Chinese culture is a set of core values that underlies - ITSP |...

David F. Miller Center For Retailing Education and Research International Retailing Education and Training (IRET )

Chinese Culture

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Consumers behavior and needs are largely driven by cultural norms. Cultural background also influences consumers’ information processing and buying motivations. Cultural factors are the major factor in shaping a company’s marketing strategies. Culture factors heavily influence their business styles and practices Conduct global business means dealing with consumers with different cultural backgrounds.

Location Module David F. Miller Center for Retailing Education and Research

Chinese Culture

Chinese culture is a set of core values that underlies social interaction among the ordinary Chinese people and remains relatively stable over long period of time.

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Picture: old Chinese drawing Chinese culture gives the Chinese people their basic identity. The core values are unique and consistent, shaped by a tradition of 6000 years of history and maintained by the same languages. We explores the Chinese cultural system in terms of what has made it the way it is, and how the system may affect your business. This section focuses on the major underlying forces, such as Chinese ways of thinking and believing that have formed and sustained the Chinese cultural system to provide some fundamental guidance, not quick fixed recommendation. For example, The American concept of “privacy” sound more like an alien notion than an individual right to many Chinese, whose culture lacks a similar social norm.


Outline

Concept of Culture Overview of Chinese Culture Foundations of Chinese Consumer Culture Traditional Chinese culture Confucianism Taoism

Marxist philosophy The influence of Western culture

Chinese Mindsets National Culture Social relationship “Face” “Guanxi”

Chinese Etiquette


What is Culture?

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Culture–ways of living, built up by a group of human beings, that are transmitted from one generation to another

Through social institutions---family, educational, religious and business institutions

A society is a group of people who share a common set of values and norms

Culture has both conscious and unconscious values, ideas, attitudes, and symbols

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Culture shock is a normal human reaction to the new and unknown. Successful global marketers strive to comprehend human experience from the local point of view. As they endeavor to understand cultural factors, outsides gradually become insiders and develop cultural empathy.

Location Module David F. Miller Center for Retailing Education and Research 4-5

Material and Nonmaterial Culture

Physical component or physical culture Clothing Tools Decorative

art Body

adornment Homes

Subjective or abstract culture Religion Perceptions Attitudes Beliefs Values

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Picture: Beijing Opera Material and non material elements of culture are interrelated and interactive.


Sathe’s Levels of Culture

Water line

Basic assumptions

Expressed values

Manifest culture

Iceberg

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Sathe’s levels of culture (Sathe 1985) : whilst the artifacts or “manifest culture and the expressed values can be experienced, the basic underlying assumptions are not visible (Figure). The metaphor of an iceberg also quite appropriately reflects that only a small portion of culture is visible and perceived while most of it is hidden. It is consistent with the three levels of culture Schein (1992): (1) artifacts (Manifest culture), like language, overt behavior, dress, rites and rituals, and espoused values like the mission statement; (2) values and beliefs that justify behavior and actions; (3) basic underlying assumptions that are guiding peoples’ perception and are the foundation of culture. �If we want understand the overt consumer behavior, we have to understand their invisible underlying cultural values and beliefs.


Overview of Chinese Culture

A cultural system rich in distinct national style which took shape within the terrain of China over more that 5,000 years.

The relatively enclosed geographical surroundings provided exceptional natural advantages for Chinese culture to evolve into a stable and independent system

Agricultural civilization plays a decisive role in forming and promoting the Chinese culture.

Customs and traditions varying greatly among towns, cities and provinces.

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Chinese culture is highly complex, but scholars across the world are agreed that despite the diversity of Chinese communities many shared characteristics persist. There is only one set of core values in the Chinese national culture, despite all the differences among these people and their societies. This cultural value system is uniquely Chinese that distinguish itself not only m western cultures, but also from other Eastern cultures. Traditional Chinese Culture covers large geographical territories, where each region is usually divided into distinct sub-cultures. Each region is often represented by three ancestral items. For example Guangdong is represented by chenpi, aged ginger and hay.[4][5] Others include ancient cities like Lin'an (Hangzhou), which include tea leaf, bamboo shoot trunk and hickory nut.[6] Such distinctions give rise to the old Chinese proverb: "十里不同風,百里不同俗/十里不同风,百里不同俗" (Shí lǐ bùtóng fēng, bǎi lǐ bùtóng sú), literally "the wind varies within ten li, customs vary within a hundred li."“ Background of Chinese culture: (1) China had a long history of feudal system and self-sufficient economy. Thousands of years of a feudalistic system have dominated the Chinese view of themselves and the world. For example, businessman has been traditionally at the lowest social class because they are far from agriculture. (2) Situated in the continent of East Asia, China is located in relatively enclosed geographical surroundings. In the north, there are the vast desert and prairie; in the west, the vast expanse of Gobi and desert and Qinghai-Tibet plateau; in the southwest, Yunnan-Guizhou mountainous region and boundless tropical rain forests; in the east and southeast, there is the pacific ocean.


Foundations of Chinese Culture

Traditional Chinese Culture Confucianism Taoism

Marxist philosophy The influence of western culture.

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Left picture: confuses with his students. Middle: the statue of confuses. Right: modern Confucian rite. The traditional Chinese culture encompasses diverse and sometime competing schools of thought, including Confucianism, Taoism, and Buddhism etc., and a host of regional cultures. Most social values of Chinese are derived from Confucianism and Taoism Confucian philosophy is at very core of Chinese identity. Indeed, since Confucian thought has dominated the Chinese way of life for 2,000 years, it is unlikely to cease its influence - even after Cultural revolution and market reform.


Confucianism

Confucianism is a Chinese ethical and philosophical system developed from the teachings of the Chinese philosopher Confucius ("Master Kong", 551–478 BC)

Meng-Tzu (Mencius) (4th century) further developed Confucianism.

Confucianism have became the official ideology of China since Han Dynasty

Behavioral and moral doctrines regarding human relationships, social structures, virtuous behavior, and work ethics.

