Cultural Differences between the Chinese and United States Business Environment - Coursework Example

Cultural Differences between the Chinese and United s Business Environment al Affiliation) Introduction With increased globalization of business practices, various businesses have been forced to create room for adjustment and to allow flexibility in their approaches to business practices to fit into new markets. The business environments in different countries are influenced by their cultural setups that make it successful for businesses to thrive in such markets. Various businesses sought to expand into foreign markets and they are presented with various challenges in terms of merging the cultural differences to ensure that they provide high quality and acceptable services and goods to the consumers. Such environments also create a problem between the employees and even the managers who come from the different cultural backgrounds and are well versed in different managerial approaches (Walker, Walker, & Schmitz, 2003). Hofstede’s cultural dimensions provide an avenue through which the cultural dimensions of different countries can be analyzed to allow the business create the necessary adjustments towards succeeding in such markets. The United States and China are increasingly growing markets for both local and international business. However, the historical, political, social, and economic pasts of these countries have formed a framework for cultural developments, which shape the current business approaches and interactions. As such, this paper is going to employ Hofstede’s dimensions in analyzing the cultural differences between the US and China, and how the cultural constructs influence the business interactions in the two countries. Cultural Differences Between China and the US Currently, China forms the most appealing and in Asia, with increased international collaboration with a variety of partners from other countries and regions. The country not only received direct foreign investments from other countries within the Asia region, but also receives large investments from Europe and North America(Guirdham, 2009). On the other hand, the US forms the largest economy in the world, with a growing number of business lines involving the highly diversified population that has generated a mainstream culture towards conducting business. The line that differentiates the US and Chinese cultures is thick enough and evident within the business practices. The four cultural dimensions by Hofstede coupled by the fifth dimension by Bond provide a clear framework for the analysis of the cultural differences between the US and China. Hofstede was one of the cultural researchers who first adopted the problem-solving pragmatic approach in relating culture and management approaches within different business settings. Hofstede clearly defines culture as a form of programming within a group’s mindset, which distinguishes them from a different set of people (Walker, Walker, & Schmitz, 2003). Hofstede further identified four dimensions that he deemed to be important in explaining the value systems of different cultures. The identified dimensions include individualism versus collectivism, power distance, uncertainty avoidance, and masculinity versus feminist. Michael Bond further engaged in research to identify an additional dimension that he referred to as short-term versus long-term orientation. To start with, the power distance between the US and China differs in a way that the US has a lower power distance whileChina has a high power distance. As such, the societal system inChinahas allowed for a high degree of inequality, where individuals hold the hierarchical positions in high degree, with power being distributed unequally among the different positions (Earnhardt, 2009). As such, the power system in Chinese business environments in centralized with each member of the organization accepting and understanding their position and place within the system. On the other hand, the US system has allowed for proper dispersion and sharing of power among the members of the organization, with the different members viewing each other as equals (Folsom & Boulware, 2009). As such, the organizations are flatter, with the management and the employees being considered as almost at the same level in terms of handling business, only separated by a thin line. In terms of the second dimension, the US holds a high ranking in terms of individualism, and thus upholds strong individualism (Paul, 2011). On the other hand, China has a low rating in terms of individualism, and thus ranks high in collectivism. This dimension refers to the intensity of the ties exhibited between different individuals within the society. As such, in the US, the there is a low level of interpersonal connections and thus individuals are less likely to share their responsibilities with each other beyond the family setting, and within a small network of friends. On the other hand, the Confucius teachings have had a great influence on China’s traditional culture, with emphasis being placed on love for humanity, and increased value being placed on the process of learning and family devotion (Guirdham, 2009). As such, the societal setting in China promotes a strong cohesion within the group, with increased levels of respect and loyalty towards the group members. As such, responsibilities are shared by individuals within the larger group for the general well-being of all the members. The US also holds a higher rank in terms of masculinity as compared to China, thus categorizing its societal system as that of medium masculinity while that of China being categorized as that of medium femininity (Paul, 2011). As such, a typical American man is expected to be tough, assertive, and to play the role of the provider as required by their traditional roles. As such, most of the roles held by women in the business environment are different from those held by men, with such roles being deemed less tough. On the other hand, the traditional roles identified for men and women are blurred, an aspect that has allowed men and women to work on equal scales within different lines of professionalism. As such, the Chinese men are provide for a room to be sensitive, while women are also allowed to engage in any line of work and input increase effort to achieve professional success (Earnhardt, 2009). With regards to Hofstede’s fourth dimension, China holds a higher ranking for uncertainty avoidance as compared to the US. As such, it is evident that the Chinese are a risk-avoiding population while the US are a risk-taking population. Uncertainty avoidance refers to the level of anxiety experienced by members of the society each time they are faced with unknown or