1 Northern China/Beijing Tommy Beatrous Haein Cho Kevin Havice Louise Johnston Sean Krug Kathy...

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Northern China/Beijing

Tommy BeatrousHaein Cho

Kevin HaviceLouise Johnston

Sean KrugKathy Miller Stan TellinsJoe Siripong

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Agenda Objectives Doing Business in China and Beijing The Rules and Scenario of the

Game Cross-Cultural Game Summary

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Objectives Prepare teammates for a business

meeting in Northern China, specifically Beijing

Teach beginning cross-cultural skills, using a scenario-based game as the framework for the training

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Why do Business in China? 2nd largest economy in the world, current

account surplus of $180 billion, $10 trillion GDP Transforming from outpost of low-cost

manufacturing to hub of technology creation – design, R&D, engineering

Large and quickly expanding pool of engineers and scientists

Huge, young and literate market – population 1.3 billion, median age is 32, literacy over 91%

Socialist market economy - market mechanisms introduced to attract foreign investment and improved trade terms

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China Business Trends Chinese stock correction - A-Share IPO pipeline - est

$30 billion raised in ’07 Major bank makeover (and deal with $200+ billion in

non-performing loans in state-owned banks) Rural strategy – improving income levels in rural

sectors $1.1 trillion in foreign currency reserves – new

channels for money management (70% are US treasury bills)

5% appreciation in the Chinese yuan in 2007 - reflects confidence that the financial system can accommodate a stronger currency

China reported a record $177 billion trade surplus last year

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Why do Business in Beijing?

Capital of China, where all decisions are made Aggressively becoming a ‘global’ city, attracting

many MNCs, huge investment in transportation and infrastructure

Home of the 2008 Summer Olympics Beijing taking the lead in combining traditional

Asian and Western values Industrial Parks - Beijing Economic & Technological

Development Zone, Zhongguancun Science Park Top universities and R&D institutes - Peking

University, Tsinghua University, Chinese Academy of Science

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Game Basics Each team has two game boards

4 players for each board The Scenario will be read so that the

players understand the setting Eight questions After the question is read, the player’s

note on their handout their choice (A or B) After the answer is read, the player will

move to either the left (correct answer) or to the right (incorrect answer)

The answers will be explained and discussed

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Game Scenario American-based MNC manufacturer is

interested in procuring parts from Chinese-based MNC The Chinese firm can give a strong

competitive advantage to the American firm The American firm wants an exclusive

contract with the Chinese firm The two MNCs have never worked together

before

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Game Scenario A week-long meeting has been

scheduled in Beijing 7-10 representatives from each

company, many different organizational levels

American MNC will send mostly Americans,

Chinese MNC participants will be mostly Chinese

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Game Scenario Primary objective of the meeting

Americans want to share information about their company, goals and lay the groundwork for successful contract negotiations

Due to the competitive nature of the industry, they want to work as fast as possible, and if things don’t work out with this Chinese firm, they will quickly need to try and procure material from their second choice

The Chinese firm has many options so they want to determine if there can be a successful long-term profitable relationship with the American firm.

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Q1: You are working on the presentation materials for the meeting. The text of the presentation will be in English, and because this will be the first time your company has worked with the Chinese company, the

information presented will be completely new. Do you…

A: Print hard copies of the presentation and give to everyone as

they enter the meeting room

B:Send the material to

the participants at least one week

ahead of the meeting

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Q1: You are working on the presentation materials for the meeting. The text of the presentation will be in English, and because this will be the first time your company has worked with the Chinese company, the

information presented will be completely new. Do you…

A:

Move 1 space to the right

B:

Move 1 space to the Left

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Explanation Though it is fine to print hard copies of the

material, don’t present to the participants as they enter the meeting room The first part of the meeting is for introductions

Participants working in a 2nd language will want to find ways to add value to a meeting rather than sitting back and saying nothing If they have the material beforehand, then they

can prepare questions and comments and be prepared to express them

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Introductions Make contacts prior to arriving Make an appointment Introductions

Shake hands if Chinese partner offers

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Introductions Business Cards

Printed in both English and Chinese Use both hands Bring lots Inspect closely Treat card with respect

Meeting Preparation Slides and handouts in black and white Bring more handouts than you think you

need Be on time

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Q2: Your Chinese business partner just offered you a gift. Do you…

A: Politely refuse it with

no explanation

B:Accept it graciously

and open it

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Q2: Your Chinese business partner just offered you a gift. Do you…

A:

Move 1 space to the left

B:


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Explanation Often gifts will be refused 3 times

then accepted Gifts are not opened immediately

It’s the thought that counts If refused 4 times, graciously put it

away Just like American’s not being allowed

to accept gifts

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Gift Giving Avoid black, white or blue paper Value should match recipient’s

level Quality writing pens are good Avoid sharp objects, or pens with

red ink 6 and 8 are lucky, 4 is not

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Q3: During the first couple days of meetings, the American and Chinese teams should:

B: Maintain strict

compliance with a joint-approved meeting

agenda and work together as a single

monolithic team.

A:Break into smaller teams

based on seniority and shared personal interests to

recreate and socialize together in a non-business setting. Schedule an extra

couple of days to accommodate these

activities.

