Morgan Chambers (an EquaTerra company) has extensive experience of working in China - so who better to ask for the ten best pieces of advice for company’s looking to set up sourcing operations in the country. Authored by Sridhar Vedala & Ali Toure.
Increasing your chances of business success in a different country will always be closely linked to how well your team understands, respects and works alongside the area's socio-cultural backdrop. This is particularly relevant when working in societies that enjoy a long history and strong cultural identity, of which China is a prime example.
Modern Chinese culture is essentially rooted in 2000 years of empire, with a strong emphasis on Confucian philosophy, which advocates loyalty, righteousness, friendship, filial piety and the importance of education. There are many key characteristics of Chinese culture which create a strong ethos of information sharing amongst employees in organisations and which, when you are aware of them, can help you achieve a successful project outcome.
Morgan Chambers (an EquaTerra company) has been working successfully on various sourcing projects from their Chinese offices in Shanghai by keeping these cultural subtleties in mind:
Be sensitive to Chinese nationalism: Chinese nationalism is very strong but there is still a big cultural divide between people living in the major cities and those in more rural areas. Furthermore there is a big divide between old and young Chinese with the motives and desires of young Chinese people being radically different from those of their parents. Young Chinese living in cities want to set themselves apart and enjoy many of the things that their Western counterparts also aspire to (working less, living longer, earning more) however this does not mean that they want to eschew their nationality or their culture.
Be aware of the collective culture: The Chinese culture is group-oriented with an identity strongly defined by affiliations to family, schools or employer. Simply - group takes precedence over individual. This character permeates businesses especially state owned enterprises where employer is seen an extension of the family and this creates an environment where knowledge sharing is pervasive. For newcomers, trust is not easily earned but grows through long-term association. To ensure that you are always kept in the loop, make it your business to get information from as many sources as possible.
The Unspoken Rule of "Guan Xi": "Guan Xi" in general stands for relationships between people and organisations. It is a dominant characteristic of the Chinese people and extends beyond business to every aspect of life. It serves as an instrument for acquisition and dissemination of information. 'Guan Xi' takes a long time to build and therefore patience is a true virtue for anyone doing business in China. Group behaviour and intensive sharing is only displayed among those Chinese people who have known each other for a long time. 'Keeping face will often lead to silence when confronted with problems as candid discussions are considered as risky and foolish.
Respect Knowledge and Learning: Chinese value learning and knowledge. This is reflected in almost every area from academics where students value intelligence and competitiveness to managers who are open to new management practices and concepts. There is considerable pressure on the average Chinese to succeed, which stems from a combination of the huge demographic pressure and the 'one child' policy.
Respect hierarchy: The social milieu based on hierarchical structures is extended to businesses. Seniority and position become the key criteria for knowledge flow. Thus knowledge flow is usually top-down in most organisations. Another key aspect of Chinese society is 'saving face' and dignity. The Chinese value their standing in society and organisation. Thus any attempts to disturb the hierarchical balance are abhorred and presenting yourself as 'humble' is a key success factor. Lying when under pressure is acceptable and it is actually considered as inappropriate for someone to be put in such a position.
Be subtle: The Chinese style of communication is quite different from that of the West and generally avoids the use of provocative or aggressive language, instead resorting to subtle hints. However, such demeanour sometimes leads to misinterpretation and ambiguity hampering effective communication. It will take patience to ascertain the real reasons behind a serious problem or issue. Telling someone directly that they have made a mistake is taboo.
That being said, the Chinese belief is that relationships within negotiation and business should have a balance between good and bad, which can result in dramatic meetings! Remain calm if your Chinese business counterpart shouts at you in one instance and is very friendly a few minutes later!
Accept before Questioning: The education system in China emphasises memorising and repeating knowledge at the expense of independent thinking. Creative thinking and fresh ideas are not encouraged. This tendency is also reflected in the business context, where corporate dictums are rarely questioned or challenged.
These are some social intricacies and cultural differences that we at EquaTerra (incorporating Morgan Chambers) focus on when dealing with our Chinese suppliers and clients. In short, we keep to these three simple rules:
1. Respect local people and build relationships honestly
2. Stay humble and avoid culture comparisons
3. Protect your interests and stay well informed through a variety of channels
Level 31, Jin Mao Tower, 88 Shi Ji Avenue, Pudong, Shanghai 200120, China
Telephone: +86 (0)2128909093