China is a growing economy in our world today. It is now the second in the world in terms of economy next to the United States of America. With this, China is now open to new opportunities that would attract western civilizations. The differences in business cultures though might overwhelm a lot of people and may cause misunderstandings. Cited below are a few key differences between business cultures.
For the Chinese people, relationships are everything. Getting to know the people they are working with and develop a relationship with them is important. As opposed to Americans, business comes first, then relationships second. The task at hand and the development of the transaction are of utmost significance to Americans. Chinese people want to build a relationship with their business partners and prefer direct confrontations. This builds a sense of trust between partners. Chinese would like to build these type of bonds before any deals, negotiations or transactions happen. For the Chinese, building a good social network is a big deal to them.
In Chinese businesses, it is common that family members or close friends play a big part in their businesses. In America, nepotism, or when people of great power prefer family or friends for a job position over other people who are more qualified, is condoned. One might face legal altercations from this kind of practice in America. The Chinese do this because of trust. They have a greater level of trust in people who they are closer to. They favor people who they trust more in making big decisions in their businesses rather than other people they know nothing about.
Making a deal be written on paper and have everything about the transaction be specifically laid out is vital in the United States. However, this is not the same in China. The Chinese value relationships and trust in their business endeavors and that is why contracts are not that much of an importance. For them, the terms of the business are agreed upon in a series of meetings, dinners, and many other social interactions. Work would develop out of a series of interactions and encounters which would improve the trust and relationship between business partners.
Reputation is seen as one’s ability to command respect and also be trusted by other people. Chinese value their reputation personally. They should never be seen humiliated or dishonored. If an event would humiliate an individual, it is avoided. Chinese do not want people to see themselves making mistakes. This is why most Chinese people keep their opinions to themselves. For the Americans, reputation is easy to achieve and also easy to lose. Americans believe that making mistakes are what makes them better the next day. One day you might be the laughing stock of the business, but through time, you could gather yourself and be better from your failures.
In China, the social structure is much more observed and more formal. One would only be able to socialize with a certain person if they are of the same social status. Americans, on the other hand, are more flexible on this matter and much more informal. Americans of different social status may socialize and get to know each other. For the Chinese, people of higher social status are looked up to and are listened to. This also carries over in business. Your social level in China has a big impact on how you are perceived in business. It is what dictates power. The one with the highest position in the company is the one who is listened to and is obeyed without hesitation. This concept is different in America. Decisions are usually made together as a group. Decisions are usually made after several discussions and debates between people of different job grades.
Falling from power in the 19th century because of a series of events which started with the signing of the Treaty of Nanking then ended with the British handing over Hong Kong back to China, China has now bounced back and has jump started its economy. America, on the other hand, has seen the rise of its economy during the start of the 20th century when its industrial power and might overtook that of the british. The cultures of the west and the east have both its benefits and drawbacks. Both are unique in their own kind of way and may pose difficulties which might lead to friction between cultures. However, looking into these differences then studying them may be the difference between either a misunderstanding or a smooth business relationship.