uncertain situations (Walker, Walker, & Schmitz, 2003). As such in China, people tend to avoid any situations that are highly ambiguous in all possible ways. As such, the population is governed by order and predetermined rules, and they always look for the collective truth before engaging any projects. On the other hand, the societal members within the US value their differences and enjoy refreshing events. The rules that govern individuals within the organizations are thus few, with each member of the organization provided with an opportunity to search and discover truth in their way (Folsom & Boulware, 2009). Following Bond’s research, Hofstede developed a fifth dimension referred to as the Long-term versus short-term orientation (Walker, Walker, & Schmitz, 2003). I this case, the US holds a short term orientation while China holds a long-term orientation. As such, this dimension describes the tie horizon of the society. In this case, China holds the future in high regard, considering it of great importance to the society. Thus, the society promotes pragmatic values aimed at rewards such as saving, persistence, and adaptation capacity. On the other hand, the US promotes normative values related to the present and the past of the society. Such values include respecting tradition, promoting steadiness, fulfilling and reciprocating social obligations, and preserving individual faces. Culture and Cooperative Strategies The maturity of employees in terms of their professional lives occurs within the social context, and thus the attitudes they develop towards corporation are highly influenced by the societal values. As earlier mentioned, the US is highly ranked in terms of individualism and is medium masculine. As such, the individuals within the organizational setting highly depend on their view of determining the course of action in their business operations. Thus, within the US, employees are more inclined towards working independently and are less likely to cooperate with each other as their masculine and individualism culture deems cooperation as an indication of weakness and thus high values control and independence (Paul, 2011). On the other hand, the Chinese are collectivists and medium feminists. As such, they are more dependent on the institutions and groups in determining the course of action that they are to take within operations while emphasizing increased loyalty to the group. Thus, the employees within Chinese organizations foster cooperation among themselves in the view of reducing the responsibilities handled by each member and avoiding risks. The Chinese value systems acknowledge and appreciate harmony among the members of the group and duty to the group in parallel persuasion of individual goals (Guirdham, 2009). Moreover, in the view of cooperation, the US business society uphold the employment of contractual safeguards as compared to the Chinese. As such, Americans believe that with the use of contracts the business partners would be held accountable for their decisions and that they would focus on the greater good of the business arrangement and not just their aspirations and individual goals. On the other hand, the Chinese do not hold contracts in the same regard as the Americans. Instead, they believe that contracts are prone to modifications as changes occur within the business environment (Earnhardt, 2009). Thus, unlike the Americans, the Chinese direct their focus on the relationships they develop with their business partners and not the contracts. Culture and Conflict Management The US and Chinese organizations solve the various conflicts that exist between them in different ways. The Chinese whose society upholds medium feminism and strong collectivism in line with promoting personal relationships and harmony employ indirect ways of conflict management to avoid open and direct conflicts (Guirdham, 2009). As such, when faced with conflict, the Chinese mostly utilize the power held by the authority in suppressing the conflict, or they handle such conflicts in private arrangements. Thus, compromise and negotiation are the most employed methods of conflict resolution in the Chinese setting. On the other hand, the American managers who are medium masculine and individualistic employ direct confrontation of their problems and are used to exposing problems in the open in the process of solving them. As such, the methods utilized in the American organizations to solve conflicts involve direct confrontation of the involved parties with factual evidence, rational arguments, and proposed solutions (Folsom & Boulware, 2009). Such an approach is consistent with their low power distance and the short-term orientation. The managers within Chinese organizations rarely employ such measures in conflict resolution with the fear of provoking disagreement among the parties, and aspect that is highly undesirable. Moreover, the American managers are less willing to input the effort and time required to consult other individuals when faced with conflicts between members of the organization. Contrary to this, the uncertainty avoidance and collective orientation values within the Chinese setting allows managers to employ indirect influence that would require the help of an arbitrator. In handling controversial or difficult requests, the Chinese managers prefer utilization of indirect influences to avoid damaging guanxi and losing face (Earnhardt, 2009). As such, the Chinese managers are likely to feel embarrassed if one would propose the use of a direct approach to conflict resolution. On the other hand, the US managers are more likely to get confused by the long process through which the Chinese solve problems that appear as simple. Culture and Decision-Making Risk-avoiding/Risk-taking The attitudes of the American and Chinese managers towards risk in decision-making differ in a great way as they hold different values in relation to uncertainty avoidance. The Chinese managers, who have a high level of uncertainty-avoidance, do not have the sense of risk and the advantageous spirit (Guirdham, 2009). These managers to not go for immediate decisions in cases where they feel uncertain, an aspect that prevents them from effectively competing in the market. Mostly these managers prefer making decisions that are less risky and comparatively safer at the expense of the opportunity presented by the market. On the other hand, the American managers, who have low levels of uncertainty avoidance, consider the various risks associated with decision-making within the organization as a natural part of business, and thus voluntarily take risks in line with development of new products, application of new technology, and entering new markets (Folsom & Boulware, 2009). Participation in