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Comparative Studies of Business Culture Between China and Western Countries

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Title: Comparative Studies of Business Culture Between China and Western Countries


1
Comparative Studies of Business Culture Between
China and Western Countries
2
Preface
  • What do you want to get from the
  • course?

3
What can you get from it?
  • Objective Through the introduction of cultural
    differences from business perspective, this
    course aims to help students to understand
    different cultural signals, challenges and
    opportunities in business. As a result, the
    students will be capable of analyzing business
    cultures in different countries and areas, so to
    avoid improper behaviors in business environment.
  • Main Contents This course consists of 2 major
    parts understanding basic cultural differences
    and cultural types cross-cultural communication.
  • This course will be conducted in the following
    aspects basic cultural types, the impact of
    culture, the globalization of business,
    non-verbal communication, cross-cultural meeting,
    cross-cultural negotiations, corporate culture,
    cross-cultural marketing and cross-cultural
    consultants, etc.

4
  • Learning approach case study, group discussion,
    group work, and multi-media methods, etc.
  • Learning result a course paper (2,000 words)
  • a group presentation (15min.)

5
Understanding Cultural Differences in
Globalization
  • A world in globalization
  • a world market economic and cultural
    penetration
  • technical possibility
  • political change after 1990

6
Defining Culture
  • Culture is the way of life of a group of people
    (Foster, 1962)
  • Culture is that complete whole which includes
    knowledge, beliefs, art, law, morals, customs and
    any capabilities and habits acquired as a member
    of a society (Tylor, 1977)
  • the collective programming of the mind which
    distinguishes the members of one human group from
    another . The interactive aggregate of common
    characteristics that influences a groups response
    to its environment (Hofstede, 1980)

7
  • A more formal definition
  • Culture is a set of learned core values, beliefs,
    standards, knowledge, morals, laws, and behaviors
    shared by individuals and societies that
    determines how an individual acts, feels, and
    views oneself and others.
  • (from Mitchell, C. (2000) The Short course
    in International Trade Series International
    Business Culture, Shanghai Shanghai Foreign
    Language Education press)

8
Functions of culture
  • Enables us to communicate with others through a
    language that we have learned and that we share
    in common
  • Makes it possible to anticipate how others in our
    society are likely to respond to our actions
  • Gives us standards for distinguishing what is
    right or wrong, beautiful and ugly, reasonable
    and unreasonable etc.
  • The knowledge and skill necessary for meeting
    sustenance needs
  • Enables us to identify with other people

9
National Culture
  • 3 aspects
  • It is shared by all or almost all members of some
    social group
  • Older members try to pass it on to younger
    members
  • It shapes behaviour and structures ones
    perception of the world
  • National culture explained more of the
    differences in employees than did professional
    role, age, gender or race
  • (Hofstede, 1980)

10
Does culture matter?
  • A case study of Euro Disney

11
  • Japan vs. U.S.
  • France vs. U.S.
  • The company, it seems, failed to do its cultural
    homework on everything from French business
    negotiating styles to employee flexibility and
    dress habits to consumer spending patterns and
    eating preferences.

12
Mistakes of the company
  • Sense and sensibility
  • land of farmers or land of Mickey?
  • negotiate with whom?
  • French way or American way?
  • The devil is in the details
  • sit-down breakfasts or continental?
  • graze or set lunchtime?
  • family friendly or wine?

13
  • Hospitality headaches
  • souvenirs?
  • month-long vacation or one nights stay?
  • Culture caution
  • It should be noted that for all of Disneys
    faults the French government was more than happy
    to have them set up shop. The government also
    bears some responsibility for not making Disneys
    transition smoother. The French have claimed for
    centuries that Americans have no culture but
    nowadays, it seems, they believe Americans have
    too much and need to export some.

14
Cultural Components
  • Language
  • Religion
  • Conflicting Attitudes
  • Manners and Customs
  • Education
  • Humor
  • Social Organizations
  • The Arts

15
Do cultures evolve?
16
Religion and Islamic Banking
  • A society based on social justice, equity, and
    moderation
  • A religious philosophy (the Koran) actually
    dictates the terms of business relationship
  • Profit-sharing principles so as not to break the
    Islamic prohibition on riba, or usury
  • Risks should be shared between the financier and
    the entrepreneur.
  • Predetermined interest or predetermined
    profit-sharing ratio?

