strategies for companies doing business in china

BRIC Country Series: ChinaBRIC Country Series: China

Strategies for Companies Doing Business in China

11© 2013 ITAP International, Inc. All Rights Reserved.

Table of ContentsTable of Contents

Management Strategies

Expats in China

Strategies for Engaging Clients

Special Offer


Management StrategiesManagement Strategies1. Currently, the most important business issues for

( ti d t ) i Chimanagers (natives and expats) in China are: • Staff retention • Obtaining financingg g• New contract law • Transfer pricing • Finding markets locally• Finding markets locally • Protecting intellectual property


Management StrategiesManagement Strategies

2 Eff ti l d hi i Chi i l d th f ll i2. Effective leadership in China includes the following behaviors: • Respect for Chinese history and culture p y• Even temper • Patience • Making the distinction between “what works in (home• Making the distinction between what works in… (home

country)” and “what works in China.” It is important to recognize that the management practices in one’s home country are not necessarily superior!country are not necessarily superior!


For Your InformationFor Your Information…

B i i t d t d d i th f ll i tiBusiness is not conducted during the following times and or occasions:

• Chinese New Year • Qing Ming Festival • Labor Day • Dragon Boat Festival• Dragon Boat Festival • Mid-Autumn Festival • National Day • New Year's Day


Motivating EmployeesMotivating Employees

E l l l i l i i iti ti• Employers welcome new employees in a welcoming or initiation event. The employer organization is likened to a family. During this event, new employees are introduced to their colleagues, managers and the organization as a wholemanagers, and the organization as a whole.

• A uniform and/or some practical gifts for office use with company logo and/or book bag would be an appropriate welcome gift. For factory workers safety goggles gloves relevant tools and/orfactory workers, safety goggles, gloves, relevant tools, and/or educational materials would be more appropriate.

• In China employers need to spend much more time with their employees than would be the case in the West To motivateemployees than would be the case in the West. To motivate employees, some employers invite them for lunch, even though this tends to embarrass employees.


Expats in ChinaExpats in China

1 Wh t th t i t t i f t1. What are the most important issues for expat managers in China to get right? • Respect for China • Using proper channels to hire and fire workers • Understanding the laws

2. How are expat managers typically perceived? • Many expat managers are regarded as aloof and not in tune with• Many expat managers are regarded as aloof and not in tune with

their Chinese employees. • Mainland Chinese tend to think that managers from Hong Kong and

Taiwan look down on them.


Expats in ChinaExpats in China

3 If t d ’t i th t t Chi3. If an expat doesn’t give the proper respect to China, he or she can be perceived by the Chinese nationals as arrogant and insensitive. g

4. Some actions and behaviors are appropriate for locals, yet should not be adopted by expats who are not completely fluent in Chinese practices andnot completely fluent in Chinese practices and culture. Here are a few examples: – Spitting – Criticizing the government – Causing the Chinese party to lose face (by embarrassing

them or not showing sufficient respect, for example).


g p , p )

Strategies for Engaging ClientsStrategies for Engaging Clients

1 T b ild t ith t ti l li t i Chi b1. To build rapport with potential clients in China by. . .• Understand that identifying and selecting the right partner in

China is key. • Try to understand the Chinese point of view. • Don't assume that business practices in the home country

can automatically be transferred and used in China. y• Be patient and understand that signing a contract can be

perceived by the Chinese as a prelude to serious discussions.



2 Wh i iti t li t2. When visiting a prospect or a client. . .• Spend some time at the beginning of the meeting in “small talk”

rather than launching straight into business. • Address the counterpart by title and name (General Manager

Wang, etc.). • Have a proper business card in Chinese and your native p p y

language to give to your Chinese counterpart. Give the card with both hands and a small nod of the head.



33. Vendors should avoid. . .• Never put the Chinese counterpart’s business card straight into your

pocket. Look carefully at it and keep it visible until the end of the timeeting.

• NEVER fold the card.4. When negotiating with prospects or clients from China…

• As the circumstances change, so would the terms of the agreement – even after a contract is signed.

• Patience is key. Developing “Guanxi” (a relationship) with the Chinese partner is the period that takes the longest time and isChinese partner is the period that takes the longest time and is therefore unsettling for negotiators who lack experience in China.



5 R i i d h dli fli t5. Recognizing and handling conflict• Conflicts can arise out of what western managers might

consider a very trivial thing which in the West would be resolved by an apology.

• Formal apologies bring “shame” on the Chinese party (even if they are in the wrong) and should be done in private or handled by a third party, neutral to the conflict, who would ensure that no one loses face.



6 T i t i l ti hi (f th f6. To maintain a relationship (for the purpose of getting follow-on business) . . .• Call or visit on a regular basis. g• Send New Year’s greeting cards (and possibly a small gift or

chocolates, cookies, etc.)• Send moon cakes for the mid-autumn festivalSend moon cakes for the mid autumn festival.


Hofstede Scores for ChinaHofstede Scores for China

1. Individualism: 20 (Group Orientation)

2. Power Distance: 80 (Hierarchical Orientation)(Hierarchical Orientation)

3. Certainty: 30 (Tolerance for Ambiguity)

4 Achievement: 664. Achievement: 66 (Achievement Orientation)

5. Time Orientation: 87 (Long-Term Orientation)( g )

The graph above provides a snapshot of the culturally based values in China The graph shows that the


The graph above provides a snapshot of the culturally based values in China. The graph shows that the Chinese tend to accept and respect hierarchy in the workplace. They also believe that the interests of the group take precedence over the interests of individuals, and intend their actions to have consequences for the future.

Cultural Disharmony Undermines yWorkplace Creativity

“Managing cultural friction not onlyManaging cultural friction not only creates a more harmonious workplace,

says professor Roy Y J Chua butsays professor Roy Y.J. Chua, but ensures that you reap the creative benefits of multiculturalism at itsbenefits of multiculturalism at its

best.”SOURCE Bl di Mi h l W ki K l d H d B i S h l 09 D 2013 R h & Id


SOURCE: Blanding, Michael, Working Knowledge, Harvard Business School, 09 Dec 2013 Research & Ideas

Special Offer ITAP’s GTPQSpecial Offer – ITAP’s GTPQ

1 If l d t th t th i lt l i li t1. If you already suspect that there is a cultural misalignment among and between team members…

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Questions? Please email or call me…

Catherine�Mercer�Bing

Questions?��Please�email�or�call�me…

CEO,��ITAP�International,�[email protected]

ITAP�International,�Inc.353�Nassau�Street,�1st FloorPrinceton,�NJ�08540�USA(W) 1 215 860 5640(W)�1.215.860.5640http://www.itapintl.com

…thank�you…Remember! Put your PROMOTION CODE: C14GTPQ

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