The Chinese management is based off of their ancient teachings of Confucius and also off of the communist ways set into place by Mao. These basic characters are Guanxi, family firms, Mianz, the middle way, indirect competition, and their specific way of communication and negotiation. Even in the United States a few of these concepts are completely foreign but some are closer to home than what most would realize.
Many people have the view point that if you work hard you can make you way up the ladder, while others would counter that it is all in whom you know or in China it would be considered Guanxi. Many companies are tight nit groups that only allow in people they know or who are known by others. If you take a look at the world of law in the United States the best way to get into a top law firm is not only by graduating top of your class but having a foot in the door with a good connection. In China the Guanxi is mainly about connections; the word Guanxi doesn’t not have a true English translation and was once believed to be based off of the corruption in China but has been more consider to truly being about the connections one has.
To have a growing and outstanding company in China one has to have connections, whether it is a business person or someone already within the Chinese culture who has the connections premade. With that, one of the biggest reasons for the misunderstanding with Guanxi translating into corruption is because once someone has given you the connections of the business would it is assumed that you will repay that debt or lose everything that you will given. Which even if you have already built an amazing name for yourself to lose your connections means to lose your spot on the market place?
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Just like in the United States there are different levels of connections that one can have. In the US, we can sometimes give more trust and faith into someone that we consider a close friend than what we would our own blood. For the Chinese the closest tie that you can have is to family, whether they are immediate or extended, they will always come first and are the most important. The second on their list is going to be someone who you have important ties to such as a friend of a friend, someone that you are in a group with, or even an old classmate. The final is group is the hardest and longest one to become and that is anybody who is a foreigner. “The system of making connections and acquaintances (based as much on good business cooperation as on a system of good friendly and human relations) is one of the key factors of successful business on the Chinese market”.
There is a famous song by Alan Jackson called the ‘Little Man’ that depicts the portrait of how America has lost sight of the smaller family owned companies and have turned to the major big wig corporations. Some see this as growth but many see it as loosing small town USA, in China those small town firms make up two thirds or Chinese firms.
One of the reasons that this is still true to today is because China was predominantly poor and families had to rely on each other to be taken care of and couldn’t depend on anyone but themselves, “Namely, family members mutually helped and protected each other, whether from the weather or from the state.”. During the reign of Mao, millions of people died because of his need to make China a wealth country, many from simply starvation, during this time families grew to only depend on each other and extended families grew closer bonds with each other in order to survive.
Confucius is the second reason behind family firms still being dominate in China today. “Confucius thought that the family must be the basis for the construction of morality and the creation of mutually dependent, helping connections”, which is still the same in the United States where there are many small towns that still believe that you can only rely on your family, a strong happy family is a strong happy life. However, in the United States that has become a faded theory, most business that were started by families working together for a common goal are now just corporations that have forgotten where they came from and only seek the money for their own individual pockets.
The Chinese have four basic ways of conducting business; the first is the Family-managed business. This entails the concept of who ever founded the company runs the company with his successors in key positions in the company. The second is the dominant business leader within the family; the founder of the company has the final say in all decisions. When it comes to handling business with a company in China this can be seen as a challenge because sometimes the founder is not present at the company so even if you impress the people he sent in to represent him you will not know the final say until he gives his decision.
The third characteristic is one that relates to all Chinese following the code of the Confucian and putting family first. The families inside the company have the obligation of making not only their current families proud but also their ancestors proud by carrying on the family name in the company. One company can consist of several family members so keep arguments down jobs and responsibilities are divided between everyone.
In the United States one of the biggest hardships we have faced is watching banks and financial institutions go under and taking the business that rely on them with down as well. In China this is avoided by companies only being financed by the family. As much as most would like to say that this is due to economic reasons and not wanting to put trust in to the outside source it is also to help conceal business results.
