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Irene Fan MBA, Hult International Business School

hult.edu. Irene Fan MBA, Hult International Business School. Growing Economic Dominance: The Cultural and Organizational Characteristics in China. hult.edu. Purpose. To discuss the cultural and organizational characteristics in China

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Irene Fan MBA, Hult International Business School

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  1. hult.edu Irene Fan MBA, Hult International Business School

  2. Growing Economic Dominance: The Cultural and Organizational Characteristics in China hult.edu

  3. Purpose • To discuss the cultural and organizational characteristics in China • Important behavioral factors that foreigners should be aware of when doing business in China hult.edu

  4. Agenda • Introduction of “Cross-cultural Challenges when Doing Business in China” (Pan, F., and Zhang, Z.,2004) • Comparison of my personal experience in China to the key findings of Pan and Zhang hult.edu

  5. Relevant Research • Cross-cultural Challenges when Doing Business in China (Pan, F., and Zhang, Z.,2004) • Presents an understanding on the general cultural differences between America and China by applying dimensions of Hofstede • An examination of cross-cultural negotiation: Using hofstedeframework (Chang, L., 2003) • Cross-cultural management in China(Dong, K., Liu, Y., 2010) hult.edu

  6. Relevance • China’s continued rapid economic development has helped China establish dominant economic power not only in East Asia but also around the world • The interest in China is growing steadily and companies around the world view the Chinese market as one of the biggest markets of all hult.edu

  7. Culture in Business • According to Hofstede, culture, as the collective programming of the mind, distinguishes one group or category of people from another. • Culture acts as an external source of influence on employee behaviors on daily personal lives which consequently influences each person’s behavior within the organization. hult.edu

  8. Cultural Differences • Cultural differences are usually represented by dissimilar language, background, perceptions and mentalities. • Hofstede: culturally-based values systems comprised four dimensions: power distance, individualism/collectivism, masculinity/famininity, and uncertainty avoidance. hult.edu

  9. Methodology • Comparison of my personal experiences in China to “Cross-cultural challenges when doing business in china” (Pan, F., & Zhang, Z., 2004) hult.edu

  10. Cultural Characteristics • High power distance • Low individualism (strong collectivism) • Medium masculinity/femininity • High uncertainty avoidance (risk-avoiding) hult.edu (Pan and Zhang, 2004)

  11. Framework • Comparative Strategies • Loyalty to the group, pursuit of personal goals is viewed negatively • Contracts are less significant than relationships • Conflict Management • Indirect ways to avoid direct conflict • Prefer to use authority to suppress conflict • Indirect forms on influence are preferred in dealing with difficult requests to avoid damaging relationship • Decision-Making • Make less risky decision at the expense of the business opportunity • Accept decisions handed down by their supervisors • Work-Group Characteristics • Focus more effort on building social and interpersonal relations (guanxi) before entering into contractual relationship hult.edu (Pan and Zhang, 2004)

  12. Findings in Comparison • Comparative Strategies • Loyalty is rare when it conflicts with personal interest • Personal relationships are more important than business contracts • Conflict Management • Use of power to suppress conflicts or oppositions • Indirect forms of influence are used to try to reach a compromise to avoid damaging relationships with the clients • Decision-Making • Employees participate in meetings but higher-level managers make the decisions • Work-Group Characteristics • Strong relationship with clients is crucial to the business • In extreme cases, clients follow the managers they trust instead of the company itself hult.edu

  13. Conclusion • Business contracts are less important than personal relationships • Indirect forms of influence are used in dealing with difficult client requests to avoid damaging relationships • Decisions are handed down by the supervisors • Only when trust is built will the business deals follow smoothly hult.edu

  14. Limitations • The critiques of the findings are based on my personal experiences in a specific industry • The time limitations of Hofstede’s research from 1993 hult.edu

  15. Future Research • Go beyond Hofstede’s quantitative measure to include more qualitative studies of cultural values to gain a deeper and broader perspective into cultural differences • Compare and contrast the differences between urban and rural areas hult.edu

  16. References • Pan, F., & Zhang, Z. (2004). Cross-cultural challenges when doing business in china. Singapore Management Review, 26(1), 81-90. Retrieved from http://search.proquest.com/docview/226850330?accountid=78988 hult.edu

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