Guanxi And Ocb The Chinese Cases Business Essay

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One primary challenge that companies face when going abroad is about the human resource management. This issue emerges as human resources vary across the countries, companies, and also cultures. They also encounter challenging situation where corporate executives are driven to manage the resources in foreign countries effectively, control costs, and close the deal with a range of different-character people. This situation highlights the importance of taking into account the cultural issues in business. In addition, the suggestion attracts more attention as currently business starts expanding their operation into the mainland China due to the potential market they present.

Although Chinese market is lucrative still it is considered as threats for Taiwan in spite their share something in common in terms of common language and culture with mainland China. This coins the ideas to treat markets differently due to the diverse culture. The so-called organizational citizenship behavior (OCB) explains the Chinese culture and society background; one study discusses the Chinese OCB from theories and methods derived from the West.

Within the discussion of OCB in Chinese culture, this paper attempts to figure out the influence of national culture and Guanxi towards Chinese organizational citizenship behavior (OCB). Therefore, this paper's objective is to highlight the differences between Taiwan and mainland China on the OCB. The following analysis will discuss culture effects in work place and key success factors determining the success of conducting business in China.


One suggestion is to matches a proper social tradition, value and conviction. This means that business should take into account the Hofstede's five culture dimensions as following:

Power distance, which explains the degree of power inequality in an institution or organization within a society.

Uncertainty avoidance that explains the degree of uncertainty and threat from ambiguous situation.

Individualism, which focuses on operation unit individually based on the perception that people are free and defined from personal point of view.

Masculinity that refers to dominant values that perceived and adopted by a society in order to obtain assertiveness, wealth, social status, and achievement.

Long-term orientation, which elaborates a dimension that differentiates social cultures from personal view.

According to Hofsted, China has a comparatively high ranking of Power Distance, Uncertainty avoidance, Masculinity, and long- term Orientation, among Asian countries and western countries. For example, Chinese people believe the supervisor has the 'absolute right to decide everything' due to high power distance, although superiors are expected to develop relationships with subordinates. This is known as "Guanxi". Guanxi plays an important role in Chinese collectivist society. It literally means "relationships". In the Chinese business world, however, it is also understood as the network of relationships among various parties that cooperate together and support one another. Chinese managers are expected to establish clear managerial power, meanwhile building a good "Guanxi" and trust with workers, which means they can ask, and expect to receive, favors or assistance.

The Rise of Toyota and the Demise of the American Auto Industry (Shared)

By Weiss, Martin

The Market Oracle

March 12, 2007

Auto industry is one business that casts the fierce challenges due to the competition of each manufacturer in providing the best products that are also affordable. Currently, there are two countries that competes one another in automobile industry: U.S. and Japan. As one concept of international business also addresses the competitive advantages, this paper will discuss the underlying facts behind the competitiveness of foreign manufacturer, especially Japan compared to U.S. counterpart. Despite the U.S. is well known for the big three (Chrysler, Ford, and General Motor), their existence in home markets are threatens the rising popularity of Japanese products. Concerning this issue, this analysis will discover the underlying reasons why Japanese automobile manufacturer are performing better than US auto manufacturers.


The American auto manufacturer industry is dominated by the Big American Three, which include Ford, Daimler Chrysler and general Motors. In 1998, these companies control 70% of the market share. But these numbers are outdated by 9 years now. Since 1998, the market share of the big three has been shrinking and left them with only 50% in 2005. These companies are reported to lose economic of scale due to the lost of loyal customers. This led to a chain reaction resulting in the company to have less and less ability to produce cars at competitive prices and catching up on new technologies.

Toyota on the other hand, as one of the most popular auto brands today, have taken some of the market share lost by the big three. Toyota Camry was reported as America's bestselling cars. Internationally, Toyota has a market capitalization of $250 billion. This is significantly larger compare to the combined market capitalization between GM and Ford which will only sum-up to $35 billion.

Global outlook: Clusters - Busting the cluster myths

By Williams, Lara

Foreign Direct Investment.

Oct/Nov 2009

Concepts of business continue evolving in diverse markets where each of them faces different sets of problems and challenges. One concept that emerges since 1990s is introduced by Professor Michael Porter of Harvard University that coins the term business clustering, which already considered as an effective route leading to better economic prosperity.

