Write an essay on Global Business Environment.
In today’s global business environment there is an undeniable increase in interdependency. International business risks and trade exchanged are continually decreasing. Yet, cultural dimensions are the one fact which is important to be incorporated in strategies related to markets and its implementation, especially when it is focused on global market area.
Motivated by this awareness, this report exhibits a contextual analysis of China with reference to my country Singapore, inspecting the differences in the cultural markets of both the countries and thereby taking a step to overcome these to promote businesses in China without any hurdle.
The reason to choose China is because it is an emerging economy that proposes number of business prospects for investors across the globe. After decades of years of reorganization and opening worldwide the economy of China is now on the second position in the world. Another reason to choose China is because it has achieved speedy industrial expansion with the increase of huge foreign direct investments, technological advancements and increased efficiency. The restrictions that were imposed on foreign business have been relaxed since WTO in 2001 (Alvesson & Sköldberg 2009).
Also, many a times for a foreign trader it is difficult to adapt cultures while doing business but it is a necessity therefore China has been chosen as its culture is unique from other western and eastern cultures. The culture of China is collection of communist ideologies, traditions, and now western values too. In recent years China has been in top recipients of world’s destination of Foreign Development Investment. More than 180 nations across the globe invest in Chinese markets (Alvesson & Sköldberg 2010).
China is rapidly becoming one of the most economically powerful countries in the world and will more than likely surpass the United States as the world’s supreme economic power. China offers access to low cost raw materials and cheap labor, which is attractive to western manufacturing companies. China has evidenced thousands of years of history, culture and traditions. The way Chinese people behave today is the result of its historical transformations, which is very different from the transformations witnessed by western societies. Hence the modern day Chinese culture is very different from the cultures of the west. The cultural aspects of the Chinese are immensely reflected in the business world (Cervellon & Dube 2005).
In the last 30 years the population of China has experienced the most significant migration in human history as millions of Chinese have migrated to eastern capitals and major cities from rural west areas. The economic transformation of China since circa 1990 has led to a significant change in the structure of employment there. The number of people working in the primary sector (e.g. agriculture) has fallen by approximately 125 million in the last 25 years as the impact of rural migration to urban environments has taken effect.
The economic transformation of China has dragged hundreds of millions of Chinese out of extreme poverty. As substantial numbers of Chinese people have been taken out of poverty, their ability to demand goods and services beyond their basic needs has grown too! China is now the world’s largest producer and consumer of motor vehicles. The growth of mobile phone ownership and Internet connectivity is also a compelling example of the impact of economic growth on consumer activity in China.
Culture is basically referring to aesthetic, spiritual and intellectual growth of some society, group or an individual. The unique culture of China that is necessary to understand before working in Chinese markets is its traditional culture which could be taken into account.
Since ancient times China is amongst the countries with beliefs of more than one God, it’s a multi-religion country. A large percent of population i.e. around 186 million people believes in Buddhism. Around 35 million believes in Christianity and remaining around 15 million believes in other religions which are Islam, Confucianism and Taoism (Cervellon & Dube 2005).
Calligraphy, painting and poetry are three perfections of civilized scholar. Along with mimesis’s western notions, the poetic tradition of China adopts the presence of basic, commonly embroiling relationships between the patterns whose nature is intrinsic and human society.
Chinese poetics is divided into two traditions by this phenomenon. First, a tradition based on analysis of Confucianism where the poem reflects a set-up of pre-established uncompromising associations amid world and poet. The other one is non-sanctioned convention of Buddhism inspired and neo-Daoism poetics who spoke to a movement from the educational to the full of feeling force of common symbolism to make reference to the artist’s perspective.
Painting and Calligraphy were embraced by honourable scholars as ethic’s aesthetic observations of self-expression along with self-development for the advancement of societal trade.
