Business Success in China – Why and How Culture Matters. By Annette Dahl, director and consultant, C3 Consulting ApS

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When you bring gifts to Chinese business partners, avoid giving four of anything, as four is considered an unlucky number in China. And when you exchange business cards, be sure to use both hands and examine your Chinese business partner's card before putting it away. These are two examples of the "business etiquette dos and don'ts" that Danish companies operating in China may come across. There is a growing awareness that when you do business with the Chinese, culture really matters. And though the dos and don't lists can certainly be useful, they are far from sufficient. In order to succeed in China, the company needs to train a culturally competent staff who possess a deep knowledge of Chinese culture and are able to act on this knowledge.

Cross-Cultural Communication
When working with Chinese colleagues, suppliers and clients, Danish staff will encounter styles of communication that are very different from what they are used to. Thus one of the first challenges facing Danish companies doing business in China is to provide their staff with some necessary cross-cultural communication skills. Three key concepts in this context are guanxi, face and harmony.

Guanxi, in short, is the Chinese way of networking. Building guanxi also means building long-term relationships with trust and mutual obligations, and a good guanxi network is crucial for business success in China.

Face is about a person's reputation, social prestige and self-respect. You can “give” other people face by showing them respect, and it is of critical importance not to lose face or cause others to do so.

Harmony is rooted in the ancient tradition of Confucianism. The ideal is that harmony should be maintained in all social relationships, and as a consequence, direct expressions of disagreement are considered impolite. The three concepts are closely interrelated – a powerful guanxi network will give face, and causing someone to lose face will also disturb the harmony.

A culturally competent expatriate in China will be familiar with these concepts and will keep them in mind when communicating with his Chinese colleagues or business partners. For instance, he will use all opportunities to develop guanxi. He will not consider small talk at business meetings as a waste of time, but as an investment in a long-term partnership, and he will note facts about Chinese business partners, their family, etc., which will enable him to show interest in these topics later. When his Chinese business partner responds with "we will think about it," he is aware that it probably means "no," and he will never criticize a Chinese business partner openly.

Managing Chinese Employees
Another major challenge for Danish companies operating in China is how to manage their Chinese employees. The following case illustrates some of the cultural issues that may arise when a Danish management style is adopted in China:

"A Danish company is starting up production of moulds in China. The Danish project manager gives the following assignment to a team of Chinese employees: provide support in making decisions concerning moulds, check the mould construction according to checklists, ensure that the moulds are optimised and function with optimal output, and ensure that they keep functioning during the ongoing production. The Danish project manager demands that the Chinese team work together on the assignment and share their knowledge with each other. However, that does not happen, and the project manager increases the pressure on the team. But it does not have any positive result. On the contrary, one of the Chinese co-workers quits her job."

If the Danish manager had learnt more about Chinese business culture, he would have known that the typical Chinese leadership style is highly paternalistic. The leader is supposed to be an expert in his field, to provide all answers and decisions and to give out clear and detailed instructions. The employees are supposed to listen and follow the instructions given. When the Danish manager tells his Chinese employees to work on the assignment as a team, they are not sure what is expected of them. The manager wants them to make several decisions on their own, but they lack experience in self-leadership and also consider decision-making risky. The team members feel uncomfortable and insecure, but are unlikely to share their frustrations with the manager, as this would be regarded as disrespectful. Instead, one of the employees chooses to quit.

This does not mean that teamwork is impossible in China. But it is crucial first to make it clear to the employees what is actually meant by teamwork and to agree on the rules of play. Initiative, knowledge sharing and positive team behaviour should be recognized and rewarded. Secondly, most Chinese are highly context-oriented. It is important for them to know what they are supposed to do and why, so make sure the overall vision and direction are clear to everybody. Finally, building guanxi is important in this respect as well. One aspect of the paternalistic leadership style is that employees expect their leader to care for them and play an active role in their private lives. Talking with the employees about family affairs, inviting them for dinner and even giving speeches at their weddings may prove an important step in creating a positive and trustful working environment.  

Danish or Chinese Corporate Culture – Which to Choose?
For Danish companies who are getting established in China, one of the important questions to consider is which corporate culture should be adopted in China – Chinese or Danish style? Often the best solution is not either/or, but both. There is so much for us to learn from the Chinese way of doing things, and vice versa. The challenge lies in taking the best from both traditions in order to achieve synergy instead of cultural clashes. A good starting point is focusing on all the things that bind people together across the cultural differences: what do we have in common, which values can we agree upon? From this common platform a company can start building its new, Danish-Chinese corporate culture.

About C3 Consulting
C3 Consulting is a Danish consultancy company that specialises in China, Chinese culture and communication. The company provides cross-cultural training for Danish companies, managers and employees doing business with China. The mission of C3 Consulting is to optimise our clients' communication and cooperation with their Chinese trading partners, colleagues, suppliers and customers. C3 offers services in the fields of cultural training, relocation and repatriation training, cross-cultural team-building and the Chinese language training. All services can be performed on location in Denmark as well as in China.

www.c3consulting.dk