Economics & Global Bus. Apps - Essay Example

China on the other hand has a very hierarchical and formal social structure which stretches to family, business and institutional life. For instance, respect for elders it is expected of children and the eldest family member bids the highest respect (Dipak 59). Collectivism vs. Individualism In china, individuals consider ideas in a collective sense in that before making a decision, they frequently consider the effects of their actions on their friends, colleagues and neighbors. Usually, decisions are not made for individual gain but for the greater good.

In America, it is normal to make personal motives and goals a priority over the collective ones. This attribute is frequently encouraged so as to induce drive and aspiration to attain personal and business success (Robert, Philip and Sarah 35). Business Relations Business relations are a reflection of the individual and collective nature of the two societies. The term 'guan xi' is commonly used in China and refers to emphasis being placed on the significance of building social networks so as to carry out business (Dipak 71).

This is mirrored in the significance of socializing with counterparts and getting to know them before signing a deal. As a result, ensuring a business deal in china is frequently a long procedure. In the US on the other hand, business is a more cut throat procedure that emphasizes more on efficiency and speed rather than on building relationships. Morals and Values In America, individuals are comfortable about praising, playing up and talking about success openly with humility being considered a weakness by some.

In the Chinese culture, respect and humility are very important. When talking about successes, it is expected of people to be modest and treat each other well, or not to talk about them at all (Robert, Philip and Sarah 39). Additionally, in America, there are grayer areas and the issue of morality is not set in stone but a matter of discussion. In china however there is a firm sense of right and wrong. Freedom of Expression The people of china are bound sternly by protocol and believe it is better to honor and respect the opinion of others even if you don’t agree with them than to demand for other people to concur with your ideals.

In American culture individuals are urged to argue on contentious issues regardless of whether they may lead to confrontation all (Robert, Philip and Sarah 42). U.S. business practices in China vs. USA The 4 P’s of marketing have both similarities and differences in China and USA. The Price of a product has a higher elasticity of demand in China than in USA. While moving to China, it is important to ensure that a company establishes competitive and stable prices if a product is to compete with the existing products.

Price changes have a higher effect on sales in China than in USA due to lower purchasing power of the Chinese in comparison with Americans. Chinese buyers feel more exploited by western companies than by local ones thus making price elasticity for foreign companies in China higher than that of local companies. While considering the product, it is also important to build a strong brand in order to penetrate the Chinese market which is characterised by many popular brands. Use of Chinese name for a brand would be a plus rather than maintain the name the product uses in USA.

Product quality is not as important as it is in USA.