Australia's Approach to Foreign Business

In early October 2018, I lead a group of 8 students into China to learn about the complexities of working with international business partners in their environments. We also looked at how to develop an approach for entering the international business arena with focus on negotiation skills and the development of cultural sensitivity. This gave us a comprehensive understanding of the social, political, cultural and economic challenges facing international business. My report will also identify recent trends that global markets and many international businesses will follow to stay competitive in the 21^st century.

Chapter 1: Cultural Sensitivity

Before travelling to China, if you had asked me if I understood the complexities of working with international business partners in their environments, I would of flat out said yes. However, based on my recent trip to Beijing & Qingdao it is now a no.  As Australian’s, it’s become quite easy for us to ignore cultural traditions and manners due to our us being so far removed from other countries geographically. Many of my friends and colleagues that I have worked with in Dan Murphy’s & Grill’d don’t seem to think that there’s much out there to benefit from apart a Contiki Tour every 3 years. 

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Most Australian workers see working and living as two separate ideas. You work for the money and then spend the money to live on the weekends. Compare this to having Guanxi in the Chinese businesses. Living and working intertwines to form a relationship with one business partner to another. To us it seems is a breaking personal boundaries, but in fact Guanxi helps to strengthen business ties and unite friends.  The study of (Wang et al., 2017) found that between 100 Australians and 100 Chinese workers believed that “Chinese employees have lower levels of humor than Australian employees, Positive humor usage helps Australian employees reduce workplace stress. Both positive and negative humor styles are ineffective in reducing stress among Chinese employees”. For me personally, looking to enter the Chinese workplace, if given the opportunity to lead a team of Chinese workers, I would try to remember to use other ways to reduce stress within the workplace by creating a personal relationship with each worker. For example, asking about family, how they enjoy their weekend and what goals they have for the next couple of years.

Thinking back to our business visits to BSBE, Huraen & Haier I remembered an interaction with one of our students Wiston & the business manager for BSBE. English was both their second language. Although they spoke the same language their accents coupled with translation made it very difficult for both to understand the conversation. I offered to step in and translate for the business manager. It’s important to have a strategy in negotiation & cultural sensitivity.

Another similar experience like this was the taxi ride home from Qingdao foreshore which was documented in my journal. The driver obviously was annoyed that we did not trust him to take us to OUC’s campus. But due to my negotiation skills to compliment Qingdao’s cleanness and how we enjoyed China, he relaxed and facetimed his wife to show us westerners in the taxi! This approach of asking someone to talk about himself is an opportunity for Westerners to listen and learn how foreigners speak and feel in their own dialect. I look forward to taking this approach when studying in Singapore next semester.

Chapter 2 – Challenges facing international business

It has become clear that the leader of the free world, America, has started to lose her dominance with the country becoming more and more divided into Right & Left political camps. Unfortunately, this has been accelerated due to Donald Trump’s rise to power in 2016. Trump’s election campaign brought mistrust of foreigners & international countries (China & Mexico) as Trump looked to instill fear in the voting population.  As recent as last month Trump called to separate ties with the EU & NAFTA (Rappeport & Tankersley, 2018). Freedom has never been more at risk with these decisions looking to impact not only my generation but future generations.

After discussing the impact of the trade war with Professor Liu, it seems there will be no winner in this war and the loser will be the US public as prices are raised to keep the bottom line competitive. Returning from China and reflecting on my visit it seems businesses and other countries will turn to China for leadership. Given the success of the China – African Cooperation (“The boon of China’s entry into Africa comes with a warning | Financial Times”, 2018). I think Australia will eventually have to pick new allies as this trade war bites overall profit for the government.

I believe that if Australia can maintain a Guanxi relationship with China and countries supporting China such as Ghana we could ship iron ore to those countries that are being supported by China. This strengthening of ties between other continents could provide Australia with the means to weather an economic crisis if the 2008 global financial crisis is repeated.

However, this partnership will need to bring a strong clear position on democratic ways of dealing with business challenges. Huawei has been denied partnership of owning a share in the 5G network in Australia due to security concerns on data privacy for Australian Citizens. All state-owned businesses and even partly owned ventures must run in accordance with the Chinese State Party lines to serve their country first.  This is to secure Xi Jinping’s dream that by 2050 China will be a modern well-developed nation on the 100^th year anniversary of the People’s Uprising in 1949.

Chapter 3- Globalization Trends in Markets & Business

From my time spent in China and Australia while researching about the next 20-year development cycle it appears that businesses are heading to an IOT (internet of things) future with the new IT infrastructure and 5G that will connect all devices to one another. When we visited Haier, we walked through a demo room showing all networks from one device to another dictating how important the role that IOT will play in the future. In the past month I was interviewed for a position in Telstra’s Network Engineer department. I was given the case study to talk about self-driving cars and why Telstra should invest in this opportunity. 

