Impact on Chinese Culture on International Business

Only available on StudyMode
  • Download(s) : 329
  • Published : October 13, 2009
Open Document
Text Preview
{text:list-item} {text:list-item} 2.0 HOFSTEDE FIVE CULTURAL DIMENSIONS 4-5 2.1 Power Distance 4-5
2.1.2 Power Distance in USA 5
2.1.3 Power Distance in Indonesia 5
2.2 Individualism vs Collectivism 6-7
2.4 Uncertainty Avoidance 8-9
4.2 Application on Mooji’s Research to China 11
*6.0 Impact on Companies Intending to Enter China* 12
*7.0 Changes in Trend in the Future* 12-13
8.0 recommendation 13
9.0 conclusion 13-14
1.1 The Important of International Business
At present time, most companies are exposes to operate internationally. This further emphasis by the declaration of globalization among countries, which willing or unwillingly a company should expand to another country to success. One of the emerging markets that show an enormous development and will be the future world economy is China. Many western companies see China as a huge consumer demand and future prospect (Coyler, 2005). The main complexity is lies within the Chinese culture than regulations. So, international business could help foreign countries to do business in other countries. 1.2 The Objectives and Scope of the Report

The main objective of this paper will try to find out business relationship in China and the impact of foreign market especially Western and Asian companies intending to do success business in China. The scope of the study will focus on the cultural dimensions to explain the impact of Chinese business style to Western and Asian companies. 2.1 Power Distance

*2.1.1* Power Distance in China
2.1.2 Power Distance in USA
Power Distance in USA has a low power distance (see table 1). This indicated that US has a flatter organizations, supervisors and employees considered almost equal; tips to apprach are use teamwork and involves as many people in decision making (MindTools, 2009, internet). As low power distance, there will be equal distribution of power and wealth. This is very contrast with China has a high Power Distance dimension. So, for westerners should noted on this issues before entering China. 2.1.3 Power Distance in Indonesia

According to Hofstede, Indonesia has the highest rate in at 78 (see table 9). Similar to China, its indicate a low level of wealth and power distribution and was accepted as cultural heritage (Hofstede, 2003c, Internet). This in line with China dimension and will be not be big issues for Indonesia to enter Chinese market. 2.2 Individualism vs Collectivism

*2.2.1* Individualism vs Collectivism in China
Individualism in China is found to be the lowest compared with many other countries, which score only 15 (appendices table 4) as contrast to US at 91 (Kriss S. & Sagatori, 2006, internet). From the article Turkovic (2007) stated that strong leadership is on company ethics and principle. This would indicate the Chinese low level of individualism or focus on group. It showed that China has a strong commitment with groups and loyalty to members of groups is value at high price (Kriss S. & Sagatori, 2006, internet). Additionally, Hofstede found that low Individualism (IDV) has characteristics like work for interinsic rewards and harmony more important than honesty (MindTool, 2009, internet). Westerners who want to enter Chinese market should show respect on age and wisdom, suppress feeling and emotion, and respect tradition and introduce change slowly (MindTools, 2009, internet). Nakane from the research of group with low IDV found that managers and workers will be discouraged to move from company to company (Hill, C.W.L., 2005). 2.2.2 Individualism vs Collectivism in USA

Individualism in USA was rated at the highest at 91 point (Hofstede, G., 2003b). High Individualism has the characteristics of value high on people time and freedom, enjoyment of challenges and rewards for hard work, and respect for...
tracking img