WHAT DOES PATIENCE MEAN IN CHINESE BUSINESS ?

       Chinese negotiators seem to have no deadline to get things done, they take their time, ask many questions meticulously and clarify every detail, they look to establish a friendly long-term relationship before moving ahead to agreeing terms (Woo, Prud’homme, 1999). However, foreign negotiators should not show any sign of annoyance because of the length of the process, on the contrary, they should be patient.


     Expatriate managers declare that it is important to have a great deal of patience and refrain from becoming irritated when negotiating with the Chinese. Sometimes, the source of irritation for multinational companies is mainly due to the fact that on the one hand, even the Chinese counterparts are often very flexible and can solve issues rapidly (issues that would have taken much longer time to solve in the West), on the other hand, a very simple issue, from a Western perspective, could take ages to get solved.

      Occasionally, the Chinese want to give the appearance that something is in a terrible hurry and that matters, have to be dealt with quickly. This is mainly done to make their counterparts give concessions easily. Generally speaking, when it comes to deadlines, the Chinese are very flexible, they even are used sometimes as a tactic in negotiations. 

     According to Woo and Prud’homme, negotiating with the Chinese can be a very lengthy and time-consuming process, which explains why foreign customers/investors usually multiply the trips to China or their duration of stay in China is mostly prolonged. To the Chinese, deadlines are flexible and they are not supposed to be met strictly, because patience is a virtue.

WHAT DOES MIANZI/ FACE MEAN IN CHINESE BUSINESS ?

    The concept of face or “mianzi” is probably the most written-about cultural characteristic within the Chinese culture literature, face means dignity, respect, status, prestige and credibility, it can be saved, protected, lost or given by social behaviour, etiquette events like the organisation of banquets, giving gifts in a social area, to create a congenial atmosphere, which will be giving face to the counterparts and consequently opens the negotiation process (Beamer,1993). The easiest way to make a Chinese lose face is to criticise him in public, intentionally or unintentionally (J. Sebanius,C.Qian, 2008) that’s why respect, loyalty and politeness are major qualities to earn face from the Chinese. Graham and Lam (2003) called it social capital, it is mainly based on reputation and social standing, if Westerners cause the Chinese to lose it, it can be fatal for business negotiations. One of the sources of earning face is to have a good network of relationships, or what is commonly called in the literature “Guanxi”.

      Expatriate business managers admit that face is always enormously important in China. What makes a Chinese lose face is for example if you say “no” straight out to a suggestion he made, basically, that is enough to make the Chinese lose face. Of course, there are other matters that can make them lose face, generally speaking, that is everything that makes them feel that they are in an inferior position. The phenomenon of face is not only applicable to the Chinese but also to Westerners in a lesser extent.

       A situation where a Chinese person loses face can be aggravated if his/her colleagues or managers are present. If such a situation occurs then it can take a while before you are back on speaking terms with that person and in a worst-case scenario the persons involved might have to be replaced, situations like this are very rare but still they occur. Moreover, the reason why face is a more sensitive cultural trait in China than it is in western countries might be derived from the fact that if ones loses face in China, then that person’s Guanxi is negatively affected. If “X” loses face or gets an unfavourable reputation, then this can have a negative effect on the persons who know or have a connection to this person “X”. On the one hand, there is a Guanxi network behind every higher ranked individual and a change in that person’s face has a contagious effect, positive or negative, on the entire network. On the other hand, a person’s face can be significantly enhanced if you praise that person in front of his/her personnel or colleagues.

UNDERSTANDING CHINESE CULTURAL DIMENSIONS WITHIN BUSINESS

        The relationship between China and the rest of the world has expanded considerably since the implementation of the open-door policy after the “program of four modernizations”. Chinese growth continues at a rate often close to 10% per year, and the country attracts more foreign investments than any other country in the world. Transfer of technology, creation of joint ventures, foreign subsidiaries, facilities on the Chinese territory, equity in business and Chinese industry groups are the main events. All these transactions involve negotiations, that is to say, the implementation of an adjustment process is often long, complex, and punctuated with the unexpected. Negotiating with the Chinese gives rise to a very special mix of uncertainties and misunderstandings which become excessive sometimes. This is because the Chinese negotiator sits on his set of assumptions that are radically different from those underlying the approach of his Western interlocutors. This disjunction leads to reactions tinged with doubt and mistrust putting the foreign negotiator in the situation of a fisherman trying to catch the reflection of the moon in a pond.

          From one country to another, from one continent to another, a negotiation requires a prior knowledge in different registers. Out of respect for a climate of trust, to know the attitudes held during negotiations to adapt to different communication styles, to minimize the differences of meaning of terms such as design planning, commitment, to minimize risk errors, loss of time, it is crucial to discover, to know the culture of others. In this present article, we are more interested in the interaction between Western countries and China in terms of business negotiations, we do mean by Western countries: Northern America, Western Europe, Australia and New Zealand.

