China Market Entry Overview for Foreign Enterprises

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China market entry overview for foreign enterprises

Dr. Peng Chan PhD
Professor California State University – Fullerton
(penchant@gmail.com)
Steve Clarke MBA
Senior Consultant – Global Management Group – Irvine, CA (stevenjayclarke@gmail.com)

Abstract. Since 1979, the People’s Republic of China (PRC) has continued to progress economically both domestically and internationally, creating a vast new market for foreign business entities wishing to enter the PRC. Although this success is evident, foreign organizations face significant hurdles based on cultural habits of the Chinese that challenge western concepts and strategies for business development. Investigation and evaluation of 12 academic peer-reviewed sources considered the subject of what role ethics play in foreign managers developing business in the (PRC). In this study, examination by cross-cultural, Guanxi and socialist groupings helps identify some current views of the impact of ethics as they relate to business managers impediments in developing business in the PRC. The results of this review suggest the assessment that most literature to date is western scholarship based and that significant additional dual directional academic based research is necessary in order to develop strategies for dealing with ethical issues when opening and expanding the China market.

1.0Introduction

The goal of this paper is to evaluate selected peer-reviewed sources that reflect upon Chinese business manager’s ethical behavior when dealing with foreign managers. As China develops economically, since Mao’s death (1976) a transition has taken place, from Marx’s communist economic system of production based on need, to a market driven form of socialism. The State has allowed and encouraged Confucian teachings to reappear. “The main principle of Confucianism is ren ("humaneness" or "benevolence"), signifying excellent character in accord with li (ritual norms)” (ReligionFacts. n.d.). Expanded relationships in business between differing cultures, adds strain to the loyalties and requirements of the Chinese individual and organization. This conversion multiplies and increases the import of foreign interaction in domestic and international business during this economic reform movement. The question of how Chinese and foreign managers deal with the changes in economic systems is complex and rather unique based on China’s very long history of cultural and economic isolation, with slight exception throughout history, controlled and managed by dynastic rule. China’s borders although somewhat unlocked at times to trade and commerce, have only moderately opened since Mao’s death and Deng’s takeover. China was the world’s largest economy for over 300 years through the early nineteenth century profusely concentrated on domestic growth. As China has flourished to become the second largest economy, a significant portion of the growth is global. (Barboza, 2010) As China abridges the state controlled and/or owned enterprises and transitions to a private control market based funding mechanism, revolutions to horizontal, vertical, individual and organizational relationships in business including structure, and management techniques will optimistically result in better-quality crucial interactions. The problem endures, as China continues to benefit from this extensive economic progression, the need for research and concept elaboration concerning ethics in business is expanding; however most source articles materialize based on scholarly surveys, interviews, case studies, national cultural indexing and historic literature. The resultant summaries present a shortfall in academic research by not utilizing credible actualities of China business strategies and concepts in use now and supportive statistical data. A mixed method approach reflects quantitative theoretical research included in the reviews, counting cultural indexing, surveys and...
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