Business Comparison Of China And USA

Business Comparison Of china And USAThis essay critic all toldy analyses the differences and similarities mingled with the unify States of America and the Republic of mainland chinaware. Firstly, this essay identifies the main theories of inter cultural confabulation by applying Hofstedes intercultural exemplar. Secondly, the Chinese and joined States negotiators style will be discussed followed by an explanaition about how to manage negotiation in twain countries. Thirdly, the similarities and differences among China and the United States will be compargond.Negotiating with the Chinese is an strategic root word in international melody and cross-cultural management since China is performing an increasingly active role in doing worry with the western countries negotiating with Chinese is also becoming increasingly all grievous(p) for international product line successes in particular, since after China joined WTO in December 2001. (Zhu et al., 2007 354)The aim of this theatre of operations is to comp atomic number 18 the Chinese and United States American negotiation styles on the normal cultural differences to help to get a better understanding when doing barter in China or the United States. Chaney and Martin (2004) as cited in Zhu et al. (2007 355) specialise cross-cultural negotiation as conversation or discussions of common and counterpoint interests mingled with persons of different cultural backgrounds who work to reach an agreement of unwashed benefit. foreign managers can profit from theatre of operationsing similarities and differences in negotiating demeanours to recognize what on the button is happening during the negotiating process (see Appendix A). However, managers first need to understand their have got negotiation styles, to understand the similarities and differences in intercultural communions (Deresky, 2000).2. Intercultural communication and their main theoriesIn 1959 the phrase intercultural communication was firstly used by the cross-cultural research worker Edward T. Hall as he divides genialisations into two types, broad(prenominal)-context nuance and low-context culture (Aneas and keystonen, 2009 Hall, 1976). Further in 1980 the management researcher Geert Hofstede analysed data from to a greater extent than 100,000 IBM employees and positive his Cultural Dimensions Model. His theory is based on the assumption of four dimensions world trade leader Distance Index (PDI), individualism versus Collectivism (IDV), Masculinity versus Femininity (MAS) and suspicion Avoidance Index (UAI) (Powell, 2006). The fifth dimension Long-Term Orientation versus short Orientation (LTO) was identified by Geert Hofstede and Michael H. Bond in 1988 (Fang, 2003). Finally, Fons Trompenaars and Charles Hampden-Turner developed a model of seven dimensions of culture to help explain intercultural differences. These dimensions are called Universalism versus Particularism, Individualism versus Comm unitarianism, Specific versus Diffuse cultures, Affective versus Neutral cultures, Achievement versus Ascription, Sequential versus concurrent cultures and Internal versus External control (Trompenaars and Hampden-Turner, 1998).3. Hofstedes intercultural frameworkIn this study the focus is on Hofstedes well-established management theory. gauge 1 displays the intercultural framework of Hofstede. According to Hofstede and his model it is of high significance to consider the high cultural differences between Chinese and American stack to be successful in doing wrinkle across borders.Figure 1 The 5D Model of professor Geert Hofstede stem Adapted from Itim International (n.d.). Geert Hofstede Cultural Dimensions online. Available at URLhttp//www.geerthofstede.com/hofstede_dimensions.php?culture1=18culture2=95compare Accessed 20 January 2010.The Power Distance Index (PDI) stands for the hierarchy of cause within a society and its general acceptance amongst the rustics populate. Chi nas rank is close to 80 which is a very high level compared to United States be with 40. The level of inequality of power and wealth is high but, according to Hofstede, judge by the Chinese society. Thus, that the level of power distance is very high in China, the boss is in the authority and in the position to see over everything. American culture however allows more equal power and respect for every rank in a line of credit, which means for our line of credit that our Chinese employees will probably need to be educated to mention decisions on their own.Regarding Individualism versus Collectivism (IDV) China ranks noniceably low in individualism (20) compared to the United States (91). Consequently, the Chinese culture is strongly collectivist cosmos integrated into a group is crucial and society value devotion as well as strong relationships to both friends and family. The high ranking of the United States means that the society is very individualistic. More precisely th e consolidation into groups does