You are required to prepare a market cultural report on a country of yourchoosing. You are to provide insights on the culture of the host market, how it is different you're your home country, and highlight what cultural factors to take note of when doing business in that country.
Market cultural analysis plays an important role in determining the different aspects of the social and cultural life of a particular market. The analysis of the market culture makes it easier for the companies to understand the consumer behavior along with the practices and patterns adopted by them.
In this report, China has been selected as the host country. China is regarded as an emerging market having a remarkable GDP. It also has the availability of cheap raw materials and labor force which has enticed me to select it as the country of my choice. The focus of this report is on the preparation of a market cultural report on China. This report provides the rationale behind selecting China as the country of choice, cultural analysis of China, its business culture along with the Hofstede’s cultural dimensions. Moreover, the report will also highlight the differences between the business culture of Singapore and China.
China is selected as the country of choice as it appears to be beneficial for the business purpose. With the passage of time, China as emerged as an economic leader and has been able to radically change its economy from an agricultural one to a market oriented one having private sectors and dynamic banking. The population of China has now increased to 1.386 billion and the GDP has increased to US $ 12.238 trillion in the year 2017. The setup of a business in China can offer a number of benefits such as the large and cheap labor force of 786,738,207 workers (The World Bank, 2018). Such a large and cheap workforce provides an opportunity to the businesses to hire manpower at cheap rates. The trained labor available in China provides the advantage of low employment cost to the businesses with the help of which higher revenues can be generated and labor costs can be saved. The people of China have a high work ethic and they develop a wide array of professional skills for the purpose of achieving success. As a result, if business is established in China, the companies benefit from the competent and committed individuals who offer their devotion to the companies not only for their personal gain but also for achieving the aims and objectives of the companies (Zhang, 2017).
The cultural analysis of the host country i.e. China provides a number of cultural components which will have an impact on the establishment of business in China. There is a unique culture possessed by every society and such culture is reflected in the various ways and is incorporated into the several elements of the society. The term culture can be defined as the set of shared goals, values, attitudes and practices which characterizes an organization or institution. Following are the cultural components of China-
Communication- China is considered to be a non- verbal society. The knowledge is acquired by them in their upbringing which provides them an understanding regarding what to say and what to do. Moreover, there is a heavy reliance on the facial expressions along with the voice tone for the purpose of determining the feelings of other person. Furthermore, they do not maintain an eye contact while communicating with people. This is due to the fact that looking directly into someone’s eyes is regarded as a sign of disrespect in the Chinese culture. This should be taken into consideration while conducting business in China and at the time of meeting and deals with the Chinese people (O'Regan, Wilkinson & Robinson, 2015).
Cultural Analysis of China
Written and Spoken Language- the main dialects spoken by the Chinese people are Mandarin and Cantonese. The southern part of China mainly speaks the Cantonese dialect while the northern part speaks the Mandarin dialect. The term dialect can be defined as the pronunciation of words and not the way the words are written. This means that the people speaking different dialects can suffer from difficulties in establishing effective communication. Different tones change the meaning of carious words. This means that the same word said in the wrong tone can have an entirely different meaning.
Basic Etiquette- Formal greetings are regarded as the basic etiquette in the Chinese culture. Moreover, firstly the elders are addressed. Also, there is a practice of reversing the name of a person. For example, if a name of a person is “John Doe” then he would be referred to as “Mr. John rather than “Mr. Doe”. Chinese people keep their head down when they greet another person. Furthermore, a handshake is considered to be appropriate when they are introduced to a foreigner. The dining etiquettes of China provide that the host is the person who raises the toast and is also the one who first begin to eat (Zhu, 2015).
Religion- the Communist Party of China is considered to be atheists. The atheists are the people who believe that the God does not exist. However, the constitution of China highlights religious freedom to everyone still there are a number of people who are harassed and persecuted for religious practices. The dominant religion of China is Buddhism. Furthermore, Taoism and Confucianism are the main religious systems of Chinese people. Islam and Christianity are regarded as the smallest practiced religions in China.
Education- the basis of Chinese education system is Confucianism. Education is given a lot of importance in China. More opportunities are grabbed by the children belonging to upper class and wealthy families as compared to the children who do not come from such families.
Meetings-an appointment is required to be made in advance in the Chinese culture. Moreover, they give prime importance to punctuality and arriving late at a meeting is considered as an insult. Outside interference or talking is not allowed when someone is presenting the information at a meeting (Meyer & Peng, 2016).
Science and Technology- a large amount of money has been invested by China in scientific advancements and is capable of challenging United States in terms of scientific research. Teleportation, bullet trains are some of the recent development in China made in the year 2017.
The business culture of every country is different. Following is the business culture of the host country i.e. China. The same has been compared with business culture of Singapore for the purpose of figuring out the differences.
Business Mentality- the business mentality of the Chinese people always expects everyone to be prepared for the meeting. Also, at the beginning of the meetings, small talks are given prime importance. The establishment of strong relationship is also preferred before the closure of a deal. Therefore, several meetings might be required for the purpose of achieving the objectives and finalizing the deal. The business hours in China are from 8:00 am to 5 pm from Monday to Friday. There is a break of the workers between 12:00 and 2:00 pm.
Business Culture of China
A hierarchical order is followed by the people while entering the meeting room. Enough time is also taken in the process of decision making and for this purpose; the negotiations are often extended beyond the agreed deadline for gaining some advantage. Chinese people used to greet each other with the help of a handshake; however, one has to wait for their Chinese counterpart for the purpose of initiating the gesture (Feuerwerker, 2017).
