Business as Unusual in China

By Brent Wilhite

"I'd always thought the American mindset was just like the Chinese mindset. But now I know more about the Chinese mindset, and how it can affect American business," said M.B.A. student Elizabeth Anderson after her tour of Asia.

Economically speaking, Asia accounts for approximately 25 percent of the global market. Based on that figure alone, one might conclude that anyone climbing the corporate ladder needs to experience this "hub" of international relations.

"The average business student doesn't understand international context until they see it and feel it," according to Assistant Professor of Economics Aric Krause. The opportunity to "see" and "feel" business in China provided a group of 25 Westminster M.B.A. students with valuable insight into business operations in the world's largest economy.

The tour centered on walking and talking with Chinese business leaders, allowing the students to experience the Asian market first-hand. "In any business setting, before you can accurately assess the needs of clients, you need to see where they're coming from," explained Assistant Professor of Management Vicki Whiting. Gaining that level of understanding was a key objective for students on the Chinese business tour.

The term "immersion" pretty much sums up how the group braved this foreign land. It wasn't a typical tourist trip, though the group did visit many of the notable landmarks in China. Visiting attractions, such the Great Wall of China andTianenman Square added to an understanding of the many facets of the Chinese culture. Krause described the way the students pursued their educational experience as "living it, seeing it, riding the subway, riding the bus, seeing what the normal person looks like, feels like, earns, and consumes, so the students could understand the people of this country and culture."

How can gaining this understanding benefit the American business professional? Many American businesses have tried to push their products in the Asian market but have failed because Chinese values are very different from those of the average American consumer. "We learned many of the problems that American businesses are having in the Chinese market," said Anderson.

The Chinese employ a "face-to-face" approach, which helps businesses create and maintain long-term relationships. "To conduct business in China, you talk with the person and you build a relationship, because it's harder to stab people in the back when you get to know them," continued Anderson. Americans don't place as much emphasis on those interpersonal relationships. Business practices seem more cold and routine. As Anderson claimed, "In America, it's just 'give me the piece of paper, and make sure it's signed.'"

Until these Westminster grad students visited China, they didn't realize what little need the Asian people have for the many goods that Americans make futile efforts to push. "The average Chinese person doesn't need a Palm Pilot," said Krause. "Yet we try to justify in our business decisions that they need TVs, cars, flashy clothes, and dishwashers. They don't need that junk. To them, it's straight junk."

To help illustrate that point, the group met with Dr. Thomas Lee Boam, minister-counselor of commercial affairs, reporting directly to the ambassador to China. "The story he told really spoke to me more than anything else that I heard while I was there," said Whiting. He told the group that every day he deals with American companies who say, "There are 2 billion people in China, so if everybody buys a 'button,' I'll have sold 2 billion 'buttons,' and I'll be rich." But what they don't realize is what a small percent of those people have any need for a "button."

The group visited with several notable industry leaders in China, including NITGen, Roche Pharmaceuticals, Compaq Computers, the Hong Kong foreign exchange, the U.S. Embassy in Beijing, IBM, 3Com, Cisco, and several other large and small companies from all sectors of the market.

"The fact that we were on a business tour allowed us to see the subtleties of how Chinese businesses actually run on a daily basis," said Anderson. "We wouldn't have gained that understanding if we had only visited as a group of tourists."

These subtleties in Chinese business culture stood out to the group because they were so different from typical American business customs. At first, some of these customs seemed quite strange.

While the students were visiting Compaq, the tour guide casually mentioned, "There's the doctor." Naturally, the group asked why there was a doctor on site, as that seemed odd compared to American businesses. "Well, the Compaq people are paid so highly here that they work a hundred hours a week," replied the guide. "They'll do whatever it takes to keep their jobs because they are the highest paid employees in the entire country, so we can't get them to take time off to eat, go to the doctor, or do their dry cleaning, so we do it all."

After examining why Compaq provided an on-site doctor, what seemed odd at first eventually made complete sense. Americans are the same way to some extent--maybe not so much in the endless hours spent at the office, but various fringe benefits at American companies can have a strong hold when one considers whether to accept or decline a new job offer.

When the group visited Rousch Pharmaceuticals, the group asked if the company provided a doctor for employees. "No, why would we do that?" came the reply. The underpaid employees at Rousch weren't as committed to the company as the highly paid Compaq employees. With a turnover rate of 60 percent, the Rousch employees quickly jumped to the next company willing to pay them a nickel more an hour.

Without proper understanding of Chinese business culture, a typical American business has a slim chance of succeeding in China. "There are certain common courtesies over there that are very different compared to here that we had to learn before our visit, so we wouldn't be offensive," said Anderson.

Ignoring little things, such as proper business etiquette, are sure-fire ways to offend potential clients. In America, the unconscious response when receiving a business card is to maybe give it a quick glance, then safely file it away in a shirt pocket, with hopes that somehow the card will eventually find its way to the Rolodex. "In China, that's very rude," said Anderson. "You are to hold it out in both hands, very openly, and keep it that way."

Although the goal of the trip was to learn about business in China, the travelers gained much more than that: they also acquired an immense appreciation for the culture and people who live there. Professor Krause summed up the culture as, "very, very structured. The people are used to living the way the government wants them to live. Very similar colors. People walk the same way. They all ride bikes--that's just what you do. You don't get ostentatious. You don't have colored hair or wear bright clothes. You do whatever you are told. If you need to drive a car, you drive the one you are told to buy."

On opposing ends of the globe are two countries with different lifestyles, routines, and business practices. However, a group of Westminster students and faculty learned that in many ways we might be more alike than we are different. "They are wanting the same things in life that we want," said Whiting. "They want their kids to be happy. They want to be able to feed themselves and to better their lives. For me, I can't help but realize that we are all the same."