Unlike ancient times the values and attitudes of Chinese society is now concerned and attentive towards money and future security and less concerned towards job security. They give careful considerations to searching for chances to build up their potential thus understand their actual worth. Individuals are turning out to be more mindful of threats and danger. The professional stability, which was given such a high need previously, is seeing a declining significance in present day society.
During past Chinese did not use to talk about money openly and it was considered shabby and use to indicate feebleness in character of the individual. But in present time of market economy, individuals are becoming more practical and talk about financial matters openly which clearly indicates a change in set of values and attitudes of society.
The manner of introducing yourself in China is quite different from other countries. It needs you to tell your complete name along with place you work at and your designation, especially when you are meeting for some professional cause. On informal occasions just your full name with simple greetings is sufficient.
Chinese are very particular about table manners and there are some considerable changes in table etiquettes from other countries like they prefer round dining table as people could conveniently seat facing each other. Except soup, every other dish needs to be eaten using chopstick. Host must take well care of guests while dining.
Hospitality is a primary concern for Chinese. They prefer to take an appointment before meeting and punctuality is what they love. Meeting empty handed is considered rude and one should carry a small gift for a meeting. Greeting every member of family you meet, no matter you know them or not. And so many other similar customs are part of Chinese culture.
Around 95 % of Chinese population speaks native language and rest 5% speaks other languages such as Lolo, Mongolian, Tai, Miao and Tibetan. The Mandarin language group forms the largest group spoken in China and consists of a wide range of dialects in the northern, central, and western regions (Armstrong & Kotler 2006).
One typical and ancient body language Chinese use to show respect, or represent congratulation (especially on a weeding day and major festivals) is called “zuo yi” (make a bow with hands folded in front ). Two index fingers coming nearer slowly in front of oneself means two people fall in love. While this body language is often mixed with a gesture representing shyness or nervousness.
Human capital flight, also known as brain drain, denotes to the displacement of exceptionally talented or knowledgeable people for better pay or conditions, bringing on their places of beginning to lose those aptitudes and mastery, i.e., the local “brains”.
China’s education system refers to social stratification and is essentially exclusive. The framework by which students are selected purportedly laid on educational excellences and subsequently victimized understudies of rustic foundation or of straightforward root. As indicated by Chinese cases, it is the kith and kin of the educated that have entry to education, while university recruitment enlistment tended to support the child of cadres and of previous individuals.
The larger part of China’s population live in the eastern portion of the nation, the conventional China Proper. Large percentages are peasants living, like their progenitors, in the sea-level slopes and focal fields that stretch from the plateaus eastbound and southbound to the ocean. Horticulture prevails in this incomprehensible zone, for the most part supported by a mild or subtropical atmosphere. The fastidiously worked fields are confirmation in part of the administration’s proceeding with worry over ranch yield and the sustenance supply.
Outstanding diverse sceneries propose the different atmosphere and wide reach of China, the third biggest nation on the planet as far as territory.
• Traditional Apparels and Dresses of China are quite unique and cannot be easily found in other western countries. These dressed are usually worn during celebrations, occasions or any other special event and almost every Chinese follows it (Glasse 2010).
• The family life of Chinese society is much different from western as western culture shows a weightage on nuclear families while in China most of the families are joined. The husband or father has the control over family, even in selecting partners for their children.
• There are numerous other social contrasts amongst China and the West. Obviously, contrasts may not be a huge when contrasting China with different nations in Asia. Not being a Christian nation, the Chinese don’t perceive the expression ” you” or “God Bless you” when you sniffle. In China, when somebody wheezes, you just disregard it. Say “Thank you” by tapping four fingers down on the table. Continuously refill others containers with tea or beverage without being inquired (Glasse 2010).
In China the extreme importance is given to ranking system during business with any company. Even this difference has to be in mind while there is any conversation going on with a representative. The Chinese see foreigners as agents and not as individuals of their company. There is no biasness on the basis of gender (Armstrong & Kotler 2006).
