Final Report on China

8/3/2019 Final Report on China

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REPORTON

CULTURAL & MANAGEMENT PRACTICES IN CHINA

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Culture and Management practices in ChinaCourse no. 402

Submitted To

Mrs.Ferdousi SultanaAssociate Professor

Department Of Management StudiesFaculty of Business Studies

University Of Dhaka

Submitted By

No Name ID no.

1 Sharmin Sultana 0012 Md. Didarul Islam Sobal 0103 Shila Nasrin 0204 Md.Mojammal Hoq 0305 Md.Mahamudul Islam 040

Group- 01Section-A

BBA 14th Batch

Department Of Management StudiesFaculty of Business Studies

University Of Dhaka

DATE OF SUBMISSION: March 01, 2011

Letter of Transmittal

March 01, 2011

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Mrs.Ferdousi SultanaAssociate Professor,Dept. of Management StudiesUniversity of Dhaka

Subject: Final Report on the Analysis of cultural and management practice in China.

Dear Madam,As per your order we have completed assessment of analysis on cultural and management practices in china. We have concentrated on different parts of the report but the mainconcentration was on the management and negotiation practices. We found that they are verymuch are very much efficient in performing their managerial practices activities in China.

Sincerely,GROUP- 1BBA 14th batch, Sec: A,Dept. Of Management StudiesUniversity of Dhaka

Executive Summary

China is one of the worlds major countries. Its situated in central and EastAsia. Its known because of its rich population, a rising economic superpower and its different style of management. China is a country with goldenhistory. Especially, its Chinese Revolution brought a lot of progress in all itssectors. . World politics is becoming even more dynamic and different blocs

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are emerging in the world. These blocs are of multiple nature, among themare the countries, which are although included in developing countries, butthey are trade winners. Their G.D.P rate is increasing continuously. So is thecase with china. China is an emerging nation. Experts say that its GDP ratewill cross the GDP rate of America until 2001.Nowadays the business

organizations of China are becoming very much improved because of theirefficient and effective management practice. China's economy during the past 30years has changed from a centrally planned system that was largely closed to international tradeto a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy. Reforms started in the late 1970s with the phasing out ofcollectivized agriculture, and expanded to include the gradual liberalization of prices, fiscaldecentralization, increased autonomy for state enterprises, the foundation of a diversifiedbanking system, the development of stock markets, the rapid growth of the non-state sector, andthe opening to foreign trade and investment. Now China is characterized as a potentialsuperpower by a number of academics, military analysts, and public policy and economicsanalysts. It is now the world's third largest economy, after the United States and Japan.

Negotiation in China are that senior members of the negotiating team will

speak. Designation is on the most senior person in your group as yourspokesman for the introductory functions. Business negotiations occur at a

slow pace. Be prepared for the agenda to become a jumping off point forother discussions. Chinese are non-confrontational. They will not overtly say

'no', they will say 'they will think about it' or 'they will see'. Chinesenegotiations are process oriented. They want to determine if relationships

can develop to a stage where both parties are comfortable doing business

with the other.

.

Table of ContentsSerial Topics Page no.

Chapter- 22.1 Introduction 052.2 China-profile 06

2.3 Economic overview 08

2.4 Leading sectors of business in China 08

Chapter-33.0 Culture of China 11

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3.1 Language (Verbal) 123.2 Chinese spoken language 123.3 Differences between English and Mandarin language 13

3.4 Language (Non-verbal) 14

3.5 Religion 14

3.6 Values and Beliefs 163.7 Dining Etiquette 17

3.8 Gift Giving Etiquette 18

3.9 Chinese business culture and practice 193.10 Geert Hofstede Analysis of China 20

3.11 Chinese business customs 22

3.12 Differences between business culture of East andWest

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Chapter -4

4.0 Management practice in China 254.1 Planning in China 25

4.2 Organizing in China 254.3 Staffing in China 264.4 Leadership in China 26

4.5 Controlling in China 274.6 Decision making 28

Chapter-55.0 Negotiation in China 285.1 Chinese Negotiation practice contains some elements they are --- 29

5.2 Suggestion for negotiating with the Chinese 30

Chapter-66.0 Entry modes for Bangladesh 31

Conclusion 41Appendix 42

Chapter - 12.1 Introduction

China is one of the worlds major countries. Its

situated in central and East Asia. Its known because

of its rich population, a rising economic super power

and its different style of management. China is a

country with golden history. Especially, its Chinese

Revolution brought a lot of progress in all its sectors.

. World politics is becoming even more dynamic and

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different blocs are emerging in the world. These blocs are of multiple nature, among them are

the countries, which are although included in developing countries, but they are trade winners.

Their G.D.P rate is increasing continuously. So is the case with china. China is an emerging

nation. Experts say that its GDP rate will cross the GDP rate of America until 2001.

With more than 4000 years of history, China has the oldest civilization. In Ancient times,

Xia Tribe, establish a state in the area of the Huang He River (Yellow River) basin. The

tribesmen, believing that this was the center of the world, called this state the Middle Kingdom

and regarded the surrounding areas as peripherals.

Thus China has been known by this name even after the 1911 Revolution which

abolished the feudal monarchy and gave birth to the Republic of China. Further again in 1949,

after a long struggle, the Chinese communist party under the leadership of chairman Mao

Zedong led the Chinese people of all nationalities to over throw the rule of imperialism,

feudalism, and capitalism, gaining victory for the new democratic revolution and establishing the

Peoples Republic of China. From then Chinese people took control of their countrys fate and

became its masters.

For centuries China stood as a leading civilization, outpacing the rest of the world in the

arts and sciences, but in the 19th and early 20th centuries, the country was beset by civil unrest,

major famines, military defeats, and foreign occupation. After World War II, the Communists

under MAO Zedong established an autocratic socialist system that, while ensuring China's

sovereignty, imposed strict controls over everyday life and cost the lives of tens of millions of

people. After 1978, MAO's successor DENG Xiaoping and other leaders focused on market-

oriented economic development and by 2000 output had quadrupled.

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2.2China-profile:

Capital:: Beijing

Total Population: 1.330.141

Annual growth rate:: 0.51%

Density:: 142.02/km2

Urban population:: 43% . Population of Shanghai (17.900), Guangzhou (Canton) (15.300),Beijing (13.200), Shenzhen (9.400), Wuhan (9.000), Tianjin (8.200)

Official language: In China, the national language is Mandarin. However, it is to be noted thatthere are many different dialects and variants of it.

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Other languages spoken: There are more than a hundred dialects. You can differentiateMandarin in the north and Cantonese in the south of the country. The official language coexistswith the other languages of the autonomous regions (Mongolian, Uyghur, Korean, Tibetan...).

Business language: When the foreigners do not speak Chinese, business discussions aregenerally held in English. The Chinese do not speak English as well as they read or write it.Ethnic Origins:: Chinese: 91.9%; Zhuang, Oughour, Hui, Yi, Tibetan, Miao, Mandchous,Mongol, Buyi, Korean and other nationalities: 8.1%.

Beliefs: The Chinese are generally atheists. However, Buddhism, Taoism and Confucianism arerelatively widespread amongst senior citizens and attracts a part of the well-to-do class today.There are also Christian and Muslim minorities.

Tele communication profile : Telephone Codes : 00To make a call to : +86Internet Suffix : cn

Type of State:: The People's Republic of China is a communist state. Deng Xiao Ping hadsuggested the phrase "market socialism" to qualify the evolution of the PRC. China correspondsto a centralised unitary state completely managed by the Chinese Communist party with a greatnational administration, authoritative in its structure as well as its ideology.