17
Conflicting attitudes
  • Young or old?
  • Culture caution
  • This example illustrates how a lack of
    understanding on both sides can cause confusion.
    The Chinese must also understand that Western
    culture is based in meritocracy and that young
    executives in the West are given far more
    responsibility.

18
Basic Cultural Types
  • Geert Hofsted and other researchers study

19
Hofstedes five dimensions of culture
  • Individualism IDV
  • Power distance index PDI
  • Masculinity MAS
  • Uncertainty avoidance index UAI
  • Long-term orientation LTO
  • (Guidham 1999)

20
Individualism versus Collectivism
  • Individualism (IDV) focuses on the degree the
    society reinforces individual or collective
    achievement and interpersonal relationships.
  • A High Individualism ranking indicates that
    individuality and individual rights are paramount
    within the society. Individuals in these
    societies may tend to form a larger number of
    looser relationships.
  • A Low Individualism ranking typifies societies of
    a more collectivist nature with close ties
    between individuals. These cultures reinforce
    extended families and collectives where everyone
    takes responsibility for fellow members of their
    group.

21
Sino-American Comparison
  • USA
  • A society with a individualistic attitude and
    relatively loose bonds with others
  • CHINA
  • A society with strong relationships where
    everyone takes responsibility for fellow members
    of their group
  • Source ITIM 2003

22
Power Distance
  • Power Distance Index (PDI) focuses on the degree
    of equality, or inequality, between people in the
    country's society.
  • A High Power Distance ranking indicates that
    inequalities of power and wealth have been
    allowed to grow within the society. These
    societies are more likely to follow a caste
    system that does not allow significant upward
    mobility of its citizens.
  • A Low Power Distance ranking indicates the
    society de-emphasizes the differences between
    citizen's power and wealth. In these societies
    equality and opportunity for everyone is stressed.

23
Sino-American Comparison
  • USA
  • a greater equality between societal levels,
    including government, organizations, and even
    within families.
  • CHINA
  • A high level of inequality of power and wealth
    within the society. This condition is not
    necessarily forced upon the population, but
    rather accepted by the society as their cultural
    heritage.
  • Source ITIM 2003

24
Masculinity versus Femininity
  • Masculinity (MAS) focuses on the degree the
    society reinforces, or does not reinforce, the
    traditional masculine work role model of male
    achievement, control, and power.
  • A High Masculinity ranking indicates the country
    experiences a high degree of gender
    differentiation. In these cultures, males
    dominate a significant portion of the society and
    power structure, with females being controlled by
    male domination.
  • A Low Masculinity ranking indicates the country
    has a low level of differentiation and
    discrimination between genders. In these
    cultures, females are treated equally to males in
    all aspects of the society.

25
  • Societies with supposedly masculine values
    appreciate aggressiveness and assertiveness while
    respecting the goal of material acquisition. The
    more feminine cultures value interpersonal
    relationships, put quality of life before
    material acquisition and actively express concern
    for the less fortunate.
  • A government that promotes a comprehensive social
    welfare system represents a highly feminine
    society that demonstrates concern for the
    downtrodden. As governments move away from higher
    taxes and welfare systems it could be said that
    they are exhibiting a more masculine approach to
    social responsibilities.

26
Sino-American Comparison
  • USA
  • the country experiences a higher degree of
    gender differentiation of roles. The male
    dominates a significant portion of the society
    and power structure. This situation generates a
    female population that becomes more assertive and
    competitive, with women shifting toward the male
    role model and away from their female role.
  • CHINA

27
Uncertainty Avoidance
  • UAI focuses on the level of tolerance for
    uncertainty and ambiguity within the society -
    i.e. unstructured situations.
  • A High Uncertainty Avoidance ranking indicates
    the country has a low tolerance for uncertainty
    and ambiguity. This creates a rule-oriented
    society that institutes laws, rules, regulations,
    and controls in order to reduce the amount of
    uncertainty.
  • A Low Uncertainty Avoidance ranking indicates the
    country has less concern about ambiguity and
    uncertainty and has more tolerance for a variety
    of opinions. This is reflected in a society that
    is less rule-oriented, more readily accepts
    change, and takes more and greater risks.

