The Global Leader: Understanding Chinese Business Culture and Business Practices
Discover a number of the most important Chinese business practices, etiquette, and customs that are different from those used in the West.
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Even people who speak the same language often misunderstand
each other. This was illustrated in the following story.
walking down the street noticed a sign in the window
of a restaurant that said, SPECIAL TODAY--RABBIT STEW.
He said to himself, "That's a favorite of
went to order the stew. After he had taken three or
four bites, which did not taste right, he asked
the waiter to
call over the proprietor. "By any chance is there
any horsemeat in this rabbit stew?" the customer
now that you ask, there is some," replied the
is the proportion?" asked the man. "Fifty-fifty," came
the reply. Now most people would have felt that no
further questioning were needed, that there was a clear
But this man pursued the issue. "What do you mean
by fifty-fifty?" he asked, and the proprietor
horse to one rabbit."
was a famous story told by Winston Churchill about an argument
between American and British military officers
during WWII about the planning of what came to be known
as D-day. The British wanted to "table it." To
the Americans that meant to delay the matter until later-to
British it meant deal with it now.
there is an even greater potential for Chinese and Westerners
to misunderstand each other
due to different
culture and business practices. To understand why
that occurs, it is important to know some of the
how people in the two cultures think.
Eastern and Western Thinking Patterns
to realize that one of the more subtle aspects of culture
and business etiquette has to do the way one thinks about how the world.
The following table presents some of the differences
between how the Chinese and the Western individuals think
about culture and values.
(America & most
Chinese and Most Asian cultures)
causal relationships and direct associations between
A and B)
(more roundabout and subtle)
of Agreement and Disagreement
argumentative, willing to express disagreement verbally
difficult to say no even if one means no, disagreement
is in the explicit, verbal message.
of direct language
is often implied or must be inferred
of indirect language patterns
overt, one is more likely to ask the person to "speak
their mind" or "get it out on the table"
rule based or based on application of abstract principles
such as regulations or laws
to take context and the specific situation into
to have rights and greater need for autonomy and
of the Business Relationship
|Less important, tend to
substitute relationship for written agreement, superficial,
easy to form, not long lasting
||Most important business
cannot occur until relationship if sound, written agreement
secondary to quan xi, hard to form, long lasting
or confrontation, use of lawyers and courts
mediation though trusted third parties
Sense During Meetings
on time and end on time.
less driven by exact start and end times
of two states: win or lose
lose is to win
in order to win
The Importance of Business Customs or How
To Blow a Business Deal
different culture world views cause a great deal of frustration
and distrust between the individuals
attempting to work together. Three examples are listed below.
A businessman went to Taiwan to close a deal with
the president of a large paper company. Since they were meeting
for the first time, they started out with the normal pleasantries
such as "How was your trip?" etc. It turned out
the businessman happened to be from Columbus, Ohio, the home
of Ohio State University. When the president of the Taiwanese
company mentioned that his son was going to this school,
the business person then said, "Yes, it's a very
good school, let's talk business."
• A while back, two dotcoms wanted to establish business
relationships with potential tech partners in Singapore.
Through the intercession of a couple of savvy Singaporean's,
an initial meeting was arranged to determine if there
might be some areas of commonalties. The two companies
chose as their representative an American lawyer.
the same trip, another dotcom company had sent their
business development person to meet with Singaporean
counterparts. Meeting followed meeting and at the end of the week things
looked very promising. Both sides were very pleased
at the progress and the potential. Then, two weeks after coming
back to the U.S., the contact person was promoted
to a VP position and a new person took over.
you missed the point of these stories, one probably doesn't
certain culture values such as lianzi
& mianzi and guan
quickly establish business relationships, but there relationships
are generally shallow and not
particularly long lasting. Throughout the Orient, it takes
to develop the relationship, but once it's developed,
it tends to last
a very long time. This simple observation means that
and some Europeans tend to lose out on business deals.
also a fairly common practice for multinational corporations
to rotate people through a country
every two or three
years. Of course, once that expat leaves, they
take with them
relationships it took months and years to cultivate.
To make matters worse, many companies tap employees
who are experts in technical or management matters
managers. However, a recent study finds other
skills vital for success.
Prudential Relocation, an arm of Prudential
Insurance, asked 72 personnel managers working for
multinationals to name the traits required
for overseas success. Nearly
35% said culture adaptability, patience, flexibility
and tolerance for others' beliefs. Only 22%
of them listed technical
and management skills.
|Elements of Chinese Business Etiquette
A common mistake business people make before
going overseas is not making an effort to understand the
basics, such as how to make a positive first impression.
These first impressions are based on etiquette and greeting
rituals that vary for different countries. The business etiquette associated with the wai in Thailand,
the bow in Korea and Japan, and the handshake in the West when done properly
create a good first impression. When done wrong, one potentially
botches the relationship in the first 30 to 60 seconds.
creating a positive first impression is not enough. One
should also have an understanding of the following
aspects of Chinese business etiquette:
• Gift giving
• Greeting rituals
• Business relationship development
• When to display emotions
• Time perceptions
• Differences in decision making and problem solving
• Guest-Host relations
• Negotiation styles
• How to use intermediaries
• Meeting customs and conduct
• Use of the names, titles and business card presentation
• How to establish relationships with government officials
Finally, according to Mark Buchman,
who teaches a class called "Doing
Business in the Pacific Basin" at UCLA, there are
five principles (The 5 Ps) that one must keep in mind to
deal with different business etiquette in general. They are:
Plan. It doesn't have to be the 60-page bulletproof version
one would present to the venture capitalists, but
to be something written that all agree on. It's critical
to define the fundamental opportunity, your competitive
and marketing strategy, and its tactical components.