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Left picture: Confucius; right picture: Meng-Tzu. Over the long history of Chinese Civilization, Confucian ideology has been firmly established as an undeniable system governing nearly all aspects of Chinese lives. In Confucianism, rules are spelled out for the social behavior of every individual, governing the entire range of human interactions in society. Confucianism was the official philosophy throughout most of Imperial China's history, and mastery of Confucian texts was the primary criterion for entry into the imperial bureaucracy. A number of more authoritarian strains of thought have also been influential, such as Legalism.


Confucianism

Five basic human relationships (Wu Lun)

Principles

Sovereign and subject (Ruler and ruled)

Loyalty and duty

Father and Son Love and obedience

Husband and Wife Obligation and submission

Elder and younger brothers Seniority and modeling subject Friend and friend Trust

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Confucianism specified the principles of five basic human relationships (Wu Lun). These principles are the virtues and relationships of a society where are inherently kept in order. Society is seen as a hierarchical pyramid of roles which entail fairly well established norms governing how people should act and behave in relation to people in other role. Social hierarchy and relation of subordination and superiority are considered natural and proper. Relationships are structured to deliver optimum benefits for both parties. For each relation, certain beahvior principles must be followed to ensure a harmonious society. The first two relationship, filial piety and loyalty, are generally deemed the most important. There are family relations, which clearly show the importance of family in Chinese culture. When they are applied to management, the first and last relationship stand out, leading to the birth of paternalistic management style in both china and Japan. Confucius always used only the male versions of language to define family relations because males dominate the social relationships.


Confucianism

The core of Confucianism is humanism. Five Constant Virtues (Wu Chang) Humanity/Benevolence (Ren) Righteousness of Justice (Yi) Propriety of Etiquette (Li) Wisdom (Knowledge) (Zhi) Faithfulness (Xin)

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The core of Confucianism is humanism,[the belief that human beings are teachable, improvable and perfectible through personal and communal endeavour especially including self-cultivation and self-creation. Confucianism focuses on the cultivation of virtue and maintenance of ethics, the most basic of which are ren, yi, and li. Ren is an obligation of altruism and humaneness for other individuals within a community, yi is the upholding of righteousness and the moral disposition to do good, and li is a system of norms and propriety that determines how a person should properly act within a community. Confucianism holds that one should give up one's life, if necessary, either passively or actively, for the sake of upholding the cardinal moral values of ren and yi. Humanism is at the core in Confucianism. A simple way to appreciate Confucian thought is to consider it as being based on varying levels of honesty, and a simple way to understand Confucian thought is to examine the world by using the logic of humanity. In practice, the primary foundation and function of Confucianism is as an ethical philosophy to be practiced by all the members of a society.14] Confucian ethics is characterized by the promotion of virtues, encompassed by the Five Constants, or the Wuchang (五常), extrapolated by Confucian scholars during the Han Dynasty.[15] The five virtues are Ren (仁, Humaneness), Yi (義, Righteousness or Justice), Li (禮, Propriety or Etiquette), Zhi (智, Knowledge), Xin (信, Integrity).[15] They are accompanied by the classical Sizi (四字) with four virtues: Zhong (忠, Loyalty), Xiao (孝, Filial piety), Jie (節, Continency), Yi (義, Righteousness). There are still many other elements, such as Cheng (誠, honesty), Shu (恕, kindness and forgiveness), Lian (廉, honesty and cleanness), Chi (恥, shame, judge and sense of right and wrong), Yong (勇, bravery), Wen (溫, kind and gentle), Liang (良, good, kindhearted), Gong (恭, respectful, reverent), Jian(儉, frugal), Rang (讓, modestly, self-effacing). Among all elements, Ren (Humanity) and Yi (Righteousness) are fundamental. Ren is one of the basic virtues promoted by Confucius, and is an obligation of altruism and humaneness for other individuals within a community. Confucius' concept of humaneness (Chinese: 仁; pinyin: rén) is probably best expressed in the Confucian version of the Ethic of reciprocity, or the Golden Rule: "Do not do unto others what you would not have them do unto you." In Confucianism, the term "li" (Chinese: 禮; pinyin: lǐ), sometimes translated into English as rituals, customs, rites, etiquette, or morals, refers to any of the secular social functions of daily life, akin to the Western term for culture. Confucius considered education and music as various elements of li. Li were codified and treated as a comprehensive system of norms, guiding the propriety or politeness which colors everyday life. Confucius himself tried to revive the etiquette of earlier dynasties.


Confucianism

Value the importance of the family and filial piety The hierarchical structure of social life Respect of seniority. The cultivation of morality and self-restraint The emphasis on hard work

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"Filial piety" (Chinese: 孝; pinyin: xiào) is considered among the greatest of virtues and must be shown towards both the living and the dead (including even remote ancestors). The term "filial" (meaning "of a child") characterizes the respect that a child, originally a son, should show to his parents. Seniority is important in China�The Chinese people tend to be quite conscious of their status and position within the company, thus it will be appropriate for you to address the other party by his designation ie Chairman So and So, Manager So and So. When you give out namecards, make sure you start with the most senior person before moving down the line. Also make it a point to stretch out with both hands to either receive of hand out a namecard.


Confucianism

Doctrine of the Golden Mean A conceptual state of control to a proper degree where no

extreme but harmony sustains (not a statistical mean) It urges individuals to avoid competition and conflict, and

to maintain inner harmony Implication for business world: nothing should go beyond

its appropriate domain.

