizations. The most relevant factors that explain the culture are the four threads, the eight elements and the blend. It is also important to know what common problems are behind a Chinese organization.
The four threads
1. Agrarism: Chinese culture has been pretty attached to the land; still two thirds of the population lives in rural areas cultivating crops. Their concept of the time is different; crops usually take long to grow. Chinese retain their agrarian values, which makes them a collectivist society, because their survival depends on the group cooperation.
2. Morality: Chinese are deeply oriented towards a spiritual society, but not religious. Two thousand years ago Confucius wrote a moral code that has served as the foundation for the Chinese education. It has been the basis of their conduct which is based on obedience and benevolence. Another important philosophy is that from Taoism which looks for The Path, the middle point.
3. Pictographic Language: Chinese perceive things as a whole, they don’t break thing into details as most western people do. In negotiations they won’t follow a sequence; it all belongs to the same thing.
4. Wariness of foreigners: Chinese have suffered several invasions and attacks from different countries what has led to a mistrust of foreigners; this can only be overcome after a long time in which a good relationship has grown.
2. Morality: Chinese are deeply oriented towards a spiritual society, but not religious. Two thousand years ago Confucius wrote a moral code that has served as the foundation for the Chinese education. It has been the basis of their conduct which is based on obedience and benevolence. Another important philosophy is that from Taoism which looks for The Path, the middle point.
3. Pictographic Language: Chinese perceive things as a whole, they don’t break thing into details as most western people do. In negotiations they won’t follow a sequence; it all belongs to the same thing.
4. Wariness of foreigners: Chinese have suffered several invasions and attacks from different countries what has led to a mistrust of foreigners; this can only be overcome after a long time in which a good relationship has grown.
The eight elements
The most important are the first and the second, which some people say that one cannot enter China without these.
1. Guanxi (personal relations): Chinese place high importance on individuals' social capital within their group of friends, relatives, and close associates.
2. Mianzi (Face, social status): In Chinese business culture, a person's reputation and social standing rest on saving face. If Westerners cause the Chinese embarrassment or loss of composure, even unintentionally, it can be disastrous for business negotiations.
3. Zhongjian Ren (The Intermediary): Business deals for Americans in China don't have a chance without the zhongjian ren, the intermediary. In China, suspicion and distrust characterize all meetings with strangers.
4. Shehui Dengji (Social Status): Casualness does not play well in a country where the Confucian values of obedience and deference to one's superiors remain strong.
5. Renji Hexie (Interpersonal Harmony): Importance of harmonious relations between business partners. Any attempt to do business without first establishing harmony is rude.
6. Zhengti Guannian (Holistic Thinking): Chinese think in terms of the whole while westerns think sequentially and individualistically, breaking up complex negotiation tasks into a series of smaller issues: price, quantity, warranty, delivery, and so forth. Chinese negotiators tend to talk about those issues all at once.
7. Jiejian (Thrift): China's long history of economic and political instability has taught its people to save their money, a practice known as jiejian. The focus on savings results, in business negotiations, in a lot of bargaining over price—usually through haggling.
8. Chiku Nailao (Endurance, Relentlessness): Chinese are famous for their work ethic. But they take diligence one step further—to endurance.
The Blend
It is said that Chinese are a blend of Maoist bureaucrat, Confucian gentleman and a Sun Tzu-like strategist.
Maoist bureaucrat because they always follow the government’s plan for doing business and operating in China needs permission from different government’s instances. The land is owned by the government.
Confucian gentleman because they are always looking to cultivate morality, benevolence and establishing good relationships. Business derives from mutual trust.
Sun Tzu-like strategist because in China it is said that “the marketplace is a battlefield”; but they perceive war different from westerns. They base war on moral law.
Even though China has been doing effort to change some of its problems, they still remain and should be considered after doing business in order to be prepared. Issues such as violation of intellectual property, internal robbery of ideas, corruption and labor instability must have a contention plan to avoid them or deal with them the best way possible.
QUESTION
the relevance of Guanxi and the existence of Chinese business networks as supporting factors to the internationalization process of Chinese companies
For Chinese and Taiwanese companies guanxi is an essential thing completely relevant even in today’s world; the central theme for Chinese companies is harmony which builds a cooperative spirit, harmony is achieved by a correct guanxi. According to I Chun Lisa Chen and Mark Easterby-Smith in their text “Is Guanxi still working, while Chinese MNCs go global? The case of Taiwanese MNCs in the UK” they say that the competitive advantage of the Chinese companies relies on the resources between firms and in their internal assets; it means that these organizations use the network approach in which cooperation and relationships are the essence. But these cooperative inter-business relationships are based on the personal trust of the major bosses it means the guanxi between them. Guanxi is also important in employment relations in which guanxi means obedience to the superior and benevolence to the subordinates. Today’s world and its globalization have made Chinese organizations to adapt and nowadays they don’t like using guanxi to recruit people. Guanxi is the mean by which Chinese companies internationalize.
VIDEO
BIBLIOGRAPHY
I Chun Lisa Chen and Mark Easterby-Smith “Is Guanxi still working, while Chinese MNCs go global? The case of Taiwanese MNCs in the UK”
Images from www.istock.com