Type of economy:: Country with intermediate income (low bracket), emerging financial market.

AT last it can be said about China that largest population in the world; highest GDPgrowth rate in the world over the last 10 years.

Source: www.cia.gov

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2.3 Economic overviewChina's economy during the past 30 yearshas changed from a centrally plannedsystem that was largely closed tointernational trade to a more market-oriented economy that has a rapidly growingprivate sector and is a major player in theglobal economy. Reforms started in the late1970s with the phasing out of collectivized

agriculture, and expanded to include thegradual liberalization of prices, fiscaldecentralization, increased autonomy forstate enterprises, the foundation of adiversified banking system, the developmentof stock markets, the rapid growth of the non-state sector, and the opening to foreign trade andinvestment. Now China is characterized as a potential superpower by a number of academics,military analysts, and public policy and economics analysts. It is now the world's third largesteconomy, after the United States and Japan. Below is the economic overview of China

GDP( Purchasing Power Parity $8.789 trillion (2009 est.)GDP- Real growth rate 8.7% (2009 est.)GDP- Per Capita (PPP) $6,600 (2009 est.)GDP- Composition By Sector agriculture: 10.6%

industry: 46.8%services: 42.6% (2009 est.)

Stock of money $2.434 trillion (31 December 2008)Unemployment rate 4.3% (September 2009 est.)Current account balance $297.1 billion (2009 est.)

2.4 Leading sectors of business inChina:

Contacting Chinese Companies

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Medium-sized and small companies are more and more trying to benefit from export to China.However they are hindered by high investment costs and administrative hurdles in China. Basedon the above, the following points are introduced on how a contact can be obtained and whichmarketing opportunities are available to companies desiring to enter the Chinese market.

Automotive Companies

Chinas automotive sector is growing at anastonishing rate. Auto makers from all over theworld want to sell in the worlds fastest growingauto market. However, the real winner in thisindustry will be China which is fast building anautomotive industry of its own with the help offoreign investors. Click here for company profilesfor the biggest players in China's automotive sector.

Aviation Companies

In this section you can find company profiles for China's

largest air lines including Air China and China UnitedArilines. The company profiles will provide you withinformation on company history, passenger numbers, growthand development, recent news and future projects andcompany goals. The largest airline in China is Air Chinaoperating a fleet of over 200 Boeing and Airbus craft to morethan 250 domestic and international destinations. No otherairline offers so many flights to the Chinese capital Beijing, oronward flights to regional points in China.

Banking Companies

Banking has become an extremely competitive business in

China since the countries entry into the World TradeOrganisation (WTO) and the development of a rapidly de-centralising market driven economy. This section willprovide you with detailed company profiles for the largestbanks in China. Including information on the history of thebanks and future projects and goals.

Energy Companies

With Chinas unquenchable thirst for energy the sector hasgrown dramatically in recent years. Justin Yifu Lin the chief ofthe China Centre for Economic Research at Beijing Universityclaims that China uses 15% of the worlds energy. Sinopec isChinas largest producer and supplier of oil and petrochemical products and Chinas second largest producer of crude oil.PetroChina supplies the country with natural gas and oil andaccording to the Forbes ranking is the largest publicly ownedcompany in China. This section with provide you with companyprofiles for the largest energy firms in China.

Insurance Companies

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The insurance industry in China has grown enormously in recentyears. Between 1999 and 2000 premium insurance revenues grewby 14.5% to 159.59 billion RMB. According to the Forbes rankingsof the top forty largest companies in China the top ten contains twoinsurance firms, China Life Insurance and Ping An Insurance. Inthis section you can find detailed company profiles for the biggest players in the Chinese insurance industry including companyhistories, revenues, profits, market values and future goals andambitions.

Materials Companies

In recent years Chinas economy has grown steadily and at afast rate rate, and so has demand for materials to produceeverything from automobiles to household appliances. Chinasunquenchable thirst for construction has also led to highdemand for materials. For Chinas numerous ambitiousconstruction projects it is estimated the country is currently

using half the worlds concrete and a third of its steel supply.

Telecommunication Companies

The telecommunications industry in China has grown exponentially inrecent years. China Mobile is now the largest mobile phone provider inthe world with a customer base of more than 269 million people. Thecompany also has a registered capital of 58.2 RMB and investmentcapital of approximately 400 billion RMB. By clicking here you will beable to view company profiles for the largest telecommunications providers in China. These profiles will include company histories,customer base, figures on growth and development and future projectsand goals

The draft Industrial Policy, 2004, which is yet to be finalized and published, is supposedto contain 33 "thrust sectors, according to media reports. However, in the Export Policy2003-2006, the Government had identified the following five sectors to have "High Priority":

Software and ICT products; Agro-products and agro-processing products; Light engineering products (including auto-parts and bicycles); Leather goods; and High value-added readymade garments

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In 2009, Chinese direct investment abroad in non-financial sectors increased by 6.5% toUSD 43.3 billion dollars. China is one of the few countries that experienced growth in its directinvestment abroad during the financial crisis.

Thus from the overview points , it can be said opportunity lies in Large sector as

well as SME in China .So if companies want to do business in China in SME swector they haveto think Many companies have come to think that sending out quotations on product is the wayto measure new opportunities. In China, the price received on a quotation is not the true cost ofan opportunity. Logistics, lead times, material prices, exchange rates, quality considerations arejust some of the factors that measure into cost. Now, more than ever, understanding the factorsthat affect cost is important in developing a good sourcing strategy.

In this regard supplier considerations including:

RMB appreciation VAT Quality Service provision, and more.

Chapter 23.0 Culture of China

The Culture of China is one of the world's oldest and most complex cultures. The area in whichthe culture is dominant covers a large geographical region in eastern Asia with customs andtraditions varying greatly between towns, cities and provinces. Chinese culture has severaldistinct elements. In this report we are going to cover the following elements of Chinese culture.

Language

Religion

Values

Customs

3.1 Language (Verbal)

Chinese now has earned itself greater status in the World. About one-fifth of the worlds

population, or over one billion people, speak some form of Chinese as their native language. TheChinese language has over 400 dialects in continental China alone. The people of each provincehave a special dialect, and then the people of each city, town, and village have their own specialdialect as well. However the official national spoken language of China (except in Hong Kongand Macau) is Standard Mandarin. Over 90% of Chinese people speak Mandarin, but also mayvery likely speak another dialect.Standard Mandarin has eight dialects. They are---

Beijing Mandarin12


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Northeastern Mandarin

Ji Lu Mandarin

Jiao Liao Mandarin

Xhongyuan Mandarin

Lan Yan Mandarin

Southwesten mandarin

Jianghuai Mandarin

Source:en.wikipedia.org

3.2 Chinese spoken language

The Sinitic languages, often synonymous with the Chinese languages, are a language familyfrequently postulated as one of two primary branches of Sino-Tibetan. The Bai language may beSinitic (classification is difficult); otherwise Sinitic is equivalent to the Chinese languages, andoften used in opposition to "Chinese dialects" to convey the idea that these are distinct languagesrather than dialects of a single language.

There are Chinese spoken languages and the number of people who are using these languages in

speaking.

3.3 Differences between English and Mandarin language

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There is a very clear distinction between English and Chinese language. The two languages are

of two different language families, English comes from Indo-European and Chinese from Sino-

Tibetan, this gives rise to many more differences in mode of expression, grammar, syntax,

meaning system. The major differences between Chinese and English are as follows.

