Business Comparison Of China And The Usa Business Essay

This essay critically analyses the differences and similarities between the United States of America and the Republic of China. First, this essay identifies the chief theories of intercultural communicating by using HofstedeA?s intercultural model. Second, the Chinese and United States negotiants manner will be discussed followed by an explanaition about how to pull off dialogue in both states. Third, the similarities and differences between China and the United States will be compared.

“ Negociating with the Chinese is an of import subject in international concern and cross-cultural direction since China is playing an progressively active function in making concern with the western states [ aˆ¦ ] negociating with Chinese is besides going progressively of import for international concern successes in peculiar, since after China joined WTO in December 2001 ” . ( Zhu et al. , 2007: 354 )

We will write a custom essay sample on
Business Comparison Of China And The Usa Business Essay
or any similar topic only for you
Order now

The purpose of this survey is to compare the Chinese and United States American dialogue manners on the general cultural differences to assist to acquire a better apprehension when making concern in China or the United States. Chaney and Martin ( 2004 ) as cited in Zhu et Al. ( 2007: 355 ) “ define cross-cultural dialogue as ” conversation or “ treatments of common and conflicting involvements between individuals of different cultural backgrounds who work to make an understanding of common benefit ” . International directors can gain from analyzing similarities and differences in negociating behavior to acknowledge what exactly is go oning during the negotiating procedure ( see Appendix A ) . However, directors foremost need to understand their ain dialogue manners, to understand the similarities and differences in intercultural communications ( Deresky, 2000 ) .

2. Intercultural communicating and their chief theories

In 1959 the phrase A?intercultural communication` was foremost used by the cross-cultural research worker Edward T. Hall as he divides civilizations into two types, high-context civilization and low-context civilization ( Aneas and Sandin, 2009 ; Hall, 1976 ) . Further in 1980 the direction research worker Geert Hofstede analysed informations from more than 100,000 IBM employees and developed his Cultural Dimensions Model. His theory is based on the premise of four dimensions: Power Distance Index ( PDI ) , Individualism versus Collectivism ( IDV ) , Masculinity versus Femininity ( MAS ) and Uncertainty Avoidance Index ( UAI ) ( Powell, 2006 ) . The 5th dimension Long-Term Orientation versus Short-Term Orientation ( LTO ) was identified by Geert Hofstede and Michael H. Bond in 1988 ( Fang, 2003 ) . Finally, Fons Trompenaars and Charles Hampden-Turner developed a theoretical account of seven dimensions of civilization to assist explicate intercultural differences. These dimensions are called Universalism versus Particularism, Individualism versus Communitarianism, Specific versus Diffuse cultures, Affective versus Neutral civilizations, Achievement versus Ascription, Sequential versus Synchronic civilizations and Internal versus External control ( Trompenaars and Hampden-Turner, 1998 ) .

3. HofstedeA?s intercultural model

In this survey the focal point is on HofstedeA?s well-established direction theory. Figure 1 displays the intercultural model of Hofstede. Harmonizing to Hofstede and his theoretical account it is of high significance to see the high cultural differences between Chinese and American people to be successful in making concern across boundary lines.

Figure 1: The 5D Model of professor Geert Hofstede

Beginning: Adapted from: Itim International ( n.d. ) . ‘Geert Hofstedea„? Cultural Dimensions ‘ [ online ] . Available at: Uniform resource locator: hypertext transfer protocol: //

culture1=18 & A ; culture2=95 # comparison [ Accessed 20 January 2010 ] .

The Power Distance Index ( PDI ) stands for the hierarchy of power within a society and its general credence amongst the state ‘s people. China ‘s ranking is about 80 which is a really high degree compared to United States ranking with 40. The degree of inequality of power and wealth is high but, harmonizing to Hofstede, accepted by the Chinese society. Therefore, that the degree of power distance is really high in China, the foreman is in the authorization and in the place to make up one’s mind over everything. American civilization nevertheless allows more equal power and regard for every rank in a concern, which means for our concern that our Chinese employees will likely necessitate to be educated to do determinations on their ain.

Sing Individualism versus Collectivism ( IDV ) China ranks perceptibly low in individuality ( 20 ) compared to the United States ( 91 ) . Consequently, the Chinese civilization is strongly collectivized ; being integrated into a group is important and society values trueness every bit good as strong relationships to both friends and household. The high ranking of the United States means that the society is really individualistic. More exactly the integrating into groups does non play such a large function as it does in China.

