Cultural Values in China and it’s Implications in Business


Cultural Values in China and it’s Implications in Business

Author: Eric Castro

China business networks are sustained by cultural values and traditions from China. When these values disappear, the networks will collapse. Trust, reciprocity, face, time, harmony, hierarchy, power distance, long-term orientation has been identified as the key cultural values from China.
These cultural values from China are the main representations of the seven core rituals of Confucianism: Benevolence, Harmony, Midway, Forbearance, Filial Piety, Trust and Cautious Words.
In China, chronic suspicion prevails. China people ‘appear to be quite suspicious and cold towards strangers with whom relationships have not been established’. Nobody could be trusted except one’s kinfolk in the form of the extended family. As China people do not trust outsiders, a social network consisting of family members, relatives, friends, classmates, colleagues etc is the immediate sphere on which trust can be established, reciprocated and developed. Such an obsession with trust is caused by another, often neglected, phenomenon in China, dishonesty. In business transactions, a great deal of adulteration of goods is practiced, for example, weights and measures are juggled. To protect one’s interest and ensure that opportunistic behaviors such as cheating are kept to a minimum, trust must be established before any serious business relationship can be cemented. Trust-based ‘guanxiwang’ is the alternative to the market, which is often driven by opportunistic behaviors.
Not coincidentally; for both transaction cost theory and network theory, trust has been also regarded as a critical component of the network (Thorelli 1986; Jarillo 1988; Williamson 1988). Williamson advocates that exchange relationships based on personal trust will survive greater stress and display greater adaptability. Thorelli observes that trust in Oriental cultures may even take the place of contractual arrangements.
Face, Hierarchy and Power Distance
Face is a concept of central importance because of its pervasive influence in interpersonal relations among Chinese. Chinese face can be classified into two types, ‘lian’and ‘mian-zi’. ‘Lian’ represents the confidence of society in the integrity of ego’s moral character, loss of which makes it impossible for him to function properly within the community, while ‘mian-zi’ stands for the kind of prestige that is emphasized, a reputation achieved through getting on in life, through success and ostentation’. When ‘lian’ is lost, the person will feel that he/she can no longer live in the world.
Loss of ‘lian’ within a guanxiwang as a consequence of opportunistic behavior means that peers will no longer have confidence in the persons or firms concerned. As a result, their membership within a ‘guanxiwang’ and in society will be untenable. Therefore, face can be another hostage which minimizes the possibility of opportunistic behavior within a guanxiwang. This is another reason why ‘guanxiwang’ cannot merely survive but can also develop in mainland China and overseas Chinese communities.
‘Mian-zi’ can also be used to form new guanxiwang. One of Confucius’ virtues is to respect authority and the elderly. Someone with authority, often elderly and with a good reputation, can ask favours of others. The person may act as a common agent to start a new exchange relationship. Favours can also be asked between friends. It is an accepted norm that as ‘old friends’ one should give face to the other when favour is requested. Once again, it has been shown that the cultural values from China such as face, hierarchy and power distance are closely related to the creation and development of the business network.
This article was researched and produced by Posicionarte for China Trading Company , 2007
Author Bio:
Eric Castro Mattas, is chief editor of Posicionarte researching and producing articles for China Trading Company. If you need products from China please visit

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Italian Business Culture on Italy


If you are going to open a company abroad, you should be aware that learning culture, etiquette and protocol is a must for the success of your business.

If Italy is the country where you want to settle down, the best thing to do is to understand the Italian market, how it works, how to relate with customers and so on.

Italians generally prefer doing business with someone they know or have been introduced to. Italy is a law-trust society and Italians are suspicious of people we don’t know, especially in the business arena. Word of mouth and a friend’s recommendation are very important. You can use your existing contacts and networks as an introduction before attempting to set up a meeting.