Point of Differences Mandarin English

Phonology It uses the pitch of a phoneme

sound to distinguish word

meaning.

In English, changes in pitch are

used to emphasize or express

emotion, not to give a different

word meaning to the sound.Alphabet Chinese does not have an

alphabet but uses a

logographic system for its

written language.

There have specific set of alphabets

Tense & Verbs Uninflected language andconveys meaning through

word order.

English much information iscarried by the use of auxiliaries and

by verb inflections: is/are/were.Articles Dont use Use ArticlesPhrasal Verbs Dont use Use Phrasal Verbs e.g. give in, put

on etc. Source: http://esl.fis.edu

3.4 Language (Non-verbal)

Nonverbal language is the process of communication of sending and receiving wordlessmessages through gestures, posture, touch or by facial expression and eye contact. Every culturehas some form of non-verbal language that conveys certain messages to other people which ifnot understood, can be quite confusing for the people of another culture. Chinese non-verbalform of communication has a few distinguishing signs which are quite shocking for a culture likeours. For example

To show curiosityWhen Chinese people find something is curious, they may glare blankly at it for too long.

For mourningIn China, people will cry sadly at the funeral rites. According to Chinese culture, people whodont cry when attending the funeral are not filial persons.

To show angerWhen people get angry or irritated over someones craziness or foolishness they usually make acircular motion near the temple or ear to show that someone is crazy, because to the psychology,crazy man is something wrong with his brain. But in China it is just a gesture of thinking.

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To point at somethingWhere we use the index finger to point at something. Chinese people use an open palm. It isconsidered offensive to point a finger at someone in China.

Source: (Cultural differences in Body Language -- Huan Jianfei)

3.5 Religion

The People's Republic of China was established in 1949. Its government is officially atheist,which viewed religion as emblematic of feudalism and foreign colonialism. Religious belief orpractice was banned because it was regarded as backward and superstitious by some of thecommunist leaders, from Vladimir Lenin to Mao Zedong, who had been critical of religiousinstitutions. This policy relaxed considerably in the late 1970s at the end of the CulturalRevolution and more tolerance of religious expression has been permitted since the 1980s. The

1978 Constitution of the People's Republic of China guarantees "freedom of religion. However,the Chinese government has also banned certain new religious movements such as the FalunGong and Xiantianism in recent times. At present there are five recognized religions by the state,namely Buddhism, Taoism, Islam, Catholicism, and Protestantism. The religious practice calledas Confucianism is now regarded as an ethical and philosophical system rather as a religion.

Religious Distribution & Description

Buddhism is a religion and philosophy encompassing a variety of traditions, beliefs andpractices, largely based on teachings attributed to Siddhartha Gautama, commonly known as theBuddha. Buddhism spread from India to China some 2,000 years ago and is the largest organizedreligion in China since its introduction in 1st Century

Confucianism is a Chinese ethical and philosophical system developed from the teachings of theChinese philosopher Confucius. It is a complex system of moral, social, political, philosophical,and quasi-religious thought that has had tremendous influence on the culture and history of EastAsia. It might be considered a state religion of some East Asian countries, because of

governmental promotion of Confucian philosophies. Confucianism is a system of behaviors andethics that stress the obligations of people towards one another based upon their relationship. Thebasic tenets are based upon five different relationships:

. Ruler and subject

. Husband and wife

. Parents and children

. Brothers and sisters

. Friend and friends15


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Confucianism stresses duty, sincerity, loyalty, honour, filial piety, respect for age and seniority.Through maintaing harmonious relations as individuals, society itself becomes stable.

Taoism (orDaoism) refers to a variety of related philosophical and religious traditions that haveinfluenced Eastern Asia for more than two millennia. The word Tao roughly translates as, "path"

or "way" (of life). Taoism has a history of over 1,700 years in China. There are numerous Taoisttemples and priests in China even now

Islam is followed by ten National minorities in China .Islam was introduced in China in the 7thCentury and even now there are several mosques in China served by the Imams.

Catholicism is the term referring to Christians and churches belonging to the Roman CatholicChurch. Catholicism was introduced in the 7th century; it became popular only after the OpiumWar. There are around 4,600 churches now in China.

Protestantism is one of the four major divisions within Christianity. Protestantism gainedground in China with the end of the Opium War and presently there are around 10 millionProtestants in China.

3.6 Values and Beliefs

The Chinese people have strong values and beliefs that have been developed for thousands ofyears. The Chinese are strongly influenced by the Confucian Philosophy. As a result their valuesand beliefs reflect Confucian beliefs and values. The chief values of Chinese people that can bepointed out are -----

Moralities: Chinese develop their moralities into several areas: for the nation, for the

family, for the friend, for others, and for the society. They have been taught to be loyal to

their nation, and even the leader of the nation.

Charity: Chinese believe that all humans are born with kindheartedness, so they treat

others peacefully and their ideal society is the world without arguments, fighting,

stealing, and robberies.

Ethic of the family: Everybody is raised by the family. The family becomes the center of

Chinese people's life. The influence of the concept is that there are seldom arguments in

the family. Children are filial and respect their parents, show love and respect to brothers

and sisters. Parents get taken good care by their children when they are old.

Veneration for intellectuals: In traditional Chinese social position, the intellectual isalways in the highest level, then the farmer, the worker, and the businessman is the lowes

3.7 Dining Etiquette

. Chinese prefer to entertain in public places rather than in their homes, especially whenentertaining foreigners.

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. If you are invited to their house, consider it a great honour. If you must turn down such anhonour, it is considered polite to explain the conflict in your schedule so that your actions are nottaken as a slight.

Arrive on time.

Remove your shoes before entering the house.

Bring a small gift to the hostess.

Eat well to demonstrate that you are enjoying the food!Table manners:

Learn to use chopsticks.

Wait to be told where to sit. The guest of honour will be given a seat facing the door.

The host begins eating first.

You should try everything that is offered to you.

Never eat the last piece from the serving tray.

Be observant to other peoples' needs.

Chopsticks should be returned to the chopstick rest after every few bites and when youdrink or stop to speak.

The host offers the first toast.

Do not put bones in your bowl. Place them on the table or in a special bowl for thatpurpose.

Hold the rice bowl close to your mouth while eating.

Do not be offended if a Chinese person makes slurping or belching sounds; it merelyindicates that they are enjoying their food.

There are no strict rules about finishing all the food.

3.8 Gift Giving Etiquette

. In general, gifts are given at Chinese New Year, weddings, births and more recently (because ofmarketing), birthdays.

. The Chinese like food and a nice food basket will make a great gift.

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. Do not give scissors, knives or other cutting utensils as they indicate the severing of therelationship.

. Do not give clocks, handkerchiefs or straw sandals as they are associated with funerals anddeath.

. Do not give flowers, as many Chinese associate these with funerals.

. Do not wrap gifts in white, blue or black paper.

. Four is an unlucky number so do not give four of anything. Eight is the luckiest number, sogiving eight of something brings luck to the recipient.

. Always present gifts with two hands.

. Gifts are not opened when received.

. Gifts may be refused three times before they are accepted.

Source:http://cidb1ed5e535d30c0d7.spaces.live.com/blog/cns!B1ED5E535D30C0D7!453.entry

3.9 Chinese business culture and practice

The Chinese business practice is vastly different from the Western method that most of us maybe used to. Nevertheless, with the reform of Chinese economy in the past 30 years Chinesebusiness practice are now beginning to align with more conventional methods.

