Business cultural milieu that foreign firms have to navigate in China

IT was very early Friday morning as I sat across a table from a colleague at a cafe in Shanghai. While sipping on our lattes, the topic of our discussion centered on foreign companies, predominantly small to medium-sized enterprises and the challenges they must navigate within the local Chinese corporate environment just to survive, success notwithstanding.

My own experiences may serve notice as to the business culture in China for foreign entities, either contemplating setting up a branch office or for those entities already here. Within the context of this article, I will refer to specific comments from a number of articles penned by Jason Patent, chief of operations/director of Robertson Center for Intercultural Leadership at International House, UC Berkeley.

Local business culture

Patent penned a noteworthy question in one of his articles: “China Business. It Helps to Know the Culture.” Why do so many Western companies send their people to China without proper training in the Chinese mindset?

Fair question. Admittedly, I came to China under my own steam. I hadn’t prepared for what lay ahead of me in the country. There were no Chinese colleagues or Chinese friends to help me get my head into the right space prior to my flight out of Sydney.

Several months had passed and I felt I had spent sufficient time on the ground and was accustomed to the local environment. I was ready to put my newly acquired knowledge to the test. Soon enough, I was invited to attend a local government meeting to discuss a project in the making.

The initial meet and greet was convivial, with pleasantries frequently exchanged. I left that meeting feeling very confident going forward. This was a dream start for me and after several more meetings I made a decision to invest significant resources in the project. Materials were purchased, a team of skilled contractors were brought in and engineers with experience signed on.

The first stage of the project got underway. But right from the start, problems emerged. Further meetings with the local official in charge of the project resulted in the requirement of further significant additional financial commitment from myself to deal with “unforeseen issues” that seemed to crop up unexpectedly.

Sounds familiar? I was called to yet another meeting and I wasn’t much in the mood for nonsense. I had that uncanny feeling that I was being played so I reacted. While the official was in the middle of justifying the need for extra funds, I suddenly leapt out of my seat and thumped the table as hard as I could with closed fists, all the while screaming out a stream of expletives in exasperation. The meeting came to an abrupt end and any further involvement I had in the project was cancelled. My investment in the project went nowhere.

As Patent correctly states, “understanding the terrain is critical to knowing where to place your next step. With China, that first step is an understanding that things are just done differently. The process of helping you navigate terrain that may look unfriendly, but is in fact just different.”

Ethics in business matters

I had reacted to the feeling of being played. Was my response justified and therefore acceptable? Yet in another of his articles, Patent observes, “Think of the staggering amount of miscommunication that happens every day among members of (roughly) the same cultural group speaking the same language. Now imagine a “typical” Westerner and a “typical” Chinese person. Both behave in ways deeply conditioned by their very different cultures; neither is familiar with the other person’s cultural habits; neither speaks the other’s language. How could they not judge each other? And what hope have they got of working things out, given the cultural and linguistic barriers?”

In retrospect, I had got it all completely wrong. Granted, ethical issues in any business-related activity will arise from time to time in every culture, everywhere. I had reacted inappropriately and had not taken the required time to fully acquaint to and assimilate with the local business culture.

Given my negative experiences in the early years, I started stereotyping everyone, officials and private business persons alike.

I began tossing about wild allegations such as; they’re all cheats, liars, having superiority complexes, care less about quality and they discriminate against foreigners. Nothing could be more further from the truth. The upshot of all this is: Do your homework, earn the trust and you will be respected and rewarded for your efforts.