Corporate Practice of Chinese Organizations - Coursework Example

?Chinese Cultural Values Table of Contents Table of Contents 2 Corporate Practice of Chinese Organizations 5 Cultural Differences: International Business Failure 7 Evaluation of Cultural Dimension through Hofstede Model 8 References 11 Introduction Chinese Culture, Lifestyle & Economy A culture usually surfaces and becomes an integral part of the social and action system of the country. This occurs when symbolic systems mediate and there is facilitation of communication between the different actors (Noronha, 2002). The ancient culture of China was more progressive than the contemporary Chinese culture. The Chinese people are famous for their traditional form of paintings, silk weaving, calligraphy and architecture (Kalman, 2008). There is more than 1 billion population in China; one sixth of the world’s population lives in China itself (Colson, 2013). More than 56 ethnic groups are recognized in China and 90 percent of the population is Hans Chinese but the group also consists of other ethnic groups like Zhuang, Yi Miao, Uighar Manchu and Dhong (Colson, 2013). Like any other countries culture the cultural values of China has altered slightly due to the impact of globalization (Ward, Entrkin & Pearson, 2002).During the Chinese Cultural Revolution in the People’s Republic of China the orthodox Chinese Confucianism was heavily criticized on several grounds. After the Cultural Revolution there was a slight alteration in the Chinese value system and even culture dominated cities like Singapore, Taiwan and Hong Kong witnessed considerable amount of changes (Yau, 2007). The Chinese culture is largely influenced by the social interactions and interpersonal relationships between the individuals in the society. The Chinese language is spoken by more than 85 percent of the population and is considered as one of the toughest language of the world. The language is also called Putonghua and is also claimed as the country’s national and official language (Kane, 2006). The remaining Chinese population speaks Mandarin which is one of the most popular dialectic of China. The Chinese economy is one of the fast paced economies of the world and there has been a sudden increase in the per capita income of the consumers. In the year 2008 the annual income exceeded 1.6 million and is expected to exceed 4.4 million by the end of 2015 (He, Zou & Jin, 2010). China: Individual or Collectivist? It is observed that the Chinese society is a highly collectivist culture where the interest of the team are given more importance than the priority of the individual. It is not necessary that in a family oriented business there would be preferential treatment towards the family members. The workers would prefer working on a holiday or a public holiday to meet the deadlines of the work. The commitment towards the organization is high than the employee interest and goals (Duel, 2012).The relationships of employees within the group are warm and cooperative while the relationship with other groups is hostile and cold. The Chinese employees believe in cooperating with each other for delivery of excellent performance (Pang, Roberts & Sutton, 1998). For example the MG6 was the first automobile designed by Shanghai Automotive Corporation in UK. The success of the car was totally contributed to the effective teamwork between the Chinese employees. If a western organization wishes to collaborate with the Chinese department then they should lay emphasis on communicating the ideas and process to the Chinese employees with patience and clarity for successful performance (Xiaoming, 2011). China: High or Low Power Distance? The power distance lays emphasis on the impact of the influence of the culture within a society or an organization (SagePub, 2006). It is observed that the individuals working in the society and the employees working in the organization are not treated as equal. The Chinese Society maintains a rank system and follows the hierarchy stringently. The Chinese society believes that the inequalities prevalent in the society are acceptable. Therefore, we can observe that the Chinese society has high power distance and the misbehavior against elderly and aged people is unacceptable (The Hofstede Centre, 2013b). Family planning is a crucial decision making in China and the decision is often vested upon the elderly population out of respect. The young people respect the decision making of the aged people and provide them with proper care. There has been a remarkable improvement in the life expectancy of the elderly population of China. It is expected that the life expectancy of the elderly population will reach 73 by the end of the year 2010 (International Market Bureau, 2010). The western organizations wishing to collaborate with the Chinese companies need to understand the importance of decision making by the aged people in the organization. The western companies should inform any managerial decision taken to the senior employees of the organizations. Corporate Practice of Chinese Organizations The corporate culture is instrumental in the encouragement of the increased performance of international business. A corporate culture portrays suitable business environment which helps in motivating the employees and helps in asserting common solutions. The corporate culture