Lots of foreign companies in China have to make a decision about personnel, whom to employ. Nowadays, more often the first preference is to recruit local candidates who are bilingual and who have experience of working in multinational corporations. The second choice is for Chinese ‘returnees’ who are ethnic Chinese with experience of studying and working abroad. Yet for certain niches and top positions with strong management skills, there can be openings for expatriate staff. But do the foreign managers know how to perform successfully in China?
Cultural differences and management styles can have a big impact on employee and company performance. There’re several important things to keep in mind as a foreign leader.
Guanxi is the core of Chinese business. Your product is 50%, and the rest is Guanxi. You need to know why business with you is worth it. You need to have right connections and right partners. Learn about the industry, its distribution structure and core players. Guanxi makes different your product perception and opportunities of cooperation with the Chinese partners. Influence the influencers. And do not forget to have the right Chinese person by your side. Guanxi belongs to mainlanders.
Suit the Chinese market
No matter how good you think your product is, no matter how well it sells in your own country or abroad, you need to look at the product in the context of China. Is it a right product for the Chinese market? What is the price? Do you need to adapt something to be competitive? Best practice from successful multinational companies shows that they act Chinese in the market. Analyze the case studies. HQs abroad seldom understand the Chinese culture, business realities, or need for speed. Companies that are not able to keep up with Chinese tempo & style lose the opportunity.
Power and clear directions
In Confucian philosophy, all relationships are deemed to be unequal. Ethical behavior demands that these inequalities are respected. Thus, the older person should automatically receive respect from the younger, the senior from the subordinate. As a leader you have to be decisive and assertive. You need to give more than just a task, but also the clear guidance and instructions with variants of solutions and designated responsibilities. The leader’s decisions do not allow employees to question or discuss the authority. “I don’t know” is not an acceptable answer to the subordinates since it is considered as “losing face” (mianzi) and respect as a consequence.
Perception of Time
Doing business abroad often has a much quicker pace than doing business in China. Apart from being on time, which might be a critical point in China, it is also important to build relationships with people before doing business. The first meeting with a potential business partner aims to get acquainted and to find out more information about possible opportunities of cooperation. The next step is dinner together. Business, however, is rarely discussed during business meals. It is a time to get better acquainted to see how well everyone can know, like and trust each other. Only after several meetings of ‘building the relationship’ there will be the right time to discuss the business in details. Remember, you need to establish a strong relationship before going into a deal. All business related processes also work under this rule. And do not forget about the lunar calendar. And Chinese festivals. And dates and numbers. For example, there are dates when it is not recommended to take serious decisions. Plan carefully and keep in mind that success in China takes time and requires patience.
Indirect way to say things
As a rule, the Chinese are much more indirect than Westerners. We tend to be more black-and-white in our communication, while the Chinese tend to beat around the bush a little more. So, think twice before giving direct comments or criticism to your Team’s work. What you perceive as direct could hurt the feelings of your colleagues. Learn the Chinese way of indirect communication and interpretation.
Build a strong local team
As a foreigner, you do have certain advantages. You know the corporate culture and western style of management. You may perform perfectly in the public events and meetings. But do not forget to form a strong local team onboard. Local talent can help you set better network, work out better deals, and understand the culture and complexities of the market. Teach your local team to make decisions and to communicate with headquarters in a certain style. At the end of the day, it is the people who make great brands.
Business in China is a fast developing target. To succeed, you have no choice but to understand the Chinese market and business culture, to learn fast and to be flexible, so you can adjust your management style to fit business situations.