         During the second half of the 20th century, several scholars and practitioners had created substantive knowledge in the area of Western-Chinese business negotiations, especially since the implementation of the economic reform in China after the 1980’s. Many authors described cultural difference to be the most influential antecedent in Western-Chinese business negotiations (Boyacigiller et al. 1996, Pye 1982, Hofstede/Usunier 1996, Redding 1980, Shenkar/Ronen 1987). Hofstede (1980), who identifies five cultural dimensions which are : high long-term orientation, high collectivism, high masculinity, high power distance, and high uncertainty avoidance; he did use Hong Kong and Taiwan samples in his research to determine the rankings of China within these five dimensions, which  made the findings of his research questioned by Shenkar (1994) and Tung (1988). In contrast, the Chinese Cultural Connection (1987), an international scholars' network, outlined four Chinese cultural dimensions derived from Chinese cultural values which are: Integration, Confucian work dynamism, Human-heartedness, and Moral Discipline; but these dimensions remain general, because they are not tailored to a business paradigm for measuring Chinese culture (Shi, Xinping, 2001). Another point is that within the literature and the negotiation practice, it has been found that political, economical and institutional factors are the basic influences behind the Western-Chinese business negotiations (Tung, 1988), while Weiss (1993) highlighted in his analysis that relationship behaviours, and environmental conditions influence Chinese negotiations.

          Furthermore, Xiaohua Lin and Stephen J. Miller (2003) examined direct and indirect effects of national cultures from a West-East negotiation approach, they characterised two dimensions of Hofstede(1980) as direct effects of national culture, firstly, individualism-collectivism assuming that in China, group goals and needs are emphasized under the shadow of maintaining relational harmony (Hsu, 1985), this is why they are always seeking the middle or a moderated position in conflicts; and secondly, high-low contexts in communication assuming that the Chinese do not express their opinions directly and openly, they rely more on non-verbal communication, in addition to this, the tolerance of ambiguity is highly emphasized in Chinese culture as ambiguous expressions and thoughts serve social purposes, such as uncertainty of the future and believing in more than one truth(Leung, 1988). Concerning the indirect effects of national cultures, two other dimensions are characterised, firstly, ingroup-outgroup consciousness meaning that the Chinese are more likely to take different approaches while interacting with foreigners, to seek the relational harmony, even if Chinese negotiators do exchange information indirectly using influence in an intra-cultural negotiation, they do adapt their behaviour in an inter-cultural negotiation, while Western negotiators remain consistent in both settings. And secondly, the mode of exercising authority differs in China, where power is considered as a tool used to facilitate a collective process, rather than adopting top-down decisions, so that important problems should be coped with by consensus and not by majority of vote (Wang, 1992). 

HOW DOES CULTURE INFLUENCE INTERNATIONAL BUSINESS NEGOTIATIONS ?

        Culture miscommunication is a very big issue for business that we should certainly be aware of. There is today a greater recognition among specialists that cultural differences are affecting all facets of international business. Some cultural mistakes were made by big companies such as Coca-Cola in the 20’s, when the Chinese characters that sounded like Coke stood for a completely vulgar meaning in Chinese.

      Furthermore, the effect of culture when negotiating in an international business context is very relevant. The language of negotiation, the need to study the culture of the parties involved, building trust, personal relationships and appropriate training for international managers should all be based on culture awareness.

        Many authors presented culture as a key issue for big success in international business such as (Hofstede, Trompenaars, etc.), they created business etiquettes for each country according to important cultural differences and attractive conditions of investment. China and India are the two most attractive emerging economies nowadays in terms of investment; however, it is not easy to invest in eastern countries where cultural differences are extreme. An international business should cope with political policies and legal practices, economic forces, geographical influences and cultural factors. However, could the influence of national culture be substantial enough on the operations of international companies to outweigh their global convergence?

        Culture, as Geert Hofstede (one relevant author for business and culture) defined it, is "the collective programming of the mind which distinguishes the members of one group or category of people from another" (Hofstede, 1991). Besides, a company's culture is related essentially to long-standing employees, company’s regulation and aims. Although, it is impossible to circumvent the dimensions of business culture developed by Hofstede, they actually determine the differences between countries and nations.

• Power distance : means how the power is distributed in the hierarchy of the company. 
• Uncertainty avoidance : is related to how social rules influence decisions during unexpected events. 
• Institutional collectivism : the degree to which leaders encourage collectivism in the company. 
• In-group collectivism : the degree to which employees feel integration in the society. 
• Assertiveness : is related to the domination of individuals in their relationships with others. 
• Gender egalitarianism : means how the two genders are in less inequality. 
• Future Orientation : is related to whether people plan for their future, in professional matters. 
• Performance orientation : how individuals are encouraged, rewarded for their performance and excellence.