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The Golden mean is a philosophical guideline associated with Greek ideal, nothing too much,. Which signifies a way of life, a capacity for compromise, defined as the most desirable sate of mind and worldly affaires. The cultivation of the people, who love moderation and restraint but hate logical extremes and avoid all excesses of theory and conduct, is considered the model of the traditional Chinese culture. Here the means is not an arithmetic notion, nor a statistical mean, but a conceptual state of control to a proper degree where no extreme but harmony sustains. It has been found that traditional Chinese cultural values and cognitive orientations have influenced the Chinese people to preserve overt harmony by avoiding confrontation and to adopt a non-assertive approach to conflict resolution. Guanxi cannot survive without harmony between two parties in a relationship. Without harmonious relationships, trust cannot be established, face cannot be saved, reciprocity will not continue and no further guanxi can be established. It is now evident that the key factors which help sustain and develop networks overlap with the key Chinese cultural values. This is why the network as a form of organizational governance is so widespread in both China and overseas Chinese communities. The basis on which Chinese visualize the meaning and purpose of life is humanism. The true end of life lies in the enjoy a simple life, especially family life, and in harmonious social relationships. To many Chinese, the importance of life is not so much to achievement wordly specified goals but to experience a spiritual supremacy. Chines culture places high priority on naturalness and simplicity in terms of living a life leisurely, carefree, self-satisfied, and unhurried.


Taoism

A philosophical or religious tradition in which the basic concept is to establish harmony with Tao. Tao (“way”, “Path”,

“Principle”): the mechanism of everything that exists

The Taoist Sage Learns from observing the

way of nature and letting nature guide his way through life.

Originating in 6th Centrury

BCE CHina

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Picture: Lao Tzu, the founder of Daosim Taoism (also spelled Daoism) refers to a philosophical or religious tradition in which the basic concept is to establish harmony with the Tao (道), which is the mechanism of everything that exists. The word "Tao" (or "Dao", depending on the romanization scheme) is usually translated as "way", "path" or "principle", although the word also means "nature" as in the nature of all things as well as the natural world. Taoism had not only a profound influence on the culture of China, but also on neighboring countries. While the philosophical Taoism is not institutionalized, the religious Taoism is institutionalized and present in multiple countries. Taoist philosophy is deeply rooted in contemporary China, and is an unavoidable part of modern Chinese life.


Daoism Symbols

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Picture: Taoist symbols Tao --- “the Way” --- the general law of nature The balance of Yin and Yang --- middle ground or compromise The most well-known Taoist symbol is the Yin-Yang symbol: a circle divided into two swirling sections, one black and the other white, with a smaller circle of the opposite color nestled within each half. The Yin-Yang symbol can also be found embedded within a more complex Taoist image - called the Taiji Tu, which is a visual representation of all of Taoist cosmology. Also within the Taiji Tu we find a symbol of the interactions among the Five Elements - which produce the Ten-Thousand Things, i.e. all the "things" of our world. The Ba Gua are trigrams that represent various combinations of Yin and Yang. The beautifully intricate diagram called the Neijing Tu maps the transformations that happen within the bodies of Inner Alchemy practitioners. The He Tu and Luo Shu are important in understanding the Eight Extraordinary Meridians - the most important meridians in Qigong practice. The Lo Pan Compass is one of the main tools of Feng Shui practitioners.


Wu Wei

The Central Concept of Taoism: Wu Wei “Action without action" or "effortless doing" It asserts that one must place their will in harmony with

the natural universe. Natural way to get things done with least effort and

greatest success. “Go with the flow,” yield to the natural way of things.

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Wu wei (simplified Chinese: 无为; traditional Chinese: 無爲; pinyin: wúwéi or Chinese: 無為) is a central concept in Taoism. The literal meaning of wu wei is "without action". It is often expressed by the paradox wei wu wei, meaning "action without action" or "effortless doing".[35] The practice and efficacy of wu wei are fundamental in Taoist thought, most prominently emphasized in philosophical Taoism. The goal of wu wei is alignment with Tao, revealing the soft and invisible power within all things. It is believed by Taoists that masters of wu wei can observe and follow this invisible potential, the innate in-action of the Way.[36] In ancient Taoist texts, wu wei is associated with water through its yielding nature. Taoist philosophy proposes that the universe works harmoniously according to its own ways. When someone exerts their will against the world, they disrupt that harmony. Taoism does not identify one's will as the root problem. Rather, it asserts that one must place their will in harmony with the natural universe.[38] Thus, a potentially harmful interference is to be avoided, and in this way, goals can be achieved effortlessly.[39][40]


Three Jewels of the Tao Compassion (love, mercy, kindness, gentleness,

benevolence) Moderation (frugality, economy, restraint,) Humility (Humble; modest; not venturing to take

precedence of others)

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Taoist propriety and ethics emphasize the Three Jewels of the Tao: compassion, moderation, and humility, while Taoist thought generally focuses on nature, the relationship between humanity and the cosmos (天人相应); health and longevity; and wu wei (action through inaction). Harmony with the Universe, or the source thereof (Tao), is the intended result of many Taoist rules and practices.


As a lifestyle Seeking Health and Longevity through diet, meditation,

exercise, and a stress-free life Meditation: “Inner Alchemy Meditation” – seeking spiritual

rather than chemical transformation Tai-Chi-Quan: A slow, graceful martial art stressing

movement in balance Natural/holistic healing: herbal medicine, acupressure,

acupuncture, …

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The healthy Daoism lifestyle and practice are promoted by Chinese modern consumers. Picture 1: tea arts Picture 2: Tai Chi Quan Picture 3 and 4: acupuncture These traditional elements of Chinese cultures are all related to Daoism.


As a religion

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Picutre1: Daoism followers are playing Tai chi quan Picture 2: Daoism temple Picture 3 & 4: fairies worshiped by Daoism followers.


Marxist Philosophy

Overturned the traditional Chinese Culture and the hierarchy of social relationship Egalitarian ideology Revolutionary spirit “Conquering and remaking nature” is in direct

conflict with traditional Chinese Culture. Common ownership and collectivism Emphasis on the country’s well-being

“Serving the people” was the legitimate objective of any business

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Left picture: statues and artworks were destroyed in cultural revolution Middle: people stuying works of Marx and Chairman Mao Right: people in high social status (e.g., government officials, land owners, teachers etc.) were publicly criticized in cultural revolution. After the establish the People’s republic of China, China became a socialist country and Marxist philosophy was the dominant ideology. Especially in the Cultural Revolution, traditional Chinese culture and the hierarchy of social relationship were overturned. Historical relics were destroyed. Government authorities also try to maintain and communicate that equality in Mainland China is crucial to national identity Some Marxist values promoted by the communist party were in direct conflict with the traditional Chinese culture.


