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Cultural Differences: China
Working with international partners requires an in-depth understanding of fundamental rules of business etiquette varying on a country-by-country basis. For instance, the business environment of China is in the state of transition because of significant changes in political regimes and leaders. Still, the modern business system operates under the postulates of Confucian philosophy and traditional cultural determinants.
Linking to a group, dan wei, and personal connection, guanxi, are two concepts shaping the foundation of the system. For this reason, setting up operations in China will not be opposed if organized as a joint venture. By choosing this form of business cooperation, one should ensure that relations are developed without ignoring hierarchy and violating the rules of subordination, and local partners are involved because it represents two principles mentioned above (“Chinese Business Structures” par. 3).
Also, the management style is often directive because it is hierarchical. Senior managers are seen as fathers, who have enough knowledge and authority to give instructions to other team members (“Chinese Management Style” par. 3-4). When it comes to teamwork, the stress is laid on group orientation putting the needs of the group higher than the needs of an individual. Moreover, it is imperative to remember that communication is a challenge in China due to poor knowledge of the English language.
That is why it is recommended to turn to interpreters for aid and cover one issue several times to be understood and arrive at a consensus. Finally, it is paramount to keep in mind that although gender equality is officially promoted by the ruling party, in practice, men are seen as decision-makers because of the Confucian background of the Chinese business system (“Women in Business in China” par. 2).
Countries and Industries Susceptible to Bribery
The 2011 Bribe Payers Index, calculated by Transparency International, ranks 28 largest economies. According to the results, companies originating from Russia (6.1), China (6.5), Mexico (7.0), Indonesia (7.1), United Arab Emirates (7.3), Argentina (7.3), Saudi Arabia (7.4), Turkey (7.5), Taiwan (7.5), and India (7.5) are most likely to become involved in bribery activities.
The score of these countries does not exceed 7.5 out of 10 meaning that they are viewed as those bribing abroad. As for the industry division, public works contracts and construction (5.3), utilities (6.1), real estate, property, legal and business services (6.1), oil and gas (6.2), and mining (6.3) are believed to be the most susceptible to bribery with the scores not exceeding 6.3 out of 10 (Transparency International 6, 16).
Foreign Corrupt Practices
The Foreign Corrupt Practices Act of 1977 (FCPA) is popular for anti-bribery provisions making it unlawful to pay to foreign officials for their assistance in obtaining or retaining business. These regulations entail responsibility for using mail or other interstate commerce instruments to make illegal payments. Also, FCPA requires transparency, demanding corporations to keep clear records of their transactions and design adequate and transparent systems of internal control (“Foreign Corrupt Practices Act” par. 1,3).
Two companies explicitly referencing FCPA in their codes of conduct are Zeiss and McDonald’s. According to the regulations of the first company, all employees, directors, agents, representatives, and partners are prohibited to violate the Act regardless of the country of origin (Zeiss 4). As for McDonald’s, the provisions are included in the Supplier Code of Conduct stressing that suppliers should not take actions violating or forcing the company to violate FCPA (“McDonald’s Supplier Code of Conduct” 6).
Chinese Business Structures. n.d.
Chinese Management Style. n.d.
Transparency International. Bribe Payers Index Report 2011. 2011.
Women in Business in China. n.d.
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