Have you heard the term “culture shock?” Canadian-born anthropologist Kalervo Oberg is credited with coining the term to describe the “anxiety that results from losing all our familiar signs and symbols of social intercourse.” Such shock can be experienced in everyday life. It certainly is a common issue for Americans wishing to engage in business in China or most any other foreign country.
In various other posts on this site, we highlight some of the most significant challenges in doing business in China. These include the ever-changing legal landscape as China’s leaders strive to close gaps that exist between their laws and those of others on the global stage. We have also discussed the importance of solid personal relationships as defined under the Chinese term, guanxi (gwahn-shee).
The concept behind guanxi is easy to grasp on its face perhaps, but the depth and breadth of its roots in Chinese culture are such that it can easily create a form of legal quicksand that can swallow a business. The millennia-old social norm seems to conflict with Western business ethics. Specifically, where codes of conduct and laws in the U.S. emphasize the interests of the company, the moral duty behind guanxi gives personal relationships precedence over all else.
This divergence of perspective can create potential problems. For example, guanxi dictates doing business on the basis of relationship, not necessarily on getting the best price or best quality of product. However, such behavior could violate U.S. codes of conduct.
Navigating the way
To overcome this dilemma and honor China’s culture, here are some thoughts on how to deal with guanxi:
- Acknowledge the norm: You know the saying that begins, when in Rome? China’s culture is much older and deserves just as much respect.
- See the other side: You might view guanxi as unethical, but don’t presume corruption. Chinese see failure to practice guanxi as unnatural and immoral. If restrictions are imposed, they could interpret them as an attack on their way of life.
- Set strict parameters: All things in moderation is a standard to consider. By setting strict parameters for acceptable guanxi practices by Chinese employees, companies are finding they can continue to do business while mitigating legal fallout in the West.
Culture shock may be hard to avoid. However, it can be eased with planning that recognizes China’s differences and proper execution.