The Influence of Western Culture

Individual liberty and success Utilitarian Money worship

Current status: melting pot and transition

period

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Deng’s Open reform policy in 1978 allowed for individuals to pursue wealth through various means. Economic reforms and opening doors to the west have not only changed the social landscape, but also reshaped the value system. Since then, western philosophies of business and society have come to exert increasing influence on Chinese approaches of business ethics. Contrary to the western culture, Traditional Chinese ethics is clearly not individualist nor simply utilitarian in the Western usages of term. Overall, After experiencing first a thorough denunciation of Confucianism followed by an overturn of Marxist values, the value system of Chines people has gone through a continual process of remaking.


Mindset

Chinese Harmony

Indirect Implicit Intuitive Seek the path Non-linear thinking Synthetic Introverted Self-restrained Privacy is not highly valued Rule of man Doing business is building

personal relationship Long term relationship

American Efficiency and

effectiveness Direct Explicit Rational Seek the truth Linear thinking Analytical Extroverted Aggressive Privacy is highly valued Rule of law Separate personal and

business relationship Friendship can be formed

and dissolved quickly

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This table shows some basic difference in Chinese vs. American mindsets. For example, The Chinese-born founder of a well-known technology company recently made a distinction between Western and Chinese business cultures. In the West, he said, the focus was on "covering your ass"; risk and liability are top of mind and Western businesses spend a lot hiring lawyers and designing contracts to control risks. In China, it was all about "giving face"; getting your counterparty on your side so as to avoid confrontation and lawsuits. He made it clear that he regarded the Chinese culture as inherently superior.


Handling Problem

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When handling a problem, Chinese stress on finding way than finding the truth. Chinese may conduct back-and-forth haggling to settle differences Chinese seek a path. American seek the truth.


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Chinese are self-retrained and emphasize the harmony in social relationship. They may still smile to others when they are angry.


Way of thingking Expressing Opinions

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Chinese thinking is indirect. American thinking is direct and straightforward.


哭笑

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Chinese children memorize thousands of pictorial characters - Words are pictures rather than sequences of letters Chinese thinking tends toward a more holistic processing of information Chinese medicine and acupuncture treat body as a whole. It believed that every part of the body are connected as a harmony system.


Arts

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The comparison of the Chinese vs. western artwork. Traditional Chinese paintings emphasize the spirit and holistic feelings but the details. Western oil paintings look like a photo.


Time orientation

American view time as a scare resource keep a daily schedule Efficiency

Chinese view time as a process of eternity Time is flexible and repeatable Time is valuable when it is used to achieve this ultimate

human reward. What is the point of keeping such a tight schedule? Rice

will grow by seasons not by minutes.

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Time orientation differs between Chinese and Americans. Chinese are inclined toward tradition. Their mindset and behavior are both significantly influences by past cultural values. American is modeled by changes, view time as a scare resource. They keep a daily schedule precise to almost every minute. Time to them means efficiency and moment value, and therefore is carefully budgeted to achieve personal or organizational goals. The Chinese, based on their philosophy of life, look at time as a process of eternity. What is the point of keeping such a tight schedule? Rice will grow by seasons not by minute; the sun will rise day after day. What really matters is how life can be made natural and enjoyable each day. If one is always processed by time where is the quality of life to be found. The Chinese look upon each experience as different and unique , not accumulative in a linear fashion. According to Chinese cultural values, the highest reward in life is the spiritual enrichment and serenity received from the contemplation of one’s living environment. Time is valuable when it is used to achieve this ultimate human reward; time is flexible and repeatable, regardless of how much present-day businesses what to go against it.


National Culture

Edward Hall: Culture Classification High- vs. Low-context Culture

Geert Hofstede: Five Cultural Dimensions Power Distance Individualism vs. Collectivism Masculinity vs. Femininity Uncertainty Avoidance Long- vs. Short-Term Time Orientation

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High- and Low-Context Cultures

High Context Information resides in

context Emphasis on

background, basic values, societal status

Less emphasis on legal paperwork

Focus on personal reputation

Saudi Arabia, Japan, and China

Low Context Messages are explicit

and specific Words carry all

information Reliance on legal

paperwork Focus on non-personal

documentation of credibility

Switzerland, U.S., Germany

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In a low-context culture, massages are explicit and specific; words carry most of the information power. In a high-context culture, less information is contained in the verbal pare of a message. Much more information resides in the context of communication including the background, associations, and basic values of the communication. China, Japan, Saudi Arabia, and other high-context cultures place a great deal of emphasis on a person's values and position or place in society. In such cultures, a business loan is more likely to be based on “who you are” than on formal analysis of pro forma financial documents. In a low-context culture such as the United States, Switzerland, or Germany, deals are made with much less information about the character, background, and values of the participants. In a high-context culture, the job is given to the person who will do the best work and whom you can trust and control. For example, Japanese companies such as Sony traditionally paid a great deal of attention to the university background of a new hire; preference would be given to graduates of Tokyo University. Specific elements on a resume were less important. In a low-context culture, one tries to make the specifications so precise that a builder is forced by the threat of legal sanction to do a good job. High context culture emphasizes obligations and trust as important values. Part of the purpose of negotiation, for a persona from a high-context culture, is to get to know the potential partner. In a low context culture, one tries to make the specifications so precise that the threat of legal sanction forces a builder to do a good job.


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High vs. low context countries. One study contrasted the eye movement of Chinese and American students scanning pictures of an object place with surroundings. American students focused on the central object while Chinese students spent more time on the background, putting the object in context.


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• Implications → Loan application and new hire • Low-context:

• Less attention is given to the information about back ground and values of the participates. Decision is largely based on the words and numbers in the application.

• High-context: • Less paper work. Decisions heavily depend on “who you

are” (e.g., background, social position)

• IM Implication → Negotiation: • Low-context:

• Important to set precise terms (e.g., contingencies, sanctions)

• High-context: • Important to learn about the potential partner (can be

trusted?)