         Hofstede focused his research mostly on culture dimensions and found later on that it could be reduced to five as follows:

• Power distance (high/low). 
• Uncertainty avoidance (high/low). 
• Individualism versus collectivism. 
• Masculine versus feminine. 
• Short-term versus long-term orientation.

    
       In theory, we can observe that these five culture dimensions must determine the differences in national culture, and thus the business must be adapted to this culture. To prove that culture is a key element in doing business, we will have to refer to a case study, and for this, we will choose China as a country reputed to be a civilisation-state country with a totally different culture from that of the West, which relates more to a nation-state type of countries.

      In the 1980’s, China’s business started to become internationalised after a long period of protectionism. Being given the opportunities of expansion enabled henceforth by the largeness of the Chinese market, therefore, western companies needed to understand the Chinese culture in order to deal with Chinese suppliers or to penetrate the market. Some of them failed because the differences in culture were very large which caused intercultural miscommunication.

     One should know that relationships in China are very important to succeed in business. The moral relationship in business is due to trust and confidence between the two parts, even if the contract is made, the “Guanxi” which means the network of relationships that can make transactions very easy to happen, is privileged in Chinese business culture, indeed, these relationships can turn on to be very close and very long, so that favours can be granted from both sides.

         Consequently, we can see that the importance of maintaining good relationships has its roots in Chinese society and therefore in business, the Guanxi can relate to more than customers only, it reaches also suppliers, local authorities, banks and tax offices. Due to this, a whole department of sales will have to be responsible to manage all these relationships and to update the links within ,the network continually, so that they will never be lost, whereas some other business relationships can be created. In other words, the network has to become bigger not smaller. Western companies should thus be aware of developing these special relationships to meet the expectations of Chinese firms.

        The notion of "Mianzi" is also very important, it copes with the dignity of individuals and not losing face, this is a very important characteristic of the Chinese culture as well, because direct criticism will create a conflict to the Chinese, and it is very harmful psychologically for them, so when once face is lost in any type of relationship in China, it means that this one is terminated. The need of harmony, commitment and a good understanding of each other is very praised in China. This comes all from Confucian principles in the old tradition of the Chinese society.

         If we look at the example of a Taiwanese company, developed by Helena Chiu and Gerhard A.Wuhrer, which wants to create a partnership with a Chinese company, it would be much more easier, as the channel structure would be direct and shorter, composed from the main company and the end-user, the transaction will be carried out between those two parts, because the language barrier is inexistent, the closeness of the countries and the similar culture that gathers them makes the company in a very good position to manage the business properly. However, when this same company deals with a European country, in a context of embracing globalisation, the distribution will involve one or two middlemen, it could be an agent, a distributor or even an interpreter, so the production doesn’t reach the end-user directly, it has to be intermediated because those people have better communication skills and the Taiwanese company will have to use them to create a partnership with Western countries. We can register an organisational change due to culture. Schein (2004) listed some mechanisms for shaping and reinforcing the culture :

1. The design and structure of the organisation. 
2. The systems and procedures used. 
3. The rites and rituals. 
4. The design and lay-out of the organisation physical space. 
5. Stories of important events and people. 
6. Formal statements of the organisational philosophy.

       Furthermore, cultural dimensions affect also the company as a whole; it has to be adapted to the national culture criteria. In a level of managers, Nancy Adler (2002) stated by her research that cultural differences among managers working for a multinational company are significantly greater than cultural differences among managers working in their own native country. The degree of adaptation to the national culture is determined by the strength of the company’s culture and its effects on the market, whether it is strong and exportable enough or not.

         On the one hand, in the study of Van Oudenhoven and De Boer (1995), one sees that when the corporate culture and the national culture of two companies are similar, the cooperation would be easier, because it is obviously a positive relationship and the chances to fail in keeping this relationship are very small. On the other hand, the chances to fail when two partners are from different cultures are bigger. In fact, we need to have a larger understanding of cross-cultural behaviour.

      One concludes that the influence is greater than expected and we could never neglect its effects at every level of a particular business in an international environment. Cultural miscommunication is very costly; one can imagine it in a context of negotiations and all the consequences that may face the company in the future due to it. So, many multinational companies (MNCs) do understand the importance of cross-cultural diversity, in a sense that doing business must adapt to these very crucial variables related to culture. Eventually, every international business establishing itself in a country with cultural differences must be aware and adapt its operation to the national culture in order to succeed.