Foreign business travellers get the notion quickly before coming to China: prepare about the country, understand some of the key issues in cultural values and behaviours, be patient, have gratitude to the elder, and master greetings and the Guānxì-building.
Yet, a high majority of those small and medium-sized enterprises (SMEs) which invested to China during the last decade … is not in China anymore. For some of them, the product might not have been right, for others the market not potential enough, and some might have simply underestimated local competition. But most of them’ managers and investors claim “misunderstandings” as the main reason for the termination of their China-efforts. With other words, no specific reasons: it just did not work out, the feeling was not right, the investment budget depleted, and the expatriate exhausted. They would return home, disappointed and frustrated, and not understanding why they could not bridge the cultural differences.
Trying to understand why cultural values and behaviours can still be such a disturbing element during an investment into an unknown market is difficult. Because, particularly across Europe, and even within Switzerland, there are also such wide differences about the way those people think, feel, behave, communicate, work, and negotiate. Dealings between for example Switzerland and Portugal respect such differences automatically, as Germans would do in a business project between say Berlin and a Bavarian enterprise.
So why it is so much more difficult to deal with China?
It probably isn’t, but there are five very particular issues for foreign companies to respect before entering China: Patience, Relationship, Communication, Persistence, and Flexibility. And these topics should be tackled in every market analyse report, Due Diligence or agreement on a Merger & Acquisition:
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Patience.Westerner would think of slow language, repetitive initiatives, and long meeting formalities. But patience in dealing with China means moreover sufficient time, lots of time in fact, and sufficient marketing budgets. Foreign companies often jump to conclusion about an investment budget without considering the pure volume of time needed to build up a successful business enterprise.
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Relationship. In linear-active Europe it is possible to trade with someone even if you don’t like that person; it’s just business. But in China, without certain sympathy, business is extremely difficult, if not impossible. That’s why relationships cannot be achieved rapidly through common interest; they must literally be built. Accordingly, ‘Guānxì’ means not only relationship, but network or connections (and the need to provide support and cooperation among the parties involved). ‘Hóngbāo’ is also part of this; the way to pay respect to an individual or to a particular interest group within any matter.
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Communication. Even experienced international business managers (unless they are native English-speaking) neglect the fact, that they speak a foreign language just like their Chinese counterpart. And the sheer number of potential misunderstandings when two parties speak in a third-country language is amazing. Hidden agendas, for example, are extremely difficult to identify and comprehend. Yes, we need to motivate our Chinese partners to improve their English, but we too must continuously work on it. No wonder, that the age-group ‘30+’ is the fastest growing among Switzerland’s foreign language schools.
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Persistence. Things won’t go easy. Administrative burden in setups and daily operations can be exhaustive, however, there is no way around. Temptation to change the direction of an effort are high, however they mainly lead to further confusion. Persist, take a deep breath and do it again. Testing endurance is part of the Chinese business culture and deeply rooted in the competitive behaviour. The last man standing will smile.
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And therefore: Flexibility. Of course, that is valid around the globe, but with the present speed with which the Chinese economy grows, flexibility has become a major skill to allow best manoeuvring between new laws, regulations and trading conditions.
In conclusion, it is fair to say that soft-factors are the main reasons for many SMEs to fail in China. Soft-factors which cannot be calculated and quoted in advance, but must be trained, emotionally experienced, and personally endorsed on-site. An empathy, which allows, for example, embracing another ability of the Chinese, as expressed by this proverb:
和谐 尽管 分歧, meaning ‘harmony despite differences’.
朱帝
[Daniel Tschudy]
演讲者，培训师， 顾问
多元文化交流
朱帝是一名演讲者，培训师，顾问及公关学者。他的演讲内容侧重于在全球经济环境、国际关系、东西方的转变、及世界旅游业方面的跨文化价值观和行为。他专注于亚非拉地区的新兴市场，并且他对中国和日本也非常感兴趣并参与其中。朱帝定期为各种报刊和商务杂志撰写文章，并经常在大学和国际商务学校发表演说。