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Hofstede’s Cultural Typology

Power Distance Individualism/Collectivism Masculinity Uncertainty Avoidance Long-term Orientation Dr. Geert Hofstede

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Hofstede is well-known for research studies of social values suggesting that the cultures of different nations can be compared in terms of five dimensions. Hofstede notes that three of the dimensions refer to expected social behavior, the fourth dimension is concerned with “man’s search for truth,” and a fifth reflects the importance of time. The first dimension, power distance, is the extent to which the less powerful members of a society accept—even expect—power to be distributed unequally. The second dimension is a reflection of the degree to which individuals in a society are integrated into groups. In individualist cultures, each member of society is primarily concerned with his or her own interest and those of the immediate family. In collectivist cultures, all of society’s members are integrated into cohesive in-groups. Masculinity, the third dimension, describes a society in which men are expected to be assertive, competitive, and concerned with material success, and women fulfill the role of nurturer and are concerned with issues such as the welfare of children. Femininity, by contrast, describes a society in which the social roles of men and women overlap, with neither gender exhibiting overly ambitious or competitive behavior. Uncertainty avoidance is the extent to which the members of a society are uncomfortable with unclear, ambiguous, or unstructured situations. Long-term orientation (LTO) versus short-term orientation is interpreted as concerning “a society’s search for virtue,” rather than a search for truth. It assesses the sense of immediacy within a culture, whether gratification should be immediate or deferred.

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Hofstede’s Cultural Dimension Scores for 10 Countries

USA 40L 91H 62H 46L 29L Germany 35L 67H 66H 65M 31M Japan 54M 46M 95H 92H 80H France 68H 71H 43M 86H 30L Netherlands 38L 80H 14L 53M 44M Hong Kong 68H 25L 57H 29L 96H Indonesia 78H 14L 46M 48L 25L West Africa 77H 20L 46M 54M 16L Russia 95H 50M 40L 90H 10L China 80H 20L 50M 60M 118H

PD ID MA UA LT


Individualism

Individualism indicates the degree to which individuals in a society are integrated into groups (it refers to the preference for behavior that promotes one’s self-interest) High individualism:

reflect an “I” mentality primarily concerned with own interest and those of family. US(91), Europe countries

• Low individualism:

reflect “we” mentality Generally subjugate the individual to the group Japan (46), as well as most Asian countries

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Each member of society is primarily concerned with his or her own interest and those of the immediate family. Collectivism, all of society’s members are integrated into cohesive in-groups. China is a collectivism country.


Chinese culture: Collectivism and Group Orientation Emphasize ties of kinship and close personal

relationships. The individuals exist for the benefit of the group. Conforming to group norms and adopting group opinions

in exchange for reciprocal care and protection. Suspicious and cold towards strangers

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The importance of groups is reflected in the form of family-ism’s claim for solidarity. The group orientation is expressed by Danwei work unit, wheere the focus is not only on work-related activtis but also an exercises and contro of non-work areas. In modern Chin, the Chinese traditonal family concept is transformed info “family-ism” that pervades almost all social organizations.. Employees are provided with housing, free medical care, and edcuation for their children by the organiztion they work for. Their activites and personal lives are closed connected to the organizations whose management, in many ways, fuctions as the parents of extended families, responsible obth for business and ovling employees’ personal problems. Hiring, selecting, compensating and other management decisions may all involve family-ism.


Life Style

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In the US, people are independent. In China, people are interdependent.


Human Relation

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The social network and interpersonal relationships are more complicated in China than in the U.S.


Power Distance (PDI)

Power Distance is the extent to which the less powerful members of a society accept power to be distributed unequally High: Hong Kong (68), France (68), Mexico (81), India

(77), Arab countries (80) Low: Germany (35), Austria (36), U.S. A. (40),

Scandinavia

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Chinese society is more hierarchical than the U.S.


Leader

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In China, people who are superior are highly respected. You can easily identify who are the leader if you are meeting with a Chinese group.


Hierarchical society Show respect to senior people Address Chinese by their title with surname. The leader/ oldest is always greeted first Do not hang up the receiver until your customer/superior

has hung up.


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This is what is look like in a Chinese banquet. There is a seating etiquette that shows the relative importance of the people on the table. Generally, the seat in the middle of the table, facing the door, is reserved for the host. The most senior guest of honor sits directly to the left. Everyone else is seated in descending order of status. The most senior member sits in the center seat. Follow this seating pattern if you are hosting a banquet or a meal in your residence, whether for business or purely social reasons.


Masculinity Masculine cultures: men are expected to be assertive,

competitive, and concerned with material success, and women fulfill the role of nurturer and are concerned with issues such as the welfare of children (masculine values achievement and possessions) Japan (95), Austria(79), Mexico

Feminine cultures: men and women overlap, with neither

gender exhibiting overly ambitious or competitive behavior Scandinavian countries (e.g.,Sweden), Spain (42), Taiwan(45)

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Modern Chinese culture is neither very masculine nor very feminine.


Uncertainty Avoidance (UA) Uncertainty avoidance (UA): the extent to which the members

of a society are uncomfortable with unclear, ambiguous, or unstructured situations. High UA:

Highly intolerant of ambiguity and high level of anxiety and stress Attention to security and rule following Likely to seek absolute truth Greece (112), Portugal (104), Belgium (94), Japan (92), France (86), Spain (86)

• Low UA: Low level of anxiety and stress A tolerance of deviance and dissent and willing to take risks Take a more empirical approach to understanding and knowledge Hong Kong (29), Sweden (29), UK (35), US (41), India (40)

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Presenter

Presentation Notes

The member of a society are uncomfortable with unclear, ambiguous, or unstructured situations. Member of uncertainty avoiding culture may resort to aggressive emotional, intolerant behavior. Members of uncertainty accepting culture (Denmark, Sweden, Iceland) are more tolerant of persons whose opinions differ from their own.