28
Sino-American Comparison
  • CHINA USA
  • a society that has fewer rules and does not
    attempt to control all outcomes and results. It
    also has a greater level of tolerance for a
    variety of ideas, thoughts, and beliefs.
  • JAPAN
  • a trade-off of individual freedom and mobility
    in exchange for a guarantee of lifetime employment

29
Long Term Orientation
  • LTO focuses on the degree the society embraces,
    or does not embrace, long-term devotion to
    traditional, forward thinking values.
  • High Long-Term Orientation ranking indicates the
    country prescribes to the values of long-term
    commitments and respect for tradition. This is
    thought to support a strong work ethic where
    long-term rewards are expected as a result of
    today's hard work. However, business may take
    longer to develop in this society, particularly
    for an "outsider".
  • A Low Long-Term Orientation ranking indicates the
    country does not reinforce the concept of
    long-term, traditional orientation. In this
    culture, change can occur more rapidly as
    long-term traditions and commitments do not
    become impediments to change.

30
Sino-American Comparison
  • USA
  • This low LTO ranking is indicative of the
    societies' belief in meeting its obligations and
    tends to reflect an appreciation for cultural
    traditions. Greater flexibility and the freedom
    to react quickly to new opportunities
  • CHINA
  • a society's time perspective and an attitude of
    persevering that is, overcoming obstacles with
    time, if not with will and strength.

31
(No Transcript)
32
Structure
  • Origin and application of Chinese and American
    business culture
  • China Confucianism
  • Buddhism
  • Taoism
  • America Protestant ethic
  • Liberty Democracy
  • Overcome conflicts

33
Origin and Application of Chinese Business
Culture
  • Confucianism
  • --- Doctrine of the mean
  • Neither conservative nor aggressive
  • --- Hierarchy Order
  • Interest of collectivity is higher than that
    of individual
  • (Fang 1999)
  • Long-term Orientation, Collectivism, High Power
    Distance

34
Origin and Application of Chinese Business
Culture
  • Buddhism
  • Samara
  • The eternal cycle of birth, suffering, death
    and rebirth
  • Fang 1999
  • Long-term orientation

35
Origin and Application of Chinese Business
Culture
  • Taoism
  • Yin Yang
  • Reversion of love hatred, good bad, fortune
    misfortune
  • Fang 1999
  • Long-term orientation

36
Characteristics of Chinese Culture
  • Collectivism
  • High Power Distance
  • Long-term Orientation

37
Origin and Application of American Business
Culture
  • Protestant Ethic
  • Pilgrim Fathers
  • If one works hard, he or she will succeed.
  • Weber 1958

38
Origin and Application of American Business
Culture
  • Liberty Democracy
  • John Locke (1632-1704)
  • Two Treatises of Government
  • We hold these truths to be self-evident, that
    all men are created equal
  • --- Declaration of Independence

39
Characteristics of American Culture
  • Individualism
  • Masculinity
  • Short-term orientation

40
Overcome Conflicts
  • Communicate
  • Understand
  • Respect
  • Learn
  • Corporate

41
References
  • Fang, T (1999) Chinese Business Negotiating
    Style, London SAGE Publications Ltd.
  • Guidham, M (1999) Communicating Across Cultures,
    New York PALGRAVE
  • History of USA http//www.usahistory.info/New-Engl
    and/Pilgrims.html (accessed 15th November 2003)
  • ITIM http//www.geert-hofstede.com/ (accessed
    15th November 2003)
  • Max Weber, The Protestant Ethic and the Spirit of
    Capitalism, New York Scribner's Press, 1958,
    Accessed via American Studies at University of
    Virginia http//www2.pfeiffer.edu/lridener/DSS/We
    ber/PECAP.HTML