not play such a big role as it does in China.Furthermore, we have to consider that in the index of Masculinity (MAS) China arrives at a rank of 66 which could be interpreted as a preferably masculine society. Chinese people do not show their feelings and try to be calm in every situation. However, between China and the United States (62) is no big difference. This points out that both countries values assertiveness, success, power and competition.The Uncertainty Avoidance Index (UAI) shows that the Chinese are sort of accepting new uncertain situations than avoiding them (rank 30), so they seem to be more tolerant to different opinions however, it is not a country that embraces risky situations, it rather accepts them. People in uncertainty- accepting countries usually do not hold their feelings. The United States ranks higher (46), which means compared to China the American culture is not open to new situations. People here act influenced by the ir emotions and pass water to the woods to be more nervous.Regarding Long-Term Orientation (LTO) it is manifest that Chinese culture is much(prenominal) more committed loyalty to and respect for traditional bloodline strategies than the United States (29). This shows the highest ranking factor worldwide in long-term dodging (118). Chinese people never want to lose face and are short-term oriented. The United States, on contrast, is a long-term planning country in which thrift, perseverance and persistence are valued to peck with. For instance, to deal with economic changes or with adaptation to new situations.4. Chinese NegotiatorsThe Chinese business culture is especially abnormal by the term guanxi and the imprint of pitch face. In a culture, which is focused on relationships, it is important who you know. Chinese people get things done through relationships with family, friends and hittings (Gesteland, 1999). Tung and Worm (2001 521) argues that guanxi refers to relat ionships among people and that they are dyadic, personal relations between people who can make demands on each other (see Figure 2). Further, guanxiwang is the friendly net profit in the Chinese business culture and for them it is fundamental to avoid upsetting anyone in the network because it can lead to destabilizing the web of connections (Chee and West, 2007 57). A key component of guanxi is the notion of saving face. A Chinese persons reputation and social position are based on it. Loosing their face involves reduced social resources, wealth and connections (Ma, 2006).Figure 2 Dyadic relationship in guanxi networkSource Adapted from Tung, R. L. and Worm, V. (2001). Network capitalism the role of human resources in penetrating the China market. International Journal of Human Resource Management. Vol. 12, no(prenominal) 4, pp. 517-534.5. Managing talks with the ChineseTo manage negotiation with the people from different cultures it is important to keep in mind that the indivi duals involved in the negotiation are of different cultures and that there is likely to be some misinterpretations because of their chosen methods of communication ( appeal et al., 2001 351). There are several reasons for the cultural differences. Most of the Chinese business persons are obsessive about equipment casualty expand, because of the fact that China has a traditional agrarian culture. The Communism system and Confucianism, the traditional Chinese demeanor of thinking, affects the negotiation process recognizable through their respect for hierarchical relationships, preservation of face, and group harmony (Chee and West, 2007 pp.97-98). Tung and Worm (2001) as cited in Davison and Ou (2008 290) large-heartedleNegotiation cores depend on the degree of mutual understanding achieved by the transacting partners the quality of the guanxi developed during negotiations may actually be more important than either the price or the product quality eventual price or product qu ality may vary subject to the guanxi.If a person, who is doing business in China, is already in a guanxi network, this business person has to intensify this relationship. If a business person is not involved in a guanxi network, then it is important getting into a network and getting in touch with influential Chinese business persons (Holt and Chang, 2009). Furthermore, when negotiating in China, business persons have to be prepared to discuss all issues at the kindred time and in an apparently disorganised order (Deresky, 2000).6. United States NegotiatorsThe United States business culture is focused on deals with foreign or undiscovered people and especially affected by notions prestige, honor, status, dignity and authority (Yabuuchi, 2004 264). Gesteland (1999 272) suggests thatan American negotiators degree of expressiveness in communication is likely to be strongly influenced by his or her particular ethnic background.For United States business people it is important to be i ssue-related, objective and time-conscious. However, Zhu et al. (2007 357) argue