CHINA
BUSINESS ETHICS



 
 
 
 
 
 
 
WORK & LEISURE Chinese are very hardworking people.  Work is important but not central to life.
DIRECTION & DELEGATION Chinese are very obedient and follow directions to the letter.  Saving face is vital to their existence.
LOYALTY Confucian filial loyalty, veneration of ancestors and firm belief of order and duty.
STAFFING Nepotism is widely accepted.  Promotions based on loyalty.
COMPETITION Because most industries are state owned, competition is negligible.  Chinese are very harmonious. 
TRAINING & DEVELOPMENT Chinese are highly educated and technically well trained.
TIME Punctuality is of paramount importance.  Tardiness is considered disrespectful, which is unacceptable.

China’s Culture and Ethics



     I interviewed Huy Kho for the Chinese perspective of transacting business in China.  Mr. Kho is a loan officer at Crescent Bank and Trust in New Orleans, who grew up in Hong Kong.  His father owned a deli style store in Hong Kong for many years before moving to Chicago in 1989.  Mr. Kho emphasized, “understanding and respecting Chinese business culture will go a long way toward ensuring a successful business relationship.”
     Mr. Kho cited the biggest difference between the United States and the Chinese business culture “is in decision making.”  “The Chinese are more slow and methodical when making decisions and prefer to have several other peoples buy in.”  They view a quick decision as incompetence.  “Any method to speed up or circumvent this tedious process is destined for failure,” according to Mr. Kho.
     Mr. Kho says, “the most integral component of being successful in China’s business climate is having connections or Guanxi,” as they call it.  Guanxi is a pervasive network of personal relationships based on truth and mutual benefit.  “A friendly, sincere relationship established over a period of time and based on mutual respect is an integral part of the Chinese culture,” according to Mr. Kho.  His father felt that the single most important ingredient of his business’s success was based almost entirely on his excellent reputation and connections within the community.
     Another aspect of the Chinese culture that Mr. Kho thought was important to know was the emphasis the Chinese place on titles.   The Chinese only want to deal with people of comparable or higher positions within a company.  Because power distance pervades their working economy, they only want to deal with the top executive and anything less is a sign of disrespect.
     As previously mentioned, the Chinese place heavy emphasis on respect.  “Being prompt for meetings and engagements is imperative to developing a good relationship,” according to Mr. Kho. The Chinese view tardiness as a sign of disrespect.  “Saving face” is an important concept to understand.  “In Chinese business culture, a person’s reputation and social rests on this concept,” according to Mr. Kho. “Causing embarrassment or loss of composure, even unintentionally, can be disastrous for business negotiations.”
     Mr. Kho did however have one caveat about doing business in China, and that was the practice of  “gift giving.”  The Chinese relish the practice of gift giving.  However, Mr. Kho claims, “his father had to give gifts for more favorable treatment from Chinese officials.”  Although, openly, bribery is strictly prohibited, the practice pervades the Chinese business economy with foreigners being the most susceptible.
     Overall, Mr. Kho said “ the Chinese people are very honest, hard working and family oriented.”  They place a heavy emphasis on family and customs.

Sources:  Huy Kho(personal interview) Wrk # 293-7295
Business Ethics in China, www.stthom.edu/cbes/oje/articles/xiaohe3.html
Deresky, Helen, International Management (Prentice Hall 2000) p66 .