Furthermore, we have to see that in the index of Masculinity ( MAS ) China arrives at a rank of 66 which could be interpreted as a instead masculine society. Chinese people do non demo their feelings and seek to be calm in every state of affairs. However, between China and the United States ( 62 ) is no large difference. This points out that both states values assertiveness, success, power and competition.

The Uncertainty Avoidance Index ( UAI ) shows that the Chinese are instead accepting new unsure state of affairss than avoiding them ( rank 30 ) , so they seem to be more tolerant to different sentiments ; nevertheless, it is non a state that embraces hazardous state of affairss, it instead accepts them. Peoples in uncertainty- accepting states normally do non show their feelings. The United States ranks higher ( 46 ) , which means compared to China the American civilization is non unfastened to new state of affairss. Peoples here act influenced by their emotions and be given to be more nervous.

Sing Long-run Orientation ( LTO ) it is manifest that Chinese civilization is much more committed trueness to and esteem for traditional concern schemes than the United States ( 29 ) . This shows the highest superior factor worldwide in long-run turning away ( 118 ) . Chinese people ne’er want to lose face and are short-run oriented. The United States, on contrast, is a long-run planning state in which thrift, doggedness and continuity are valued to cover with. For case, to cover with economic alterations or with version to new state of affairss.

4. Chinese Negotiators

The Chinese concern civilization is particularly affected by the term A?guanxi` and the impression of salvaging face. In a civilization, which is focused on relationships, it is of import who you know. Chinese people get things done through relationships with household, friends and contacts ( Gesteland, 1999 ) . Tung and Worm ( 2001: 521 ) argues that “ guanxi refers to relationships among people ” and that “ [ T ] hey are dyadic, personal dealingss between people who can do demands on each other ” ( see Figure 2 ) . Further, A?guanxiwang` is the societal web in the Chinese concern civilization and for them it is cardinal to avoid “ disconcerting anyone in the web ” because it “ can take to destabilising the web of connexions ” ( Chee and West, 2007: 57 ) . A cardinal constituent of A?guanxi` is the impression of salvaging face. A Chinese personA?s repute and societal place are based on it. Fring their face involves reduced societal resources, wealth and connexions ( Ma, 2006 ) .

Figure 2: Dyadic relationship in guanxi web

Beginning: Adapted from: Tung, R. L. and Worm, V. ( 2001 ) . ‘Network capitalist economy: the function of human resources in perforating the China market ‘ . International Journal of Human Resource Management. Vol. 12, No. 4, pp. 517-534.

5. Pull offing Negotiation with the Chinese

To pull off dialogue with the people from different civilizations it is of import to maintain in head that “ the persons involved in the dialogue are of different civilizations ” and that “ there is likely to be some misunderstandings because of their chosen methods of communicating ” ( Woo et al. , 2001: 351 ) . There are several grounds for the cultural differences. Most of the Chinese concern individuals are obsessional about monetary value inside informations, because of the fact that China has a traditional agricultural civilization. The Communism system and “ Confucianism ” , the traditional Chinese manner of thought, “ affects the dialogue procedure ” recognizable through their “ regard for hierarchal relationships, saving of face, and group harmoniousness ” ( Chee and West, 2007: pp.97-98 ) . Tung and Worm ( 2001 ) as cited in Davison and Ou ( 2008: 290 ) suggest

“ Negotiation results depend on the grade of common apprehension achieved by the transacting spouses [ aˆ¦ ] the quality of the guanxi developed during dialogues may really be more of import than either the monetary value or the merchandise quality [ aˆ¦ ] eventual monetary value or merchandise quality may change topic to the guanxi. ”

If a individual, who is making concern in China, is already in a A?guanxi` web, this concern individual has to escalate this relationship. If a concern individual is non involved in a A?guanxi` web, so it is of import acquiring into a web and acquiring in touch with influential Chinese concern individuals ( Holt and Chang, 2009 ) . Furthermore, when negociating in China, concern individuals have to be prepared to discourse all issues at the same clip and in an seemingly disorganised order ( Deresky, 2000 ) .

6. United States Negotiators

The United States concern civilization is focused on trades with foreign or unknown people and particularly affected by impressions “ prestigiousness, award, position, self-respect and authorization ” ( Yabuuchi, 2004: 264 ) . Gesteland ( 1999: 272 ) suggests that

“ an American negotiant ‘s grade of expressiveness in communicating is likely to be strongly influenced by his or her peculiar cultural background ” .

For United States concern people it is of import to be issue-related, nonsubjective and time-conscious. However, Zhu et Al. ( 2007: 357 ) argue that “ Americans tend to pay less attending to societal ranking ” .

