China’s ways of doing business are becoming more Westernized. But non-Chinese executives still must work hard at building trust in relationships with their Chinese business partners.
As China’s growth and integration into the world economy continue, many companies are looking for ways to build effective business relationships with Chinese companies. China’s ways of doing business are becoming more Westernized, but non-Chinese executives must still work hard to build trust in relationships with their Chinese business partners.
Many Western companies are familiar with the idea of guanxi, or the importance of relationships in doing business. But developing trust between Chinese and Western executives takes time. The author and his colleagues identified two foundational types of trust. The first they term “trust from the head” or cognitive trust. That emanates from the confidence one has in another’s accomplishments, skills and reliability. The second type is trust from the heart (affective trust), which arises from feelings of emotional closeness, empathy and rapport and is more complex to develop.
Western executives who have mastered the art of building affective trust do so by developing a deep cultural knowledge, one that goes beyond the mastery of social customs and etiquette. This deep knowledge can help bridge the trust deficit by approximating the basis of common ties and values that individuals from the same culture enjoy.
The author’s research into building affective trust found that the habit of constantly testing cultural assumptions in the context of actual experiences helps build rapport by making people feel understood rather than stereotyped. Executive who have mastered this cultural “metacognition” do four things consistently. First, they remain aware of their own cultural assumptions. Second, they test these assumptions against reality — that is, do the assumptions help them understand motivations and predict behaviors? Third, they revise the assumptions if they see that they don’t apply. And finally, they plan how to integrate this knowledge into upcoming interactions.
6 Comments On: Building Effective Business Relationships in China
Great article! The value of intercultural competence cannot be undermined in the current business world. I think intercultural competence development is critical not only when doing business abroad but also for effective management at home. Today many large organisations have employees from diverse cultural backgrounds and in order to be an effective global leader one has to have intercultural competency. I would recommend another post on the topic which goes into more detail on the topic of understanding different cultural orientations for those who are interested in learning more about the topic: http://www.opportunityindiversity.com/blog
A very well-written and insightful article about a very useful topic. It is clear from this article that cultural understanding in the business world does not mean copycatting what one presumes to be a nation’s business culture. It means truly learning the nation’s business culture from those who are steeped in that culture and adapting to it.
Yes. Chinese business strategy has changed a lot. They adopt western practices. I was in China recently and could see the tremendous difference in business approach now compared to the past.
Dr.A.Jagadeesh Nellore(AP),India
E-mail: anumakonda.jagadeesh@gmail.com
A very interesting and very useful article.
Our organization is involved in cross-cultural entrepreneurship activities and we observe how this topic is crucial for successful business relationships and internationalization.
In fact, cultural misunderstandings and stereotypes are one of the main cause of business failures.
Thank you for bringing some light to the east-west bridge. While the west is about a subtle as a hemorrhoid, the east has a very long culture that excels at the unspoken… consider classic Chinese art, for example. While the west is in a hurry and usually does not look past the profits in the current quarter, China takes steps that build the future brick by brick, and the west cannot always see the vision behind the bricks. This philosophical difference appears in many things in our two countries, from healthcare to business. If a company would prefer all of your ideas first, they are thinking very far into the future, further than you may be around, for example. Its not personal, just a long term strategy. The West should be strengthening its own internal self.
These business strategies are useful not only for China but for each and every part of the business world. I am a business owner and I had bought an existing business about 3 years ago. Its been three years since I am running this business but still I struggle to get clients and maintain them. The only principal I believe is that you can manage a good relationship with your customers by providing them your best service.