In Singapore more weightage is given to telephonic meetings and interviews to save time. Also video calling is very popular nowadays. But in China face-to-face meetings are given high preference. Unlike Singapore they do not discuss business while at social events or a dinner party. China has demarcation between social activities and business and one should not try to intertwine otherwise it could be a problem (Library of Congress 2009).
The business culture of Singapore is easy and is ranked number 1 in World Bank’s report 2011 while China stand for 79th place in the same. From a recent analysis it has been surveyed that China has come on number 1 in most efficient bureaucracy in Asia while Singapore achieved 7th spot in the same.
Chinese believes in maintain personal relations with the clients they deal with while Singaporeans are in opposition to this, according to them the value of business is foremost and rest later. As this tendency of Chinese to get to know the person before dealing business they usually arrange face to face meetings but this sometimes slows down the pace of work, also trust is the foremost requirement while working in Chinese culture. Foreign Investors should be surprised if someone inquires about personal matters. This in an indication of interest and not discourtesy (Laszlo, David, Griffith & Craig 2005).
The Agents in Singapore frequently conceit themselves for being dominant and tough, while in China business people are less aggressive and pleasant in conversations. The representative of Chinese business prefers to give sufficient amount of time to a contract, they tend to discuss its dangers and advantages and if they feel the need to cancel the contract they do instead following tough negotiations. The aggressive nature of representatives of Singaporeans is seen as highly unprofessional in China (Foreign Investment in China 2009).
As Chinese value relationships and careful contemplation over business, contracts are of less value for them while Singaporeans values contracts first and rest everything later. The representatives may not even sign contracts and deal gets confirmed on handshake base. And even there is a signed deal its successful completion depends on the maintenance of social relationships (Foreign Relations 2010).
Unlike China in Singapore an investor might take an important client out for dinner to talk about the deal, whereas in China to entertain is a goal unto itself. Efficacious representatives frequently entertain their partners but they do not discuss it during parties or dinner. Also, Chinese values gifts highly so even if to present small gifts to someone they consider it as a great respect and care and both these elements are of high importance for the business in China (Foreign Relations 2010).
Hofstede’s Five Dimensions of Culture of China
A study was conducted by Professor Geert Hofstede regarding how cultural factors affect business across countries. His recent publications consist of 94 countries and China is one of them. Hofstede emphasise five dimensions of culture that are:
Individualism vs. Collectivism
This dimension is related to the thinking of individuals that whether the person thinks with the mentality of ‘We’ or ‘I’. The culture of Singapore is highly focused on ‘I’, implying that they concentrate more on facilitating themselves and vocations versus encouraging there area of expertise or gathering. Then again China, it ranks 15 on IDV, which means Chinese are strongly collectivistic and ponder others over themselves. And it could be seen with great volume of out-groups and in-groups. Whereas Singapore ranks 91 which clearly show that the society highly reinforces individual achievement.
The exceptionally less IDV score has been obtained after surveying tightly closed and loyal member committees, whether they are sport teams, work or family. Being loyal is a profoundly respected quality in Chinese society, especially where connections and relations are strong and is, accordingly, of foremost significance to most Chinese individuals.
Power Distance is related to the distance or difference of power amongst various employees in a corporation and to which extent people with less power will acknowledge and anticipate power to be scattered in a different way. Being high on PDI scale is an indication of high inequalities of wealth and power is allowed and accepted inside society.
China is on a high position in PDI and ranks 80 which mean that a high power distance exists amongst superiors and subordinates, yet that it is acknowledged and ordinary. This environment is not forced on Chinese citizens rather acknowledged by the general public as the heritage of their country. High on PDI scale means that foreign invaders must be aware of this difference which exists both inside organization they are dealing with and inside society at large.
The UDI i.e. Uncertainty avoidance Index concentrates on the level of resilience for vulnerability and equivocalness inside a general public. A high UDI rank shows that the nation has a less resilience for instability and vagueness (individuals will have a tendency to be vigorously determined by laws and standards).