Persevere. It's not easy to do business there, so don't
give up. Many sound business concepts fail when the
company loses heart too early in the process.
Patience. If you are a financially driven company that
sets high hurdle rates with short-term payback periods,
you will give up too early and lose the investment
or not have
the guts to try.
Personal Relationships. Something generally considered
*not too important for most task oriented
managers is extremely important in Asia.
Perfection. We are bound to make many mistakes. Learn
from them and don't make them a second time.
To those five, I would add a six principle, "Prevention." As
Ben Franklin once said, "An ounce of prevention is
worth a pound of cure."
greatest enemy is our own ignorance. If we don't take
steps to understand the subtle aspects of Chinese
and business practices, we will most likely never experience
the sweetness of success
Business Practices and Cultural
Legacee has put together a number of resources
to assist with the culture side of market entry.
a. We have put together
a number of books on business and business strategy to help the business traveler. These include books such as:
- Doing Business in Asia: The Complete
- Digital Dragon: High-Technology
Enterprises in China
- China Dawn: Culture and Conflict
in China's Business Revolution
- Passport China: Culture and Conflict
in China's Business Revolution
- Business China: Your Pocket Guide
to Chinese Business, Customs and Etiquette
- Doing Business in China: A Practical
Guide to Understanding Chinese Business Culture
- Cowboys and Dragons: Shattering
Cultural Myths to Advance Chinese American Business
- Chinese Business Etiquette: A
Guide to Protocol, Manners, and Culture in the
People's Republic of China
b. There is also coaching and workshops for the side of things not easily
learned from the books.
c. We can also refer you to experts here
and in other countries for individualized coaching
According to Andrew Kwok, a consultant with
many years of experience in this field:
Guan xi (connections/relationships) is a
very important element in doing business in China. Being
introduced by even midlevel government bureaucrats can
give you a head start in the trust building process with your potential
Bring lots of business cards when visiting
China. Don’t be afraid to
offer your business card. Chinese people love to exchange business cards.
Chinese names are traditionally written with the last name first and other
In recent years, the Chinese government
has been aggressive in launching various campaigns against
bribery and graft. However, bribery and graft
are still problems. It would be best to establish your reputation and
avoid being involved in such behavior at the beginning of the relationship.
Do not give lavish gifts. It may be seen
as a bribe. Never give clock as a gift. The words “give
you a clock” sound similar to “attending
Do invite your host to a meal. The Chinese
people love elaborate meals. If you invite the General
Manager of a company, do expect him to bring along
a couple of deputies and assistants to the event. There will be a number
of toasts throughout the meal. You are expected to make at least one
toast to the most senior member of the Chinese party.
Resources For the Business Traveler
A great site that discusses the numerous
aspects of Chinese culture.It contains lists of over
700 web sites organized into many different categories
of subjects that include: About China, Feng Shui, Proverbs
Business Customs, Practices, and Etiquette
Here you will find a series of reports
on Chinese (Taiwanese) business customs, etiquette, cross-culture
communication, negotiating tactics, business culture,
manners and business entertaining.
For the person who enjoys learning from
pictures: the site contains a number of very interesting
pictures from modern and ancient China. The site is organized
into sections that include: maps. archaeology, art, divinities,
people, historical sites, historical illustrations, technology,
customs, and stereotypes.
Historical and Culture Texts
One cannot understand a Chinese culture
unless one also is familiar with the classic texts that
shaped this culture. The site contains a large number
of translations to for classic texts of Chinese literature.
It's organized in categories that include:
- Confucian philosophy including the Confucius
- Taoist texts from Lao Tse and Chuang
- Short articles
Art of War
Of interest to many business people is
Sun Tzu's classic, The Art of War. Many Chinese
read the book for its insights into business, it's
customs and practices even though it was written almost
2500 years ago.
A very complete listing of China and Chinese
Related Business and Economic Information.
The Society for Intercultural Education, Training, and Research
is an organization which aims to enhance awareness of
intercultural issues in education, policy-making, and
business, to facilitate
communication between people of different cultures, to
provide professional expertise in culture issues,
to develop standards for interculturalism, to promote
exchange of ideas and experience in the intercultural
site provides newsletter with great articles regarding
is a free online interdisciplinary resource designed
for the interculturalists around the
world who study, teach, train and/or research in
cross-cultural psychology, cultural anthropology, intercultural
multicultural education, race/ethnic relations
(sociology), multicultural literature, sociolinguistics,
business and other related sub-disciplines. This
researchers and teachers to keep up with relevant
developments (research results and methods) in other
relations disciplines, and also help to promote
efficient research and effective teaching and training
This page contains a list of classic Chinese books--many
of them available in English versions.
Legacee is located in Southern California, near Los Angeles. Copyright © 1996-2012
by Legacee Management Systems Inc. All Rights Reserved