reflects the various themes and patterns derived from the national culture and replicate these values in another national group setting. The Chinese economy has mixed with other countries with ease which was initially perceived as the outside world. After the introduction of the Open Door Policy in the year 1978 the economy of China has grown at a rapid rate of 13 percent (Pang, Roberts & Sutton, 1998). Various economic analysts have predicted that the Chinese economy is highly unstable and unpredictable. However, the businessman in China is dependent on the Chinese government policies and regulations and always relies on guesswork and speculation. Theorist Pringle had identified that China would be always facing potential dangers (Pang, Roberts & Sutton, 1998). The Chinese political structure, business and the organizations are greatly influenced by the Confucian philosophy. The Confucian philosophy deals with the moral values, loyalty, righteousness, friendship. These elements clearly distinguish the Chinese culture from cultures with western influences. The corporate practices were largely influenced by the laws and legislation of the communist party. The combination of the social changes imposed by the communist party and elements of Chinese culture has helped in shaping the organizational values. The Chinese organizations focus on elements like harmony, time, patience, flexibility and “Guan Xi” which means the unspoken rule and also the concept of face (Pang, Roberts & Sutton, 1998). Strict control on speech and thought is of paramount importance to the Chinese businessman and the companies. The fifth dimension of the Hosted culture also plays an integral role in the organizations. The Chinese businessman and the management of the organization strongly support the idea of looking forward and planning for the future. The dimension is strongly associated with the collectivist nature and calls foreign investors as outsiders. Mastering the Chinese language is prerequisite for effective communication skills in the daily lives and professional lives of the individuals. It is believed that efficient communication skills in the Chinese language helps in smooth interaction between the employees and the managers of the organization. The business relationships with the external stakeholders and government bodies are considered as one of the most integral sources of competitive advantage. Alliances with organizations belonging to other countries help in rationalizing operations of the organization. We can observe from the chart that the management of the Chinese organization gives priority to the relationship with the customers. Customers are treated as partners and not as service takers. The management of Chinese organizations believes that the customer satisfaction should be given top most priority (Ramanathan & Yu, 2012). Cultural Differences: International Business Failure The immense cultural work culture differences between China and the western countries have led to the failure of various international business deals. The techniques used by the management are very slow paced and western organizations are usually not able to cope up with the process. For example AOL tried to enter the Chinese market twice however could not be successful because of their issues with the Chinese department (Lee, 2012). One of the major reasons of the company being slow paced is because the Chinese departments are less empowered by the western countries. The Google department in China requires approval from the headquarters which makes the process ultimately slow and ample time for data and product collection. eBay had acquired Eachnet but refused to use it as a platform and had used its own platform which led to a disastrous performance (Lee, 2012). The western organizations do not prefer employees or managers speaking in Chinese language and hire candidates of Western origin. For example a general manager working in Yahoo, China general manager was fired because his policies were considered as misfit within the organization (Lee, 2012). Thus, we can observe that the cultural mismatch and the lack of patience of western organizations have led to several international business failure deals within Chinese organizations. Evaluation of Cultural Dimension through Hofstede Model We will now evaluate and compare the varied cultural dimensions of USA & Chinese corporate practices. Figure 1: Hofstede Cultural Dimensions (Source: The Hofstede Centre, 2013c) China (80) USA (40) A high power distance score signifies that all the individuals are not treated as equal in the society. The society accepts the existence of the inequalities in the society. It also reflects that majority of the companies are centralized and there is huge income and authority gap between the employers and employee. A low power distance score signifies that liberty and justice is pervasive in the society. This is evident from the fact that all American are vested with equal rights It is also observed that the informal hierarchy exists in the organizations so that the managers are accessible at any time. The employees and managers are consulted for decision making (The Hofstede Centre, 2013a). China (20) USA (91) With a score of 20 it can be said that China is a highly collectivist society where the individuals act in the best interest of the team. There