In this dimension Chinese and Singaporeans ranks equivalently. The rank of China is 41, which means they acknowledge circumstances what are ambiguous very efficiently and are not dissuaded. . It might appear like China has a ton of guidelines and controls set up to evade questionable or unverifiable circumstances; in any case they will twist and changes the principles as circumstances need it.
The dialects of China are additionally exceptionally uncertain; alphabets of Chinese language are difficult to understand in case this does not come under your native dialects (Laszlo, David, Griffith & Craig 2005).
According to the research done by Hofstede Chinese are very ambitious of success, achievements and competition. The country ranks 66 in this dimension. Time and again they will put work before family and leisure. The proof to the pervious statement is Chinese go outstations for concurrent 11 months for work by leaving their families behind (Barthelemy 2006).
This measurement demonstrates people’s point of view and a disposition of diligence, meaning people’s will to overcome complications in time (by strong will and strength).
As per Hofstede’s research and ranking Chinese ranks enormously high on this which is 118, that means workers of China is focused on perseverance and persistence. Also, Chinese will devote as much time needed to attain the goals. Building trust and healthy relationships is seen as a time consuming task here.
Conclusion
Every company has their own strategy to deal with different things. A company IKEA has achieved high positions in China and this has been possible because of customer centred and well-designed market strategy. With a whole heart respect for the Chinese culture and additionally keeping a harmony between its worldwide vital arrangement and nearby advertising exercises, IKEA Shanghai adjusts the 4Ps to speak to the neighborhood clients while keeping up a uniform corporate society. The instance of IKEA Shanghai passes on an imperative message to other multinational organizations that the way to effective global promoting is suitable social awareness in different markets.
The companies those are able to adapt changes grow and attain congruence; sometimes they even make cultural diversity a cause of benefit. This report has stressed on the differences in the culture of Singapore and China so that one could appreciate other in case the representatives of Singapore wants to join hands with the companies of China.
Society has certain impacts on showcasing choices yet it is without a doubt not a definitive component. Global organizations must complete careful statistical surveying, paying due consideration regarding each angle to get a complete photo of the business sector and clients.
References
Alvesson, M., & Sköldberg, K. (2009). Reflexive Methodology Interpretation and Research. London: Sage.
Alvesson, M., & Sköldberg, K. (2010). Reflexive Methodology: New vistas for qualitative research. London: Sage.
Armstrong, G. & Kotler, P. (2006). Marketing: an introduction, 8th ed. New Jersey: Pearson Education, Inc..
Barthelemy, J. (2006). The Experimental Roots of Evolutionary Vision, MIT Sloan Management Review, 48, 1: 81-84.
Business Strategy Review. (2004). IKEA’s investing 1.2 billion RMB on another logistics hub of the Asia-Pacific region in Feng Xian District, Shanghai, National Business Daily.
Cervellon, M.,C., & Dube, L. (2005). Cultural influences in the origins of food likings and dislikes, Food Quality and Preference, 16, 5: 455-460.
Foreign Investment in China. (2009). USCBC, from https://www.uschina.org/info/forecast/2007/foreign-investment.html
Foreign Relations. (2010). Relations with Neighboring Countries, from https://www.china.org.cn/english/en-shuzi2004/dwgx/dw-zb.htm
Glasse, J. (2010). Foreign Business in China Political Instability. Retrieved March 17, 2010, from https://www.faqs.org/abstracts/Business-international/
Library of Congress. (2009). Report on China, Retrieved February 17, 2009 from https://libraryofcongress.org
Laszlo, T., David, A., Griffith, F. & Craig, J. (2005). The Effect of Cultural Distance on Entry Mode Choice, International Diversification, and MNE Performance: A Meta-Analysis, Journal of International Business Studies, Volume 36, No. 3, pp. 270-283.
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