China is an exciting but challenging place to do business.In reality, some companies succeed, some under-perform, while others, unfortunately, fail.In addition to the usual business pressures, the effectiveness of a company’s management of cultural conflict leads to either success or disappointment.
This article aims to address this culture conflict with the intention of helping these companies understand the issue, avoid common mistakes and achieve their business goals.
The current Chinese culture has its roots in thousands of years of tradition, and has been passed down from generation to generation.It is quite different compared to the Western culture due to its long history, geographical environment, and unexpected events.Together with its unique system of government, the Chinese culture forms different ethical standards, value systems, communication methodologies, and business mentalities than those in Western countries.This culture conflict between Chinese and Westerners is easily observed in each phase of the business process.If not understood and respected, it can often lead to miscommunication, frustration, unhealthy business relationships and even business failure.
Therefore it is critical for these companies and their managers to recognize the importance of cross-cultural management and to always keep this in mind when considering strategy planning, daily operation, and business decisions.
Here are some guidelines I suggest be considered when doing business in China. They are definitely beneficial for you as a means of reducing frustration, ensuring smooth operation, and securing business success:
1. Understand and respect the Chinese culture – it is the only way to learn.
2. Cultures between China and Western countries are just different - neither is right or wrong.
3. Culture does not travel - don’t simply apply a Western business approach to your Chinese venture.
4. Nurture a good relationship with all stakeholders, even you own local employees - a good relationship in China means friendship and trust.
5. Tailor your products to the Chinese culture and customers - simply promoting the same Western products in the Chinese market reduces your chance of success.
6. Factor “culture cost” into your budget, to cover relationship management costs and expenses not traditionally incurred in Western countries.
7. Develop a business model for your Chinese venture that combines the strengths of the Western culture and business system with those in China.
8. Consider hiring an outside expert to support your Chinese business team in developing an entry strategy and implementing your cross-cultural business plan.
Jerry Fan is managing director, China
FiberMark North America, Inc.