Business culture- China vs US Presentation Outline Foundation of US ethics- basic discussion Comparison of Business culture-China vs US Strategies and Managerial Implications

Cultural Foundation of American Ethics Foundation based on Judeo-Christian and Western socio-theological principles intrinsic underlying truth a sovereign moral authority--God God declines “right or wrong” Natural law -- “inalienable rights” life, liberty and pursuit of happiness Equality implies no prior claims against the rights

American ethics (continued) Limits on individual freedom are either (1) voluntary (2) lawfully imposed Results -- individualism and contract Individual’s right to choice is consistent with market economy The functioning of a free market economy can be described as “nexus of contracts” A business contract - spells out details of relationships and is enforced by law if violated

Comparison of Business Culture: China vs US Business culture - time-tested and conventional practices China and US have a different business culture -- result of different history and practices

Notion of Harmony China Everything is in harmony Change is viewed as disruptive Reason -- too many people US Efficiency and effectiveness End result logical reasoning on facts change to get desired results

Importance of Relationship China 4 important social groups: relatives, schoolmates, personal friends, and the indirect relationship from the 3 Importance of “guanxi” (connection) US constitutions guarantee the rights a short history to inherit traditions stress on individualism for personal achievement

Relationship (continued) Agricultural state (small community mentality) privacy is not highly valued individualism is not singled out “rule of man” over “rule of law” Relatively few norms melting pot Increased tolerance on diversity separate personal and business relationship friendship can be formed and dissolved quickly

Subtlety and Explicitness US Frank and open China Build on subtlety Language based on abstraction of ideas Reduce confrontation Outspoken --not norm (read the tea leaves-- observe body, words, tone)

Subtlety and Explicitness (continued) Courtesy (righteousness, ethics and honor)-virtues Saving face Do not say “no” easily Hint to get help Self-control makes people appear “shy”

Communication Style China Silence for reflection Not to exaggerate (implications on marketing a product) US uncomfortable with gaps of silence Some American feel ok to exaggerate fluency and gift of gab--admirable

Communication-continued Non-linear thinking pragmatic thinking rare physical contact no eye contact “Yes” means “I am listening” (not I accept) Linear thinking pragmatic and look for innovation normal touching eye contact is important (implying I have no harm) Hi- means friendly

Negotiation ChinaUS contract is the end in itself Americans think Chinese use banquet as the way to get upper hand discuss openly costs and benefits

Rule of Banquet China Much attention to eating and drinking Private rooms in restaurant round table with chopsticks Seats assigned Do not stretch arm for food US using club members

Taboos China Concerns with numbers (symbol for luck) Success factors: fate, luck, feng- shui,good deeds and knowledge US Hard work

Strategies of Resolving Conflict Avoiding Forcing Education and persuasion Infiltration Accommodation Negotiation and compromise Collaboration and problem solving