Business Practices and related Environmental factors of

China

Danish AhmedJohn BorgoyariAmrita Gupta

Abhipoorn GuptaVaibhav Raj

“Their attitudes and behaviour are

rooted in a culture that is diametrically

opposed to Western thought.”

Boye Lafayette De Mente

Flow of Presentation

. •Introduction•PEST Analysis

. •Hofstede’s Model Analysis•Basic Etiquettes

. •Business Practices

Introduction

• The People's Republic of China is the world's largest market, with a population of 1.3 billion people. China is a blend of growing modernization and ancient culture. Anyone considering the Chinese market should never underestimate the importance of culture.

•Two of the most important concepts in Chinese culture are guanxi and mianzi. The first, guanxi, has been defined as sharing favors between individuals, connections, relationships, and the ability to exert influence. The second, mianzi, means face: saving face, losing face, and giving face.

•The most fundamental cultural difference between Chinese and Americans relates to the role of the individual. The Chinese place great importance on the family, group, consensus, and surface harmony.

Introduction

Capital: BeijingClimate: extremely diverse; tropical in south to subarctic in north GDP

Religions: Daoist (Taoist), Buddhist, Muslim 1%-2%, Christian 3%-4% Government: Communist state

Hofstede’s Model

Hofstede’s Model

Power Distance Individualism Masculinity Uncertainty Avoidance Pragmatism Indulgence0

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China India

Basic Etiquettes

Greetings and Introductions• Chinese prefer to be formally introduced to someone new. This

applies to both Chinese and foreigners• Do not be surprised if you are applauded. Be sure to applaud back.• Always stand up when being introduced and remain standing

throughout the introductions• When being introduced to Chinese, the accepted form of greeting is

the handshake, even among Chinese. Chinese may also nod or slightly bow

• Unlike the Japanese, the Chinese bow from the shoulders rather than the waist

Business Card Presentation and Exchange

• Use both hands when presenting business cards and be sure the writing faces the person to whom you are presenting your card

• Cards should also be received with both hands. Do not immediately put the card in a pocket or bag—this is considered rude. Never put a card in your back pants pocket. This would be the same as sitting on someone’s face

• Follow with “I am pleased to meet you/how are you?” Ni hao in Chinese• When seated, place cards on the table. This shows respect and is also an

excellent way to remember names• Never “deal out” your cards across the table like a game of cards – this is

very rude

Forms of Address and Titles• The Chinese will state their last name first, followed by the given name

(may be one or two syllables). For example,Liu Jianguo, in Chinese would be Mr. Jianguo Liu using the Western style

• Never call someone by only his or her last name. Unless specifically asked, do not call someone by his or her first name

• Addressing someone by his or her courtesy or professional title and last name conveys respect. In Chinese the name precedes the title. For example, Liu Xiansheng for Mr. Liu, and Liu Jingli for Manager Liu

• Women’s names cannot be distinguished from men's names. Chinese women use their maiden names even after marriage, but may indicate marital status by using Mrs., Ms., Miss, or Madam. Mrs. Wang might be married to Mr. Liu

Contd…….• Courtesy titles for women include:

– Taitai or Furen = Mrs. or Madam– Nushi = Ms.– Xiaojie = Miss

• Foreign women may be addressed by using Miss plus the first name. Jane Smith may be Miss Jane

• Chinese who frequently deal with foreigners or travel abroad on business may adopt a Western first name, such as David Liu. They may request that they be referred to as David, once a relationship has been established

• Do not use the term "comrade" in China • Among themselves, they often call each other Lao” Li, or Xiao Li, in which

“Lao” means Senior or older and “Xiao” means young and junior. People are comfortable relating to each other with the age factor clearly defined. Chinese culture stresses respect for the old and care for the young

Personal Questions • Do not be surprised when asked personal questions regarding age, marital status,

children, family, income, job, etc. This is done to seek common ground• On the other hand, the Chinese will be uncomfortable with American familiarity,

particularly early in a relationship• Compliments • Unlike the Western custom, compliments are not graciously accepted with a

“thank you,” but rather with “not at all or it was nothing.” Accepting and giving direct praise is considered poor etiquette

• A common Chinese phrase is nali, meaning “where.” However, the Chinese will use this expression to convey “not at all” or “it really isn’t anything”

• However, among the younger generation and those who often deal with foreigners, they often respond to compliment with a “thank you”

Silence• Silence is used effectively. Not talking while others do signifies politeness• Silence in meetings and during discussions gives one the opportunity to

carefully consider what is being said and formulate an appropriate response. Resist the urge to fill the silence and continue talking. Patience is indeed a virtue

• The Chinese concept of privacy differs significantly from that in the West, where people are used to having their own space, office, room. The Chinese are not accustomed to this luxury. Privacy to them relates to their own thoughts and emotions that they proudly keep to themselves

• Saying “No”• Refusing requests and saying no can cause a loss of face and disrupt

surface harmony• The Chinese have many ways of indicating refusal without actually saying

“no”. Commonly you will hear “that would be inconvenient,” or “it will be taken under consideration,” or “it is being discussed”

Farewells• When departing, accompany guests beyond the door of the office or

meeting room. Guests should be accompanied to the elevator.

