Identifying Ethical Differences in Culture - Essay Example

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The term "guanxi" is a cultural ethic from China and East Asia and is what we would find similar to networking. Guanxi is based on informal relationships and perpetuated by the use of exchanges of favors use of exchanges of favors and dominates both the business and interpersonal worlds…
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Identifying Ethical Differences in Culture
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Running Head: ETHICAL DIFFERENCES Identifying Ethical Differences in Culture Identifying Ethical Differences in Culture
The term "guanxi" (pronounced guan-shee) is a cultural ethic from China and East Asia and is what we in the west would find similar to networking, but not exactly. Guanxi is based on informal relationships and perpetuated by the use of exchanges of favors and dominates both the business and interpersonal worlds of these countries (Lovett, Simmons & Kali, 1999, p. 231). In an article entitled, “Crossing the Cultural Divide,” the authors, Fred Burton and Scott Stewart (2008) elaborate on this principle and compare the ethical and legal parameters of its use in China and the adverse reaction that business and law enforcement in the United States have towards it.
In China, as in most countries, culture certainly defines actions often more than any laws will do. In regarding guanxi, it usually outstrips any rules and regulations that run contrary to it. In China guanxi obliges one to defer to a complex system of personal relationships and moral obligations, which may even date back generations, in all aspect of life. This certainly includes business as well. Guanxi places relationships above all other considerations and in business one may be forced to use their position to purchase products from an associate that may in fact be more expensive or of less quality than is available somewhere else. Actions like these, if detected by a company from one of its staff would usually be grounds for dismissal as well as legal action in many cases.
This disparity between worlds is due to one of the major cultural differences between the U.S. and China. In the US business and even personal relationships are usually transactional, that is there is a give and take that is considered an equitable exchange between two parties. This usually holds for both business entities as well as personal relationships. Chinese cultural is far more relationally oriented and is often guided by complex associations of family and friends over many generations. Based essentially upon honor and respect, it is far more important to maintain good relationships under the rules of guanxi than it is to do what is best for your company. This is of course considered treason in the U.S., while in China it is accepted and tolerated by most organizations.
Although the law does limit it to some extent and the excessive reliance on guanxi to the complete detriment of one’s company is not allowed. Although to the U.S. guanxi seem synonymous with bribery, there are some important distinctions between the two that are understood in both law and culture in China. The main difference is that guanxi is performed to promote relationship building, while bribery is simply a completely illegal transaction for personal gain. There is a gain-and-loss calculation predominate in bribery, but of much lower importance in guanxi. Guanxi obligations are very long-term and somewhat diffuse, but bribery is for a very immediate and specific gain. There is also an emotional and familial consideration when it comes to guanxi, but this is not in the case of bribery (Lovett, Simmons & Kali, 1999, p. 231).
When attempting to blend the two, such as a when U.S. company hires a Chinese national, business managers find it almost impossible to make him or her understand that guanxi is not acceptable under their system of ethical business procedures. Conversely, the stringent polices and laws that U.S. businesses operate under make them appear, “as alien and incomprehensible entities” (Burton & Stewart, 2008). This in turn can set up more animosity between the US company and its Chinese employee, making them more likely to increase their loyalty to friends and family while their fidelity to the company declines.
Finally the authors go on to say that any attempt to eliminate this behavior completely will only result in alienating employees, as well as Chinese businesses and cultural understanding on a larger scale. There must be some meeting of the minds that can help to redefine how the U.S. sees this practice as well as how China understands the U.S. viewpoint. This change must by nature be a two way process. The profoundly different ideals of each culture are certainly clashing at the moment.
Burton, Fred and Stewart, Scott. (2008). Crossing the cultural divide. Business Spectator
Jan 19, 2008 Retrieved Jan. 22, 2008 from
Lovett, S., Simmons, L. C., & Kali, R. (1999). Guanxi versus the Market: Ethics and Efficiency. Journal of International Business Studies, 30(2), 231. Read More
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