42
Trompenaarss Alternative Dimensions
43
Hofstede
  • Study (IBM) is a general way to look at
    differences between cultures.
  • But
  • Assumption of one-to-one relationship between
    culture and nation-state.
  • Research may be culturally bound.
  • Respondents worked within a single company.
  • Work is beginning to look dated (1967-1973).
  • Missing countries
  • Estimates values
  • Ignores differences within clusters

44
Culture Map for Uncertainty Avoidance and
Masculinity-Femininity
45
Culture Map for Power Distance and Uncertainty
Orientation
46
Trompenaarss Alternative Dimensions
  • Focus on values and relationships
  • Survey of
  • 15,000 managers
  • Over 10-year period
  • From 28 countries
  • Bipolar cultural dimensions

47
Outer-directedInner-directed
  • Sense of control over ones destiny
  • Outer-directed will accommodate behavior to
    situation
  • Inner-directed willing to change and pursue own
    goals

48
Trompenaars Research
  • Trompenaars dimensions of culture
  • Universalism v Particularism
  • Individualism v Collectivism
  • Neutral v Emotional / Affective
  • Specific v Diffuse
  • Achievement v Ascription
  • Attitudes to Time
  • Attitudes to the Environment

49
UniversalismParticularism
  • Extent of belief in defined set of rules
  • Universalism
  • Performance-based considerations
  • Particularism
  • Relationship- or situation-based considerations

50
Universalism
  • Universalistic cultures focus more on rules than
    relationships, have a preference for legal
    contracts, and believe there is only one truth.
    In universalistic cultures a deal is a deal.
    Trust is based on honoring your word or contract.
    Fairness is treating all people the same.

51
Particularism
  • Particularistic cultures focus more on
    relationships, change legal contracts easily and
    believe in several perspectives on reality.
    Particularists evolve their relationships to suit
    the situations.

52
UniversalismParticularism (contd)
U.S. Austria Germany Switzerland Sweden Honk
Kong China Indonesia Former Soviet Union Venezuela
Universalism
Particularism
53
IndividualismCommunitarianism
  • Dependant extent of peoples achievement
  • Individualism
  • Frequent use of I
  • Communitarianism
  • Frequent use of We

54
Individualism
  • Individualism is defined as societies where
    people ideally achieve alone, use "I" frequently
    and take vacations singly or in pairs.

55
Communitarianism
  • Communitarian societies, on the other hand, use
    "we" more often, achieve better in groups, and
    vacation in organized groups. In individualistic
    cultures, decisions can be made quickly by
    representatives at negotiations, while in
    collective cultures, the representatives must
    defer to the organization.

56
IndividualismCommunitarianism (contd)
United States Czech Republic Argentina Former
Soviet Union Mexico France Indonesia Japan Thailan
d Singapore
Individualism
Communitarianism
57
NeutralEmotional
  • Extent to which emotions are expressed
  • Neutral
  • Reserved and composed
  • Emotional
  • Very expressive

58
Affective (Emotional)
  • Affective cultures readily express their thoughts
    and feelings. Expressing feelings relieves
    tension. Emotions flow easily. Touching and
    gestures are common. Statements are dramatic and
    fluent.

59
Neutral
  • Neutral cultures do not openly reveal thoughts
    and feelings, admire self-possessed behavior and
    frown on physical contact.

60
NeutralEmotional (contd)
Japan United Kingdom Singapore Austria Indonesia B
razil China Switzerland Netherlands Mexico
Neutral
Emotional
61
SpecificDiffuse
  • Extent to which various life roles kept separate
  • Specific
  • Compartmentalize roles
  • Diffuse
  • Mix personal, professional, and private roles

62
Specific
  • Specific cultures get to know people easily and
    maintain flexible relationships, yet specific
    cultures make acquaintances for specific or
    limited reasons.

63
Diffuse
  • Diffuse cultures on the other hand, keep their
    distance from unknown others. Individuals are
    slower to develop relationships, however, once an
    individual has been accepted in a diffuse culture
    that person is in all the way.

