There is a huge importance placed on sincerity above all other qualities. Their communication style tends to be very indirect. It is not uncommon for them to say “yes” to acknowledge they are listening to you but it may not mean the same as it does in other cultures. Chinese have a hard time saying no and the organizational structure is hugely bureaucratic so things are unlikely to happen fast. Their teams are groups of specialists working under a leader who may not be a specialist but will have links to the head of the company.
The the legal system, infrastructure and guideline are developing and guanxi is important in China. Brand X did not understand these concept since it did not understand the cultural and market differences between their operations in the West and in China. Therefore, according to Ho and Perry, Brand X must learn to cultivate long-term relationships with distributors and customers. In China, relations with the government appear important as they have a strong influence especially in the industrial goods market. (Ang, S. H. (1998)) Also, Brand X should learn the culture and market difference between the West and China.
“Cultural amalgamation means two cultures mix to form types of new culture.” (Mihir, 2012) Due to the different expectations of Chinese and foreign multinationals, a few companies operation and profit models bristle with difficulties. Cooperating culture and business practices are yet other factors. Short-term profits are preferred with business decisions in the Chinese enterprises. Moreover, the company’s operation mechanism is lacking of transparency, the government and public supervision in China. China wants to politicize the investment so that the state-owned enterprises further develop; all of the executives are appointed from the Chinese Communist Party.
The cause of this is because of their differing cultures. In order for their business to work efficiently both Chinese and American workers must find the right balance between the two cultures. For instance, Chinese cultures suggest harmony in everything including business. Sudden change is seen as dangerous to them whereas Americans are use to the hustle and bustle of everyday business techniques. Another differences in business ethics between China and the U.S. include: relationships, touch, subtleness and many more differences.
Doing Business in China How to do Business in China Overview: China remains an untapped market with great growth potential for companies seeking to do business in there. Be aware that the Chinese community is weary of companies entering the country because they believe that most companies are there to make a fast dollar. However, if a western company follows a few simple rules and adheres to some cultural outlines, success in China can be achieved. Culture: Building relationships are crucial in China. Also known as guanxi.
However, the impact it has made on China can be considered to be great as it brought China under the limelight in the global economy. Globalization has had many positive and negative ramifications on the Chinese economy. In the short run, it may be so that the negative impacts outweigh the positive impacts, but that is easily debatable. This is because all the negative impacts of globalization can be corrected with economic policies that can be efficiently undertaken by the Chinese government. In this manner, China in overall will be able to enjoy all the benefits of globalization and contribute more to the rest of the world as it continues to grow economically and socially.
Before doing business in China, there’s a few things needed to know about this to-be home away from home for the company. A completely different world from that of the United States, this second largest supplier is as simple as our own in business etiquette, and a few simple things can go a long way. Social-cultural, economy, legal-political, and managerial differences are just a few categories of information to be taken into consideration when pursuing a business agenda in China. Social-Cultural The first rule of business in China stems from the social and cultural aspects of China, such as accepting them as a whole. This is the essence of business in China, because acceptance and understanding generates the groundwork for the whole relationship.
According to World Intellectual Property Organization (2013), broadly speaking, it is any confidential business information which provides an enterprise a competitive edge. The Uniform Trade Secret Act (19... ... middle of paper ... ... rights of foreign businesses are not being protected. The inability to rely on the rule of law is creating a risk for U.S. businesses operating in China.’ This case has attracted so many attentions because it highlights the risks of US companies doing business in a country with level of IPP legislation which is much lower than global standards. While two countries have a great opportunity to successfully work together such regulation drawbacks create significant obstacles for this work, especially in cases when the potential risks are as high as the rewards. In this way, Chinese government has a chance to show their attitude to IP theft by real actions not just words.
However, with the growing economy and the rising labor wages many companies find themselves moving to other places that can facilitate their budgeted needs. The Chinese government is another regulator for entering businesses. The government does not regulate the services they produce as much as they should. Due to China’s lack of regulation, many businesses uphold their companies in India where the regulations of service are much stricter. I believe these are the two best places ... ... middle of paper ... ...cia.gov/library/publications/the-world-factbook/>.
In the sprawling urban areas, people in China simply don’t have the room that we have in other parts of the world. Research and development of products that fit the needs and lifestyle requirements of the middle-class Chinese is critical to Electrolux’s continued success in the Chinese market. Electrolux must take clues from the local companies who have remained successful for quite some time in the Chinese market, if they wish to continue their growth there. Discuss the three leading perspectives on strategy, and how this strategy tripod influences Electrolux. Electrolux has a solid strategy focused on profitable growth.