My conclusions from my research is that China is already 5 years ahead of where Australia is in renewable and A.I car manufacturing. This can be seen in popularity of electric vehicles over the petrol alternatives such as the Chinese built BYD (Build Your Dreams) car. This manufacturer is the largest supplier of electric vehicles in the world and looks to grab a large foothold on Telsa’s dominance in the West.  (Research, 2018)

As BYD looks to build self-driving cars and supply the growing middle class of china with reliable electric cars, I cannot help but feel like Australia is starting to be left behind in these financial and technological systems.

Case study presentation to hiring manager (Lochie Burr)

China has two main payment platforms to use when purchasing goods or services, WeChat & Alipay. Scanning codes, such as this QR code to my online journal, it allows for online payments & information to occur almost immediately. Although the two platforms have centralized control of all spending on the apps. The convenience of QR codes outweighs the issue of privacy.  Here “Ignorance is bliss” as Westerners that use technology such as Facebook & Google but often don’t stop to think about the consequences of how much data is collected about them. However, the recent Cambridge Analytica leaks brought to light about how much is already known (Cadwalladr & Glendinning, 2018).

There should be a fine balance to data collection for the benefit of humanity and outright exploiting what businesses can discover about our personal lives. I believe that a balance of Chinese convenience & Western democracy can bypass fears of privacy by using blockchain (a decentralized database to store private data) (Ammous, 2018).  Markets will provide what the customer demands; i.e more privacy and less centralized control.

In conclusion, over our ten-day trip to China we saw a glimpse of the positives and negatives of having a one-party political party in charge of a country. However, during this short stay there was also another glimpse of what Australia could be technology wise if our relationship with China continues to develop at an advanced rate.

Firstly, I continue to believe that Australia must strengthen relationships with both China & India as their new middle economic class looks to work and earn a higher wage in the respective countries. Demand for goods and services such as minerals (Iron Ore) & commodities (wool) will skyrocket as the consumers will demand higher quality products. Australia is also in the unique position to leverage relationships between China & America to receive the best of both worlds. This can and will be an influence the economic state of Australia for the coming decades.

Secondly, I noticed was of the successful companies it appears there was a small to large presence of the State Party. This was due to the increasing ties from the board of directors to the increase of the profit and growth of the company under investigation. As ties deepen companies can start to receive more recognition and “public spotlight” as companies that party members have vested interests in look to boost profits and thus earn more shares as rewards.

Thirdly some of the dangers with running an only party system e.g. Communism, once overthrowing the “bourgeoisie” is to keep the people united against the common enemy so as you are not overthrown. Mao himself had a hard time clamping down on ruling China as “freethinkers” questioned the idea of one-man ruling China. In 1957 Mao wanted to establish an industrial society from an agrarian society. This resulted in the deaths of 45 million people in one of the harshest famines in history (Zhou, 1964). However, if life improves and flourishes societies will rarely question what government is in power and continue their life. But this is precautious as economic stability since 2008 has been ever so slightly been fluctuating into instability.

My final thoughts in my conclusion is that I firmly believe that China will overtake the US within the next 10 years due to the technology and the one-party state of mind to become a modern et powerful country. This has been evident over my 10 days spent in China and in my journal photos.  Given the reception received as an Australian ready to start my career that I’m more than happy to pursue a career in China. To prepare me for my career in China I’ve decided to study a beginners learning course of Mandarin & learn about how to lead professional organizations in my last couple of units at Nanyang Business University.

• Ammous, S. (2018). The Bitcoin Standard. Newark: John Wiley & Sons, Incorporated.
• Cadwalladr, C., & Glendinning, L. (2018). Exposing Cambridge Analytica: ‘It’s been exhausting, exhilarating, and slightly terrifying’. Retrieved from https://www.theguardian.com/membership/2018/sep/29/cambridge-analytica-cadwalladr-observer-facebook-zuckerberg-wylie
• Rappeport, A., & Tankersley, J. (2018). Trump Berates Canada and Threatens Car Tariffs as Nafta Talks Falter. Retrieved from https://www.nytimes.com/2018/09/26/us/politics/trump-canada-nafta-tariffs.html
• Research, Z. (2018). IoT Devices Market Size & Share Growing Rapidly To Surpass USD 158,140 Million by 2024. Retrieved from https://globenewswire.com/news-release/2018/10/15/1621098/0/en/IoT-Devices-Market-Size-Share-Growing-Rapidly-To-Surpass-USD-158-140-Million-by-2024.html
• Wang, R., Chan, D., Goh, Y., Penfold, M., Harper, T., & Weltewitz, T. (2017). Humor and workplace stress: a longitudinal comparison between Australian and Chinese employees. Asia Pacific Journal Of Human Resources, 56(2), 175-195. doi: 10.1111/1744-7941.12157
• The boon of China’s entry into Africa comes with a warning | Financial Times. (2018). Retrieved from https://www.ft.com/content/e25b4824-c163-11e8-95b1-d36dfef1b89a
• Zhou, X. (1964). Forgotten voices of Mao’s great famine, 1958 – 1962