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Chinese Mana ement : a rofileChinese Mana ement : a rofile

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National Context:

Free market socialism combined with an ancient culture withsome unique features not easily understood by foreigners.

Chinese state capitalism consists of different kinds of corporate share holders namely:

collaborators controlled by local governmentsindividuals

domestic legal persons foreign companies (wholly owned subsidiaries and JVs)

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A complex system highlighted by the presents of as manyas 10 million business people in the Communist Party.

To quote an authority on China :

The Chinese case could be described as that of state-led and controlled development from above and that of

network of guanxi capitalism from below, with a largenumber of small family-based businesses forming clusterswith informal credit and trade links among themselves and with the diaspora and often in tacit or open cooperation with

local officials.

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Mainstay of Chinese culture:agrarianism: basis of Chinese traditional way of lifeethical heritage: Confucianism: emphasis on 5 cardinalrelationships (ruler and ruled, husband and wife, parentsand children, older and younger brothers and friend andfriend)Lao Tse: relationship of opposites that are alsocomplementaries -Yin and Yang conditioning the Chineseto find the tao the middle round a com romise in ever

aspect of likePictographic nature of Chinese language influencing theChinese thinking towards a more holistic processing of information.

Chinese wariness of foreigners

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8 important elements of the Chinese negotiation style (alsoinfluencing Chinese management in general):

Guanxi (personal connections) The person with the bestquanxi wins in China

Intermediary (zhongjian ven) important in business deals

Social status (shehui dengji) Role of formality importance of high rank for negotiators of business deals

.

Interpersonal harmony (renji hexie) essential in anyattempt to do business with Chinese parties

Holistic Thinking (zhengti guannian)- Chinese negotiatorstend to deal with all issues together rather than insequence.

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Thrift (jiejian) A lot of bargaining to reduce prices and tomaximize values of their own offers is an importanttendency for the Chinese

Face (mianzi) Social capital. A persons reputation andsocial standing in his social network. Face, like money, canbe earned, lost, given or taken away. It is important thatone does not make a Chinese lose his face in a business

ea or nego a on

Endurance, patience and stamina: in preparations fornegotiations and during negotiations, Chinese work hardand practice diligence.

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Chinese scores:HofstedeLong-term orientation 100; Power distance 89; Individualism

39; Uncertainty avoidance 44; Masculinity 54TrompenaarsUniversalism 26 Individualism 26 Emotional - 85 S ecific 3Ascription 58; Past orientation 82; Future orientation 89;Internal control 2

Edward HallChina figures first in the High Context group

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Globes Cultural DimensionsHolds highest ranking in in-group collectivism

In particular:

Collectivism:Stress on need to maintain harmony; distinction between in-groupand out group, former trusted latter suspect; business relationshipwith an outsider requires time spent first on establishing trust;

discouragement of argument and hence of diversity of thought andopinion.

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Power and authority:Power distance means that managers exercising power can rely ondeference from subordinates expecting to be told what to do ratherthan to be consulted.

Management by objective, eg., is not easy to be introduced inChina

Harmon and hierarch : Confucian tradition, with stress on social harmony, promotesobedience and acceptance of social obligations as against therealization of the (isolated) self.

Result: comfort with hierarchical top-down structure andundelegated management functions.

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Communication:Chinese favour the reserved, the implicit and the indirect and as tomessages, reading between the lines.

Chinese practice of letting children learn to control their facial expressionsis described by an author as training in inscrutability (useful in poker andnegotiations)

Trust and suspicion:According to World Values Study Group, USA, China has a high level of general trust in people, greater than the US and Japan. But according toauthor Redding, however, the Chinese trust the family absolutely, friendsand acquaintances on the basis of specifically understood guanxi and beyondthat, no assumptions are made about their good will.

So nepotism and favouritism are rather regarded as understandable andnatural.

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Tradition and modernity:Elements of modernity are seen more and more as erodingand modifying traditional aspects of Chinese management.

Communist imprint:

There are large areas of practice where communismimposes its own patterns on Chinese management this isespecially so in state-enterprises, but by no means confined

to them.

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2 Important Chinese concepts relevant to management:

losing / giving faceguanxi