However, China will always have their own unique business culture and etiquette, given their

unique history and background. In this section we are attempting to illustrate the Chinesebusiness culture and practices.

Business Meeting Etiquette

on white background. Colours have special meanings and if you are not careful, your colourchoice could work against you.

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. Presentations should be detailed and factual and focus on long-term benefits. Be prepared forthe presentation to be a challenge. . Appointments are necessary and, if possible, should be madebetween one-to-two months in advance, preferably in writing.

. If you do not have a contact within the company, use an intermediary to arrange a formalintroduction. Once the introduction has been made, you should provide the company with

information about your company and what you want to accomplish at the meeting. . Visual aidsare useful in large meetings and should only be done with black type

. You should arrive at meetings on time or slightly early. The Chinese view punctuality as avirtue. Arriving late is an insult and could negatively affect your relationship

. Pay great attention to the agenda as each Chinese participant has his or her own agenda thatthey will attempt to introduce.

. Send an agenda before the meeting so your Chinese colleagues have the chance to meet withany technical experts prior to the meeting. Discuss the agenda with your translator/intermediaryprior to submission.

. Each participant will take an opportunity to dominate the floor for lengthy periods without

appearing to say very much of anything that actually contributes to the meeting. Be patient andlisten. There could be subtle messages being transmitted that would assist you in allaying fears ofon-going association.

. Meetings require patience. Mobile phones ring frequently and conversations tend to beboisterous. Never ask the Chinese to turn off their mobile phones as this causes you both to loseface.

. Guests are generally escorted to their seats, which are in descending order of rank. Seniorpeople generally sit opposite senior people from the other side.

. It is imperative that you bring your own interpreter, especially if you plan to discuss legal orextremely technical concepts as you can brief the interpreter prior to the meeting.

. Written material should be available in both English and Chinese, using simplified characters.Be very careful about what is written. Make absolutely certain that written translations areaccurate and cannot be misinterpreted.

This section contains: Geert Hofstede analysis of China, Chinese business customs,management practices, negotiation presentation to be a challenge. tactics.

3.10 Geert Hofstede Analysis of China

Geert Hofstede is an influential Dutch organizational sociologist, who studied the interactionsbetween national cultures and organizational cultures. Geert Hofstede found five dimensionsupon studying the culture of different societies. Analysis of China by Geert hofstede reveals thefollowing characteristics of Chinese people.

Power Distance: This dimension measures how much the less powerful members of institutionsand organizations expect and accept that power is distributed unequally.

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China scores 80 in Power Distance which is very high if compared to other countries of theworld. Because of this high score --- Decisions are taken mainly by top management.

Decisions taken by top management are readily accepted by employees.

Moving up the corporate ladder becomes very hard.

Source: http://www.geert-hofstede.com/hofstede_china.shtml, Cross-cultural challenges when

doing business in China by Zhang ZigangSingapore Management Review January 1 2004

IndividualismThis dimension measures how much members of the culture define themselves apart from their

group memberships.China is low in individualism. Individualism score is only 20. As a result--- They follow we concept rather than I concept.

Depend more on groups or institutions to determine what they should do and emphasis

loyalty to the group.

More likely to cooperate with others to avoid risks and reduce responsibilities.

Appreciate duty to the group and harmony among its members while pursuing personal

goals is viewed rather negatively

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Masculinity: The value placed on traditionally male or female values and the role differentiationin a society.China scores 66 in Masculinity. This shows there is still differentiation and discriminationbetween male and female.

Uncertainty Avoidance: How much members of a society are anxious about the unknown, andas a consequence, attempt to cope with anxiety by minimizing uncertainty.China is low in uncertainty avoidance. Uncertainty avoidance score is only 30. Therefore---- Managers dont plan much; when they plan it tends to be much relaxed.

Dont think much about minute details of the contractual relationship.

More readily accepts change

They prefer more experimental jobs.

Long-Term Orientation: A society's "time horizon or the importance attached to the futureversus the past and present.Chinese people are very long term oriented. Their score in this dimension is 118. They prefer to know a client well at first then they starts dealing.

Initially focus more effort on building social relations.

Tend to continue relationship with a business partner for a long period of time.

3.11 Chinese business customs

Chinese business customs differ greatly from the west. They have specific decorum for everyaspect of business related tasks like greeting, seating, dress code, gift giving, eating etc.Greetings: When greeting each other or meeting acquaintances nodding of the head or shakinghands is acceptable. This applies to greetings between the same sexes and the opposite sexes. Ahandshake may linger for longer than is normal in Western culture - this is a gesture of respect.

Dress: Chinese tend to dress formally. Therefore when they say `informal', they expect you towear a shirt, tie and pants, but never shorts. White is used for funerals it is to be avoided. Red,suggests power, prosperity and authority, and is the preferred color in China.

Names: Chinese place the surname (family name) first then the personal name. Womennormally keep their own family name. Unless invited to do so use of personal names ornicknames should be avoided.Punctuality: Punctuality is important, as it can be interpreted as a measure of courtesy andprofessionalism.

Gifts: It is appropriate that gifts should be given on the appropriate occasion, such as thefarewell banquet or at the conclusion of an important introductory meeting. The gift should bemade as a formal presentation to the entire group as a gesture of goodwill and friendship.

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Extremely valuable gifts shouldnt be given because; the Chinese may take it with suspicionwhich can cause undesirable consequences.

. In general, gifts are given at Chinese New Year, weddings, births and more recently (because ofmarketing), birthdays.

. The Chinese like food and a nice food basket will make a great gift.

. Do not give scissors, knives or other cutting utensils as they indicate the severing of therelationship.

. Do not give clocks, handkerchiefs or straw sandals as they are associated with funerals anddeath.

. Do not give flowers, as many Chinese associate these with funerals.

. Do not wrap gifts in white, blue or black paper.

. Four is an unlucky number so do not give four of anything. Eight is the luckiest number, sogiving eight of something brings luck to the recipient.

. Always present gifts with two hands.

. Gifts are not opened when received.

. Gifts may be refused three times before they are accepted.

Additionally, there are certain things that should never be given as gifts. Such as a clock, ahandkerchief, an umbrella, or any white flowers. All these objects represent death in the Chineseculture.Business cards: The Chinese are very keen about exchanging business cards. When presentingor receiving a business card, both hands should be used. It is considered rude to write on thebusiness card. It is polite to admire and read what is on the card before putting it away. Thebusiness cards one side should be in English and the other in Chinese.

Drinking: It is customary for guests to drink only when making or receiving toasts. When theChinese make toasts, both parties are expected to drink. The cup is held in the right hand, and itis polite to place the left hand as if supporting the cup. The first toast is frequently a general onewith everyone drinking together, perhaps with the arrival of the first dish. After this, it isstandard practice for everyone at the table to toast all others.

Conversation: Controversial issues like Taiwan, Tibet should be avoided in conversation.Although Japan and China are neighboring countries praising Japan too much in front of Chinesepeople can make conversation argumentative so this should be avoided as well. Saying No isnormally regarded as Impolite. So Instead of saying No one should respond to Chinese withanswers like Inconvenient Under consideration Maybe or That might be difficult etc.

Chinese people also do the same in this case.

