Comparative Studies of Business Culture Between China and Western Countries

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Comparative Studies of Business Culture Between
China and Western Countries
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Preface

• What do you want to get from the
• course?

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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.

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• 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.)

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Understanding Cultural Differences in
Globalization

• A world in globalization
• a world market economic and cultural
  penetration
• technical possibility
• political change after 1990

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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)

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• 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)

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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

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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)

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Does culture matter?

• A case study of Euro Disney

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• 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.

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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?

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• 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.

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Cultural Components

• Language
• Religion
• Conflicting Attitudes
• Manners and Customs

• Education
• Humor
• Social Organizations
• The Arts

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Do cultures evolve?
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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?

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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.

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Basic Cultural Types

• Geert Hofsted and other researchers study

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Hofstedes five dimensions of culture

• Individualism IDV
• Power distance index PDI
• Masculinity MAS
• Uncertainty avoidance index UAI
• Long-term orientation LTO
• (Guidham 1999)

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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.

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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

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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.

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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

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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.

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• 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.

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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

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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.

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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

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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.

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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.

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Structure

• Origin and application of Chinese and American
  business culture
• China Confucianism
• Buddhism
• Taoism
• America Protestant ethic
• Liberty Democracy
• Overcome conflicts

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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

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Origin and Application of Chinese Business
Culture

• Buddhism
• Samara
• The eternal cycle of birth, suffering, death
  and rebirth
• Fang 1999
• Long-term orientation

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Origin and Application of Chinese Business
Culture

• Taoism
• Yin Yang
• Reversion of love hatred, good bad, fortune
  misfortune
• Fang 1999
• Long-term orientation

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Characteristics of Chinese Culture

• Collectivism
• High Power Distance
• Long-term Orientation

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Origin and Application of American Business
Culture

• Protestant Ethic
• Pilgrim Fathers
• If one works hard, he or she will succeed.
• Weber 1958

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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

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Characteristics of American Culture

• Individualism
• Masculinity
• Short-term orientation

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Overcome Conflicts

• Communicate
• Understand
• Respect
• Learn
• Corporate

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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

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Trompenaarss Alternative Dimensions
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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

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Culture Map for Uncertainty Avoidance and
Masculinity-Femininity
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Culture Map for Power Distance and Uncertainty
Orientation
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Trompenaarss Alternative Dimensions

• Focus on values and relationships
• Survey of
• 15,000 managers
• Over 10-year period
• From 28 countries
• Bipolar cultural dimensions

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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

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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

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UniversalismParticularism

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

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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.

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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.

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UniversalismParticularism (contd)
U.S. Austria Germany Switzerland Sweden Honk
Kong China Indonesia Former Soviet Union Venezuela
Universalism
Particularism
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IndividualismCommunitarianism

• Dependant extent of peoples achievement
• Individualism
• Frequent use of I
• Communitarianism
• Frequent use of We

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Individualism

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

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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.

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IndividualismCommunitarianism (contd)
United States Czech Republic Argentina Former
Soviet Union Mexico France Indonesia Japan Thailan
d Singapore
Individualism
Communitarianism
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NeutralEmotional

• Extent to which emotions are expressed
• Neutral
• Reserved and composed
• Emotional
• Very expressive

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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.

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Neutral

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

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NeutralEmotional (contd)
Japan United Kingdom Singapore Austria Indonesia B
razil China Switzerland Netherlands Mexico
Neutral
Emotional
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SpecificDiffuse

• Extent to which various life roles kept separate
• Specific
• Compartmentalize roles
• Diffuse
• Mix personal, professional, and private roles

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Specific

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

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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.

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SpecificDiffuse (contd)
Austria United Kingdom United States Switzerland F
rance Singapore Hong Kong Spain China Venezuela
Specific
Diffuse
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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

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AchievementAscription (contd)
Austria United States Switzerland United
Kingdom Sweden Singapore Former Soviet
Union China Indonesia Venezuela
Achievement
Ascription
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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
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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

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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

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Customs Etiquette and Protocol
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Is it important to understand the basics of
etiquette and protocol?
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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

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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.

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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)

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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 ????

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• 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)

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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

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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.

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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

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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.

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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

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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

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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.

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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

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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)

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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

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

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

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• 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.

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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

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• 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

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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.

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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.

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Telephone Etiquette

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

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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

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• 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

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• 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