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Q3: During the first couple days of meetings, the American and Chinese teams should:

B:


A:


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Explanation

Show you value and respect relationships Understand corporate values and

objectives – don’t waste each others time Respect for social hierarchy Efficiency and depth of diligence; Easier to

point out weakness or disagreement Seize every opportunity to give mainzi

(face)

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SGE Example Intercultural supply chain SNAFU:

Marketing pressure Lost incumbent relationship Poor communication Lack of ownership Loss of tacit knowledge and corporate

sponsorship Ignorance about relationships – go for quick fix Technical communications can be very difficult

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北京欢迎你

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Q4: The business meeting has come to an end and it is time to say goodbye.

A: You stand up, bow, shake hands, and

then leave.

B:You stand up, shake

hands, and then leave.

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Q4: The business meeting has come to an end and it is time to say goodbye.

A:


B:


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Explanation

Bowing in China is reserved for formal occasions such as funerals or ancestor worship

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Meeting Expectations Start meeting with small talk Do not mention deadlines Be prepared for Q&A in Chinese

Bring your own translator Escorting guests out is respectful Don’t refuse invitations for going

out

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Q5: Which one is the best subject for small talk in Beijing?

B: Economics and current stock

market

A:History and culture

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Q5: Which one is the best subject for small talk in Beijing?

A:


B:


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Explanation Beijing is the capital of History and

Politics Shanghai is the capital of economy

Beijing people emphasize history more than actual profit More related to Mianzi (face)

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Relationship Building Guanxi: “The age-old practice of

continuously cultivating and valuing relationship”

How to build Guanxi? Being friends with business partner Doing something together outside the

office Emotional bonding

Guanxiwang: New phenomenon

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Q6: During a post-meeting dinner banquet, do you…

A: Seat all of the Chinese company’s attendees

on one side of the table, facing all of your

company’s attendees

B:Intersperse everyone

so that each person sites next to

individuals from the other company

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A: B:

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A:


B:


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Explanation Importance of relationships Opportunity to build relationships One-on-one conversations

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Explanation

Door

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Hierarchy & Guanxi Guanxi relationships Hierarchy

Send matching seniority levels Order matters -- enter in order of

seniority

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Q7: If you are full what should you do with the food that is still left in your dish.

A: Finish everything in

the dish

B:Leave some food in

your dish

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Q7: If you are full what should you do for the food that is still left in your dish.

A:


B:


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Explanation A clean plate indicates you are still

hungry and it is the host's responsibility to see that you are continually served food and drink

Dinner ordering

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Dinner Etiquette Don’t start eating or drinking before

your host Try every dish offered

There may be several courses Sample size portions are recommended

Chopsticks Don’t push business during meals

Let the Chinese bring up the subject first

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Q8: You are the guest at a social function, it’s getting late and you wish to leave. Do you…

A: Start telling your business partner

it’s late, keep sipping beer and

restate for another hour before

leaving

B: Tell your Chinese partner it’s late and

you need to go soon, then leave in

a few minutes.

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Q8: You are the guest at a social function, it’s getting late and you wish to leave. Do you…

B:


A:


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Explanation Guest usually initiates the end to

social functions Host will remain until guest leaves Should inform host several times Don’t stop drinking unless you have

a face saving excuse

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Explanation Chinese generally feel that in a formal

business setting, people put up an artificial impression that hides the person’s true inner self.

Through enjoying social alcoholic drinks together, they believe one can attain a better understanding of a person’s true character. Based off that understanding, they can build business relations through a deeper sense of mutual understanding and trust.

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Party Basics If the Chinese side invites its guests to

social drinks after a formal dinner, it would be rude to refuse, and potentially death to the business relationship.

On entering the bar, the host should enter the bar first and then get the waiter.

It is important to let the most senior members sit first and juniors sit afterwards in the remaining seats.

The group that makes the invitation to go drinking pays for the bill.

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Extra

Use formal titles and last names Avoid large hand gesture Don’t talk too much Don’t brag or flaunt – promote

your virtues inconspicuously

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Extra

No jokes or insults of others Speak in short simple sentences Avoid slang and technical terms

when possible

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Next Steps If you ended up in the United States

end of the board... You need to invest in building

credibility with your Chinese partners Learn about the culture and how to do

business in China – hire an expert to help bridge the cultural differences between companies

Set up a meeting (in person is best) to apologize and discuss next steps with the most senior person who attended the meeting – show respect and a commitment to change

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Next Steps Between start and the US end...

It could have been worse, understand what went wrong and build a corrective action plan

Plan another meeting in China, asking for help from an expert

Show commitment to the relationship Between start and the China end – good

job! You have established some credibility – part of

the way there to having the required interpersonal foundation for business negotiations

Schedule another meeting in China to continue to grow the relationship, you may be able to obtain some feedback

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Next Steps If you reached the China end of the board –

CONGRATULATIONS! You have good basic skills and led a

successful meeting that will form the basis of a strong working relationship

Grow on your success by working with your business partners to set up the next meetings where more information can be obtained and specifics on the contract can be discussed

Don’t take the relationship for granted Just because you think you have a good

relationship, that view may be one-sided – continue to think of ways to deepen and expand this foundation

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Summary In all cases, professional follow-up is key

to success Updates, timely completion of action items,

remembering personal information your new contacts shared with you

Business in Beijing is competitive and complex, and your business’ priorities may not be the same as China’s

Investment in learning the culture and diligent meeting preparation will pay off

1 Northern China/Beijing Tommy Beatrous Haein Cho Kevin Havice Louise Johnston Sean Krug Kathy...

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