The common definition of a cluster refers to any capabilities of companies that serve in the same field within the same geographical location. Meanwhile, Porter's definition on cluster conveys broader scopes as he includes industries and institutions in the same location where it also covers variety of elements such as suppliers, government agencies, universities. They usually enjoy unusual competitive success in a particular field.

Despite many discussion on the benefits of business clustering in many scholarly journals and other publications, there is still a question regarding how important and what kind of advantages that a company receives when it is located to their major competitors so closely. In addition, there is another question regarding the definition or the meaning of business clustering concept from a company point of view despite the belief that industry clusters are beneficial for local economies.


Amidst the question regarding the benefits of business clustering, some companies belief that it helps them to increase their productivity, encourage innovation, and also bring up an entrepreneurial spirit. These factors in turn will leads to new business creation. However, some analysts say that this concept of locating in a cluster does not guarantee a success and at some points this practice can deliver the disadvantages in terms of competition for staff. This argument is based on the facts that companies require suppliers and partners to exist in a market/location but they do not certainly need to locate in a cluster to be successful.

This article takes a sample on oil and gas industry where there is a requirement of locating where the raw product originates. According to Matt Corbin, regional head of drilling and production for GE Oil & Gas in Aberdeen, the most important factor when comes to selecting a supplier is quality of service followed by location as another factor.

Chevron, another giant in the oil and gas industry, also has another perception regarding the clustering concept. The company that establishes a global technology centre in Aberdeen in 2007 reveals that they are required to decide the optimum locations around the world to present their network of technology.

Based on the careful analysis, the company decides to present in Aberdeen (UK) and Perth (Australia) as logical choices for their most immediate needs. In addition, the two locations also become the center of mature industry operations and growth and constitute established business clusters. The criteria that influence the selection of these locations include the area where the company has a business, opportunities to gain access to new technology development, and the availability of technical talents.

Ethics in international business: multinational approaches to child labor

By Kolka, Ans and Rob Van Tulderb

Journal of World Business


The discussion of business ethics is still interesting for business that aims at expanding their operation worldwide and those that already listed in stock markets. This study also analyzes 50 leading multinationals that implement the ethical norms or relativist ethical norms (related to adaptive HRM and multi-domestic strategies). Among the issue in the business ethics is regarding the child labor where some multinational companies are found to employ child in order to reduce costs.


As code of ethics has been ruled out and the companies understand the importance to comply with the codes, how multinational companies address conflicting norms and expectations in terms of codes of ethics in the area of child labor?

One interesting fact in the course of child labor is the findings revealing the facts that among 50 multinationals that have child labor codes, none mentions home-country laws. The study encounters that codes never refer to the standards that is implementable in the country of companies' origin especially in the U.S. and Europe.

Culture and the self: implications for cognition, emotion, and motivation

By Markus, H. R. and Kitayama, S

Psychological Review


In reality however, culture is often perceived as 'soft' issues on which managers put very small attention compare to the 'hard' issues like information system and technological development within their factories. This is very much an irony considering evidences that culture actually defines business results.

An easy example of culture management gone bad is of course the Enron case, which involved the organization's bankruptcy, and unpaid debts to numerous parties and innocent individuals. Furthermore, this paper discusses at least two reasons of why culture and culture management is not a 'soft' issue.

In the development of managerial science, there is always one of several themes that become the center of people's attention. In the industrial revolution, people only care about producing as much as possible as fast as possible. In 1930's, the money market became the center of attention because of how it influences the economy at the time.


In the end there are several types of cultural tendencies displayed by management which directly affected ethical behaviors within their organization:

Apathetic, which means management shows little concern whether to people within the organization and their performance? This cultural tendency generates poor ethical behavior within daily operations because members of the organization are not presented with ethical standards to follow.

Caring, which means management of the organization displayed a high concern for people, but minimal concern for their performance. This cultural tendency will also exert poor ethical behavior because member of the organization will feel free to break ethical boundaries while performing their daily tasks.

Exacting, which means management shows little concern for people but high concern regarding their performance. In the short term, this cultural tendency will probably generate highly ethical behavior, but in the long term, people will feel an overwhelming pressure that might just drive to ignore any existing ethical standards.

Integrative, which means management has high concern both for people within the organization and their performance. This is the ideal cultural stance that will generate the best ethical behavior in most companies. (Markus, 1991)