Implications North America consumers are persuaded more by promotional-

focused information (benefits to be gained) whereas Chinese consumers are driven by prevention-focused (problems can be avoided. )

Build trust with Chinese partners and customers Building brand name and focusing on brand loyalty


Long-term Orientation (LTO)

LTO (Confucian Dynamism): whether gratification should be immediate or deferred Long-term orientation: Japan (80), Hong Kong (96), Taiwan (87)

Short-term orientation: USA (29), UK(25), Germany (31)

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Presentation Notes

Chinese are long-term orientated. Long term orientation include persistence defined as a general tenacity in the pursuit of a goal. In the filed of personal selling, many US companies like to rotate salespeople across territories. In high-context societies, where nurturing trust and rapport with the clients plays a big role. Firms might need to adjust such rotation policies.


Implications Consumer behavior: future-oriented, thrifty, and

persistence Relationship plays important rule in partner

selection Building a relationship with a potential business

partner takes precedence over transacting the deal. Be patient.

A good deal vs. a good relationship Quick meeting and meal vs. long meeting and

banquet Cold call vs. draw on intermediaries


Face (“Mian-zi”)

Refer to the confidence of society in the integrity of ego's moral character 93% Chinese think face is very important to them

Loss of face cause embarrassment and makes it impossible for him to function properly within the community

Causing the Chinese partner to lose face will damage the business relationship.

Giving face is a very important concept in China: You must give them appropriate respect according to rank and seniority and avoid to make them look bad in public.

Presenter

Presentation Notes

From a Western perspective, it is very difficult to fully appreciate just how critically important the role of face is in the day-to-day lives of the Chinese. A recent study conducted by the China Youth Daily found that over 93 percent of the 1,150 respondents surveyed admitted that face is very important to them, with 75 percent acknowledging that making a mistake in public was, by far, the most humiliating experience they could ever have (Shan, 2005). In other words, most Chinese will do whatever they can to avoid looking bad in public and that often manifests itself in an unwillingness to openly admit to any wrongdoing, no matter how small or insignificant the error might have been Face is a concept of central importance because of its pervasive influence in interpersonal relations among Chinese. Chinese face can be classified into two types,'lian' and 'mian-zi'. 'Lian' represents the confidence of society in the integrity of ego's moral character, loss of which makes it impossible for him to function properly within the community, while 'mian-zi' stands for the kind of prestige that is emphasized, a reputation achieved through getting on in life, through success and ostentation'. When 'lian' is lost, the person will feel that he/she can no longer live in the world. Loss of 'lian' within a guanxiwang as a consequence of opportunistic behavior means that peers will no longer have confidence in the persons or firms concerned. As a result, their membership within a 'guanxiwang' and in society will be untenable. Therefore, face can be another hostage which minimizes the possibility of opportunistic behavior within a guanxiwang. This is another reason why 'guanxiwang' cannot merely survive but can also develop in mainland China and overseas Chinese communities. 'Mian-zi' can also be used to form new guanxiwang. One of Confucius' virtues is to respect authority and the elderly. Someone with authority, often elderly and with a good reputation, can ask favors of others. The person may act as a common agent to start a new exchange relationship. Favors can also be asked between friends. It is an accepted norm that as 'old friends' one should give face to the other when favor is requested. Once again, it has been shown that the Chinese cultural values such as face, hierarchy, power distance are closely related to the creation and development of the business network.


Guanxi

Guan Xi

A personal connection between two people in which one is able to prevail upon another to perform a favor or service, or be prevailed upon (Wikipedia).

Presenter

Presentation Notes

Guanxi is very important for doing business in China given the reality that entering china’s market equals to entering a huge web of guanxi. When you have guanxi in China, you would make doors opened and otherwise wouldn’t. In America, who you know makes big differences. But in China with guanxi, you can get things done that would be absolutely impossible without a guanxi. Chinese would be more willing than the American to accept business practices based on interpersonal relationships, in some case illegal from the American point of view, to achieve his/her profit objective. In Chinese, the word of guanxi has two characters: guan and xi. Guan means a gate or pass. If you look at the great wall of China, you will see the gates. They are Guans. Xi means a system or a human tree, like a family tree. Literately, Guanxi means a gate to the network of human beings. Guanxi’s essence is a set of interpersonal connections that facilitate exchange of favors between people. It involves the exchange of gifts, favors, and banquets: the cultivation of personal relationships and networks of mutual dependence, and the manufacturing of obligation.


Guanxi (Fan, 2002)

Guanxi is based on relationships, but relationship do not guarantee the development of guanxi

Guanxi is an active connection. Guanxi is a long-term social obligation. Guanxi is reciprocal exchange. Guanxi is a form of social capital. Guanix is a dynamic process. A→ B → C

Presenter

Presentation Notes

Some foreigners want to give an one-word of translation on Guanxi. They usually comes up with relationship. But Guanxi is much more complex than relationship. The philosophy behind Guanxi is “I scratch you back if you scratch mine.” But it goes even deeper than that. If you have good guanxi with some one, that person will go out his/her way to help you and give you a favor when you need it. You are expected the same for him/her. It is impossible for guanxi to be developed between two total strangers who have no shared guanxi base. Guanxi must be active connections. For example, two classmates have no contact for many years. Although they have relationships, but they do not have guanxi because if one of them needs help, he/she is not sure if the other person would like to help him/her or not. Relationship is the necessary foundation of guanxi, but relationship itself does not guarantee the development of guanxi. There must be some other factors that trigger the development of guanxi. Guanxi takes time to cultivate. It costs time, energy, and money. Guanxi is the reciprocal exchange between two persons for a specific purpose. Guanxi like an electric circuit., which can be connected and switched off. To develop and maintain guanxi is like putting one’s money into a saving account or purchase an insurance, so that one could get help whenever he needs. But failing to reciprocate may result in the loss of one’s social network and the multiple resources embedded in it. The beauty of guanxi lies exactly in that through one single guanxi, one can get access to a much wider network of connections. A person with wider or stronger guanxi in Chinese society will have more resources. Guanxi is dynamic. If B is not able to help A. B will ask C to help A. B might introduce A to C or might not depending on the situations.


