Week 11: Confucian and Southern Asia

The cultural cluster presented this week was Confucian and Southern Asia. In my case, I have always found Asia as a very intriguing region, being culture the main reason. Furthermore, the increasing importance of China in world’s economy and its expansion throughout the world have turned Asian cultures into very popular in western countries and people getting interested in learning more about them, especially if we are told that no matter if you have the most innovative product, knowing their culture in deep is critical if you really want to do business with Asians. The two more important aspects about these clusters’ culture for me were:

In first place, I corroborated that Japan and China, as high-context countries, place a high importance on relationships. Relationships they establish are based on trust. They do not deal with anyone who are not trustworthy; in fact, when doing business with Chinese, in the first meeting you shouldn´t be surprised if they invite you to a karaoke or to their homes. Rejecting the offer can be a show of disrespect. We as westerners may think “I took this long trip to do business, not to play a karaoke”, but for them building a close relationship is the starting point.

The second aspect I found important is Chaebol model in South Korea. It is a structure of conglomerates composed of companies from different economic sectors. The collaboration and strategic alliances formed among them allow the Chaebol to report high growth, diversify their business, mitigate risks and promote innovation. This economic model is the reflection of teamwork and collectivism characteristic of Asian countries. In fact, similar business structures are found in Japan, named Zaibatsu and Keiretsu.

Knowing, understanding and analyzing these concepts is a good advantage to negotiate with Asians. Actually, here in Colombia we find many small and big entrepreneurs wanting to do business with Chinese; however, they think this is the same as how they do business in Panamá. Therefore, I think it would be very important entrepreneurs can have access to training on Chinese culture since, unfortunately, in our country little importance is given to culture when doing business.   

Research Question: What is the impact of guanxi when doing business with China?

Guanxi, a concept which has no translation in English, makes reference to the importance of building relationships in China. As a matter of fact, its growing importance not applies for interpersonal but also to business relationships. According to Sullivan and Goh (2011), a Chinese company will feel more comfortable doing business with a company which they have a strong guanxi  because they believe it will make it far easier for them to trust their business counterpart. Establishing guanxi is not only important with customers, but also suppliers, partners and even the government, to the extent that when having problems and facing legal obstacles, the stronger your guanxi is, the easier you can overcome those difficulties.

Reference

Sullivan, M. & Goh, A. (2011). The Most Misunderstood Business Concept In China. Business Insider. Retrieved from: The Most Misunderstood Business Concept In China