CULTURAL SENSITIVITY AND GLOBAL BUSINESS 6
CulturalSensitivity and Global Business
CulturalSensitivity and Global Business
Major cross-cultural differences between U.S and China
Culturehas been found to have considerable influence in the manner in whichbusiness is done in particular regions and countries. It determinesthe values that individuals hold, which consequently determine theorganizational or business cultures. Needless to say, businessentities are more comfortable doing business with other entities thatshare their values. This underlines the importance of ensuring thatthe business managers are conversant with the cultures and values oftheir counterparts in other countries for the furtherance ofbusiness. Needless to say, there are cross-cultural variations in themanner of business in China and the United States.
First,business in China is based on relationships, unlike the United Statesmarket which is transaction-based. Research has shown thatrelationships often come before economics as far as making businessin China is concerned. This is unlike the case of United States whereeconomy usually takes a front row seat compared to personalrelationships. Scholars have noted that the Chinese conduct businesswith individuals that they have some knowledge about and whom theycan trust (Mooij,2010).In essence, instead of going to business discussions immediately uponmeeting, it would be imperative that one takes time to know thepotential partners in the country. Upon building some trust, theChinese share their thoughts and give honest feedback. In essence,enhancing trust by hanging out with them in off-office hours would becrucial.
Inaddition, the kinds of interactions needed for doing business aredifferent in the two countries. Chinese business deals and activitiesare carried out via face-to-face interactions unlike the case of theUnited States business deals that can be made without even meetingthe other individual in person (Usunier&Lee,2009).This is in line with the need to enhance relationships and trust withthe Chinese partners, which can be attained via regular face-to-faceinteractions.
Inaddition, there are variations pertaining to the manner in whichdeals are deemed closed. In the United State sit is commonly assumedthat an individual can start doing business immediately after acontract has been signed (Mooij,2010).However, the same cannot be said of China. Once a contract has beensigned, it is imperative that that simply means the start of anarrangement, in which case it would be imperative that one follows upwith the new partner and goes ahead to look for possible actions orindicated commitments.
4PMarketing Mix Application in China Market
The4Ps or marketing mix model is a tool used by marketers in theimplementation of the marketing strategies. The marketing managersuse the tool in an effort to create an optimal response from thetarget market through combining four variables optimally (Usunier&Lee,2009).Marketing mix may be adjusted regularly so as to meet the varyingneeds and the dynamics of the marketing environment. However, themanner in which the four are combined in Chinese and American marketsis different.
InChina, the abundance of cheap labor means and intense competitionmakes it possible to manufacture highly customized products atextremely low prices. Indeed, it is common for a wide array ofproducts to be produced with specific variations for the same targetmarket. In the United States, products may be customized but fordifferent markets. Indeed, the customized ones will more often thannot have higher prices and usually marketed in high-rise places forspecific markets or consumers (Mooij,2010).
Scholarshave acknowledged that the perceived value of a commodity will haveto be higher than the price at which it is being offered if it is tobe adopted in any market. In China, researchers have recommended thatmid-range pricing is applied to products in line with the minimaxstrategy. This means that anything whose price is lower than theminimum price would be seen as of poor quality, while those above themaximum price would be rejected as being beyond the customers’reach (Mooij&Mooij, 2011).While considerations must be made regarding the market prices, it iscommon for United States’ marketers to craft their prices dependingon the target markets. Indeed, some products sell out when they arepriced highly in particular markets as they are deemed to be of highquality (Usunier&Lee,2009).
Theplacement of products in China is also quite different from theAmerican market. Companies that aim at successfully penetratingmarkets have to craft long-term projection as a result of theslow-paced nature of deals with the varied players. Further, it isoften recommended that companies get in by selecting a city or two(Mooij&Mooij, 2011).In the United States, products are placed in multiple markets alreadyidentified as having high potential. It is common for businesses toalign themselves with established companies to ensure that theproducts reach the intended consumers.
Perhapsthe area where Chinese and American markets converge would be inadvertising. For the two countries, the use of e-commerce as a newsales channel is common in the two considering that the two have ahigh number of internet users (300m and 240m for China and UnitedStates respectively).
Nevertheless,it is also acknowledged that Americans still widely use conventionalmethods of advertising including the use of newspaper ads andtelevision ads. The Chinese, on the other hand, are known to widelyuse word of mouth and posters. The posters, however, are required toincorporate messages depicting patriotism (Mooij&Mooij, 2011).
DistinctEthical Issues in China
Oneof the most distinctive ethical issues revolves around speaking up.The Chinese business operates under Confucian values pertaining torespect for superiors in the hierarchy, loyalty to the team, avertingthe loss of face, as well as the willingness of an individual tospeak up in instances where a fellow Chinese is engaged in unethicalbehavior (Mooij,2010).In this regard, it is deemed more important to save face and protectthe dignity of fellow worker than speak up even in cases where he orshe is unethical.
Inaddition, loyalty to the company is regarded as fundamental inbusiness. It is noteworthy that the interests of the companysupersede those of an employee. By virtue of being employed by thecompany, an individual is ethically obligated to seek the interestsof the company before his or her own interests. Similarly, companiesthat have entered a pact with a Chinese company would have to beloyal. For instance, entering a pact with a company and then goingahead to collaborate with its rivals would be seen as corruption.
Mooij,M. K. (2010). Globalmarketing and advertising: Understanding cultural paradoxes.Los Angeles: SAGE.
Mooij,M. K., & Mooij, M. K. (2011). Consumerbehavior and culture: Consequences for global marketing andadvertising.Thousand Oaks: SAGE Publications.
Usunier,J. C., & Lee, J. A. (2009). Marketingacross cultures.Milano: Pearson.