Business Philosophy in China
Chinese business etiquette is closely linked with country’s culture and its history.
In this article we will try to explain the philosophical base of Chinese business etiquette.
It is necessary for better understanding your Chinese partners and for evaluation of their behaviour.
Confucianism and Taoism are the two main philosophical sects in China, which have had an impact on the Chinese way of doing business for centuries, and nowadays still have been influencing and remain important.
Interpersonal relationships are the main core in Confucianism. And nowadays it has a great influence on Chinese mentality and social behaviour.
- One of the most important aspect of Confucianism is mutual respect and interpersonal trust in society.
- There are two main doctrines that have an impact on business negotiations: hierarchical social relations and the concept of saving face.
- Confucianism defines the hierarchical relationships in society as follows:
Managers and followers, father and son, husband and wife, elder and younger, teacher and pupils. The first protect and guide, while the others respect and follow. In Confucianism obedience and adherence to these rules is regarded as the path to harmony in society.
In China, we can notice that the doctrine of the hierarchy is still present in many companies and management systems.
Also, in business negotiations it is important to determine a key person or a manager from your company, which will have the same status as the Chinese key person or manager.
- There is also as a concept of saving face in Confucianism.
- This concept is needed to create harmony in social relations.
- There is an example of the influence of Chinese culture on the bargaring.
Suppliers from China do not refuse to reduce prices. As bargaining about the price is also a part of Chinese culture. But still they will say “NO” to your target price for the goods, in order to save your face, and also will control the negotiation process.
Understanding of Chinese philosophy of doing business will help you to achieve your business goals, and also will help you to understand actions of your business partners. However it does not mean that you can avoid misunderstandings, it will just help you to better analyze the partners, and gain a stronger position in negotiations.
Famous Chinese strategist and philosopher Sun Tzu (author of Art of War) said:
“Know the enemy and you do not have to fear the result of 100 battles.”
Of course your Chinese partners do not real enemies. But it is better to be always aware the Chinese way of doing business is still totally different from the European. China is needed to lear.