for amanda smith due in 50 hours

1-VIU6-May-2018KeystoSuccess.pptx

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The Key to Success in China: Understanding the Business Culture • Geography & Historical Background • Cultural Fabric of the Chinese Workplace • Business Networking & Basic Skills • Impact of Cultural Differences • Importance of Social Harmony

Daniel M. Krassenstein

6-May-2018 - Shanghai

Daniel M. Krassenstein

2008- Procon Pacific (China)

1999-2008 BAS (USA & China)

1995-1999 TMM/Mexican Line (Panama/ Mexico)

1993-1995 Inchcape (China)

1988-1993 Sea-Land (USA & Indonesia)

Daniel M. Krassenstein

Masters:

Global Supply Chain Management

(University of Southern California – Marshall School of Business)

Author:

Journal of Commerce

Lecturer:

U of Dayton, UCLA, IES Abroad, TPM, AmCham

Bachelors:

Marketing, Int’l Business & Spanish

(Miami (Ohio) University)

China on World Map

China on Asia Map

China Major City Map

China – Quick History Lesson

1850-1945 - Foreign occupation, opium trade, land concessions

1911-1938 – Overthrow empire ROC – 1st Democracy experiment

1939-1945 – Japanese War of Aggression – Occupation

1946-1949 – China Civil War (KMT corruption vs. CCCP Soviet)

1949-1978 – PRC – 30 years of turmoil

1979-1990 – PRC – Chinese Capitalism in coastal zones

1991-2015 – PRC – Export-focus – World’s factory, rich vs. poor

2016-____ - PRC

Rule of law

Quality of life

Corruption control

World stage

What’s Right With China?

Infrastructure

Highways

Ports

Electricity

Labor

Raw Materials

Growing Consumer Market

Increasing Use of New Technology

Stable Government

What’s Wrong With China?

Labor Cost Increases (Labor Displacement)

Reliance on Export Machine

World/Regional Tension threatens stability

Guanxi System

Questions Enforcement of Laws

One-Party Rule

Rich vs. Poor Divide is Growing

N American Firms in China

China & N America – Examples of conducting business together

Heavy Industries – Automobiles, Power Grid, Aerospace,

Services – Financial, Insurance, Tourism

Light Manufacturing – IOT, widgets

2-Way Trade – Many PRC export items use US components and raw material

China investment in US real estate and spending on N American education and tourism

Presence of N American Firms in China and implications

IP Protection & Hacking

North American Firms held to a higher standard (rules enforcement)

Mgt Shift – Chinese with N American MBAs taking top positions in western firms

China SOE’s and Private firms buying US companies

Innovation in North America

Opportunities for Expatriates and Entrepreneurs

2nd/3rd/4th Tier Cities – Their time has come – Need for Western advisors

Education & Tourism – Its all about their child(ren)

Emigration – If they are able (EB5, etc.)

Doing Business in China

Project Management Triangle (Quality)

Time vs. Cost vs. Scope

Never Threaten the Party/Stability

Guanxi System is Alive and Well

Laws are good – Enforcement Spotty

China Face (Historical vs. Future)

Middle Class Environmental Protect

New Economy (Energy, Robots, Data)

Doing Business in China

Cultural Fabric of the Chinese Workplace

Mianzi - Face=Pride (Patriotism – understand humiliating history)

Guanxi – good old boys network – impenetrable, favor-for-favor

Stability – Communist Party rule cannot be questioned

Corruption – define it and work with it (PRC has laws –spottily enforced)

Rules - China didn’t write today’s establishment rules, so why follow them

Loyalty to Leader - Chinese education – memorize, not innovate - soldiers

No Teamwork - Dog Eat Dog – trust no one (Cultural Revolution)

Play Hardball - Game of Chicken – end-game – already steps ahead

Opaque - Need to trust you before they communicate proactively on errors

See No Evil - Highest blade of grass gets cut first. Don’t inform on others

Business Networking & Basic Skills

Guanxi – Favor-for-Favor

Corruption – Define it and work with it

Double Standard – Only Westerners must comply

Dog Eat Dog – trust no one (Cultural Revolution)

Brinkmanship – like they drive, no eye contact

Social Harmony

Hypocrites

Status Quo only matters if you’re on top

Create chaos and havoc if it suits them

Mianzi as a tool to set you off-balance.

Stability – One Party Rule unquestionable

Impact of Cultural Differences

West vs. Chinese Business Negotiations

Power – Always at the top of the pyramid.

Influence – Top only listens to direct-reports

Negotiations – Are you dealing with the one yields the power?

Signed/Chopped Contracts are just the beginning of negotiations

Relationships with foreigners are fluid and short-term

Always last-minute hiccups

Ask yourself, what are they really after in their end-game?

Enforcement jurisdiction and cost of enforcement

Non-Emotional business decisions when in disagreement

Western rules don’t apply to “fair and reasonable standards”

Impact In Workplace

Power - Blind allegiance. Don’t think. Do as told. No Innovation, as no incentive to “think outside the box”.

Influence - Silo Structures of Trust and Alliances – Pure Guanxi

Negotiations - Corruption – define it and work with it

Tiered Hierarchy - Fed vs Prov vs Local – Tiered like government Fed Prov Local

No trust - It could end at any time - Wealthy Individuals prefer their kids overseas to study AND live