Levels of Guanxi

Jia-ren Shou-ren Sheng-ren

Jia-ren Guanxi

Shou-ren Guanxi

Sheng-ren Guanxi

Guanxi Model

Presenter

Presentation Notes

There are three major categories of guanxi: Jia ren (among family members); Shou ren (among relatives, friends, neighbors, colleagues, classmates etc.), and Shengren (with mere acquaintance and strangers.) Traditionally, Guanxi’s essence is built upon friendship or intimacy and oriented toward continued exchange of favor. It is guided by a set of traditional Chinese Feudal ethics. Jia-ren guanxi: obligation (based on filial piety and adoption fraternal duty). It is the most intimate inner relations which are tied up by “blood, marriage, or adoption and having common budget and common property”. According to Confucianism, an individual must be loyal to his/her family and show his or her benevolence to his/her family members without an anticipation of reciprocity. Shou-ren Guanxi: Reciprocity (Based on an code of brotherhood). In such a clan or cohort, people are connected by consanguinity or friendship, and thus are mutually attached, trusted, and committed. They need to take on a reciprocal obligation which must be repaid in the future. Entry: commitment, altruism, giving face, empathy, intermediary. Sheng-ren: instrumentality (based on personal gain and loss). Relationships with mere acquaintances or strangers such as residents in a local community, employees in the same large company, customers, foreign businessmen; Interactions are superficial and temporary.


Business Guanxi (Fan, 2002)

Business Guanxi Guanxi is a personal asset Guanxi may not transferable A guanxi process consists of informal social interactions.

B2B Buyer-suppler

B2G Business-government officials Obtain information Improve efficiency by reducing the transaction costs. A way to bypass laws and regulations and obtain special

treatment or scarce resources.

Presenter

Presentation Notes

Business guanxi is defined here as the process of finding business solutions through personal connections. Guanxi is not a company asset but a personal asset. Employees needn’t to fully reveal their guanxi to their employer. Whether an organization can use the guanxi asset of its employees is entirely up to its employees themselves. When the employee leaves the firm, he/she takes the guanxi with him. Guanxi relationships are defined by a strict ethics of reciprocity and obligation. A firm’s employees in procurement and sales always need to return favors to their Guanxi partners. They’ll do it according to their own timetables and sometime may not consider the firm’s benefits. In the context of buyer-suppler relationship, the cultural context within which gift giving takes place. The objective of donors and in particular the degree to which gift giving is designed to elicit particular favors rather than to develop relationships. It involve under-table, back-door practices, or red-envelops in suppler relationship in China. It is commonplace in China today. 70-80% of suppliers give advantage to buyers in form voucher, or even ATM card in China.


Types of Guanxi (Su and Littlefield, 2001)

Favor-seeking vs. Rent-seeking Favor-seeking It is selective and limits to certain carefully

chosen circles. Rooted in Chinese traditional ethics and

possesses a moral power

Presenter

Presentation Notes

People think that gaunxi is synonymous with bureaucratic corruption or bribery. In fact, not all guanxi is bad. There is no good or bad guanxi itself. Whether a guanxi is good or bad depends on its purpose. There are two basic types of guanxi: favor-seeking vs. rent-seeking. Favor-seeking is culturally rooted while rent-seeking is institutionally defined. A rent-seeking theory in political economy may be utilized to explain Guanxi. Rent here as an alternative definition of economic rent refers to the returns over and above the costs of employing a monopolistic resource (e.g., bureaucratic power) by manipulating government policy. Rent-seeking is synonymous with corruption in imperfect market conditions, in which an official has the power to allocate a resource at a price below the market equilibrium level. Bureaucratic corruption, which has become rampant in mainland China, is essentially a rent-seeking behavior capitalizing on the monopoly power and common people’s favor-seeking behavior. In this game, guanxi plays vital roe in connecting rent-seekers to favor-seekers. Gift giving is associated with bribery when the receiver is invited to pursue personal interests at the expense of the legitimate aims and objective of their employers.


Benefits of Good Guanxi (Fan, 2002)

Right guanxi could bring a wide range of benefits: securing rare resources, bypassing or short-cutting the bureaucratic maze, obtaining information and privilege, reduce transaction costs, selling otherwise unsellable goods, provide insurance against uncertainty and assistance when problems arose.

Guanxi is not a competitive advantage. Guanxi is necessary but not sufficient for achieving

business success.

Presenter

Presentation Notes

It is widely believed that right guanxi is a vital factor for doing business in China, and could bring a wide range of benefits: securing rare resources, bypassing or short-cutting the bureaucratic maze, obtaining information and privilege, selling otherwise unsellable goods, provide insurance against uncertainty and assistance when problems arose. Goode side of guanxi is totally moral and even desirable, causing no harm to outside parties. However, Guanxi is not a competitive advantage because it is not valuable, rare and imperfectly imitable and not substitutable. It may become worthless or even turn into a liability if one party loses power or is implicated in corruption. In addition, Guanxi owned by individual is mobile and volatile. Guanxi does bring in certain advantages, but these advantages are not strategic. Ultimately, it is not ganxi but high quality products and good marketing strategies that make business success in the Chinese market just as it is true anywhere elsewhere.


Dark Side of Guanxi (Fan, 2002)

Rent-seeking Quanli guanxi (power-dependence

relationships emphasizing rent-seeking) Quanli guanxi is equated to bureaucratic

corruption and is often synonymous with nepotism, bribery, favoritism, unfair competition, and fraud Guanxi and Corruption Money←Guanxi → power Corruption

Presenter

Presentation Notes

Today, you almost hear the news everyday on intertwiningly using guanxi and corruption by all kinds of people for various purposes, actively or passively, from rent-seeking businesses to worried parent looking for child education opportunists, from job-seeking college students to nervous sales men intending to secure some large block orders in China. Guanxi plays an vital role in connecting rent-seekers to favor-seekers. Quali guanxi is the dark side of guanxi: money and power exchanges through guanxi. Corruption can be found in any country or economic system, but it is guanxi that provides fertile soil in China for corruption to flourish. The weakness in the market structure, and an inadequate legal system, combined with a lack of transparency due to the absence of political opposition and media scrutiny, have allowed guanxi to contribute greatly to making China top of the league table of most corrupted counties. Guanxi itself is not necessarily an origin or a source of corrupt behavior. It is a critical facilitator of corruption in a demoralized society. In a demoralized environment, the general principle of guanxi is shifted from favor exchange toward power exchange and money sharing without obligating formal laws and information relational norms.


