Chinese companies in Mainland China are expanding and improving their operations to increase profits and compete globally. Part of this includes sourcing top-tier Western talent for a variety of functions including finance, operations, sales, and marketing. However, for the Western business professional contemplating a move to Mainland China, it is essential to first be aware of the many differences present in Chinese companies. The office culture of many companies in Mainland China, even those operated by Western companies, can cause stress and worry for the unprepared Western expatriate as a result of differences in culture, business practices and unspoken social rules. Research suggests that at least 30% of expatriates on assignment in foreign countries may not complete their entire assignments. It is likely that some of these failures in China are a result of stress and other difficulties brought on by cultural differences. To increase an expatriate’s chances of success and reduce the time required for cultural acclimation, it is a good idea to first be aware of the basic elements at play within a Chinese office environment.
An article published by efinancialcareers lists a number important points to be aware of before joining a company in the Chinese finance industry. In fact, many of these lessons can be applied to Chinese companies in many sectors throughout China. Some of the more widespread issues are listed and expanded on below:
- You Need to Understand Guānxì. Guānxì is your relationships with coworkers and the favors owed between you and them. The Chinese make use of gifts, social dinners, and other methods to maintain their relationship networks and navigate the office environment. To get things done in a Chinese company, it is essential to form friendships and alliances with your coworkers and supervisors.
- Account for Yearly Bonuses. When accepting a contract at a Chinese company, be aware that your actual salary is based upon 13 months rather than 12. It is customary in China for all employees to receive a yearly bonus before the Chinese new year equal to one month’s pay.
- Don’t Rush Meetings. Meetings can take time in China. On one hand, when meeting with new people the Chinese will want to get to know you first and will not want to get down to business immediately. At internal company meetings, social etiquette can prevent direct communication as no one wants to cause embarrassment. Don’t try to rush things or it is possible to alienate or annoy clients and coworkers.
- Learn the Company’s Hierarchy. In a Chinese company there is much more space (or power distance) in a company between the highest and lowest level employees. While in Western companies there can be much more freedom for low and mid level employees to talk and mingle with company executives, this is usually not the case in China. You probably won’t be able create relationships higher than your direct supervisor.
- Orders are not Debatable.The leadership model in many Chinese companies is markedly different than many successful Western firms. Chinese leaders are not accustomed to discussing courses of action and getting everyone’s opinion and buy-in. They give orders and expect them to be carried out.
- Don’t Cause a Loss of Face. Causing a loss of face can be dangerous in China as it strains relationships. It can also drive away coworkers or prevent a promotion. Also, be careful when criticizing others, or offering up an opinion lest you become a disliked member of the office.
- After Work Company Entertainment May Not be Optional. When invited to attend a company dinner or karaoke event after office hours, attendance is likely expected. These occasions not only offer an opportunity to relax, but also act to reinforce the various relationships within the company. If you don’t attend, it can reflect badly on you and your supervisor may feel you are not demonstrating the proper amount of respect and loyalty for the company.
- Expect to Minimize Expenses. No matter what official company policy might be, the Chinese have different ideas than some Westerners on company expenses. For example employees in Chinese companies are expected to be proactive in saving the company money. This might include things such as sharing hotel rooms on business trips, using personal cell phones for company calls, and providing personal receipts for the company to write off as business expenses. Not complying can cause one to be seen as greedy and not a team player.
For the full list from efinancialcareers’s website including perspectives from local experts in China, the article, “Ten things to know before you join a Chinese bank,” can be viewed HERE.
All in all, Chinese companies are not so different from Western ones in that they have similar goals; they simply have different ways in which they go about achieving those goals. A solid foundational understanding of Chinese business culture and the Chinese office environment can go a long way towards preparing new Western expats for China and preventing costly mistakes. For more information on the fundamentals of Chinese culture, take a look at the China Culture Corner’s section on Culture Basics.
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