On the other hand, the business hours of the offices in Singapore are usually from 8:30 to 17:30 pm from Monday to Friday. In Singapore, at the time of organizing business meetings, a formal request is considered appropriate to be made to the business partner. Furthermore, a list of all the team members who will be a part of the meeting is also prepared in advance along with the area of their expertise (Chan & Tong, 2014). Punctuality is a vital part of the Singaporean business culture as well. However, if someone gets expectantly late, they use to call others and inform them about the same. For greeting another person in Singapore, a handshake with a gentle squeeze of 10 to 12 seconds is regarded as ideal (Murray, 2014).
The Art of Conversation- it is appreciated by the Chinese when a person makes the use of a couple of words in Chinese language. However, the person should be aware regarding its meaning before using it. Chinese are also careful regarding the strong negative statements as they are regarded as impolite (Thomas, 2017).
In Singapore, casual conversations are also common at the beginning of the meeting which helps them in getting to know each other. At this time, they often ask about the background and personal details of each other.
Body Language- while doing business in China, one has to be careful regarding their movements and body language. Therefore, the body language of a person should be controlled, collected and calm. The body posture should be attentive and formal as it demonstrates respectfulness and self- control (Besley, 2015).
On the other hand, Singaporeans are of reserved nature. According to Singaporeans, their body language plays an important role in honoring a person. They try to be professional and polite and are also honest in their conversations (Cavusgil, Knight, Riesenberger, Rammal & Rose, 2014).
Business meetings and meals- For the purpose of business meetings in China, conservative suits are considered to be appropriate. On the other hand, bright colors of any kind are regarded as inadequate. Punctuality is vital in the Chinese business culture and being late is regarded as an offense (Mackie, 2018).
While in Singapore, lunch is regarded as the preferred meal for the purpose of business discussions. Also, the scheduling of the meetings are avoided in Singapore during the lunch time i.e. 12:00 to 2: 00 pm. Due to the hot and humid weather of Singapore, business shirts and pants or skirts are the dress code for business meetings without any blazers or jackets (Chan, Clegg & Warr, 2018).
The culture of China can be better understood with the help of Hofstede’s cultural dimensions as described below:
Figure 1 Hofstede's Cultural Dimensions of China
Power Distance- Power Distance can be defined as the extent to which the members of organizations who are less powerful expect and accept the unequal distribution of power. China has scored high (80) in terms of power distance. This means that China comprise of a society that believes that inequalities are acceptable among people. The organizations can easily conduct their businesses in China as the superior- subordinate relationship in China tends to be split and there is no defense against power abuse by the superiors (Brown, 2018). Furthermore, in order to operate effectively in China, the foreign companies need to influence the influence the individuals with the help of formal authorities and sanctions. The individuals and also be influenced through general optimism regarding people’s capacity for initiative and leadership (Deresky, 2017).
Individualism versus Collectivism- This dimension addresses the extent of interdependence maintained by the society among its members. The score of China under this dimension is 20 which makes it a highly collectivist culture where the interests of the group are given due consideration by the people. This will benefit the foreign companies who plan to establish their business in China as it will ensure the commitment of the employees towards the organization. However, the companies have to make sure that the personal relationships of the employees do not prevail over the task and the company.
Masculinity versus Femininity- this dimension addresses the issue that motivates people i.e. liking what is done (Feminine) or wanting to be the best (Masculine). China has scored 66 which make it a masculine society- success oriented and driven. This will assist in the business operations of foreign companies in China as the Chinese are ready to sacrifice their leisure and family priorities to work. In other words, they do not give much importance to their leisure time. This can be very beneficial for the businesses in China (Beugelsdijk, Maseland, Onrust, van Hoorn & Slangen, 2015).
Uncertainty Avoidance- this dimensions deal with the extent to which the threat of unknown and ambiguous situations is felt by the members of a culture and have created institutions and beliefs for the purpose of avoiding these. The score of China in this dimension is 30 which is very low. All the Chinese people are considered to be entrepreneurial and adaptable. This further implies that they are full of innovative ideas and passion. Such ideas can be used by the foreign companies which can simplify their business operations in China and can assist them in establishing their business. The flexibility is often granted while requiring the adherence to the laws and regulations in accordance with the situation (Cervantes, Lemus & Montalvo, 2017).
Long Term Orientation versus Short Term Orientation- the purpose of this dimension is to describe the way in which every society is required to maintain some connections with its past at the time of dealing with the challenges of the future as well as present. China scores 87 in this dimension which provides that its culture is pragmatic. It means that the employees in China believe that the dependence of the truth is mainly on time, context and situation (Williams, Mummalaneni & Erramilli, 2015). The foreign countries will benefit from this culture as the employees will show the ability to easily adapt themselves to the changes taking place in the conditions and situations and also portray determination in the achievement of the results and objectives which will be of great help for the foreign companies (Hur, Kang & Kim, 2015).
Indulgence versus Restraint- This dimension provides the degree to which the desires and impulses are controlled by the people on the basis of the way they are raised. China scores low (24) in this dimension and is therefore regarded as a restrained society. The foreign companies can easily make benefit from the tendency of the employees to pessimism and cynicism. The employees will give up their leisure time to work and have a control over their gratification of desires. The companies can utilize their time and obtain their efforts for the purpose of succeeding in the Chinese market (Paris, 2015).
Therefore, it can be concluded that China is an emerging market and has the availability of cheap raw materials and labor force and therefore it has been selected as the host country for the purpose of this report. This report highlighted the cultural components of China and also compared it with the business culture of Singapore. Also, it focused on the scores of China in the different dimensions of Hofstede’s cultural dimension model.
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