The United States has an always had a cut throat way to business. I say that with the thought in my head that not all companies or employees are that way, but in most cases one employee will receive praise over another or one will get called out on not doing as good as a job as what they should. In China Mianzi, meaning honor, is a method completely different from our own, “When you stain someone’s honor, it means that you have also stained yourself.” In a business since you do not speak as openly to others, when someone has earned the right of being praised it is not done directly and is given to everyone, such as reprimanding is done in a private manner.
The fourth main characteristic is The Middle Way, which translates not only to their way of life but also the placement of their country, the Middle Kingdom. The Chinese try to keep a balanced life between their life and that of the world around them. “The term incorporates Confucius’ view that it is necessary to have one’s own balanced, middle way- a way without extremes, where everyone will act modestly and properly.” it sounds like an amazing way of life but not one that we see in the United States. More often than not most people solely focus on work and not on the world around them but often enough we see the opposite where employees do not focus on the job in front of them because they are too focused on something else going on in their life.
The Chinese have two approaches to the Middle way, the holistic and the paradox approach. The holistic approach includes looking at things as a whole, establishing harmony, achieving performance while respecting harmony, and a long term view of things and relations. The paradox approach is a symbol of yin and yang, which basically translates into where there is something good there is something bad and where there is something bad there will be something good. This thought process can slow down the closing of a deal with other companies because it is seen that if something bad has happened if was for a specific reason.
In the United States, the idea of having petty cash has become a very unheard of practice. Most companies operate off of credit cards or Net 30. One of the characteristics of the Chinese management is to have indirect competition. With this Chinese companies attempt to not stand out and keep away from threatening other companies when working in foreign markets as to avoid the time and money it would take to fix that situation. They also use cash for everything, like before to have to avoid relying on someone else, but also to keep their transactions discreet and the amount that has been spent unknown. They also go after the market that is least wanted, mainly for the reasoning that if that market were to take off they would have the first and strongest hand hold on it.
The last and final characteristic is communication and negotiation which is one of the hardest parts that most businessman have to deal with when it comes to conducting business with China. The United States has a very first person language most things include I or me. In China that is unheard of, in conversation things will be related to you but never directly at you, such as your colleague. During communication with the Chinese face and hand movements are minimal and gifts that are offered will be refused several times until the end of the transaction or business agreement.
The Chinese are very strategic and thorough when it comes to making a business deal. The Chinese use several strategies when it comes to conducting business one of the first being conducting long negotiations, which in turn lets them find out everything they can about the deal that is in front of them, we as Americans love to jump the gun and have to make the deal as soon and as quickly as possible. Sometimes we forget to check all the facts and read the fine print to see what is really going on in the transaction. They also will negotiate on their terrain, not all anyone to know their true intentions and turn opponents strengths into weakness, unfortunately we see that all too often here in the United States but not done so cunningly.
The Chinese have a very calm and intelligent business manor. When most companies on the western hemisphere are very fast paced with a need to get to the top without a worry about who is taken down to get there, the Chinese try to keep the balance. I know as a human being that that is not always as easy done as said but the thought that the practice is at least there makes for a better view on how I see china. We were once asked if we would like to like in China, easily I answered no and still after this paper would give the same answer. Although I fully respect some of the business manners as a woman I would not have a place in that growing company. Masculinity prevails in the Chinese environment and even though some of our business practices are a little more on the rough side and not so family orientated I have a want to succeed and would be unable to in the Chinese management world.
China management has had the complete influence of Confucianism with market communism which has been helpful in creating their economic goals. It has also been because of their investment in consumer industries and ability to rely “on human resources (devoted employees, highly skilled and socially responsible entrepreneurship and highly efficient management”.
Works Cited
1. Zakic, K. (2010). Basic Characteristics of Chinese Management from the Intercultural Point of View. Megatrend Revies , 253-272.
2. M.J. Chen, Inside Chinese Business, Harvard Business School Press, Boston, Massachusetts, 2001, p. 46
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