making decisions Collectivistic and individualistic settings allow different levels of individuals participating in the decision-making process. In addition, the power distance in different countries also influences the level of participation in the making of important decisions within the organization. In the American business setting, the managers, who are highly individualistic, uphold individual decision-making or prefer deferring some of the decision-making needs to the supervisors as opposed to consulting other individuals within the organization (Paul, 2011). The low power culture dictates equality among the organizational members, an aspect that promotes empowerment of the subordinates and decentralization of responsibilities. Contrary to this, the Chinese setting provides for a complicated system. The kind of decision that is to be made determines the level of participation of the subordinates. In some cases, due to the strong collectivism all the members of the organizational groups are involved in the decision-making process to provide decisions that would reduce chances of risk and ambiguities. However, some of the decisions that are deemed technical are made by the top ranked managers within the hierarchy and passed to the subordinates, with the latter provided with no opportunity of participation due to the high power distance (Earnhardt, 2009). In some cases, the subordinates even resist participation as a result of their attitudes, which remain unquestionable, towards their managers and supervisors. However, most of the state-owned organizations uphold non-participatory decision-making, where the managers make decisions without involving the subordinates. In such cases, various characteristics of low disclosure, centralization, high formality, and openness are upheld. Fortunately, various reforms have taken place within the Chinese business environment over the years and most organizations are increasingly adopting the participatory form of decision-making. Culture and Work-Group Characteristics Being a relation-oriented nation, China emphasized the importance of interpersonal relationship within its institutions. As such, the initial focus of the Chinese managers is directed towards building interpersonal (guanxi) and social relationships before they consider the contractual or business engagement (Guirdham, 2009). Such managers spend most of the time building such relationships as they interact with their business partners, considering it as a requirement of engaging in business. On the other hand, the American managers emphasize the importance of individuals learning from the other organizational members, directing focus on the task as opposed to the interpersonal relationships, and building confidence necessary for increased performance. These managers uphold the importance of the business deal or task and desire to shift focus as soon as possible on the specific matters within the business arrangement (Folsom & Boulware, 2009). As such, these managers are achievement oriented, which implies that they consider work as the first business order of any business arrangement with other issues such as interpersonal relations given less weight. Culture and Motivation Systems In the value system of the Americans, individual achievement is greatly valued, with individuals expected to succeed as per their individual efforts. As such, the employees I this setting uphold competition, personal goals, and achievement, thus motivation systems are established to recognize and acknowledge the individual contributions towards organizations. The Americans thus consider success as highly dependent on the efforts put. In this case, the organizations implement “pay for performance” mechanisms relating accomplishment to sole efforts by individuals as much as they are likely to have received assistance from other organizational members (Paul, 2011). As such, the employers ion the American setting highly consider the job performance and talents of their employees before they offer them promotions and salary increases. On the other hand, being in a collectivistic environment, Chinese organizations promote interdependence, group goals, and cooperation, thus uphold any motivation plans that enhance group harmony. To the Chinese devotion and the sense of belonging to the organizational group are of more importance. As such, they believe that the success of individuals is determined by the efforts of the entire group. I this vein, the reward is expected to be directed to the entire group and not an individual. Case in point, the Chinese managers direct their focus on the academic qualifications and work experience of the employees when determining salaries (Guirdham, 2009). In addition, more attention is given towards the history, interpersonal relationship, and political quality when considering promotions. Conclusion It is evident national culture has an influence on the behavior of individuals and thus the general engagement of individuals in business operations. As such, different countries have different approaches to business, an aspect that calls for proper adaptation of managers from foreign countries to succeed in such new settings. China and the US have different cultural backgrounds, an aspect that is well represented in their business settings, with the major emphasis being on collectivism among the Chinese, and individualism among the Americans. From a consideration of the various dimensions suggested by Hofstede, it is evident that the approach of collectivism allows for increased engagement of individuals in ensuring the success of the organization while still upholding the success of the individual members. This approach should thus be borrowed into the US approach to ensure that all the organizational members are encouraged to actively participate in the societal development, through doing the greater good not just for themselves but for the entire society. Through supporting each other, the employees would develop an array of ideas that would be effective in promoting general success of the organization and further development of the society. References Earnhardt, M. (2009). The Successful Expatriate Leader in China: Expatriate managers must consider the cultural dimensions of leadership. Graziadio Business Review, 12(1). Folsom, W. D., & Boulware, R. (2009). Encyclopedia of American Business. New York: Infobase Publishing. Guirdham, M. (2009). Culture and Business in Asia. New York: Palgrave MacMillan. Paul, J. (2011). International Business (5th ed.). New Delhi: PHI Learning Private Limited. Walker, D., Walker, T., & Schmitz, J. (2003). Doing Business Internationally, Second Edition: The Guide To Cross-Cultural Success (2nd ed.). Boston, MA: McGraw-Hill. Read More