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Navigating China's Business Landscape: Cross-Cultural Insights for Successful Management

Gain valuable insights on managing diversity in China while exploring cultural differences and effective strategies for success in the Chinese market, with a focus on Nike's approach. Learn about the nuances of decision-making, communication styles, and building relationships based on local customs and traditions. Discover how Nike's Regiocentric staffing model and global expansion have contributed to its growth and market dominance. This comprehensive guide provides essential knowledge for navigating the complexities of doing business in China.

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Navigating China's Business Landscape: Cross-Cultural Insights for Successful Management

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  1. Cross-Cultural perspectives on managing diversity By: David Pickering Huang,DeJing(Kevin) Roy Tanuwidjaja Norito Kobayashi Luisa

  2. China

  3. CHINA OVERVIEW • President: Hu Jintao (Since 2003) • Location: Eastern Asian with area 3.7 million square miles. • Major cities: Beijing (Capital), Shanghai, Tianjin, Guangzhou, ect……………… Sources: (China Daily)

  4. Population: 1.3 Billion (July 2004) Languages: Mandarin (Official), and many local dialects. Ethnic Groups: Han Chinese (92%). Religion: Officially atheist;Taoist, Buddhist, Muslim(1-2 %), Christian(3-4 %). Sources: (Asia Pulse; Dow Jones Newswire). CHINA OVERVIEW

  5. CHINA REAL GDP GROWTHsource: (Financial Times)

  6. CHINA EXPORTS AND IMPORTS • CHINA EXPORT: $ 529.3 billion( 2004). • CHINA IMPORT: $ 505.8 billion( 2004). Sources: (Financial Times)

  7. CULTURAL DEFFERECES • Decision Making: A. Western-Fast decision making; quickly gathered and processed information. B. Chinese-Deliberate longer; Want to be included. Sources: (China Daily)

  8. CULTURAL DIFFERENCES • “YES” MEANS “NO” A. Chinese-Don’t like say “No” in a business setting nor admit don’t understanding something. B. Western-Encouraged to express. Sources: (China Daily)

  9. CONNECTION • Relationships-with vendors, suppliers, central government. • Both outside and inside relationships building.

  10. PERSONAL STYLE • Chinese-Don’t challenge the instructor. • Western-Encourages to questions, hand on training. • Lose face

  11. Hofstede Theory

  12. Hofstede Theory (cont’d) • Long term orientation vs short term orientation

  13. Nike’s international staffing • Nike uses Regiocentric approach. • The strategic decision made at the region level. • Each region has its own VP. WWW.NIKE.COM

  14. Nike’s global Area Division

  15. NIKE • US-7 Subsidiaries. • OTHER COUNTRIES-34 Subsidiaries. • Employees-25,000(none of them are represented by unions). • Distribution-21 centers around globe, 23,000 retail accounts. Sources: (Securities and exchange commission).

  16. NIKE • Athletic Footwear-Largest seller in the world. • China-36% manufactured in China. • Revenue-120 foreign countries account for 53%.

  17. Nike’s Subsidiaries • Grew from “single product, single market””multiple brands, multiple markets” • Subsidiaries: Sources:http://www.nike.com/nikebiz/nikebiz.jhtml?page=3&item=facts#nike

  18. Net Revenue by Global Region(US $,millions) • Total net rev. increased 15% Sources:http://www.nike.com/nikebiz/gc/r/fy04/docs/company_profile.pdf

  19. Net Revenue in U.S. • FY’04 : $4.8billion (39% of Nike revenue) • Increase 2.9%

  20. China’s attraction: • Emerging economies • Cheap labor costs • Stable currency • Bountiful raw materials Sources:http://www.fortune.com/fortune/subs/print/0,15935,375164,00.html

  21. Nike approaches China • Moved most production into China in mid 1980s • More than workshop • Set challenge: to change China’s culture Sources:http://www.chinalaborwatch.org/en/web/article.php?article_id=50214

  22. Open the China market • Phase I:Getting Swoosh recognized -Donated equipment and sponsor high school basketball game -Bring NBA player-Michael Jordan to visit -Target middle class: seeks Western culture • Phase II:Bring in Black culture-Hip Hop -Encourage rap-style trash talk • Phase III:Challenge Confucian-style -Fragrant possibilities of higher-quality shoes Sources:http://www.chinalaborwatch.org/en/web/article.php?article_id=50214

  23. Nike’s success in China • Sales through 1990s increase 60% a year • Biggest seller of athletic shoes • Example: Zhang Han -20 years old art student in Beijing -Owns over 60 pairs of Nikes shoes costing $6,000(RMB) • Western goods mean “status” to Chinese consumer • Nike did not enter China selling usefulness, but selling status • Grew 66% in revenue in the past year Sources:http://www.chinalaborwatch.org/en/web/article.php?article_id=50214

  24. Nike Case LeBron James in Chamber of Fear

  25. Nike Case Corporate Transparency in oversea factories - Contracting through unbiased audits

  26. Nike Case Computer hacking: Stickman copy right lawsuits

  27. Expatriates in China • CEO’s and top executives • Senior and middle managers • Costs and Benefits

  28. Nike IHRM in China • Production staff • Production management personnel • Corporate manager

  29. Home Country Nationals • Establishments • Employee profile • Pay compensation

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