Culture Clash

We’ve had a couple of clients come to us with some serious production difficulties in the last few months. As I listen to their dilemmas and try to figure out how they got where they are and what we can do to help them, I keep coming back to a couple of general themes.Westerners do business, and indeed live their lives, with a couple of unconscious cultural assumptions influencing their expectations, business decisions and the way they then interact with their Chinese counterparts. While everyone obviously carries their own unconscious baggage, Western assumptions are often inaccurate or even completely wrong in a Chinese environment.These 4 assumptions are by no means exhaustive and are not meant as a critique of either Western or Chinese culture. But these assumptions do represent personally observed and reoccurring themes in Western/Chinese interactions.First, Westerners assume that all people are innocent and honest until proven otherwise. The Chinese, on the other hand, believe that anyone outside of immediate family is probably dishonest and will treat them as such until proven otherwise. I am not saying that Chinese are dishonest. I am saying that generally Chinese believe that all other people are not honest and are not to be trusted until a serious and confirmable connection/relationship has been established—in other words, there is guanxi.The innocent/honesty mentality fundamentally changes the way that Chinese and Westerners view the world and interact with people. For example Westerns assume (and expect) that employees are basically honest, government officials will do their jobs and that services will be meted out more or less evenly. Chinese assume that employees are dishonest, government officials will not do their jobs unless paid off and services are given only to those with special connections. The consequence is that Westerns will hire the best qualified applicant while the Chinese will often hire an adequately qualified family member or friend (this is a generalization, of course). Westerners are frustrated that official stamps, registrations and procedures are constantly changing, never clearly defined and seem to depend more on who is in the office than the specifics of the case. Chinese assume inequality and corruption are standard and find a connection to overcome the differences. James McGregor in “One Billion Customers” states that foreigners “often come to China with too much trust” to work effectively.The second assumption afflicting foreigners in China is the assumption of equality: “All men are created equal.” I personally believe the truth of this statement, but foreigners must know that Chinese society does NOT support this belief. Chinese society is not horizontal (non-hierarchical) as much of the West is. China is very vertical—everyone has a place and a role. The Chinese language is marked for social hierarchy (English has one word for cousin while Chinese has eight terms reflecting maternal/paternal and older/younger of each individual). Titles and specific names are much more important to Chinese than they are to Western companies where everyone is a “manager” of something.This is not just anthropological mumbo jumbo. The Chinese government, that vanguard of the proletariat, has codified at least two different levels of citizens in the hukou system (house registration)—urban and rural—with the rural at a significant disadvantage socially, economically, politically and in every other way. This inequality is not just a product of the recent socialist system either. Historically relationships in China (most of East Asia, for that matter) are vertical and clearly defined. And just because this is the 21st century does not mean that things have changed socially. Modern relationships between boss-employee, rich-poor, white collar-blue collar, junior staff-senior staff are noticeably unequal. Specifics of gender inequalities are different than in the West but are also disproportionately favor males over females.The abundance mentality is the third mindset that Westerners bring with them to China. Most Western managers are from the middle to upper-middle class of the richest countries in the history of the world. Having lived their entire lives in the most prosperous 50 years in history they come to China—a now huge booming economy—with an engrained abundance mentality that is wholly foreign to most Chinese and all of Chinese history.In direct opposition to the wealth of the West, the last 50 years, indeed the last few hundred years of Chinese history are marked by extreme poverty, war and politically induced starvation and failure. Chinese mentality is scarcity, not abundance—there is a limited supply of money/resources and you better get yours while the getting is good. Chinese have been (wisely) taught to get as much as they can for themselves and their families whenever the opportunity arises. I am not saying that Chinese are greedy. I am saying that they are opportunist and certainly fatalistic in their understanding of opportunity and resources. China may have a long memory and even longer history but business relationships are notoriously sacrificed for personal profits on a one time deal over long term consistent buying.What this means for business is that time is not money in China. There is always enough time and usually enough people to do whatever it takes. Money and other resources are seen as being in limited supply. Solutions to problems in China are often solved with people/labor rather than technology or money. Some individuals in China see the opportunities to pad expense accounts as an extension of the opportunistic strategy—I’ve been told more than once that not padding your expense account is just “stupid.” The sale of counterfeit “fapiao,” official receipts that can be used for business reimbursements is rampant in every city in China.The fourth piece of baggage that foreigners bring to China is a set of absolute ethical standards. The Chinese, due to historical opportunism, political turmoil and corruption (among other things), are much more situational in their view and application of moral standards and ethics. Since China is not governed by the rule of law, but still a rule by law (i.e. powerful men) where you stand depends on where you sit. For most Chinese, offending officials is still dangerous, even deadly.In business this means that Chinese typically don’t feel guilty about lying or charging different people different prices. This is how negotiations are conducted. Instead of guilt, Chinese feel shame if they are caught in a lie—a loss of public face is more important than any eternal standard that would guilt them into compliance with universal standards.