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Source:http://www.austcham.org/page/china-business/doing-business-in-china/understanding-business-etiquette-in-china/

3.12 Differences between business culture of East and West

The following table presents some of the differences between how the Chinese and the Western

individuals think about culture and values.

Cultural Values

Expressed

West

(America & most Europeancountries)

East

(The Chinese and Most Asiancultures)

Type of Logic Linear (More causalrelationships and directassociations between A and B)

Spiral (more roundabout and subtle)

Expression ofAgreement andDisagreement

More argumentative, willing toexpress disagreement verbally

More difficult to say no even if onemeans no, disagreement expressednonverbally

Communication ofInformation

More meaning is in the explicit,verbal message. Use of directlanguage

Meaning is often implied or must beinferred Use of indirect languagepatterns

Expression ofHonesty

More overt, one is more likely toask the person to "speak theirmind" or "get it out on the table"

Subtle, nonverbal

Expression of Self "I"-oriented "We"-oriented

ThinkingOrientation

More rule based or based onapplication of abstract principlessuch as regulations or laws

Tends to take context and the specificsituation into account in ruleinterpretation

The Individual Has to have rights and greaterneed for autonomy andindividual achievement

Group duty ,preservation of harmony

Nature of theBusiness

Relationship

Less important, tend to substituterelationship for writtenagreement, superficial, easy toform, not long lasting

Most important business cannot occuruntil relationship if sound, writtenagreement secondary to quan xi, hardto form, long lasting

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Conflict Resolution Trial or confrontation, use oflawyers and courts

More mediation though trusted thirdparties

Source:http://www.legacee.com/Culture/CultureOverview.html

Chapter 4

4.0 Management practice in China

In a transition economy, business leaders must adopt certain management practices to ensure thestrong performance of Chinese companies. These practices are role-specific and vary accordingto whether a manager is in charge of environment analysis, operations planning, control andfollow up ,for example. They are also strongly influenced by a managers personality andcultural background, and reflected in the way he or she deals with risk, asserts his or opinions infront of employees, acts in a determined manner, as well as in the methods he or she uses toplease, communicate with and interact positively with others, and his or her propensity to use

other methods in the Chinese conception of an interaction-based society (Yang, Yu and Yeh,1989). As company leaders gain more independence, management practices become extremelyimportant. Aside from having an effect on employee behaviour, they can incite employees totake an active role in the company, which in turn leads to better results. Highly complexapproaches that rely on seduction not only have a normal effect on employee work habits, theyalso influence their attitudes. In our view, Chinese business managers must therefore adoptpractices that are likely to produce proactive employees who will help the company graduallyachieve high-level performance. Management is a set of activities (Including planning,organizing, leading and controlling) directed at an organizations resources with the aim ofachieving organizational goals in an efficient and effective manner. Chinese managementpractice is described in brief below.

4.1 Planning in China

Planning organization Long-term orientation.Decision Making Centralized decision making by few people.

Level of Involvement? Involvement of few people at higher level.

Where are decisions initiated? Decisions flow from the top to downHow quickly are decisions made Slow decision-making : fact implementation

of the decisionHow quick is the decision implementation Quick Implementation

4.2 Organizing in China

Who is responsible for activities? Collective responsibility and accountability

How clear are the responsibilities Clear and specific decision responsibility

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Structure of organization Formal organization structure

Nature of Organizational Culture Well-known common organization cultureand Philosophy

Identification with what? Identification with the company but not so

much with profession

4.3 Staffing in China

When are people hired ? Young people hired out of school, no mobilityof people among companies

How much advancement wanted? Slow promotion through the ranks

Loyalty is to whom? Loyalty to the company

How is performance evaluation done? Very infrequent performance evaluation fornew employees

What type of results are appraised ? Appraisal of long-term performance

How are promotion allowed? Promotion based on multiple criteria

How is training and development done? Training and development considered a long-term investment

What is the basis of remuneration? Lifetime employment common in large.Level of Job security High

4.4 Leadership in China

Leadership of the top managementplays a decisive role in deciding thesuccess of the company. In face ofgreater competition brought about byglobalization, management today willneed to possess stronger judgment,decision ability, adaptability andgreater foresight. Ability to look far iscrucial as one need to be able toforesee unforeseen circumstances inorder to be ready at all times to reactto any changes.Form keycompetitiveness for the enterprise, and

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grow together with the economy. Treat your staff with an open heart, cultivate the enterprisesvalues .

Build and strengthen the institutional framework and economic system of the enterprise. MNCsusually will establish main or Asian headquarters in key cities in China. Beside that, research anddevelopment centre, training centre and logistic base will also be built. Therefore it is vital for

the organization to have a strong organization structure dealing with its cash flow, flow ofinformation and manpower movement in order to ensure its success in China.It is essential forthe foreign-funded enterprises to understand the Chinas culture, especially regarding the cultureof Guangxi (relationship), so as to be able to gain the p .popularity and trust of China population.With a good relationship, business can become smoother and probability of failure will begreatly reduced. Stronger bonds can also be built with the customers, suppliers and partners.Now let me how the more clear view about leadership:

How does the leader react? Leader acting as decision-maker and head of the group

What style of management is followed? Participative style

How do values of individuals function inteams?

Common values facilitating cooperation

How is confrontation done? Communication primarily top-down.

Nature of communication Up-bottom communication

Source: www.amcy5.com/projects/marketing/amcy37.htm

4.5 Controlling in China

Who Controls? Control by superior

What is the focus of controlling? Control focus on group performance

Is blame fixing done? Blame fixing is avoided; rather face saving isdone.

Use of Quality Circles Increasing use of quality control circles

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4.6 Decision making

Decision making is vastly different in western and Chinese business cultures

In the West it is seen as positive if you can gather and process information quickly for

rapid decision making.

The Chinese prefer instead to deliberate, even on decisions that may seem simple, which

can cause decisions to take a long time

It is unlikely you will convert a prospect at the first meeting

Decisions are unlikely to be made during the meetings you attend

Ask for feedback, discuss the issue and explain your thinking to avoid looking as thoughyou have made a snap decision

Being included in the decision-making process is important to the Chinese culture

Sourcehttp://www.rsmi.com/attachments/approved/chinese-business-practicesetiquette/en/Chinesebusinesspractices_w.pdf

5.0 Negotiation in China

. Only senior members of the negotiating teamwill speak. Designate the most senior person inyour group as your spokesman for theintroductory functions.

. Business negotiations occur at a slow pace.

. Be prepared for the agenda to become ajumping off point for other discussions.

. Chinese are non-confrontational. They will notovertly say 'no', they will say 'they will thinkabout it' or 'they will see'.

. Chinese negotiations are process oriented.They want to determine if relationships candevelop to a stage where both parties

. Your starting price should leave room for negotiation.

are comfortable doing business with the other.

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Chiku nailao (endurance, relentlessness)Chinese prize relentless hard work. They prepare diligently for negotiations and expectlong bargaining sessions. Demonstrate your endurance by asking many questions, doing yourresearch, and showing patience.

Source: The Chinese Negotiation by John L. Graham and N. Mark Lam Harvard BusinessReview article

5.2 Suggestion for negotiating with the Chinese

The Chinese are renowned for being tough negotiators.

When negotiating one must show compromise so their negotiators feel they have gainedconcessions.

Only senior members of the group should speak during Negotiations.

Short, simple, sentences should be used when speaking and jargon and slang should beavoided.

A great deal of research regarding subject matter should be done prior to meeting.

Use of high pressure tactics should be avoided.