64
SpecificDiffuse (contd)
Austria United Kingdom United States Switzerland F
rance Singapore Hong Kong Spain China Venezuela
Specific
Diffuse
65
AchievementAscription
  • Extent to which status depends on certain factors
  • Achievement
  • Status linked to goals obtained or performance
  • Ascription
  • Status linked to age, connections, class, or
    gender

66
AchievementAscription (contd)
Austria United States Switzerland United
Kingdom Sweden Singapore Former Soviet
Union China Indonesia Venezuela
Achievement
Ascription
67
Trompenaars organisation types
egalitarian
Project oriented culture
Fulfilment oriented culture
INCUBATOR
GUIDED MISSILE
task
person
FAMILY
EIFFEL TOWER
Person oriented culture
Role oriented culture
hierarchical
68
Implications of Culture on Management
  • What people want from work
  • Work centralityimportance of work in life
  • Work goals differ
  • Positive environment Autonomy
  • Interesting work
  • Good pay
  • Match between self
  • Job security and job

69
Implications of Culture on Management (contd)
  • Views about leadership
  • Who becomes leaders
  • Class vs. merit
  • Role of leader
  • Facilitate motivate vs. direct provide
    expertise
  • Some convergence of views
  • Particularly in MNCs

70
Customs Etiquette and Protocol
71
Is it important to understand the basics of
etiquette and protocol?
72
Proper etiquette?
  • The elements that go into making a first
    impression?
  • Manner of dress
  • Professional appearance
  • The color of your dress or tie
  • Body language
  • Handshake
  • Posture
  • Eye contact
  • Where you put your hands
  • How you accept a business card and how you
    present yours

73
When in Rome do as the Romans do?
  • Proper etiquette means maintaining your own
    values while respecting those of others.
  • The real value in understanding etiquette and
    protocol is in the confidence it gives you and
    the impression it makes in colleagues.

74
The Name Game
  • Chinese Names
  • two or three characters
  • surname given names
  • WANG Tai Hua or Wang Tai Hua
  • Chinese women always retain their family name
    even after marriage.
  • In Hong Kong, women normally put their husbands
    surname first, then follow it with their own
    names.
  • the Sino-Asian cultures (e.g., Singapore)

75
The Name Game (contd)
  • Japanese Names
  • Traditionally, the family name came first.
  • Today, the most common practice is to put the
    name in western order.
  • Suffixes indicate honor and status.
  • San the most common (honorific) title in Japan,
    it is the Western equivalent of courtesy titles
    such as Mr., Mrs. Or Miss.
  • Yamamoto san ????

76
  • Sama (in written correspondence, including
    business letters)
  • Dono (never uses in conversation anymore)
  • Sensei (born before, address a teacher,
    instructor or mentor)
  • Sensbu (superstar)
  • Kun and Chan (address a friend of the same age or
    someone of equal or inferior status, used with
    first or given names)

77
The Name Game (contd)
  • Korean Names
  • surname given names
  • two given names
  • the use of personal or given names for address
    is usually restricted to members of the same
    family and close friends
  • address a Korean colleague by his/her surname
    only
  • married women do not take their husbands name

78
The Name Game (contd)
  • Russian Names
  • address business title Company Director Koslov
  • to address a Russian by his or her first name is
    an insult
  • same order as in the West
  • Mikhail Sergievich Gorbachev
  • Once Russians move beyond the initial formal
    stage of a relationship, they use the first name
    and patronymic as a less formal method of address.

79
The Name Game (contd)
  • Spanish Names
  • two surnames (one from father and one from
    mother)
  • Julio Cortez Garcia
  • Indian Names
  • do not have family names, use the fathers
    initial first with their given name
  • V. Naipal Naipal, son of Vijay
  • P. Samateer marries V. Naipal Mrs. Samateer
    Naipal

80
Face-to-Face Greetings
  • The back-slapping
  • Death-grip handshake
  • Greeting bow
  • The rules of social distance etiquette vary by
    culture.
  • Africans
  • Argentina
  • Islam
  • You should never offer your hand to a woman first.

