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AVDS -1-. YOU ARE WELL ADJUSTED IN CHINA(1). INSTEAD OF ASKING SOMEONE’S AGE YOU ASK WHAT ANIMAL THEY ARE YOU PREFER TO EAT SPAGHETTI WITH CHOPSTICKS YOU CALL OTHER FOREIGNERS “LAO WAI” YOU THINK KARAOKE ON A SATURDAY NIGHT IS FUN OTHER FOREIGNERS SEEM STRANGE TO YOU. AVDS -2-.

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YOU ARE WELL ADJUSTED IN CHINA(1)

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You are well adjusted in china 1

AVDS -1-

YOU ARE WELL ADJUSTED IN CHINA(1)

  • INSTEAD OF ASKING SOMEONE’S AGE YOU ASK WHAT ANIMAL THEY ARE

  • YOU PREFER TO EAT SPAGHETTI WITH CHOPSTICKS

  • YOU CALL OTHER FOREIGNERS “LAO WAI”

  • YOU THINK KARAOKE ON A SATURDAY NIGHT IS FUN

  • OTHER FOREIGNERS SEEM STRANGE TO YOU


You are well adjusted in china 2

AVDS -2-

YOU ARE WELL ADJUSTED IN CHINA(2)

  • YOU BRING YOUR OWN TEA IN A USED NESCAFE JAR TO THE OFFICE

  • YOUR BODY NO LONGER ACCEPTS DAIRY PRODUCTS

  • YOU THINK NOTHING OF TAKING THE HIGHWAY –ON A BIKE

  • YOU ASK FOR A DISCOUNT ON EVERYTHING

  • THE LAST TIME YOU VISITED YOUR FAMILY YOU GAVE THEM YOUR BUSINESS CARD


Chinese culture 1

AVDS –1-

CHINESE CULTURE (1)

CULTURE IS THE COLLECTIVE PROGRAMMING OF THE MIND WHICH DISTINGUISHES THE MEMBERS OF ONE GROUP OF PEOPLE FROM ANOTHER

THE DIFFERENCES WITHIN THE NATIONS ARE MUCH LARGER THAN BETWEEN THE NATIONS

---Gerard Hofstede

AMERICANS (EUROPEANS) AND JAPANESE (CHINESE) ARE 95% THE SAME AND DIFFERENT IN ALL IMPORTANT ASPECTS

--- Fujisawa

  • POWER DISTANCE - HIERARCHY VS CHAOS

  • tend to be comfortable with being told what to do

    • reluctance to accept responsibility and make decisions……

    • often defer decisions to a higher level of authority


Chinese culture 2

CHINESE CULTURE (2)

INDIVIDUALISM vs COLLECTIVISM

minimally integrated

limited trust

RISK VS UNCERTAINTY AVOIDANCE

guanxi

group and relationship conscious - care more about what others think

harmony and stability are essential

communicate indirectly - avoid conflict by pretending to change their mind when they have not done so

AVDS –2-


You are well adjusted in china 1

CHINESE CULTURE (3)

AVDS -4-

  • ACHIEVEMENT vs ASCRIPTION

  • age and education

  • respect for tradition and knowledge

  • moral example

    • maintaining the dignity and respect of others and oneself

    • awareness of face... giving and maintaining face

    • avoiding someone to lose face - responding with humility

    • when given recognition

    • demonstrating an interest in and recognition of each

    • others culture

  • CONFUCIANISM

  • universalism vs particularism

  • long deliberations vs simple mindedness

    • belief in the existence of a correct answer [or one truth]