Decisions may take a long time. So one should refrain from mentioning deadlines, bepatient, show little emotion and calmly accept that delays will occur.

6.0 Entry modes for Bangladesh:

Entry modes means the mode through

which a firm can enter into another

market in other country . The choice ofentry mode for entering into the foreignmarket is another major issue withwhich business must wrestle . Thechoice of entry mode should be drivenby the assessment of relative long termgrowth and profit potential .Themagnitude of the advantages and

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disadvantages associated with each entry mode is determined by a number of facts includingtransportation costs , trade barriers , political risk , economic risk and firms strategies .

There are various entry modes through which a firm can enter into a foreign market :

Direct distribution Exporting Turnkey projects Joint Venture Licensing Franchising Agent or distributor with network Participating in trade fair

6.1 Direct distribution : Before entering into the direct distribution firm must convey the

market research so that it will be easy for them to sell product effectively and to capture the

market . In this regard a representative office is required . In the direct distribution licensingprocess is an potential issue and this facts should be favourable in effective direct distribution .

6.2 Exporting:

exporting means producinggoods in home then shippingthem to other receiving countryfor sale . The advantages ofexporting is to help firm achieveexperience curve and locationeconomies ..

6.3 Turnkey projects

Firms that specialize in thedesign , construction and startupof turnkey plants are comm,on in some industries .In a Turnkey projects , the contractor agreesto handle every detail of the projects for a foreign client , including the training of operating

personnel . But this is not suitable for all sectors .

6.4 Joint Venture

A joint Venture entails establishing a firm that is jointly owned by two or more otherindependent firm . Joint Ventures with local partners face a low risk of being subject tonationalization or other forms of adverse government interference . Here main benefits from a

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local partners knowledge of the host country's competitive conditions , culture , language ,political systems and business systems . The disadvantages includes inability to realize locationand experience economies , inability to engage in global strategic coordination .

Here it is to be noted that Bangladesh has a long relationship in Joint Venture withChina . A joint venture, between a Chinese and a Bangladeshi company, is set for producing lowcost, but more efficient solar panels to tape the country's growing market for green energyespecially among rural population.The joint venture of Bangladeshi Auto Power Private Limitedand Chinese Zhejiang Jinxi Solar Energy Equipment Company Limited is expected to startproduction early next year, Chairman of Auto Power Engineer Abul Hossain told BSS today.thefactory had already been set up in Gazipur to produce the low cost solar panels ranged between50 watts to 1500 watts for low to high demanding customers.

6.5 Licensing

A licensing arrangement is an agreement whereby a licensor grants the rights to intangible

property to another entity for a specific period and in return the licensor receives a royalty feesfrom the licensee . Intangible property includes patents , inventions, formulas, processes, designs, copyrights , trademarks . A firm may use licensing when it wishes to enter into the foreignmarkets but is prohibited from doing so by barriers to investments .Main disadvantages oflicensing is not to give a firm a tight control over manufacturing, marketing and strategies that isrequired for realizing the experience curve and economies .

6.6 Franchising

Franchising is a specialized form of licensing in which a franchiser not only sells intangibleproperty to the franchisee but also insists that franchisee agree to abide by strict rules as to how itdoes business .The franchiser also assist the franchisee to run the business on an ongoing basis .The franchiser typically receives royalty fees which amounts to some percentages of franchiseesrevenue . Here main disadvantages is lack of control over quality .

6.7Agent or distributor with network

Another way to enter into market is through a reputable or well-known agent or distributor.These companies are located regionally and typically have large sales network. Thus they will beable to have a better understanding of the market and can provide assistance in developingdistribution strategies in the desired region. In this way, new products can be launched .

6.8 Preferential Entry modes

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Entry modes are many and among them preferential will be those which provides the highest

opportunity. If we overlook China's market then it will be seen that most overseas companieswho set up operations in China were in the form of a joint venture (JV) with a Chineseorganization. The biggest benefit from this approach is probably to establish local relations and

get access to local markets. The importance of guanxi, or personal connections in China, makesJoint Venture an effective way of developing business relationships in this country. However,Joint Venture often leads to conflict between foreign and Chinese entities due to the differencesinherent in management styles.

A side issue to note will be that joint venture usually requires large amount ofcapital and Chinas government may have capital control towards outflow of funds should onetransfer his/her funds back to his/her home country .Besides this problem Joint venture issuitable mostly in big sector .If we overlook small and medium sector then most preferentialentry mode in China may be the following :

6.8 Direct Distribution:

Before exporting your goods into China or Chinese partner, it is advised for you to conductthorough market research and due diligence. Companies should be mindful of possible problemsin export rights, regulations and intellectual property rights protection. If the company decides todistribute the goods directly, then it will have to be aware of the distribution rights andunderstand the licensing process in China.

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PreferentialEntryMode

InChina

Agent or DistributorWith vastnetwork

DirectDistributionParticipating

InTrade Fair


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6.9 Agent or Distributor with Vast sales network:

The best way to enter the China market is through a reputable or well-known agent ordistributor. These companies are located regionally and typically have large sales network. Thus

they will be able to have a better understanding of the Chinas market and can provide assistancein developing distribution strategies in China and the region. In this way, new products can belaunched easier into the market and distribution network can be set up rapidly without anyproblems dealing with distribution rights and licensing.

6.10 Participating Trade Fair

Trade fair can be an acceptable mode to enter into a market .Trade Fair is a common affair inChina . Trade fair occurs in China all year around . Guangzhou is a place where trade fair occursall year with a specialize product or more emphasizing product .As all types of product areavailable in trade fair so huge opportunities lies here through participating in trade fair . Somecities which arranges trade fair in China are Beijing, Shanghai ,Qingdao, Chengdu , Dongguan ,Shenzhen etc . To participate in the trade fair one must have to select specific fair with productthen steps have to be taken .

Besides all these, the most important step that one must take before exporting products intoChina will be have a thorough understanding Chinas customs, regulations and controls towardsimported goods.

A sound market entry strategy is also necessary in order to penetrate the Chinasmarket. An assessment of goods strengths, weakness, opportunities and threats can allow you

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to promote and distribute products better. Understanding the profitability and marketability ofproducts in the Chinas market is thus vital before exporting products into China.

6.11 Trade Fair:An Easy Acceptable medium:

Trade Fair is the most easy way to attract the customer of China for Bangladeshi ProductIf Bangladeshi business become able to participate in Chinese Trade Fair only then they will beable to introduce our product in Chinese market . If they participate in Trade Fair th en thefollowing opportunities will lead them to success :

Chinese customers come to know about our product

Trade Fair reflects our product quality

Chinese importer companies become attracted toward our productas well as our country.

Chinese investors knows about our product & opportunitiesIt provides easy marketability

It makes us able to understand the demand of Chinese customers

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Though it is tough to enter into the Chinese trade fairs but Bangladesh Govt and then businesspeople jointly can make it possible .In this regard firms which are interested in doing business inChina have to identify where they will get the best opportunities and in which product.