81
Business Card Etiquette
  • Translate into local language
  • Hand your card to the colleague with the printed
    face up (local language side up)
  • Give to the highest-ranking individual or leader
    of the delegation first
  • With two hands at two upper corner
  • Read carefully when received
  • A small pocket cardholder or case
  • In Europe and North America
  • your product, not your business card

82
Business Card Etiquette (contd)
  • In Japan
  • the exchange of business cards is a meaningful
    ritual rather than a casual informality
  • lay the card in front of you on the table
  • In Korea
  • have a glance and place it in the pocket
  • In Islamic world
  • use the right hand always

83
Conversational Taboos
  • Avoid politics, religion, race and negative
    history
  • Toward less volatile subjects sports, family,
    food and travel experiences
  • Before you visit a new culture or country, it is
    wise to have some knowledge of its history.

84
Social Drinking Protocol
  • Social drinking is part of relationship building
  • Alcohol helps to break down the strict social
    barrier between classes
  • Host and guest to take turns filling each others
    cups
  • If you disapprove of alcohol?
  • One drink
  • Subterfuge

85
Social Drinking Protocol (contd)
  • The best-known drinking culture is Russia
  • Meal vodka
  • An open bottle must be consumed
  • Impossible to avoid consuming booze
  • The ability to consume great quantities of
    alcohol in short periods manhood
  • (Russia and South Korea)
  • Formal toast
  • (Russia and China)

86
Global Dress Codes
  • Keeping it simple
  • A well-fitted dark suit (blue, gray or black)
  • When in doubt, overdress for the occasion
  • For women skirts and dresses (power dressing)
  • Color counts
  • cultures attribute different characteristics to
    different colors

87
  • Red sun or yellow sun?
  • Red and white in China
  • Green in Islam, Great Britain and Czech Republic

88
Communicating Across Cultures
89
  • The most immutable barrier in nature is
  • between one mans thought and anothers.
  • -------- William James

90
  • Doing Business Internationally
  • means that you will come into increasing contact
    with individuals who speak different languages
    and live in different cultures.
  • You Must Have Some Understanding Of
  • thought patterns, values, societal norms and of
    how individuals from different cultures process
    information.

91
High-Context versus Low-Context
  • People from different cultures process and
    disseminate information differently.
  • Low-context cultures are much more precise in
    their communication, providing mountains of
    detail, groping for the correct word or phrase to
    summarize an event.
  • The United States, Britain, Germany and the
    Scandinavian countries

92
  • In High-context cultures, communication tends to
    be imprecise and as much attention is paid to the
    person delivering the message as to the message
    itself.
  • Most of Latin America, Asia, the Middle East and
    Africa

93
Two Important Rules of Thumb
  • Dont be overconfident.
  • You should always assume there are differences in
    the way information is received and processed.
  • Use uncomplicated descriptive language to explain
    your position.
  • Using visual aids and being clear and concise in
    written materials can play an important role in
    ensuring better understanding.

94
Responsibilities
  • Regardless of the cultures that the speaker and
    the listener originate from, both have certain
    responsibilities to each other in cross-cultural
    situations to ensure a maximum of understanding
    and a minimum of potentially disastrous
    miscommunication.

95
Telephone Etiquette
  • The phone is often the first significant personal
    contact you have with an overseas colleague.

96
Basic Rules of International Telephone
Communication
  • Know the time of the locale you are calling
  • To be sensitive to the customs and ways of the
    person and culture you are calling
  • Always try and use uncomplicated language
  • Dont hurry the pace of your speech
  • Be prepared with what you want to say

97
  • Smile
  • Concentrate when you listen and never interrupt
    someone on the other line
  • When dealing with secretaries or message takers
  • remind them to get a pencil and paper and to
    write the message down
  • Be sure to ask them to repeat the message and the
    contact numbers you have given
  • If a phone conversation start to turn sour

98
  • Try and return calls in the same business day
  • Video-conferencing
  • Make sure the message and the body language are
    consistent in tone
  • Voice mail and answering machines
  • Be prepared with a clear, brief, and purposeful
    message
  • Less than 30 seconds long
  • Always give the time and day you call
  • Give your name and number both at the beginning
    of the message and at the end
  • Be positive and upbeat in your sign-off
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