• The host will accompany a high-ranking guest all the way to the car, and wait until the car has departed before leaving. Don’t turn your back to the car until it is out of sight

Social Distance• Every culture defines proper distance. Westerners, particularly Americans,

find that the Chinese comfort zone regarding distance is a bit too close for their comfort

• Instinctively Westerners may back up when others invade their space. Do not be surprised to find that the Chinese will simply step closer.

• The Chinese do not like to be touched, particularly by strangers. Do not hug, back slap or put an arm around someone’s shoulder

• Do not be offended if you are pushed and shoved in a line. In some circumstances, the Chinese do not practice the art of lining up and courtesy to strangers in public places is not required

• People of the same sex may walk hand-in-hand as a gesture of friendship in China

Gestures & Customs• Western gestures that are taboo in China include: 

– Pointing the index finger--use the open hand instead– Using index finger to call someone—use the hand with fingers motioning

downward as in waving.Do not snap fingers

– Do not put feet on a desk or coffee table. It is rude to show the soles of the shoes

– Whistling is considered rude– Use both hands when handing someone an object, such as a teacup, a gift, or a

business card

Contd….• Western gestures that confuse:

– Shrugging shoulders– Winking– The “OK” sign (Be cautions when using gestures – they don’t always translate

across cultures)• Mutually-understood gestures:

– Nodding the head up and down for agreement, side to side for disagreement– Thumbs up indicating approval– The smile– Laughter. However, a note of caution: Although laughter is the response to

something humorous, it can also mean someone is uncomfortable or in a situation where they do not know how to respond. Consider the situation

Contd….• Chinese customs that are confusing to Westerners:

– Waving the hand in front of the face to indicate “no”– Pointing to the nose to indicate “oneself,” rather than to the chest – Girls covering one’s face and giggling to show embarrassment.

• Chinese customs that are annoying to Westerners:– Belching or spitting on the street– Lack of consideration when smoking and failure to ask permission to smoke– Staring at foreigners, particularly in remote areas– Slurping food or making noises while eating– Talking while eating– Eating in public places that are not designated for food– Pushing in crowded areas such as railway stations or bus stop

Guests• Protocol begins when guests arrive. It is appropriate to greet guests and

escort them to the meeting room• It is important to have the right attendees for meetings, thus the Chinese

desire to have guest lists, detailed information and meeting purpose clearly defined in advance

• Be sure the highest-ranking person enters the meeting room first, followed by the next ranking official and so on. Otherwise the Chinese may mistake the person entering first as the leader of the delegation. The only exception would be interpreters who need to stay with the leader of the group

Seating• After everyone shakes hands, guests are seated• The more formal the meeting, the more rigid the protocol• Guests are seated in descending rank with the interpreters seated

behind• The guest of honour and other VIPs are escorted to the seats of

honour• In rooms with seating around the perimeter, the honoured guest is

seated to the right of the host (on a sofa or chairs at the end of the room). Remaining guests are left to seat themselves. After all the guests have been seated, the remaining Chinese in the group will seat themselves

• When seated around large conference tables, the honoured guest will be seated directly across from the host

Gifts• Suggested Gifts

– Gifts should reflect the giver and the recipient– Consider gifts from your country, state or region– Small items such as key chains, scarves, golf balls, or calendars with a

company/organization logo are a good thing to take along– Gifts with a company/organization logo are also of interest providing

they do not include things that are considered taboo– Other possibilities include: desk accessories, framed art, particularly if

it is from your own area, and books.

Contd…..• Gift Taboos

– Be sure not to give in denominations of four. Four is a very unlucky number and signifies death

– Any gift which carries an association of death or funerals such as clocks, cut flowers, white or black objects

– Do not give scissors or anything sharp as it symbolizes severing relations

– Be cautious when giving food items—it can suggest poverty– Always wrap gifts, but do not use white or black paper—it symbolizes

death– Red and gold are the best. Avoid elaborately wrapping gifts– Never write anything in red ink– Never give a man a green hat.

Chinese Business Practices

Chinese Business Practices

• Problem Solving• Motivating People• Appraising Performance• Performance Expectations• Negotiating• Decision Making Process• Participation in Meetings• Superior/Subordinate Relationships• Hiring/Dismissal• Customer Relations