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The Seven Deadly Sins of Doing Business in China

August 26th, 2008 @ 9:39 am

4 Comments

Categories: Global Trade, Tips, Uncategorized

Tags: China, Blogging, Internet, Jessica Stillman

  • Wash away your sins the easy wayThe Find: One expert claims that many Western managers working with Chinese business people mask their fear and confusion with an air of superiority; instead, she suggests, they should strive to understand and avoid the seven deadly sins of doing business in China.
  • The Source: A post by Janet Carmosky, CEO of the China Business Network, on the Business Pundit blog.

The Takeaway: Carmosky offers seven sins, but she only has two basic points: don’t be arrogant and be aware of what she calls China’s “We Know Where You Live Capitalism.” Putting aside the slightly creepy ring of the phrase, what does “we know where you live capitalism” mean? Carmosky explains:

The Chinese… are relationship-oriented. Chinese only use the people they know, like, and respect. To them, a transaction is not really business. This is part of the reason we have quality problems. To them, shipping a container of widgets for a letter of credit is not a relationship, even if you’ve been doing it for 16 years. Before they do a transaction or project with you, they want to know who you are… They’re not comfortable doing a project or transaction first.

The primacy of the personal in China can lead to misunderstandings, Carmosky claims. “From a Chinese point of view, if situations change… naturally you’re not going to be bound to the initial agreement. That would be rigid and unrealistic… They believe that if you’re going to be business partners, it’s not about the rule of law, it’s about the relationship.” From one side of the table that can look a lot like breaking a contract, but on the other it’s just an appropriate amount on flexibility and respect. The complete list of deadly sins:

  1. Assuming Chinese Do Business the Same Way Americans Do
  2. Assuming a Contract Will Get You Respect from China
  3. Assuming Chinese are Unethical Because They Don’t Respect Contracts
  4. Thinking Chinese Need American Business
  5. Treating Chinese Our Way, and Assuming They Will Adapt
  6. Thinking All You Need is One China Guy
  7. Thinking We Don’t Have to Worry About China Yet

For much more of Carmosky’s views, check out the lengthy post.

The Question: Readers who are old China hands: are these tips on target?

(Image of sin removing handwash by Lori Greig, CC 2.0)

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  •  
    1

    asesh

    08/26/08 | Report as spam

    RE: The Seven Deadly Sins of Doing Business in China

    Why 7? The list can go on? Again why 'deadly'? Is it so damaging? Who wants to commit 'sins'? Are they itself not deadly?
    In Business 'u' comes before 'i' and that too 'i' is silent. So allow 'u' to do the business with 'i'.
    Lastly, why China? Can we not replace the country's name with anyone individual first in the list of assumptions above? What answers do we get? Will it be a 'deadly sins' category?
    If 'yes', now we know where is the problem. Please do not brand yourself as the representative of your nationality?
    If the answer is 'no', then try a 'win-win' business agreement, I am sure all will agree and those will not be a sinful activity.
    In this democratic world we want to do business by choice and not by any 'blog' or article. Understanding China requires to be with them first.
    Thanks for allowing me to respond and your time to glance.
    Regards
    Asesh Datta

  •  
    2

    asesh

    08/26/08 | Report as spam

    RE: The Seven Deadly Sins of Doing Business in China

    This is the third attempt that I am trying to express my thinking to the above article.
    One last final one.
    Why 7? The list can go on. Again why categorize them as 'deadly'? Can any sins committed lesser than 'deadly'? Who wants to commit 'sins'?

    In 'business', 'u' comes before 'i' and that to 'i' is silent. Allow 'u' also to perform the business.
    In the list of 'sins' if we replace 'China' with 'I' what answers we derive? If 'yes' that too are 'sins' may be 'u' and 'i' are not in the save frequency. But why designate 'China'? If 'no', then try 'win-win' in business. In this democratic world we have choices of doing business, but not generalize branding a nation. Will your nationality come in any failed deals.
    Dare to fail. May be we shall to it better prepared next time with increased motivation.
    Thanks for allowing me to write and for your time to glance.
    Regards
    Asesh Datta

  •  
    3

    psd1941@...

    08/27/08 | Report as spam

    RE: The Seven Deadly Sins of Doing Business in China

    We should not forget a very old saying "While in Rome do as Romans do." So, while in China do as Chinese do will be befitting saying for doing a business in China.

    Most of the Business Tactics and Principles, Ethics, etc., depend upon the Leadership Styles that a person adopts to promote his business. Alternatively Leadership Style depends upon the situation and culture of the place where you want to test your Leadership Style. You cannot enforce your own ethics, business tactics or principles unless you adapt yourself to the culture of the place, even if it is against your own principles and ethics.

    Several of MNCs are reported to have failed in China when they tried to adopt their own perceived Management styles. They have learnt lessons like the above mentioned sins. The list of sins cannot be treated as exhaustive, as there may be hundreds of such types of follies that you may treat sins, as you may perceive. For failure of any Business House we cannot however blame the said Business House as a whole. But it is the failure of the management people who are at the helm of affairs of the Business House and would not have studied the cultural requirements and would also not have adapted themselves to the requirements of situational leadership in China.

    The Basic thing to understand is that it is however not be safe to adopt the western styles of leaderships unless China is accustomed to such leadership styles. The management in that country needs to adopt Hersey, Blanchard and Johnson???s Situational Leadership Theory that has made a significant impact in the field of leadership and organizational behavior. The said Theory, a situational nature of leadership stresses upon the flexibility on the part of anyone in position to influence behavior of both the leaders and followers.

  •  
    4

    Matt6

    08/27/08 | Report as spam

    RE: The Seven Deadly Sins of Doing Business in China

    To be honest, most of these points would not help your business in the U.S.A. either. After selling into China (and many other areas of the world) over the last 15 years the reality is that business here, in Europe or the Far East is very similar in many ways. Like here, you need to listen to your potential customer and what their needs are, you need to respect their thoughts, you need to realize they have options (you are not the only company offering them this product) and you need to respond in a timely manner. In the area of not respecting contracts, unfortunately there are many U.S. companies that act the same way when they see their business change and a contract is no longer in their best interest. The biggest difference I have seen is that (Chinese) buyers, in the same industry, do discuss competitor pricing amongst themselves so you need to be a shrewd negotiator going into this culture of business. This is where your relationship with the customer kicks in. Always be open to trying different foods and cultural events they want to share with you (as long as they are ethical). Try to also learn a little of their language. Many of my customers are very interested in the U.S. and want to discuss U.S. politics so be ready to do so in a very nonbiased way. If you show respect and use many of the same sales and people skills you do here you should do well. Bottom line is Be Friendly and Be Professional.

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