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Event City Month Venue Details Cycle

NEPCONSHIENZHE

N

SHENZHEN September Shenzhen intconvention

andexhiobitioncenter

Leadingelectronics

manufacturing exhibitionin China

Once a year

ASSEMBLYTECHNOLOGICALEXPOCHINA

SHENZHEN September Shenzhen intconventionandexhibitioncenter

Trade showandconferencefor the entiremanufacturemarketfocusing onelectronic

equipment

Once a year

WIRELESSCHINA

BEIJING September TheLandmarkHotel&Towers

Wirelessforum

Once a year

HOMETEXTILEAND HOMEDECORCHINA

GUANGZHOU

September China import& export fairpazhoucomplex

Home textileand homedecorationexhibition

Twice a year

COS+H BEIJING September Chinanationalconventioncenter

China intoccupationalsafety&healthexhibition

Twice a year

ALL CHINALEATHEREXHIBITION

SHANGHAI September Shanghainew int expocenter

Int leathershow:rawmaterials ,tanningmachine etc

Once a year

QITMF QINGDAO September Qingdao int

conventioncenter

China int

txtilemachinery

Once a year

CHINA INT.FOOTWEAR FAIR


Chinafootwear

Once a year

ICC-CHINACHENGDU

CHENGDU September unknown High-endcomponents

Twice a year

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MODASHANGHAI


Int fashionfocus of leathergarments &travel goods

Once a year

FILEXPOCHINA

SHANGHAI September Shanghaimart

Filtrationproduct,technology &equipment

Once a year

WORLD OFFOODCHINA


Food &beverageexhibition

Once a year

FAMOUSFURNITUR

E FAIR

DONGGUAN

September unknown Furniturefair, home-

woodworkingmachinery

Twice a year

NEXCONEXPO&CIPCC

SHANGHAI September Pudong expo Telecommunication eventtargetingenterpriseusers &carriers

Once a year

CIEME-CHINA INT.

EQUIPMENTMANUFACTURINGEXPO

SHENYANG September Shenyeng intexhibition

center

Equipmentmanufacture

expo

Once a year

PET FAIRASIAPROFESSIONAL

SHANGHAI September Intexshanghai

Pet fair Once a year

6.12 Guangzhou , a city of TradeFair

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Guangzhou ,3rd largest city after Shanghai & Beijing ,is adjacent to Hongkong & Macauforming and urban try-angle . It is a city with 10 million of population . The city s famous forforeign trade and business doings and holds China's largest trade fair , the Canton Fair orChina Import & Export Commodities . The Canton Fair takes place annually during the 3 rd & 4th

weeks of April & October . If a businessmen of Bangladesh wants to take participate in this tradefair then Metro Authority Headquarters permission is needed along with Govt. permission .

Conclusion

China is a very prosperous country. It is quite unique in many aspects. It has a very longgoldenhistory behind it. The history goes beyond even the birth of Christ. It has a very strongand deep-rooted cultural and historical background. In addition to this the country has a verydifferent life style. Its religions, customs, and its society are much different than the other partsof this world.

Apart from its social, historical and traditional aspects China has got a unique way of managingthings and doing the business. It has its own set of norms and values that are very much deeprooted in its every day life. The Chinese way of managing the things have got a deep impact ofculture on them. Chinese plan, organize and work in a very different manner. Their way ofinteracting with each other and their way of evaluating each other is also very much different.Chinese give more importance to known material than the material values as they evaluate andget work from others.

Chinese management style is very much different than the rest of management styles in theworld. Their management style has different criteria of managing the things, doing the things andevaluating the things. There work pattern and working environment is also much more different

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than the rest working environments of world. Chinese attitudes and there orientation towardsmanagement is very much specific and it has got a different way of achieving results.

Chinese are very much conscious about their values and it is very much opposite to the west.Chinese give more importance to norms and values than money. In west money is the god butChinese will never be ready to sacrifice their any of value, norm or tradition just for the sake of

money.The final lesson that we can derive from Chinese is that only continuous hard work in a properdirection will lead to happiness and prosperity. There is no short cut to continuous handwork.

Appendix

Deng Xiaoping: A Chinese politician, statesman, theorist, and diplomat. As leader of theCommunist Party of China, Deng was a reformer who led China towards a market economy.

Falun Gong: A system of beliefs and practices founded in China by Li Hongzhi in 1992.Western academics have described Falun Gong as a "spiritual movement" based on the teachingsof its founder.

Xiantianism: A religious system thatencompasses five religious groups of Chinese origin. Theyclaim to strive for the unification of Confucianism, Taoism, Buddhism, Christianity and Islam.

Quality Circles: A volunteer group composed of workers (or even students), usually under theleadership of their supervisor (but they can elect a team leader), who are trained to identify,analyze and solve work-related problems and present their solutions to management in order toimprove the performance of the organization, and motivate and enrich the work of employees.Quality circles were first established in Japan in 1962; Kaoru Ishikawa has been credited withtheir creation. According to Wikipedia there are more than 20 million Quality Circles in China.

Mao Zedong: A Chinese revolutionary, political theorist and communist leader. He led thePeople's Republic of China (PRC) from its establishment in 1949 until his death in 1976. Histheoretical contribution to Marxism-Leninism, military strategies, and his brand of Communistpolicies are now collectively known as Maoism.

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Huang He River: The second-longest river in China and the sixth-longest in the world at theestimated length of 5,464 kilometers (3,395 mi).

Case Study-1: Chinese Negotiation

Volkswagen (VW), the first overseas carmaker in China, is the only foreign manufacturer tohave been making a profit in China over the past ten years.

It all began in October 1984, when VW signed a joint venture agreement with China. One ofthe countrys first major joint venture agreements, it involved several governmentauthorities, including the Ministry of Foreign Trade and Cooperation (MOFTEC, now

MoCom), the State Planning Commission, the State Economic Commission, the Ministry ofFinance, the Bank of China (BOC), the Municipal Government of Shanghai, and the ChinaNational Automobile Industry Corporation (CNAIC). A manufacturing facility was built inShanghai, and VWs partners were Shanghai Tractor and Automobile Corporation (STAC),with a twenty-five percent share, as well as the BOC, Shanghai Trust and ConsultantCompany, and the CNAIC, which together had a twenty-five percent share.

VW was approached by the China National Technical Import Corporation in 1977, and in1978 a Chinese delegation visited VW headquarters in Wolfsburg, Germany. The first VWdelegation went to Beijing in 1979. So there were six years of negotiations, involving at leastseven parties on the Chinese side, and major contracts were negotiated, including a jointventure contract, a technology transfer agreement, articles of association, supply agreements,and a planning agreement.

According to Heinz Bendlin, one of the original VW negotiators with China, even in theearly days the Chinese behaved courteously. He has commented as follows:

"I learned in China that foreigners tend to have a typical mode of behavior. They want toachieve results quickly, get answers to all their queries, and immediately come up withsolutions to problems. But in China one has to be patient and be prepared to spend

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considerable time solving problems step by step, or ibu ibu, as the Chinese say. Settingdeadlines or showing impatience leads to disadvantages in negotiations."

"The Chinese like to negotiate in rather large groups. Fairly frequently, three or four VWpeople negotiated with ten to twenty Chinese. However, typically only one would speakwhile the others took notes. They were all very disciplined."

"There were times when they would cultivate a friendship, seemingly to manipulatesituations. Our Chinese partners also frequently asked us to explain matters several times.This was not a sign of insufficient professional knowledge on their part, but just a tactic, asare the meticulously organized extras during negotiations, such as banquets, toasts, andsightseeing."

"We should listen carefully to the Chinese. Never try to convince them by saying that onlyyour products or plans are outstanding. Instead, explain the facts and figures as often as theyrequire; explain why you believe yours is the best offer; and explain why you are asking forcertain payments."

"Do not show that opinions are divided on a given topic within your team, and avoiddiscussions in front of them. They cannot understand such behavior and will interpret this asa sign that you lack clarity about your concept."

