WHAT DOES TRUST AND FRIENDSHIP MEAN IN CHINESE BUSINESS ?

           Many authors included the notion of trust in the feature of Guanxi as mutual trust is a must in building relationships, however, Woo and Prud’homme (1999) considered trust as another cultural trait, because the character of a trustworthy negotiator should be direct, honest, and no hidden agendas must appear in the negotiation process. Nevertheless, J. Sebanius and C.Qian (2008) proposed three images to transform a preliminary business relationship into a warm, cooperative, and fruitful one, the first image is that of a polite, respectful, face-giving individual, the second one is that of a trustworthy negotiator, the third one is that of a caring-friend. Trust building is a difficult process and consumes too much time, but the Chinese will not do business with strangers or untrustworthy people (P. Herbig, D.Martin, 1998).

          Trust is very important when doing business in China because the Chinese do not conduct business with someone they are not familiar with. You want to understand each other on a personal level and that is crucial if an agreement is to be reached. The fact that you want to trust your business counterpart is, most likely, very common in every major business deal around the world. A basic trust between two companies is a good foundation, but these activities, Chinese partners say, are more common in the Northern provinces of China, while the south is more business-oriented. When it comes to MNCs, an expatriate manager explains that one has to remember that he have worked with his customers for about ten years, thus, they know them and the customers know the company. If a new company wants to establish business in China, it will probably take a while before any negotiations can start. A major part of the trust and friendship building activities take place long before the actual negotiation begins. 

        It is very important to MNCs to have a long-term vision and to be “a good corporate citizen”, meaning that the company gives something back to the community. For example: treating its Chinese personnel well and giving them possibilities of improving their competence to be promoted for management positions. Other ways for companies to be socially responsible are by: sponsoring different events in China, donating money to schools and even building schools, donations to support environmental projects. Therefore, showing that the company cares about China and that it wants to be part of the development of the country is a very good and important way of generating trust. In return, the Chinese understand that the company is not here to trick them, or to do things they will regret. Moreover, if you give the impression that you are in China to make fast money and do not show any interest in operating in China for years to come, then you will not gain the trust that is necessary when negotiating.

WHAT DOES RESPECT OF HIERARCHY AND SOCIAL STATUS MEAN IN CHINESE BUSINESS ?

       

      Many scholars wrote about social status and respect of hierarchy as another cultural characteristic of the Chinese business, it is given a strong visibility in Chinese business meetings, the status means the role and the position of a person in the company, the Chinese will agree to work only with a person from the same hierarchical level or a higher one (Woo, Prud’homme, 1999). However, Graham and Lam (2003) emphasized the importance of rank and status by showing its repercussions, it can ruin a business meeting with the Chinese, in a way that high-level negotiations will involve directly executives of both companies, and it has nothing to do with sales representatives. A negotiation usually requires the meeting of equals, so that more cooperation is visible. Some of the reflections of hierarchy would be how Chinese people greet themselves and address each other, who speaks during business meetings and who makes decisions (J. Sebanius,C.Qian, 2008). A social status implies directly a mutual trust between a business negotiator and his counterparts.

    The Chinese feel that hierarchy is something very important and thus the manager makes all decisions. Usually, a diminutive amount of authority and decision-making power is delegated down in the organisation since hierarchy is extremely important.

     It is very important for the Chinese to know that the persons they are negotiating with have authority to make relevant decisions. More often than not, western negotiators have the authority to make decisions and answer the customer’s questions while the chinese negotiating counterpart perhaps has to confer with a superior before a decision can be made.

    Another important thing to consider is the way people are seated around a meeting table. The highest manager sits in the centre and the rest of the group is placed in hierarchical order alongside him. The expatriate team has to position itself in the same manner in order to facilitate the understanding of who is in charge.