Business culture- China vs US

1. Business culture- China vs US Presentation Outline • Foundation of US ethics- basic discussion • Comparison of Business culture-China vs US • Strategies and Managerial Implications

2. Cultural Foundation of American Ethics • Foundation based on Judeo-Christian and Western socio-theological principles • intrinsic underlying truth • a sovereign moral authority--God • God declines “right or wrong” • Natural law -- “inalienable rights” • life, liberty and pursuit of happiness • Equality implies no prior claims against the rights

3. American ethics (continued) • Limits on individual freedom are either(1) voluntary(2) lawfully imposed • Results -- individualism and contract • Individual’s right to choice is consistent with market economy • The functioning of a free market economy can be described as “nexus of contracts” • A business contract - spells out details of relationships and is enforced by law if violated

4. Comparison of Business Culture:China vs US • Business culture - time-tested and conventional practices • China and US have a different business culture -- result of different history and practices

5. Notion of Harmony China • Everything is in harmony • Change is viewed as disruptive • Reason -- too many people US • Efficiency and effectiveness • End result • logical reasoning on facts • change to get desired results

6. Importance of Relationship • China • 4 important social groups: relatives, schoolmates, personal friends, and the indirect relationship from the 3 • Importance of “guanxi” (connection) • US • constitutions guarantee the rights • a short history to inherit traditions • stress on individualism for personal achievement

7. Relationship (continued) • Agricultural state (small community mentality) • privacy is not highly valued • individualism is not singled out • “rule of man” over “rule of law” • Relatively few norms • melting pot • Increased tolerance on diversity • separate personal and business relationship • friendship can be formed and dissolved quickly

8. Subtlety and Explicitness China • Build on subtlety • Language based on abstraction of ideas • Reduce confrontation • Outspoken --not norm(read the tea leaves-- observe body, words, tone) • US • Frank and open

9. Subtlety and Explicitness (continued) • Courtesy (righteousness, ethics and honor)-virtues • Saving face • Do not say “no” easily • Hint to get help • Self-control makes people appear “shy”

10. Communication Style China • Silence for reflection • Not to exaggerate (implications on marketing a product) US • uncomfortable with gaps of silence • Some American feel ok to exaggerate • fluency and gift of gab--admirable

11. Communication-continued • Non-linear thinking • pragmatic thinking • rare physical contact • no eye contact • “Yes” means “I am listening” (not I accept) • Linear thinking • pragmatic and look for innovation • normal touching • eye contact is important (implying I have no harm) • Hi- means friendly

12. Negotiation • China US • contract is the end in itself • Americans think Chinese use banquet as the way to get upper hand • discuss openly costs and benefits

13. Rule of Banquet China • Much attention to eating and drinking • Private rooms in restaurant • round table with chopsticks • Seats assigned • Do not stretch arm for food US • using club members

14. Taboos • China • Concerns with numbers (symbol for luck) • Success factors:fate, luck, feng-shui,good deeds and knowledge US • Hard work

15. Strategies of Resolving Conflict • Avoiding • Forcing • Education and persuasion • Infiltration • Accommodation • Negotiation and compromise • Collaboration and problem solving