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Business Culture and practices differ from one country to another. It is very important to be well versed with culture and practices before starting a business in any country (Guffey, 2008). This study focuses on important business communications used in China for the purpose of helping entrepreneurs to be able to start and expand business in China. The paper will provide set of business customs and practices used in China.
In China rules and laws mostly do not conform to international standards and laws. There is a Chinese proverb which goes like 'a policy is imposed from above but a counter policy is executed from below'. That implies that, traditional business laws and regulations are more practiced than international standards and laws which making it hard to understand Chinese laws and rules (Wood, 2010). From this point of view it is therefore very important for new entrepreneurs in China especially foreigners to use intermediaries to assist them in setting the business.
Having an understanding of business communication and practices in China is fundamental for the success in business in that country. It would help entrepreneurs to relax and avoid embarrassments thus focusing on better ways of making profits, the prime goal for starting a business (Guffey, 2008).
The starting point of any conversation is introduction, starting a business conversation in China basically begins with introducing oneself to the client in a manner systematic way. First people shake hands for as long as the client would be comfortable (Wood, 2010). The entrepreneur then introduces the name of the company first followed by his or her title in the business and then lastly their names.
The introduction also serves in informing clients of the products in a particular company for him or her to decide on what to buy. In China the most preferred drink is strong distilled alcohol which is preferred for meetings; the drink is popularly called baiji or maotai (Hayter & Hospitality Training Foundation, 2002). There are also other drinks used in the country such as yoghurt which is taken together with the maotai. The drinks are taken together with cakes, biscuits or bread. Those foods and drinks among others are what most Chinese customer would like to buy as snacks (Wood, 2010).
The drinks and food can also be given as gifts or presents as per Chinese norms; entrepreneurs should be able to take advantage of gifts to boost their relationships with their customers or clients. However, the gifts should not be too expensive (Wood, 2010). The gift presented should have local identity or real meaning to the recipient and therefore pride to the giver. The types of gifts preferred in China apart from food and drinks should mostly be of blue, gold or dark red color. Usually the gifts are given at the end of business conversation using the two hands to facilitate the success of good business deals (Guffey, 2008).
Usually the recipient will refuse the gift first but upon insisting they finally take the gift. It is also important to note that, in China, the custom does not allow giving of things such as clocks, flowers, handkerchiefs or sharp objects (Guffey, 2008). The gifts again should not be wrapped in white or black materials, such colors are associated with funerals. Wood (2010) points out that, in China, non-verbal communications speak volumes; however, the symbols should be carefully used to avoid unknown frustrations. Facial expression, tone of voice and posture tells much in terms of what someone is feeling in business conversations. High tone for instance is a sign of discontent among Chinese (Wood, 2010).
In China it is also considered disrespectful to stare directly for long into people's eyes. Chinese would mostly avoid eye contact for privacy (Chen, 2001). That means even during business communications entrepreneurs should not maintain eye contacts with their customers because that might turn them away. In any case if a Chinese customer frowns, that implies that he or she has disagreed with the matter at hand. According to Guffey (2008), it is important to maintain impressive expression when speaking to a client.
On the part of business etiquette, greetings are very important in China, the oldest person is greeted first and then the younger in cases of several clients visiting at the same time. Handshakes are very formal in China as noted earlier in the discussion but if the client does like hand shake, it should not be forced (Chen, 2001). Usually one should look towards the ground when greeting a Chinese client. It is important to ask the client their surname since it is the correct name to be used in the conversation (Wagner, 2009). Addressing Chinese in their surname would mostly make them very happy such that they even laugh at themselves. However, they would only laugh when they are comfortable with the relationship. That means that the businessperson should be ready to laugh with the client any time.
Chen (2001) argues that, doing business in China may be tricky especially given the formal introduction required for the success of a business. Chinese do not enjoy doing business with foreign or companies they do not know. The Chinese clients again do not easily buy products they are not used to. It is therefore advisable to use intermediaries especially for the purpose of introduction. A successful or strong business relationship in China only results when the clients get to know the businessman or the company (Guffey, 2008).
Entrepreneurs looking forward to starting business in China should also learn hidden languages (nonverbal) of Chinese culture including personal space and time. In China, time for business meetings should not be fixed (Wagner, 2009). That is because it depends on the time taken to move from one office to another.
In China it is considered important to keep a personal space not less than four feet with the client when conducting a business conversation (Chen, 2001). Again in China, Men are not expected to come into conduct with women during business transactions. That means one has to wait for the female client to stretch her hand for a hand shake otherwise they should not shake hands.
As noted earlier in the paper, there some colors which are not impressive in China thus they should be avoided at all costs. White and black colors are associated with funerals thus they should not be used to wrap goods or placed in the shop for displays because customers would not get into that particular shop (Chen, 2001). The most preferred colors in China include gold and blue colors; those are colors which any product should take. That is very important to observe before ordering for the stock because messing up with color preferences might leads to low sales in any business segment in China no matter the negotiations (Chen, 2001).
For any person to engage in business in China he or she must understand important business negotiations. In China, negotiations are not just done by any person; an organization should have seniors such as the manager to negotiate for purchases (Chen, 2001). However, that may not be possible all the time. In that case the company should have a spokesman whole facilitates introductions and negotiations (Chen, 2001).
Chinese negotiations are process oriented implying that, the client will always seek to find out if the conversation or relationship is leading to a mutual understanding where he or she would also be assured of a comfortable transaction (Chaturvedi & Chaturvedi, 2011). For instance, at any starting price, there should be room for negotiation. The Chinese clients mostly may not reach conclusion after a short negotiation but they tend to come back for arrangement. Chinese consumers do not rush into buying products, a Chinese is likely to survey more than three shops before purchasing a commodity (Chaturvedi & Chaturvedi, 2011). Very important again is the point that, a business negotiator with Chinese client should not lose temper at any time since that can permanently damage the business relationship.