Enter Guanxi (Su and Littlefield, 2001)

Making friends or becoming shu-ren or insiders. Take the lead in making commitments Always be helpful Always be empathetic Use intermediaries

Develop guanxi cost time, energy and money. Avoid quali guanxi and illegal transactions

Presenter

Presentation Notes

Develop and maintain guanxi is a time consuming and expensive endeavor. A survey conducted by Hong Kong Independent Commission against Corruption estimated that Guanxi accounted for up to 5% of total costs of doing business in China.


How to control “bad” Guanxi?:

Create competition Rotate the front line Increase points of contact Build company loyalty

Presenter

Presentation Notes

Guanxi is so pervasive and powerful. Thus, it is crucial to understand and manage frontline employee’s personal networks before they turn into liabilities. Companies must bring transparency to existing relationships, prevent conflicts of interest from developing, and alien employee’s interest with their own. Creating competition among frontline employees (compete on looking for the best prices) might be an effective way to reduce “bad” guanxi. One way that shifts the emphasis of business from relationships to transactions is to periodically reconfigure the sales and procurement staff’s client assignments. Such rotations must be managed gingerly because they can backfire if they are too frequent or seem arbitrary or punitive. Another way that tempers guanxi is to depersonalize the sales and procurement processes by instituting a team-based approach or creating multiple contact points in the origination. Many local and foreign companies have employed team-based selling in China. Powerful as Guanxi is, in china only family relationships and close family like bonds warrant true loyalty. Thus, companies should capitalize on the unique loyalty-building quality of kinship-type relationships by fostering them among and between senior managers and frontline people. With high loyalty, employees will be less likely to build up their own guanxi at the expense of the firm’s well-being.


Will Guanxi Remain So Important?

A better legal system will make it less necessary as transaction support

A market economy and administrative reform will make it less profitable

Presenter

Presentation Notes

The growth of gaunxi practices in China can be associated with the breakdown in social order during the cultural revolution and as a product of economic reform and the emergence of capitalism. In the first case people are seen to rely on connections cemented through gifts and favors as a response to the breakdown in formal structures while in the second case it may reflect the growth of individualistic patterns of behaviors within a weakly regulated society. With the further progress in the market economy and an emerging democratic civil society, the importance of business guanxi will be gradually reduced rather than increased. In addition, the emergence of legal system, formal rational bureaucracies at the firm level, reduced power of government on market, and increased contract-based agreement help to reduce the importance of Guanxi in the future.


Etiquette (Meeting)

The Chinese will sometimes nod as an initial greeting.

Bowing is seldom used except in ceremonies. Address Chinese by their title with surname. Handshakes are the most common form The leader/ oldest is always greeted first When exchanging business card, hold the card in

both hands when offering it or receiving it; examine a business card before putting it on the table next to you or in a business card case

Business interactions between men and women are reserved. After an initial handshake, avoid body contact such as hugging or kissing on the cheek.

Presenter

Presentation Notes

With the opening up of the Chinese economy, many Chinese business practice are now beginning to align with more conve0ntional western practices. Having said this, Chinese people in China will always have their own unique Chinese business etiquette and culture given their historical background. To avoid any cultural misunderstandings, here are some tips for understand Chinese business etiquettes.


Etiquette (Conversation)

Basic difference: Western rules value clarity and efficiency; Chinese value harmony and politeness

The Chinese will not directly say “no” to you. Instead, ambivalent answers such as “perhaps”, “I'm not sure”, “I'll think about it”, or “We'll see” usually mean “no.”

Try to Communicate disagreement negatives in an indirect way and don’t do anything disturb the harmony

You may be asked intrusive questions concerning your age, income, and marital status.

There is no need to avoid mentioning Taiwan. If the subject comes up, never refer to this island as 'The Republic of China' or 'Nationalist China.' The correct term is 'Taiwan Province', or just 'Taiwan.'

Do not hang up the receiver until your customer/superior has hung up.


Etiquette (Breakfast and Lunch)

Business lunches are growing in popularity here. Business breakfasts, however, are not a part of Chinese business culture, except in Guangdong, Hangzhou and Fujian province where the 'Morning Tea' is very popular.


Etiquette (Banquet) Evening banquets are the most popular occasions for

business entertaining. If you are the guest, you should arrive on time.

Wait to be seated, as there is a seating etiquette based on hierarchy in Chinese business culture.

Generally, the seat in the middle of the table, facing the door, is reserved for the host. The most senior guest of honor sits directly to the left. Everyone else is seated in descending order of status. The most senior member sits in the center seat. Follow this seating pattern if you are hosting a banquet or a meal in your residence, whether for business or purely social reasons.

It is not uncommon for a host to order enough food for ten people at a table of five. He or she loses face if there are not plenty of left-overs at the end of a meal.


Etiquette (Banquet)

Drinking a lot (and even drunkenness) may earn you respect or trust, since many Chinese believe that alcohol causes barriers to come down and true intentions to be revealed (Especially in Northern and Western China)

During a meal, do not turn a fish over to get to the flesh on the underside. Superstition holds that turning a fish over will cause a fishing boat to capsize.

You may be invited to eat at someone's home. Always bring a gift (fruit or flowers or something from your own country), and remember to take your shoes off at the threshold.


Etiquette (Gift Giving)

Do not give clocks, they are associated with funerals and death.

Always present gifts with two hands. Make sure the senior people get a better gift or

at least gifts perceived to have a higher value than their junior staff


Summary

Harmony with Chinese partners Relationship building is important. Get used to the way of Chinese communication Respect and honest effort Attitude is important! You don’t need to change everyting! Chinese

don’t expect you to be Chinese!

Chinese culture is a set of core values that underlies - ITSP |...

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