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 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.