When it comes down to business practices, there are very few pairings that are as different as that of the U.S. and China. Culturally, they are worlds apart, yet as the two largest economies in the world, they must learn to coexist. The very basis of the mentality difference between the two cultures provides a foundation of massive differentiation. The U.S., having pride in the success of the individual at all costs is the seemingly polar opposite to the collective national identity of the Chinese. (IBS, 2018)
This is only one of the many differences that exist within the business cultures of these two nations. Another being the contrast in the interpersonal mingling of client and representative. In China, it is heavily encouraged and accepted as it is part of the growing relationship that is so sought after in business. Whereas, in the U.S., this type of practice is often considered to be unethical and controversial. American business practices tend to rely more on the negotiation and law of contracts rather than facilitating a long-lasting personal bond with its clients and partners. The Chinese call this practice guanxi, and it comes into play to help protect their personal interests also as it is not unheard of for a business associate to ask for special “favors” in return for accommodations that may have been extended in earlier dealings between organizations. (Moran et al., pg. 408) This being said, the Chinese tend to avoid confrontation at all costs in order to save face. Even going so far as to tell a white lie and agree with the individual that they disagree with in order to save face. In the U.S., it is not unheard of for aggressive discussions to occur as it is considered part of the negotiation process in the business. Something that is not well received in Chinese business circles. (IBS, 2018)
Another major variation is that of how the hierarchal composition and role-plays out differently in each culture. In the U.S., there is little hesitation for subordinates to challenge their managers in the workplace as the boundaries fall to the wayside as the culture seems to accept this transgression as it is seen as a positive interaction for the organization that helps to foster openness and innovation. In China, however, the subordinate is expected to follow the direction of the supervisor regardless of the difference in opinion one may have. The decision of the superior is final and should be respected at all costs.
These basic elemental differences provide challenges for either side when it comes to approaching a negotiation. It is important for each party to realize these differences and especially so for the American congregation that is hoping to expand their business venture into the vast Chinese market. It takes more than just a clever game plan to be successful in this competitive market, it takes local finesse in order to establish and cultivate successful business relations.
References:
Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing Cultural Differences (9th ed.). Oxford: Routledge.
IBS International (author unknown) May 8, 2018, Differences Between U.S. and China Business Etiquette, IBS International Business Seminars. Web. Retrieved March 29, 2020. Link: https://ibstours.com/blog/differences-chinese-business-customs/
asy5 says
Hi,
You did a great job writing this article. You hit on several excellent points about the cultural differences between the U.S. and China. Every U.S. Multinational Enterprise (MNE) leader should understand these cultural differences to conduct business in China or lead a Chinese workforce successfully.
You raised a crucial cultural difference when you touch on the practice of guanxi, as I think this is particularly important for global leaders to understand. The Confucian practice of guanxi refers to robust personal, reliable, trusting, and reciprocal relationships or networks that can be relied on for mutual protection of their interests (Moran, Abramson, Moran, 2014).
Initially, guanxi is expressed through gift-giving and an exchange of favors and can evolve into ganqing. Ganqing is a “heartfelt feeling of mutual concern and commitment that dictated behaving reliably towards one’s true friends [and] friends bound by ganqing looked after each other’s interest ahead of their own” (Moran et al., 2014, p. 408). Guanxi and ganqing are pervasive practices in Chinese culture and should be respected. However, leaders should consider managing the guanix of frontline employees to ensure their guanix do not become a corporate liability. “Companies must bring transparency to existing relationships, prevent conflicts of interest from developing, and align employees’ interests with their own” (Vanhonacker, 2004, p. 18).
Global leaders should also be aware of another Chinese practice known as Thick Black or thick face and black heart. Although banned in China, it may still be practiced by some. Thick Black refers to the deceitful practice of pretending to build ethical and committed relationships (guanxi) to gain power and influence at the expense of others. This practice can be compared to Machiavellian deceit (Moran et al., 2014).
Global leaders should also consider cultural differences within Chinese society. Xiang, Ribbens, Fu, & Cheng (2015) studied the variations of career-related perceptions within different generations in the U.S. and China workforce. Specifically, global business leaders should consider the “generational differences in career perceptions [and] compare career attitudes” (p. 67). Because the Chinese government has proposed to extend the legal retirement age, global business leaders will be managing at least three key generational groups within the Chinese workforce at a given time. While leaders should understand the cultural differences between the generations, they must also recognize that within any culture, individual values will vary from person to person (Dubberke, 2014). The generations in China are differentiated by birth decade and include Post-1960, Post-1970, and Post-1980.
Post-1960 generation is also known as the Cultural Revolution Generation or the Lost Generation and got its name because they “lost a decade during the Cultural Revolution because instead of getting an education, they were relocated from urban areas to the countryside” (Dubberke, 2014, p. 64). This generation tends to be conservative, idealistic, and embrace the collectivist culture, and substantial value is placed on providing their children with a better life. This generation is satisfied with the high power distance and willingly put their careers and physical needs in the hands of their organization’s leaders.