7. Pull offing dialogue in the United States

The United States civilization is affected by their immigrant society and that is the ground for the cultural diverseness. As mentioned above it is all but impossible to foretell and respect specific the negotiating manners of the United States concern people. The concern people in the United States are time-conscious because of the fact that they do n’t blow their valuable clip for the company. There exists no commitment to the company ( Chua et al. , 2009 ; Gesteland, 1999 ) .

8. Similarities and Differences between China and the United States

After analysing the dialogue manner in China and the United States and its grounds, several similarities every bit good as differences can be pointed out. First of wholly, it is of import to understand the consequence negociating perceptual experiences have on the negotiating results ( see Figure 3 ) .

Figure 3: The relationship theoretical account

Beginning: Adapted from: Ma, Z. ( 2006 ) . ‘Negotiating into China: the impact of single perceptual experience on Chinese dialogue manners ‘ . International Journal of Emerging Markets. Vol. 1, No. 1, pp. 64-83.

Both states put accent on assertiveness, success, power and competition through their closely index of Masculinity in the intercultural model of Hofstede. Further, expression on China ‘s and the United States ‘ grant behaviour both states are making their uttermost to accomplish their end and acquire every bit much net incomes as possible ( see Appendix A ) . Harmonizing to Hofstede, differences between the two states can be shown in their Long-run Orientation. The United States ( 118 ) are long-run orientated and China ( 29 ) short-run oriented. This means that China is more committed to loyalty to and esteem for traditional concern schemes than the United States. Furthermore, one of the biggest differences is their decision-making behavior ( see Appendix A ) . United States concern people are known as the fastest determination shapers in the universe whereas China does n’t hotfoot to take a determination. Finally, both states have a different pursue a different end in the dialogue procedure. For the Chinese it is a sort of duologue, more exactly an exchange of information. In the United States dialogue is associated with an result which could be a contract.

9. Decision

Summarizing the findings and statements shows that both states should hold an apprehension of the traditions and civilization. Woo et Al. ( 2007: 351 ) suggest that “ [ tungsten ] biddy negociating with the Chinese it is imperative to be witting of [ aˆ¦ ] the structural Bolshevism of those involved in concern dialogues ” . Particularly the concern people from the United States should be prepared for a long visit when making concern in China. The best manner to be successful in China is to construct guanxi, which is a time-consuming process but indispensable. The Chinese concern people have their focal point more and more on the content of the trades and the inside informations of the monetary values. In comparing to the concern dialogue in the United States soft handshakings should be avoided because for some of them it reflects failing ( Gesteland, 1999 ) .


Appendix A: Negotiation Procedures

a Business Protocol

Chinese Negotiator

United States Negotiator

Dress Code

amen: suit, white shirt,

conservative tie

awomen: conservative

suit or frock

avaries slightly

harmonizing to location and

type of concern

Meeting and Greeting

+ soft handshake/ centrist

oculus contact

– bone-crushing handshake/

excessively direct regard

+ house handshake/ direct

oculus contact

– some believe soft

handshaking reflects


Exchanging Business Card games

+ exchange of name cards is

done utilizing both custodies

+ read the concern card

+ put the card off in a

leather card/ topographic point it on

the tabular array in forepart of you

– do n’t compose on person ‘s

name card

amay non originate the

exchange of concern


Exchanging Gifts

abe prepared with

appropriate gifts/ nowadays

gift with both custodies

+ expensive cognac/ points

typical of your ain

country/ logo gifts

ais non a gift-giving

gift-giving civilization

– many feel uncomfortable

if presented with an

expensive gift

Wining and Booming

+ maestro the all right humanistic disciplines of

eating with chopsticks

+ crispening your opposite numbers

amany prefer to keep

a separation between

their professional and

private lives

a Negotiating Behaviour

Chinese Negotiator

United States Negotiator

Bargaining Scope

aoften deal smartly

aexpect major grant

on monetary value and footings

aexpect them to prove your

gap offer for


Concession Behaviour

aexpect force per unit area tactics

abe prepared for some

difficult bargaining

Plaies and Counter-Ploys

agenerally mask negative


amay on juncture show

choler as a force per unit area tactic

aa front-runner bargaining

maneuver is clip force per unit area

aanother is to inquire for

citations on a sliding

graduated table by measure

Decision-Making Behaviour

aa long time-consuming


adecisions take clip

afastest determination shapers

in the universe

Beginning: Adapted from: Gesteland, R. R. ( 1999 ) . Cross-cultural concern behaviour: selling, negociating and pull offing across civilizations. 2nd erectile dysfunction. Kobenhavn: Handelshojskolens.


Hi there, would you like to get such a paper? How about receiving a customized one? Check it out