The process of decision-making in China is very slow but informative. It might take time to conclude or make important decisions with Chinese clients. Decisions concerning what to purchase in China are based on group dynamics, senior people in many cases decide for the juniors what is good and important to purchase (Chaturvedi & Chaturvedi, 2011). Entrepreneurs interested in doing business in China should therefore make good use of group dynamics to increase sales volumes.
As noted earlier in this study, Chinese clients take long to decide, they may decide to go, think about the issues or the deal and then come back. It is very important therefore to be patient when negotiating with Chinese clients to avoid misunderstanding them leading to unnecessary frustrations (Guffey, 2008). In most of times, Chinese people are believed to consult with the stars or just wait for the lucky day known to them before they make a business decision.
Just like in any other business environment, disagreements may results when doing business in China. The important thing for a businessperson to consider is how to manager the conflict (Chaturvedi & Chaturvedi, 2011). The preferred methods of conflict resolution differ from one country to another. In the case of China, compromise and avoidance are the best practices. Accommodation of business conflict leads to satisfaction during negotiations.
Chinese prefer agreement in place of justice which is very important factor the entrepreneurs should take advantage of. Even when a Chinese client understands that the deal is poor, they would prefer more transactions (Chaturvedi & Chaturvedi, 2011). Chinese usually do not like assigning blames or responsibility implying that they are very reliable in doing business especially given the fact that, even after a business conflict they do not prefer cutting the relationship (Tao, 2005).
To manage business conflicts in China, the most important point for an entrepreneur is to know his or her business goals, choose the right business partner for the right reason from the beginning, build strong business relationship and finally manage his or her utility value (Wagner, 2009). Those steps would minimize incidences of business conflicts in China.
The success of business in China is also subject to understanding the role of both women and men in the business. That helps not only in facilitating transactions but also in assigning duties to employees. According to Wagner (2009), in China, for the last thirty years women and men have equal opportunities in workplace. Foreign businesswomen in China are treated with great respect and courtesy. However, men are recognized as more competent business decision-makers.
That provides a baseline understanding for entrepreneurs to ensure gender balance when recruiting their business dealers. That would include giving women more senior responsibilities in the companies especially in businesses located within cities or big towns (Guffey & Loewy, 2010). It is equally important to understand the norms of behavior whenever starting a business in a new environment. That would help in maintaining a good business society with minimal business conflicts (Tao, 2005).
In China particularly, people are polite and they expect politeness in their day to day business transactions. Businesspersons in China are expected to demonstrate friendship in business. Facial expressions in China show the level of honor (Verstappen, 2008). At all the time, an entrepreneur operating in China should always show respect to clients. Respect is demonstrated right from the business introductions throughout all the transactions (Chen, 2001).
The other important point to note concerning business negotiation in China is that, high-pressure tactics do not work well since such can make one easily outmaneuvered. Patience and humbleness are very important for successful business negotiations (Wagner, 2009).
Dress code is another factor to understand first before venturing into business in China. There are different attires for men and women in the country. Business attires in China are considered conventional and modest (Guffey, 2008). Businessmen in China should wear dark colored, conservative suits. The businesswomen on the other hand should put on conservative business suits and flat shoes or just shoes with low heels. At all cost, bright colors should be avoided in business environment (Mancini, 2003).
China is a high-context culture country, the rules, regulations and important communications are just internalized (Guffey & Loewy, 2010). It was until recent past when the country started adopting international standards in its business transactions. According to Wagner (2009), the business communication in China is fast and efficient but requires taking time foreigners time to learn and apply it in their daily business transactions.
Doing business China may be both easy and frustrating, on one hand Chinese are fierce business negotiators, they always try to establish private base for negotiations thus taking a lot of time. As indicated earlier in the discussion, Chinese take their time before making a single decision (Wagner, 2009).
In many cases Chinese are associated with fixed arrangements thus not giving way for changes in case any changes are required in a business transaction. That makes them hard to deal with in environment which requires changing from one term to another (Martin & Chaney, 2012). Form non verbal point of view, a yes in China does not always mean yes in the western world, that make them perceived as untruthful when it comes to business. In most cases the Chinese clients will keep on restarting negotiations thus consuming more business time (Wagner, 2009).
China every year hosts hundreds of exhibition and the number keeps on increasing. The exhibitions areas also increase every year. Just to mention, China has three times as many exhibition area as they are in Japan (Wagner, 2009). Wagner (2009) also points out that, most important trade fair locations in China include Beijing, Shanghai among others. Beijing has seven exhibition centers with approximate area of 150000 square meters, 60000 square meters reserved for international exhibition.
Shanghai on the other hand has six exhibition locations occupying 180000 square meters. The shanghai New International Exhibition Centre which was opened in 2001 is the largest in world. China has been able over time to export its products to other countries including German and others in the world every year (Reuvid & Li, 2005). As argued by Wagner (2009), the two centers hold numerous fair trade exhibitions which are attended by many Chinese and foreign companies. The products brought in centers include plastics, fine chemicals, automobiles, electrical equipments and many others.
To expand the export volume, China invites foreign investors and companies in its exhibitions centers with a view of exposing the products. The foreign companies are then allowed to coordinate with other ventures in China to export the products (Cromer, 2007).
China also provides incentives for foreign companies which want to use China as the manufacturing base. The companies are allowed to use local, low-cost labor and resources. Such countries then export the products to other countries in the world (Wagner, 2009).
Those are some of the important business communication which a foreign business person should have to start and run a business smoothly in china. Failure to have understanding of the business customs as analyzed in this study may be impossible for a foreigner to have a successful business in China.