Source: http://www.negotiations.com/case/well-managed-negotiations/

Case Study-2: Chinese Culture (GuanxiTies That Bind)

In 1992, McDonalds Corporation opened its first restaurant in Beijing, China, after a decade ofmarket research. The restaurant, then the largest McDonalds in the world, was located on thecorner of Wangfujing Street and the Avenue of Eternal Peace, just two blocks from TiananmenSquare, the very heart of Chinas capital. The choice of location seemed auspicious, and withintwo years, sales at the restaurant were surpassing all expectations. Then the Beijing citygovernment dropped a bombshell; officials abruptly informed McDonalds that it would have tovacate the location to make way for a commercial, residential, and office complex planned byHong Kong developer Li Ka-shing. At the time, Mc-Donalds still had 18 years to run on its 20year lease. A stunned McDonalds did what any good Western company would doit took theBeijing city government to court to try to enforce the lease. The court refused to enforce thelease, and McDonalds had to move. Chinese observers had a simple explanation for theoutcome. McDonalds, they said, lacked the guanxi of Li Ka-shing. Given this, the companycould not expect to prevail. Company executives should have accepted the decision in good

grace and moved on, but instead, McDonalds filed a lawsuita move that would only reducewhatguanxi McDonalds might have with the city government!

This example illustrates a basic difference between doing business in the West and doingbusiness in China. In the advanced economies of the West, business transactions are conductedand regulated by the centuries-old framework of contract law, which specifies the rights andobligations of parties to a business contract and provides mechanisms for seeking to redress

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grievances should one party in the exchange fail to live up to the legal agreement. In the West,McDonalds could have relied on the courts to enforce its legal contract with the citygovernment. In China, this approach didnt work. China does not have the same legalinfrastructure. Personal power and relationships or connections, rather than the rule of law, havealways been the key to getting things done in China. Decades of Communist rule stripped awaythe basic legal infrastructure that did exist to regulate business transactions. Power, relationships,and connections are an important, and some say necessary, influence on getting things done andenforcing business agreements in China. The key to understanding this process is the concept ofguanxi.

Guanxi literally means relationships, although in business settings it can be better understoodasconnections. McDonalds lost its lease in central Beijing because it lacked the guanxi enjoyed bythe powerful Li Ka-shing. The concept ofguanxi is deeply rooted in Chinese culture,particularlythe Confucian philosophy of valuing social hierarchy and reciprocal obligations. Confucianideology has a 2,000-year-old history in China, and more than half a century of Communist rulehas done little to dent its influence on everyday life in China. Confucianism stresses theimportance of relationships, both within the family and between master and servant. Confucian

ideology teaches that people are not created equal. In Confucian thought, loyalty and obligationsto ones superiors (or to family) is regarded as a sacred duty, but at the same time, this loyaltyhas its price. Social superiors are obligated to reward the loyalty of their social inferiorsbybestowing blessings upon them; thus, the obligations are reciprocal.

Source:http://highered.mcgraw-hill.com/sites/dl/free/0072973714/214805/Sample_Chapter03.pdf

Case study-3: The KFC case study. human resouce problem in china

Thanks to cultural differences and Social Background influences, KFC in China faceschallenges: it needs to establish a new management style. The KFC must develop the new

management style to match up Chinese habit. For example accept the commission in China is thenormal phenomenon but in the West was not. The KFC must to understand the different habitualbehavior in China and try to adapt it. The different management style will make a lot of conflict.Some times will make the company lost the market or suffer a setback. For example Taiwanscompany was suffering a setback in China. It was a famous department store in Taiwan. It wasas a leader in the department store in Taiwan. But they involves of many details staffs, and iscontrollable. For the suppliers, the evaluation is not for the eliminating through the selection orcontest, but for strict control of the products from the beginning. Later on, we also need to trainand support the suppliers. Through the evaluation program, we can see through the week pointsof the suppliers, and focusing on the week points, KFC must give the relative training, that willinvite the standard of international quality to the suppliers. The training includes:1. Altitude:

how to be a good and trustable suppliers 2.Technology: the technical information of raising thechicken. 3.Finance support: for the suppliers, who need the finance supportThrough thealternatives we talked above.

Case study-4:Wal-marts customization emphasis in china

Wal-mart mainly focuses on the customers. It has laid down three basic believe to be carried outin doing a retailer business. They respect for individual, serve their customer, and strive for

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excellence, these 3 basic believe furthermore create culture of the sun down rules, ten foot ruleand pricing philosophy. These culture value customer as the most important to all, wheremanagers are consider as servants leader that helps the associate to realizes there potential andhave to answer the question made by customers within 24 hours. Moreover, when ever associatesof wal-mart come to the customer within 10 feet, they will have to greet and offer helps to thecustomers.

Source: www.casestudy.com in china

References

Articles

1. Cross-cultural challenges when doing business in China by Zhamg Zigang SingaporeManagement Review January 1 20042. Bond M and G Hofstede, 1989. "The cash value of Confucian values", Human SystemManagement, 8, pp 195-200.3. Hofstede G, 1980. Culture's consequences: International differences in work-related values.Beverly Hills, CA: Sage4. "Cultural constraints in management theories". The Academy of Management Executives,7(1): pp 81-94.5. Sosik, John and Jung Dong, 2002. "Work-group characteristics and performance incollectivistic and individualistic cultures". The Journal of Social Psychology. Washington, pp 5-23.6. Axtell, Roger E. Gestures. The Dos and Taboos of Body Language Around the world[M],John Wiley & Son, 1991.7.RSM International, Chinese Business Practices and EtiquetteVada Ng, Chinese Business Culture, The Confucius Institute, University Of Western Australia

8. John L. Graham and N. Mark Lam, The Chinese negotiation, Harvard Business Review,October 20039.Zhang Zigang, Cross-cultural challenges when doing business in China January 1 200410. Huang Jianfei. Cultural differences in Body Language11.International Business Review 17 (2008) Page no.141-14512.IMF, World Economic Output April 2007

Web

www.casestudy.comwww.icmrindia.comwww,chinaorbit.comwww.amcy5.com/projects/marketing/amcy37.htmwww.51share.net/upfiles/2004512844319300.dochttp://esl.fis.edu/grammar/langdiff/chinese.htmhttp://www.southwestfocus.com.au/_content/documents/2009%20conference/Vada%20Ng.pdfhttp://www.chinaprimer.com/chinese-business-culture/chinese-business-etiquette-meetings.htmlhttp://www.legacee.com/Culture/CultureOverview.htmlhttp://ezinearticles.com/?Doing-Chinese-Business-Based-On-Hofstede&id=797967 Hofstededimensions

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http://www.rsmi.com/attachments/approved/chinese-business-practices--etiquette/en/Chinesebusinesspractices_w.pdfhttp://hbr.org/2003/10/the-chinese-negotiation/ib
http://www.rsmi.com/attachments/approved/chinese-business-practices--etiquette/en/Chinesebusinesspractices_w.pdfhttp://www.rsmi.com/attachments/approved/chinese-business-practices--etiquette/en/Chinesebusinesspractices_w.pdfhttp://www.rsmi.com/attachments/approved/chinese-business-practices--etiquette/en/Chinesebusinesspractices_w.pdfhttp://www.rsmi.com/attachments/approved/chinese-business-practices--etiquette/en/Chinesebusinesspractices_w.pdf

Final Report on China

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