What is the role of culture in explaining the differences in business systems in Asia and the West? What does it explain and what does it not explain?

Topics: Business, China, Western culture Pages: 7 (1914 words) Published: May 26, 2008
When researching the differences in business systems between Asia and the West it is very difficult to find any material that does not attribute many of these disparities to cultural influences (Davidson, 1987; Ferguson, 1993 and Blackman, 1997). This is due to the fact that it is generally believed that intercultural awareness does contribute to successfully doing business in another culture. However, establishing how and where culture affects business systems is by no means an easy question to answer and many western businesses are in fact currently trying to answer this question in order to successfully integrate into the Chinese marketplace (Dayton, 2006 and Journal of Intercultural Learning, 2006). Therefore, in this essay I will analyse exactly what role culture has in explaining the distinctions between business systems in the West and China and argue that in many cases these discrepancies are incorrectly attributed to cultural reasons when in fact these variations can be explained by using far more obvious economic causes.

Harris (2006) notes the eagerness of business journalists to attribute the differences in Western and Asian business systems to cultural factors by stating: the airport newsstand best-sellers and glossy news weeklies are packed with admonishments to 'preserve face' and build relationships and local Chinese writers have jumped on the bandwagon, poking fun at the clueless westerners blundering towards failure in China because they don't understand the local culture. Graham and Lam (2003) concur stating that Western and Chinese approaches to business often appear incompatible. Graham and Lam (2003) also believe that these differences in business systems and attitudes stem from deep cultural origins and in order for western business to successfully interact with their Chinese counterparts they must understand the cause of these differences is in fact their cultural differences.

However, Maidment (2006) argues that western Multi-National Companies (MNCs) are succeeding in China because they place little value on the role of culture when conducting business in China, but rather focus solely on business issues when conducting business. Maidment (2006) states that MNCs succeed because they hire the best local talent, pay the highest salaries, and invest the most. They have no culture, no beliefs, and no predispositions. They are machines. It does seem that too many western businesses are too concerned with recognising cultural differences in China, which often provide no explanation to the difference in business systems. Instead they should just focus on implementing successful business strategies in China, rather than becoming fixated on cultural differences (Harris, 2006 and Dayton, 2006).

Recognising that China has a different culture to that of western countries is not a universal explanation to explain the differences in business systems (Baird et al, 1990). In fact, Maidment (2006) argues that traditional Chinese culture is changing so fast that no one understands it. It is therefore debatable whether or not culture plays any part in the difference in business systems, this is due to the fact that the current generation of Chinese professionals has very little in common with the previous one (Maidment, 2006). One could therefore argue that analysing cultural differences to explain the business ones carries very little weight in China (Asian Business Law, 2006).

However, Maidment (2006), Harris (2006) and Dayton (2006) all concede that knowing Chinese history and culture is a benefit to conducting business in China but also state that cultural knowledge should not be solely relied upon in order to understand these differences. Given the rapid changes that are occurring in both the Chinese marketplace and Western economies it would seem that understanding the economic forces of the here and now would provide far greater insight into understanding the differences between China and the West,...
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