Top 10 ways to avoid trouble in China
By Ted Revis

GLOBAL LEADERSHIP Top 10 ways to avoid trouble in China On 'being yourself — not! — and other ways Westerners are advised to tread with care. BY TED REViS C HINA BOASTS the world s fast- est-growing economy, offer- ing a wealth of opportunities for investors who are prepared to participate in markets that are a world away from American culture. Here arc the most common mistakes that Westerners make in nav- igating the Chinese business and cultural scenes. 1. Don't Just 'Be Yourself — In nearly every component of business etiquette, the Chi- nese culture dictates almost the exact opposite of West- erner practice. Proper pre- sentation of business cards, attire that constitutes mod- erate or conservative dress, and engaging in appropriate business communications are just a few ofthe issues in great contrast to Western customs. Following your instincts with regards to directness, compe- tition, planning, and relationships will likely lead to embarrassing moments and missed opportunities. 2. Underestimating the Value of Es- tablishing a Solid Personal Relationship — Business transactions and negotia- tions in China can proceed only after a substantial personal relationship has been developed in good faith that the relationship is built for the long term. Business people who try to rush the deal ahead ofthe relationship are doomed to failure in China. 3. Ignorance ofthe Habits and Intri- cacies of Chinese Culture — Westerners Ted RevJs is a founder and president of The IMorelli Group and a longtime veteran of facilitating trade with China (www.norelli- group.com). should seek out cultural training to align their thinking and practices with Eastern traditions. Attempting to force Western business principals on a business en- deavor in the East will yield few results other than a large number of frequent flyer miles and authentic lo mein. Taking time to learn the ways and means of this culture is not just polite but also good business sense. 4. Lack of Patience in Nego- tiations— While most West- ern businesses address imme- diate or short-term goals, the Chinese typically plan for the long term. Chinese corporate executives relish vague state- ments that can be negotiated as you progress through the cumbersome bureaucracy that is one of the world's oldest and most-entrenched. This process can often take years, so patience is essential to your sanity and ultimate success. 5. Not Appreciating the Indirect and Ambiguous— Because the Chinese em- phasize honor and abhor losing face, they will neglect to say they do not under- stand something. Negative answers are often avoided because they are believed to cause disharmony and are considered rude. They also dislike confronting prob- lems and prefer to maneuver around an issue so that it can be addressed in com- mittee at a later time. This approach is in sharp contrast to the ways of Western business people who prefer to say what they mean and move to correct a prob- lem with swift action. 6. Missing the Long-Term View vs. the Short-Term — The Chinese emphasize slow, methodical, and well-thought- out actions. This characteristic requires Westerners to move from their custom- ary fast-paced, methodical, and sequen- tial business practices to a slower process that can move forward only after both parties have taken time to get to know each other well. Favors and obligations are weighed heavily, and for this reason it is a good idea to perform small favors for the Chinese, placing them in your debt. 7. Disrespecting Eastern Business Tra- ditions and Intricacies — Simple hand motions, poor posture, touching, and direct eye contact are just a few of the mannerisms that can put a Westerner in poor standing with a Chinese counter- part. Westerners are well advised to em- phasize the group's greater good and the human elements of business, which are essential to China's highly disciplined business culture. 8. Inadequate Investment in On-The- Cround Oversight — Managing out- sourcing in China is a never-ending priority if you are to assure consistent quality, logistic, and operational effi- ciency, while remaining in good stand- ing from a legal and diplomatic point of view. But don't necessarily rush into establishing and positioning your own full-time personnel in China. This can be a costly venture that should be weighed against the option of retaining professional outsourcing groups already established in China. 9. The Joint Venture Trap— Investing in Chinese companies and following tra- ditional investment approaches through the formation of IVs are loaded with danger. Chinese laws mandating JVs have been greatly relaxed in the last 10 years, except in select areas (e.g., national secu- rity, communications, aviation and en- ergy) which still require joint ventures. 10. Irreverence Towards Authority and Order— Understanding the Chinese and the way they conduct business goes 26 DIRECTORS a BOARDS back to the profound impact Confucius had on their culture and the emphasis placed on obedience and order. Chinese businessmen enter a room in the order of their rank and they expect coun- terparts to do the same, allowing both groups to immediately understand each other's hierarchy. Only a leader speaks during meetings, and the Chinese ex- pect that the opposing delegation also will have only one speaker — a condi- tion that most individualistic Westerners find difficult to follow. • The author can be contacted attrevis@norel- ligroup.com. QUIDDITIES Alignment strikes out Continued from page 8 was due not to Casey's managerial skills but to the Forbes Field groundskeepers. (Absent the pebble, the Yankees would surely have won, despite Casey's wrong- headed pitching rotation.) Joe Torre should be admired for refus- ing to participate in a misguided exercise in "alignment." It is past time for Cor- porate America to stop swinging at this same screwball. • The author can be contacted at hkaback® directorsandboards.com. BOARD LEVERAGE Big fish, little pond Continued from page 24 board that will eventually wither away and become disengaged. Allow total access to information, fi- nanciai statements, compensation, strat- egy, and personnel. This openness will produce a vibrant board whose members will feel that their efforts are for a good purpose — thus, keeping them engaged, helping your company mature, and pro- fessionalizing the organization. • The author can be contacted at DJM@Wests- horeCapitalPartners.com. rmTrcial disclosure: This program could ^ protect your compari and your reputation.* CORPORATE DIRECTORS' RESPONSIBILITY: ENHANCING THE INTEGRITY OF FINANCIAL DISCLOSURE MARCH 10-12 OR SEPTEMBER 8-10, 2008. As a corporate director your responsibility has never been greater. This unique 3-day program, accredited by Institutional Shareholder Services and supported by the New York Stock Exchange Foundation, Inc., will focus directly and comprehensively on the critical issues of financial disclosure. The expertise, analytical skills, and confidence you will gain will contribute to protect your company's future, and your own. To learn more, go to WWW.GSB.COLUMBIA.EDU/EXECED or call us at 212.854.3395. Columbia Business School EXECUTIVE EDUCATION FIRST QUARTER 2008 27
 


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