that Americans tend to pay less vigilance to social ranking.7. Managing negotiation in the United StatesThe United States culture is affected by their immigrant society and that is the reason for the cultural diversity. As mentioned above it is all but impossible to predict and esteem specific the negotiating styles of the United States business people. The business people in the United States are time-conscious because of the fact that they dont glom their valuable time for the company. There exists no allegiance to the company (Chua et al., 2009 Gesteland, 1999).8. Similarities and Differences between China and the United StatesAfter analyzing the negotiation style in China and the United States and its reasons, several similarities as well as differences can be pointed out. First of all, it is important to understand the effect negotiating perceptions have on the negotiating outcomes (see Figure 3) .Figure 3 The relationship modelSource Adapted from Ma, Z. (2006). Negotiating into China the impact of individual perception on Chinese negotiation styles. International Journal of Emerging Markets. Vol. 1, No. 1, pp. 64-83.Both countries put emphasis on assertiveness, success, power and competition through their closely index of Masculinity in the intercultural framework of Hofstede. Further, look on Chinas and the United States concession behaviour both countries are doing their utmost to achieve their goal and get as much profits as possible (see Appendix A). According to Hofstede, differences between the two countries can be shown in their Long-Term Orientation. The United States (118) are long-term oriented and China (29) short-term oriented. This means that China is more committed to loyalty to and respect for traditional business strategies than the United States. Furthermore, one of the biggest differences is their decision-making behaviour (see Appendix A). United States b usiness people are known as the prompt decision makers in the world whereas China doesnt rush to take a decision. Finally, both countries have a different pursue a different goal in the negotiation process. For the Chinese it is a kind of dialogue, more precisely an exchange of information. In the United States negotiation is associated with an outcome which could be a contract.9. ConclusionSummarising the findings and arguments shows that both countries should have an understanding of the traditions and culture. Woo et al. (2007 351) suggest that when negotiating with the Chinese it is imperative to be conscious of the structural sovietism of those involved in business negotiations. Especially the business people from the United States should be prepared for a long visit when doing business in China. The best way to be successful in China is to skeletal frame guanxi, which is a time-consuming procedure but essential. The Chinese business people have their focus more and more on the content of the deals and the details of the prices. In comparison to the business negotiation in the United States nutty handshakes should be avoided because for some of them it reflects impuissance (Gesteland, 1999).AppendixAppendix A Negotiation Procedures Business ProtocolChinese NegotiatorUnited States Negotiator dress up Codemen type, white shirt,conservative tiewomen conservativesuit or dressvaries somewhataccording to location andtype of businessMeeting and Greeting+ soft handshake/ moderateeye contact bone-crushing handshake/overly post gaze+ firm handshake/ directeye contact some believe softhandshake reflectsweaknessExchanging Business Cards+ exchange of name tease aparts isdone victimisation both hands+ read the business bug+ put the card away in aleather card/ place it onthe table in front of you dont write on someonesname cardmay not initiate theexchange of businesscardsExchanging Giftsbe prepared withappropriate gifts/ presentgift with both hands+ high-ticke t(prenominal) cognac/ itemstypical of your owncountry/ logo giftsis not a gift-givinggift-giving culture many feel uncomfortableif presented with anexpensive giftWinning and Dinning+ maitre d the fine arts ofeating with chopsticks+ toasting your counterpartsmany prefer to go fora separation betweentheir professional andprivate lives Negotiating deportmentChinese NegotiatorUnited States NegotiatorBargaining Rangeoften hand vigorouslyexpect major concessionon price and damageexpect them to test youropening offer forflexibilityConcession behaviorexpect pressure tacticsbe prepared for some breathed bargainingPlays and Counter-Ploysgenerally m claim negativeemotionsmay on intimacy displayanger as a pressure tactica favourite bargainingtactic is time pressureanother is to ask forquotations on a slidingscale by quantityDecision-Making Behavioura long time-consumingprocessdecisions take timefastest decision makersin the worldSource Adapted from Gesteland, R. R. (1999). Cross-cultural business behavior marketing, negotiating and managing across cultures. 2nd ed. Copenhagen Handelshjskolens.