Guanxi

Sarah Schulze

IBUS 480

Sarah Schulze

Case Study #1

* The Hofstede Cultural Dimensions comparison between the U.S and China explain the main cultural differences between the two countries. The biggest differences between the two fall within these five categories; power distance, individualism, long-term orientation, indulgence, and uncertainty avoidance. These cultural differences play a huge role when the two countries are negotiating with one another.

First, the power distance dimension explains that China is a society that believes inequalities among each other are acceptable This acceptance shows that when negotiating, China will direct their attention to the individuals who are the oldest, have the highest position and who are male. An example of this difference was shown in the case when Ai Hwa Chew was not including Barb in the conversations, but instead directed his attention to Barbs male counterparts.

There is also a huge difference between the two cultures when it comes to individualism. China is a very collectivist culture where people act in the interests of the group, where as in the U.S we are very individualistic. This can make negotiation hard between the two groups because in China their groups are very close knit and it is hard to become a respected member of a group. Since relationships come first in their culture, you must establish a relationship with the others before you will be able to negotiate any business deal. As we know, establishing relationships can’t happen over night which is the third main difference between the two cultures.

Due to the value placed on relationships in China, they tend to be long term oriented. This can be a problem when conducting business with them because generally westerners are use to creating a contract, laying out the details, signing the papers and then getting on their way. In contrast, China is focused on establishing relationships, which can take weeks/months, before ever talking...