  • You are well adjusted in china 1

    ORGANISATION CHARACTERISTICS

    AVDS - 5-


    Organization w vs c

    ORGANIZATION W vs C

    AVDS - 6-


    You are well adjusted in china 1

    LOCAL ORGANISATION

    AVDS -7-

    FIT WITH PRODUCT AND CHINESE MARKET

    ADAPT AND TRAIN ORGANISATION

    IF NEED A PARTNER LOOK FOR A STRATEGIC FIT

    FUNCTIONAL

    ensure capacity utilisation

    respect local contributions

    DIVISIONAL

    remain within area of expertise

    avoid forced interventions to global efficiencies

    MATRIX

    local empowerment


    Management styles

    MANAGEMENT STYLES

    TRADITIONALHUMAN RELATIONSHUMAN RESOURCES

    DIRECTIONBELONGINGSELF FULFILMENT

    CONTROLRECOGNITION CREATIVITY

    SUPERVISIONUSEFULNESSDEVELOP POTENTIAL

    SIMPLE TASKS CONSULTATIONCHALLENGE LIMITS

    ENFORCEMENT SOME SELF-CONTROL RAISE TARGETS

    FAIRNESSSHARINGSELF-DIRECTION

    OBEDIENCYCO-OPERATIONWORK SATISFACTION

    DIRECTIVE- DIRECTIVE- PERMISSIVE -

    AUTOCRATIC DEMOCRATICDEMOCRATIC

    AVDS –8-


    Management style c vs w

    AVDS -9-

    MANAGEMENT STYLE C vs W

    • CHINESEWESTERN _

    • INTENSELY PERSONALSUPERFICIALLY PERSONAL

    • LOYAL TO LEADERLOYAL TO COMPANY

    • STRATEGY FLEXIBLESTRATEGY IS DOGMA

    • ORGANISATION ADAPTS TO LEADERORGANISATION IS FIXED

    • REPORTING TO LEADERREPORTING TO SUPERIOR

    • VERTICAL COMMUNICATION (SILO)LATERAL COMMUNICATION

    • LEADER DECIDES ON MAJOR ANDDECISION POWER DELEGATED

    • MINOR ISSUES

    • INTENSE NEED FOR STRENGTHENING TIME IS LIMITED

    • RELATIONS


    Management style hybrid

    AVDS -10-

    MANAGEMENT STYLE - HYBRID

    • LOYALTY TO COMPANY

    • STRATEGY ADAPTED TO CHINA

    •  ORGANISATION CLEAR (TARGETS) AND EMPOWERED NO AMBIGUITY

    •  EXTENSIVE REPORTING (INTRANET) – CONTROLS

    •  MORE PERSONAL TIME THAN IN THE WEST

    • NEGOTIATION ON PRINCIPLES

    • LEADERSHIP DIRECTIVE – DEMOCRATIC


    Strategies

    STRATEGIES

    DEFENDER PROSPECTOR ANALYZER

    PRODUCT- LIMITED BROAD, CHANGING STABLE AND CHANGING

    MARKET COST EFFICIENCY INNOVATIVE ADAPTIVE

    STRATEGY ECONOMY OF SCALE RESPONSIVE to MARKET PLANNED INNOVATION

    SECOND IN MARKET WITH

    IMPROVED PRODUCT

    R&D PROCESS / PRODUCT PRODUCT DESIGN PROCESS / PRODUCT

    IMPROVEMENT MARKET RESEARCH ADAPTATION

    PRODUCTION HIGH-VOLUME FLEXIBLE, ADAPTIVE DEVELOPMENT TO LOW COST SPECIALISED PROCESS EQUIPMENT /PROCESS PRODUCTION

    ORGANISATION FUNCTIONAL DIVISIONAL MIXEDPROJECT/FUNCTIONAL

    STRUCTURE

    CONTROL CENTRALISED DECENTRALISED STABLE UNITS

    PROCESS PLAN PERFORMANCE PROJECTS BY PERFORMANCE

    AVDS -11-


    You are well adjusted in china 1

    AVDS -12-

    INVESTMENT STRATEGY

    COOPERATION WITH CHINESE PARTNER CHALLENGING BECAUSE OF DIFFERENCE IN CULTURES

    GOVERNMENT, PARTY AND LAW ON THE CHINESE SIDE

    • DISILLUSION WITH LOCAL PROBLEMS:

      • ABSENCE OF STRATEGIC LONG TERM VISION

      • FAILURE TO EVALUATE THE INTENTIONS AND

      • CAPABILITIES OF THE PARTNER

    SOLUTION

    • FIRM APPROACH TO SHARED STRATEGY

    • STAGED COMMITMENT

    • CAPABLE LOCAL STAFF ESSENTIAL


    Sales strategy

    AVDS –13-

    SALES STRATEGY

    • CREATE AWARENESS ESTABLISH RELATIONSHIPS  PROVIDE TECHNICAL SEMINAR  INVITE POTENTIAL CUSTOMERS START NEGOTIATIONS CONCLUDE AGREEMENT