is an increased level of organizational commitment. The interest of the team is given high priority than the interests of the individual. It also signifies that emphasis is given on the enhancement of the technical skills and harmony. A high score of 91 signifies that the USA is highly individualistic society. This means that the American society is loosely knit and the individuals give due importance to their families than their work (The Hofstede Centre, 2013a). China (66) USA (62) A high level of masculine society signifies that the society is success and result oriented. This reflects that the Chinese people will sacrifice their family and leisure time to work. It also signifies that there is well defined distinction between job duties of the women and men employees (The Hofstede Centre, 2013b). A high masculine society signifies that the American society is result, work and competition oriented (The Hofstede Centre, 2013a). China (118) USA (29) A high long term orientation score signifies that the society is highly educated. Relationships are prioritized by status and order among the individuals. Traditions can be altered to suit the situation (The Hofstede Centre, 2013b). A low long term orientation score signifies the existence of the short term oriented culture and the society is focused on the tradition and fulfilling the social obligations. They quantify their performances with the profit and loss statements. A low LTO score also signifies that the Americans believe in quick results and honesty. China (30) USA (46) A low UA score signifies that honesty is given due importance than the laws and regulations prevalent in the society. It also signifies that there is existence of informal attitude among the employees in the organization. A high level of emphasis is given to long term planning than the daily panning of activities (The Hofstede Centre, 2013b). A low UA score signifies that innovation, new ideas and ideologies were accepted readily and easily. Americans are tolerant and permit the exercise of freedom. The American employees widely accept new rules and regulations and are not indifferent to new ideas, ideologies and methodologies. Thus we can observe from the above Hofstede cultural dimension chart that the Chinese and American traditional and work culture is diverse and different. It is also observed that apart from the masculinity and UA score the other cultural dimension is varied for the countries. We can state that in spite of the stricter rules and regulation prevalent in the Chinese society the main focus of the individuals are on their work. Although, innovation driven technologies and ideas are not welcomed easily the Chinese population is constantly steering to be at par with the western countries. The western organization need to study the cultural aspects of the Chinese organization in order to create a niche for itself in the market. The Chinese market is booming and it would be wise for the western organizations to penetrate into the market for yielding profits. The western organizations need to empower the local units of China in order to facilitate a speedy work process. References Colson, M. (2013). Chinese culture. London: Raintree. Duel, M. (2012). Forced to stand for 24 hours, suicide nets, toxin exposure and explosions': Inside the Chinese factories making iPads for Apple. Mail Online. Retrieved from http://www.dailymail.co.uk/news/article-2092277/Apple-Poor-working-conditions-inside-Chinese-factories-making-iPads.html He, Y., Zou, D., & Jin, L. (2010). Exploiting the goldmine: A lifestyle analysis of affluent Chinese consumers. Journal of Consumer Marketing, 27(7), 615-628. International Market Bureau. (2010). The urban Chinese consumer. Retrieved from http://www.gov.mb.ca/agriculture/statistics/agri-food/china_consumer_report_en.pdf Kalman, B. (2008). China: The culture. New York: Crabtree Publishing Company. Kane, D. (2006). The Chinese language: Its history and current usage. Tokyo: Tuttle Publishing. Lee, K.F. (2012). Why American internet companies fail in China? Morning Whistle. Retrieved from http://www.morningwhistle.com/html/2012/Company_Industry_1012/214513.html Noronha, C. (2002). Chinese cultural values and total quality climate. Managing Service Quality, 12(4), 210-223. Pang, C.K., Roberts, D., & Sutton, J. (1998). Doing business in China – The art of war? International Journal of Contemporary Hospitality Management, 10(7), 272-282. SagePub. (2006). Dimensions of culture. Retrieved from http://www.sagepub.com/upm-data/11711_Chapter7.pdf The Hofstede Centre. (2013a). What about the USA? Retrieved from http://geert-hofstede.com/united-states.html The Hofstede Centre. (2013b). What about China? Retrieved from http://geert-hofstede.com/china.html The Hofstede Centre. (2013c). China in comparison with USA. Retrieved from http://geert-hofstede.com/china.html Ward, S., Entrkin, L., & Pearson, C. (2002). Chinese cultural values and Asian meltdown. International Journal of Social Economics, 29(3), 306-8293 Xiaoming, L. (2011). The MG6 is an example of China-UK cooperation. The Telegraph. Retrieved from http://www.telegraph.co.uk/news/worldnews/asia/china/8509201/The-MG6-is-an-example-of-China-UK-Cooperation.html Yau, O.H.M. (2007). Chinese cultural values: Their dimensions and marketing implications. Hong Kong Baptist College, 22(5), 44-57. Read More