Post-1970 generation is also known as the Social Reform Generation or Modern Realist Generation (Dubberke, 2014). During their formative years, the Social Reform generation saw significant economic development (Xiang et al., 2015), and experienced rapid modernization as they came of age in a market-driven economy in which the government urged them to seek financial success. This generation possesses a more realistic and practical perspective than the Lost Generation and is considered a transitional generation as they are sandwiched between traditional and modern Chinese values. They are viewed as materialistic and as benefiting from a more modern China. The Social Reform Generation are realistic and pragmatic, more accepting of change than previous generations, embrace strong Confucianism values, and rely heavily on the practice of guanxi (Dubberke, 2014).
Post-1980 generation is also known as the Me Generation, the One-Child Generation, or can also be called the Millennial Generation (Dubberke, 2014; Xiang et al., 2015). The Me Generation are products of the One Child Policy and as a group is viewed as “selfish, self-centered, rebellious and irresponsible [but also as] having strong self-confidence, diverse interests, and strong need for self-improvement” (Xiang et al., 2015, p. 68). It’s important to note that although inconsistent with Chinese tradition, the Me Generation “emphasize differences and individualism” (p. 68), which must be taken into consideration when managing this generation. China’s Me Generation, more than 200 million individuals, are more strongly educated than the previous generations and are more familiar with the Western world. This generation values individualism and open-mindedness and has embraced some Western workplace values. The Me Generation values a smaller power distance scale than previous generations as can be more assertive. They are willing to ask for a promotion, more responsibility, or share with their supervisors their needs, wants, and expectations. This generation still follows, but are less committed to Confucian values and are more reliant on new technologies. A significant difference between this and previous generations is that this group seeks work-life balance. They work to live and are not afraid to change jobs to achieve their career goals.
Thank you for providing valuable information about the differences between the U.S. and Chinese cultures. I hope you find the information I’ve shared useful.
Amelia
References
Dubberke, S. (2014). Exploring China’s multigenerational workplace. [pdf]. Retrieved from https://cdn2.hubspot.net/hubfs/466336/Exploring%20China's%20Multigenerational%20Workforce.pdf?_ga=2.163291644.178724239.1585056620-1729166640.1583847344
Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing Cultural Differences (9th ed.). Oxford: Routledge.
Vanhonacker, W. R. (2004). When Good Guanxi Turns Bad. Harvard Business Review, 82(4), 18–19. Retrieved from http://web.b.ebscohost.com.ezaccess.libraries.psu.edu/ehost/detail/detail?vid=0&sid=9a14539a-591e-4915-a5ca-a41fffb87423%40pdc-v-sessmgr04&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZzY29wZT1zaXRl#AN=12774584&db=buh
Xiang, Y., Ribbens, B., Fu, L., & Cheng, W. (2015). Variation in career and workplace attitudes by generation, gender, and culture differences in career perceptions in the united states and china. Employee Relations, 37(1), 66-82. Retrieved from https://search-proquest-com.ezaccess.libraries.psu.edu/docview/2084387646?pq-origsite=summon&accountid=13158
Jessica Buck says
Hello!
I found your article very informative and interesting which gave me time to do a bit more research myself! I found a 2017 article from CNBC where it gives the top eight etiquette tips for doing business in China. I would have had no idea about entering the room in order of seniority, but after thinking about it, it does make sense! Usually when going into an executive meeting, the most anticipated guest is the CEO or next highest ranking official, and if conducting business, they are most often the decision maker. It would make sense to allow them the time to enter the room first to be greeted properly by others. However, in my time in executive management, I don’t often see executives heading into meetings always on time!
Dress to Impress: Appearances and first impressions are important in Chinese business culture. Dressing conservatively and wearing high quality clothing will help to indicate both status and modesty.
Entrance: Enter the room in order of seniority. You should actively demonstrate great respect to the leader of the Chinese delegation. The person with the highest rank of your team should introduce the rest of the group.
Handshakes: Handshakes in China are not as firm as in the West — expect it to be soft and short. And keep the eye contact brief. Too much eye contact can be interpreted as a challenge.
Business Cards: Make sure you have both a Mandarin and an English side on your business card. When the time comes, present your card with two hands, with the Chinese side up and facing the other person. Receive a card with two hands, study it briefly and place it into a business card holder — never your wallet or pocket. In China, business cards are treated as extensions of the person, so you’ll want to treat any business card you receive with great respect.
Face: Losing or gaining “face” is an important Chinese concept. It can be loosely understood as your honor, your community’s honor and the honor of those you are with. Avoid self-deprecation or sarcasm. Attempt to display competence and keep your emotions under control.
Don’t Point: It’s considered rude in China to point with your finger. Instead, point with an open hand or, if possible, make eye contact and get someone’s attention without using your hands at all.
Be Prepared for More: The Chinese often prefer frequent and lengthy meetings to build trust before signing contracts. When it comes down to it, most business in China isn’t even done in the boardroom. Expect to be invited to long dinners featuring courses you may not be familiar with. Make sure you try everything. It most definitely will be rude if you don’t.
Finally, Be Yourself: The most important concept to remember when doing business in China is to be true to you. The Chinese place a high value on authenticity and have low tolerance for posturing or pretending. If you are genuine, respectful and observant, you are likely to endear yourself to your host. Otherwise, they’ll see through your facade and it will be impossible to do business.
References
Hudgins, J. (2017, June 27). 8 etiquette tips for doing business in China. Retrieved from https://www.cnbc.com/2017/06/27/etiquette-tips-for-doing-business-in-china.html