    • STREAMLINING OF CHANNELS IS SLOW DUE TO GUANXI

    • GUANXI INVOLVES FRIENDS AND FAMILY AND IS NOT CORRUPTION

    • INFORMATION IS CAREFULLY GUARDED AS CAPITAL

    • FOCUS ON COSTS AND QUALITY / SERVICE

    • ESTABLISH LONG TERM CUSTOMER RELATIONS

    • STABLE ORGANISATION


    Process of negotiation

    AVDS -6-

    PROCESS OF NEGOTIATION


    You are well adjusted in china 1

    AVDS -9-

    MINDSET TO VENTURE NEGOTIATIONS

    • PREPARATION INCLUDES ANALYSIS OF STRATEGIC FIT AND STRATEGIC MOTIVES

    • TAKE TIME TO UNDERSTAND THE PARTNER AND

    • DISCONTINUE IF THERE IS NO FIT IN MOTIVES

    • THE NEGOTIATORS YOU SEE OFTEN ARE NOT THE DECISION

    • MAKERS

    • RESPECT THE INTERNAL NECESSITY TO CLEAR ISSUES AND

    • CONSENSUS BUILDING

    • TO SET WESTERN DEADLINES WORKS AGAINST SUCCESS AND

    • WILL FORCE UNNECESSARY CONCESSIONS - AVOID DEADLINES


    Foreign management

    AVDS -11-

    FOREIGN MANAGEMENT

    COMMITTED

    ADAPTABLE

    PROACTIVE, FORESEE CHANGES & ACT ON IT

    WILLING TO SPEND MANY DAYS / NIGHTS TO STRENGTHEN RELATIONS LONG TERM

    DEVELOP LOCALSTRATEGY

    ABLE TO COMMUNICATE THE LOCAL REQUIREMENTS TO

    THE H/O

    HAVE TRUST AND BACKING OF THE H /O


    You are well adjusted in china 1

    AVDS -18-

    LOCAL MANAGEMENT

    • HIGHLY ABLE IN CHINESE CONTEXT

    • BICULTURAL SMALL POND 

    • NOT EASILY TRANSFERABLE:

      BEIJING POLITICAL - IMPROVE EFFICIENCY

      SHANGHAI EFFICIENT - STRONG LOCAL

      GUANGZHOU - INDEPENDENT

    • GOOD LOCAL STAFF IS A DISTINCTIVE COMPETENCE

    • LOST GENERATION


    Hr management of the venture

    AVDS -17-

    HR MANAGEMENT OF THE VENTURE

    • PITFALLS:

      CONFLICT IN CULTURE - CONFLICT IN HISTORY

        CONFLICT IN WHAT IS IMPORTANT - CONFLICT IN POWER 

    • TRAINING:

    • TEAM BUILDING - CHALLENGE OF CHANGE

    •   PROJECT MANAGEMENT - COMMUNICATION , CHANGE PROCESS

    • HR CONCEPTS

    •   JOB ANALYSIS  ORGANISATION

    • PERFORMANCE APPRAISALS

    •   BONUS / TARGETS

    •   EMPLOYEE RELATIONS

    •   RECRUITMENT

    •   TRAINING ANALYSIS


    Third asian partner

    THIRD ASIAN PARTNER

    • MOTIVATION: COST REDUCTION, RISK REDUCTION

    • NEGATIVE: DIFFERENCES IN CULTURE, HISTORY

    • RELATIONS – MAIN COMPETENCE

    • KNOW HOW- CAREFULLY GUARDED

    • CAPITAL / FINANCE - ORIENTATION

    AVDS -8-


    Principal causes of failure

    AVDS -20-

    PRINCIPAL CAUSES OF FAILURE

    • LACK OF COMMITMENT TO THE JV ON EITHER SIDE

    • LACK OF STRATEGIC VISION - PURELY DEFENSIVE OR OPPORTUNISTIC SHORT TERM REASONS

    • LACK OF UNDERSTANDING OF THE STRATEGIC LOGIC OF THE

    • CHINESE PARTNER

    • HIDDEN AGENDA’S

    • SETTLING FOR LESS

    • HASTE IN NEGOTIATION - EMPHASIS ON LEGAL, TECHNOLOGY

    • AND OPERATIONAND LACK OF DEFINITION OF OBJECTIVES AND

    • STRATEGIES OF THE ENTERPRISE

    • LACK OF SUITABLE STAFF - EXPATRIATE AND LOCAL

    • COMPLEX STRUCTURES AND ORGANISATIONS

    • LACK OF SUPPORT OF H/O


    Change

    AVDS -14-

    CHANGE

    • RAPID IMPROVEMENTS IN ALL AREAS

    • LARGE NUMBER OF FOREIGN ENTRANTS

    • LOCAL COMPANIES LEARNING FAST

    • LOCAL MANAGERS LEARNING FAST

    • RAPID IMPROVEMENT IN INFRA STRUCTURE

    • ENTREPRENEURS VERSUS STATE COMPANIES

    • SEARCH FOR JV PARTNER OFTEN DISAPPOINTING THE GOOD COMPANIES MAY NOT NEED FOREIGN PARTNERS

    • FOREIGN COMPANIES PREFER WHOFE, OUTNUMBER (60%)


    Paradigmatic transformation

    PARADIGMATIC TRANSFORMATION

    • SHIFTING , FAST PACED AND INTENSE COMPETITIVE CLIMATE

    • HIGHLY FLEXIBLE STRATEGIC DECISION MAKING IS A DISTINCTIVE COMPETENCE

    • PREVAILING RULES IN WEST ARE ILL-SUITED TO ASIA PACIFIC

    • TRANSFORMATION OF MANAGEMENT PRACTICES

    AVDS -15-


    Challenge to change

    AVDS –16

    -

    CHALLENGE TO CHANGE

      EARLY RESPONSE TO CHANGES IN BUSINESS ENVIRONMENT REQUIRES LOCAL DECISION MAKING AND LITTLE REMOTE CENTRAL CONTROL

    SUFFICIENT LOCAL RESOURCES – AVOID IMPOSITION OF CENTRAL ORGANISATION MODEL

    LOCAL MANAGEMENT NEEDS HIGH LEVEL TRUST OF HEAD OFFICE


    China an enigma 1

    AVDS -22-

    CHINA AN ENIGMA(1)

    A PLANE TOOK OFF FROM SHANTOU IN 1992.

    AFTER 20 MINUTES THE PILOT ANNOUNCED:

    L&G, WE HAVE FORGOTTEN TO TAKE ON FUEL AND HAVE TO RETURN

    AFTER 20 MIN: L&G, WE WILL TRY TO MAKE HEFEI AIRPORT FOR LANDING

    AFTER 1 HOUR: L&G, BECAUSE OF TAILWIND WE THINKWE CAN REACH BEIJING.

    ALL PASSENGERS SMILED

    QUESTIONS: UNEARTHLY SENSE OF HUMOR?

    DUBIOUS PROCEDURES?

    DO CHINESE SMILE WHEN NERVOUS?


    China an enigma 2

    AVDS -23-

    CHINA AN ENIGMA (2)

    8 YEARS LATER DURING A RECEPTION OF THAT AIRLINE SWAPPED SOME STRONG STORIES WITH A FEW PILOTS

    ONE OF THE PILOTS REMEMBERED , HE WAS ON THAT PLANE

    HE HAD BEEN PRACTISING ENGLISH BECAUSE THEY HAD BEEN

    ABLE TO ONLY JUST GET ENOUGH FUEL

    HE DID NOT KNOW THERE WAS A FOREIGNER ON THE PLANE

    CONCLUSIONS: A.GOOD SENSE OF HUMOR

    B.DUBIOUS PROCEDURES

    C.CHINESE SMILE WHEN NERVOUS

    D.CHINA IS A SMALL COUNTRY


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