Essay Sample on Doing business in China – the art of war?

In an era where consumers are more demanding, critical and possess higher purchasing power, organizations increasingly discover that where service was previously a mere factor employed in support of the main organizational functions, the quality of, and efficiency in delivering, service, have now joined the fundamental business pillars of technological advancement and product novelty as principal determinants of success.

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Nowadays, many organizations in service-oriented industries, including multinational hotel chains, rely on corporate culture as a distinctive “cutting edge” in gaining and maintaining business. Hampden-Turner, (1990) suggests that corporate culture is fast becoming a vital management tool in the encouragement of high performance in international business. His definition of corporate culture indicates appropriate organizational behaviour which bonds and motivates individuals and asserts common solutions where ambiguity exists.

However corporate cultures often display themes and patterns established from the national culture indigenous to an organization’s own geographical origin. Where multinational organizations attempt to replicate these values in another national setting, problems may arise. Mead (1994) suggests that such organizations may have to modify these home country systems, structures and values to comply with local norms.

Theorists have advocated opposing arguments on the transferability of corporate culture to locations with different national cultures. Burack (1991), for example believes that values in a corporate culture are deeply ingrained, producing patterns of uniformity in behaviour and underlying values among organizational units, regardless of geographic, functional or business boundaries. Conversely, Laurent (1986) argues that organizational culture is unlikely to modify national cultural values and when national and organizational cultures come into conflict, the first is likely to override values in the second.

This paper addresses the issue of the transferability of international corporate cultures into the Chinese working society, based on established theories and observed findings gathered during a 12-month study in one of Beijing’s leading hotels. It presents the hypothesis that corporate cultures can be transferred into and accepted by Chinese society, but the process and fruition of this transference may take an entire generation to realize.

Methodology

The paper is based on literature review in the areas of the evolution of the Chinese culture and the concept of corporate culture, and observations on Chinese attitudes towards the introduction and implementation of corporate culture in the work environment. These observations include opinions and suggestions from a broad spectrum of individuals, from top managerial to operational rank-and-file staff within the organization under study. Participants were differentiated along the dimensions of age, gender, social background, formal (management) training, expatriate/indigenous managerial experience, hierarchical position and length of experience within the hospitality industry.

Participant observation was employed, which, according to Lacey (1976), is “the transfer of the whole person into an imaginative and emotional experience in which the fieldworker learned to live in and understand the new world”. A research technique often used in critical social research, it is described by McCall and Simmons (1969), as a set of methods directed towards an unbiased and accurate analytical description of a complex social organization.

Bell (1993) advocates this as a tool that can reveal characteristics of groups or individuals which would have been impossible to discover by other means and suggests that direct observation may be particularly useful to discover whether people do what they say they will do, or behave in the way they claim to behave. In support of this, Nisbet and Watt (1980) assert that interviews reveal only how people perceive what happens, not what actually happens.

Several theorists (Jones, 1996; Kirk and Miller, 1986; Lofland and Lofland, 1984; McNeill, 1990) confirm that participant observation offers long-term personal interaction providing an understanding of a setting that cannot be attained with any other research method, and helps develop an understanding of the participants’ views of reality, and the meanings underlying their own and others’ actions. The observations can then be used to arrive at hypotheses about the social and behavioural processes operating in the setting observed. To conduct an objective and unrestricted observation on the prescribed environment, the observer in this case was an overseas Chinese person with an understanding of the Chinese culture, and an appropriate background knowledge and understanding of the social rules within the Chinese working environment, i.e. a knowledge of whom to talk to, what to do, where to go and when.

Gold (1958) suggests that there are three types of researchers: the complete participant, the participant-as-observer and the observer-as-participant. In this case the observer predominantly adopted Gold’s “observer-as-participant” or what Gans (1962) classified as a “researcher who participates”. However, during the course of the project, the observer’s role changed according to the social situations being studied. Additionally, one-to-one informal conversations and single topic group sessions were conducted.

Literature review The Chinese – who are they?

As China slowly opens its economy to what the Chinese collectively perceive as the “outside world”, it finds itself vulnerable to the unavoidable influences and changes that arrive with anything foreign and different. The more significant areas subjected to these external influences are those of China’s social ideology, political stance, business ethics and management style. It is the last area – management style – that this paper will address, with a focus on corporate culture.

With one fifth of the world’s population and abundant untapped resources, the People’s Republic of China (PRC), presented a large potential market for foreign investors when it introduced the Open-Door Policy in 1978. Since then China’s economy has grown at an average rate of approximately 13 per cent per annum, and in some coastal cities, growth has been as high as 35 per cent (Tseng et al., 1995). It has been suggested (The Economist, 1992) that within a further two decades, China might overtake the USA to become the world’s largest economy.

Following the death of Premier Deng Xiao ping in February 1997, there is concern that potential political instability may yet again plunge China into a further era of change. Despite little evidence to support this speculation, there is reason behind such concern. As Pringle (1997) highlights, transition in China is always fraught with potential danger and the shadow of the 1989 Tiananmen Square incident still hangs over Beijing, China’s capital and political centre. If China’s long history demonstrates anything, it is that China is unpredictable. In business “predictability”, commercially termed as strategic planning or speculation, is considered necessary to plan ahead. However, in China’s case, businessmen can often rely only on guesswork, and to support such conjecture, a study of the past is crucial.