Remember not to try to schedule meeting on August. This is a kind of sacred month for Italian people, since it is dedicated to holiday and relax and everything concerned to work has to be postponed to September.
Once you managed to schedule a business meeting remember that Italians so mind the image and the appearance. Trust widely depends on your image and attitude. So, dress to impress, choose tasteful and stylish clothing. For example Italian men use to wear dark suit, sophisticate ties and expensive watches. Italian women chose elegant outfits and sober accessorizes.

Keep in mind that the right image and formality are key elements in the Italian business culture.
In Italian business culture, relationships matters. You will get use on shaking hands upon arriving and departing. On the other hand you should avoid moving away or keeping your distance because it can be perceived as unfriendly. Since Italians are often guided by their emotions, establishing a business relationship based on trust is essential for the success of your Italian business.

Another aspect you should consider if you are going to set up a business in Italy is the time keeping. Italians are lively and sociable people and we think that finishing a conversation with a colleague is much more important than breaking it off to be punctual for a business meeting. But if for Italians to be late it’s the normality, they expect foreign business people to be on time. By arriving promptly you show your consideration and courtesy, that we have seen is very important for Italian people.

Before opening a company in Italy is therefore important to understand the cultural differences and the customs of this country in addition to its law and the legal requirements necessary to set up a business in Italy. You can fine lots of useful information a tips on Italy Law Blog, an independent blog run by a pro bono association called T & Partners, which goal is to provide free information about Italy regarding economical, strategical and legal topics.

Find all the information you need about Italian business culture at

Article Author: Daniela F.

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The Effective Communication Principle


By: Jonathon Hardcastle

According to Peter Drucker in his article “The Transnational Economy” written back in 1987, “To maintain a leadership position in any one developed country, a business-whether large or small-increasingly has to attain and hold leadership positions in all developed markets worldwide. It has to be able to do research, to design, to develop, to engineer and to manufacture in any part of the developed world, and to export from any developed country to any other. It has to go transnational.” But is going international as simple as it sounds in this passage, or business leaders and executives need to consider another usually unforeseen barrier commonly referred to as “the effective communication principle?”

Companies in developed countries such as the United States must engage in international business transactions or lose an important competitive advantage. Such firms have not only found tremendous commercial opportunities a thousand or ten thousand miles from their plants, but they have also found cooperative partnerships because of a community of interest. Community of interest is in fact the common ground upon which a business relationship can be based and later flourish. If a firm in Japan, for example, finds an American company with expertise in marketing and handling its products in foreign markets, then a community of interest has been found and remains to be exploited to the advantage of both. But how is that possible and on which factors does it depend upon?

Although the answer is rather complex, undoubtedly one factor is that the worldwide level of technology has greatly advanced easing the process of communicating among people located in different countries. Their ability to share information almost instantly has turned the globe to resemble a village, and as a village its citizens can communicate with one another quickly and easily with the use of various technology-based methods. But then again how come and the message is not received in the manner intended when sent by the messenger? The answer is simple: worldwide we share the much of the same information and technology, but no the same culture. Our family, recreational, financial and other values are different, as these values spring from diverse experiences, expectations and habits. Even if the language used to communicate is the same, the cultural differences between states are evident and a message can be distorted or at least not understood as one intended.

Technological advances in the last 100 to 200 years have spread and been adopted and refined worldwide. But cultures based on thousands of years of development are slow to change. For many, they should not change, as these cultural differences among societies and nations give individual identity to each group. In fact, this persistence diversity in the thinking of human beings has made this world an exciting place to be in. But at the same time it has also created barriers that constitute a major challenge for communicators. Even with the advancement in the transition of information, when words and actions are not understood in the same way because of differences, communication can suffer. This is a key factor for people to remember when dealing with different cultures or employed in different countries from that of their origin. Verbal or nonverbal communication can have different meanings to different people and thus careful consideration and examination of the others’ environment can ensure a better delivery of a message and overall a much more successful communication process.

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 Jonathon Hardcastle writes articles on many topics including Employment, Consumer Information, and Employment

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