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Guidelines to succeed in China

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102 pages
Comment réussir en Chine? Que faut-il savoir pour réussir en Chine? Que faut-il savoir pour comprendre les Chinois? Les stratégies employées par les cadres des multinationales pour s'implanter en Chine et faire face aux différences culturelles? Les erreurs à éviter... Comment les Chinois fonctionnent-ils d'un point de vue Business? Est-ce que "l'acceptable" pour un Occidental l'est pour un Chinois? Avons-nous le même "business ethic"? Un ouvrage intégralement rédigé en Anglais.
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GUIDE PIUR RÉUSSIR EN CHINE GUIDELINES TI SUCCEED IN CHINA

(Ç)L'Harmattan, 2005 ISBN: 2-7475-8419-4 EAN : 9782747584197

Michel Huyghues- Beaufond

GUIDE POUR RÉUSSIR EN CHINE GUIDELINES TO SUCCEED IN CHINA

L'Harmattan 5-7,rue de l'ÉcolePolytechnique 75005 Paris FRANCE

L'Harmattan Hongrie Kossuth L. u. 14-16 1053 Budapest

HONGRIE

L'Harmattan Italia Via Degli Artisti, 15 10124 Torino ITALIE

GUIDELINES TO SUCCEED IN CHINA

Acknowledgement
We would like to acknowledge the contributions of the following individualsto the developmentof our thesis:
We wish to express sincere appreciation to Professor Christian MARA VELIAS, Mr Diêù TRINH-XUAN, CEO of ARELEC, Ms Jianrong WEI, Director of SEFICA, the Purchase Manager of PSA in China and the Plant Director of The Wine Company in China for their participation. In addition, special thanks are due to Mme Jacqueline and Mr Thierry HUYGHUES-BEAUFOND, who provided important guidance throughout this project. Finally, we would like to thank Mr Olivier DUBREAS for his assistance.

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GUIDELINES TO SUCCEED IN CHINA

Abstract
How to be a successful French company in China? From previous literature, one of the most common answers to this question is to understand the cultural differences and find a Chinese partner to integrate a Chinese network. However, referring to the high rate of failures in Sino-foreign joint ventures, having superficial knowledge about Chinese culture is not enough. French companies need to have some concrete managerial guidelines to overpass or avoid the most common cultural and ethical mistakes that they make. Indeed, French and Chinese companies do not have the same culture and standard of ethics. In fact, when French companies venture into China, the potential for ethical conflict is very high. Reducing that risk of ethical conflicts requires deep knowledge in culture and more precisely in Chinese business ethics. Knowing the nature and history of the two cultures can lead to an understanding of the foundation of their ethical systems. Ethics influenced by the national culture affects all business transactions. It is imperative for French companies to understand the ethics of their partners around the world. Understanding the cultural bases for ethical behaviour in France and in China can arm French companies with the knowledge needed to succeed in cross-cultural business. Implementing that knowledge with a clear series of managerial guidelines can actualize the value of that understanding.

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GUIDELINES TO SUCCEED IN CHINA

TABLE OF CONTENTS
INTRODUCTION PART 1- THEORlTICAL 1. National culture 1.1. 1.2. 1.2.1. 1.2.2. 1.2.3. Definitions of culture Theoretical models: What makes up a culture? 13 features to analyse Culture The Shein model The Hofstede model Individualism / Collectivism Uncertaintyavoidance Power distance Femininity/ Masculinity Long term orientation FOUNDATIONS 6 9 9 9 12 12 14 14 15 15 15 15 16 16 17 18 19 19 19 20 21 21 22

1.2.3.1. 1.2.3.2. 1.2.3.3. 1.2.3.4. 1.2.3.5. 1.2.4. 1.2.5. 1.3.

Choice of the model Cultural dimension score for 10 countries Influence of Culture on Ethics

2.

Ethics and business ethics

2.1. 2.1.1. 2.1.2. 2.2. 2.2.1. 2.2.2.

Ethics General definition The different branches ofEthics Business ethics Definition
Issues of business Ethics

3

GillDELlNES TO SUCCEED IN CHINA 2.2.3. 2.2.4. 2.3. 3. Politics and business Ethics Cross-cultural business ethics A clearer distinction between culture and ethics and China 22 22 23 25 25 27 29

Ethical dilemmas between western countries 3.1. 3.1.1. 3.2. 3.3. 3.4. 3.4.1. 3.4.2. 3.4.3. 3.4.4. 3.5. 3.6. 3.6.1. 3.6.2. 3.6.3. 3.6.4. Western Beliefs concepts

France differs trom other Western cultures France and China similarities Chinese beliefs: Influenced by Confucianism and Taoism _30 Chinese protocols Introduction process Eye contact Gifts Banquets Entering and maintaining Guanxi Face and Harmony Preserving harmony Saving Face Influence of communism An ideal Sino-Western relationship

35 35 35 35 35 36 40 40 40 43 43 44 45 45 45

4.

Strategy to resolve ethical conflicts 4.1. 4.2. 4.3. Avoiding Forcing Persuasion and education

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GUIDELINES TO SUCCEED IN CHINA

4.4. 4.5. 4.6. 4.7.

Infiltration Negotiation Accommodation Collaboration

45 45 46 46 47

PART II- EMPIRICAL PART 4.8. The Chinese Culture of doing business from a French

point of view 4.9. 4.9.1. 4.9.2. 4.9.3. 4.9.4. 4.9.5. 4.9.6. 4.9.7. 4.9.8. 4.9.9. 4.9.10. Ethical conflicts I Potential resolution strategies Integrity Hierarchy Win win-win lose Courtesy and banqueting Reconsidering contracts Bribes Gift-giving The law Intellectual property Favouritism

48
56 56 60 61 63 65 66 68 69 69 71

PART III - ANALYSIS

73 94

CONCLUSION

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GUIDELINES TO SUCCEED IN CHINA

INTRODUCTION
Baclœround: China is rapidly becoming an economic power in the world economy and its huge market attracts many Western companies (Phillips, 1999), and many firms have already been confronted to its culture. To increase their chance of success in penetrating this complex Chinese market, heritage of a long historical past, most studies advise firms to opt for a Sino-foreign joint venture strategy. This strategy gives Western companies the opportunity to integrate a Chinese network which is one of the most important conditions to succeed in business in China. Indeed, Chinese society is based on "networks" more commonly called "Guanxi". However, establishing, developing, and maintaining a successful "Guanxi" with Chinese partners is not an easy task due to cultural distance and ethical discrepancy. In fact, culture and ethics are fundamental elements of international network development and often a key determinant of most overseas relationships (Tornroos and Moller, 1993). For example, studies between China and the USA have suggested that the ethics of the participating partners, influenced by their national culture, was one of the significant variables that determined their success (Baird et at, 1990; Ding, 1997; Eiteman, 1990; Fischer, 1993; Pan, 1997; Tse et al., 1997; Vanhonacker and Pan, 1997). Consequently, it appears to be obvious that understanding the Chinese culture and beliefs, increase the chance of success to create partnerships and integrate Chinese Guanxi durably (Buttery and Leung, 1998). Nevertheless, according to previous researches, the rate of failure of Sino-foreign partnerships, whether identified by 6