CHINA

China is defined as a socialist country with a market economy

CULTURAL BACKGROUND

· Wariness of foreigners (Chinese people only trust in their families)
· Confucian culture (education, moral, and relationships)
· Pictographic Language
· Agricultural activities (farming)

CHARACTERISTICS OF THE CHINESE CULTURE:

· Collectivist
· Hierarchical
· Relationship oriented
· Holistic

CHINESE COMPANIES

The Chinese organizations are working following eight important elements:

1. Guanxi (Personal Connections): Chinese place a premium on individuals' social capital within their group of friends, relatives, and close associates.

2. Zhongjian Ren (The Intermediary): In the United States, people tend to trust others. In China, suspicion and distrust characterize all meetings with strangers.

3. Renji Hexie (Interpersonal Harmony): Importance of harmonious relations between business partners.

4. Shehui Dengji (Social Status): Casualness does not play well in a country where the Confucian values of obedience and deference to one's superiors remain strong.

5. Zhengti Guannian (Holistic Thinking) : The Chinese think in term of the whole while Americans think sequentially and individualistically.

6. Jiejian (Thrift): Save their money, a practice known as jiejian. Chinese negotiators will pad their offers with more room to maneuver than most Americans are used to, and they expect both sides to make concessions on price.

7. Mianzi ("Face" or Social Capital): In Chinese business culture, a person's reputation and social standing rest on saving face.

8. Chiku Nailao (Endurance, Relentlessness): The Chinese are famous for their work ethic. They prize relentless hard work.

CONFUCIAN GENTLEMAN
They were to:

— Cultivate themselves morally
— Show filial piety and loyalty where these are due
— Cultivate humanity, or benevolence
— Behaves on the basis of mutual trust and benefit and seeks cooperation and win-win solutions. He/she associates business with guanxi, friendship and trust

BEHIND CHINESE ORGANIZATIONS:

· Corruption: It is a deeply-rooted custom
· Energy shortcuts: there is a lack of capacity in energy resource
· Internal Robbery: Stealing ideas, designs and products from other organizations
· Labor instability: It is difficult to find qualified personnel

Question:

¿What is the relevance of Guanxi and the existence of Chinese business networks as supporting factors to the internationalization process of Chinese companies?

Nowadays Chinese organizations have become more globalized, due to contemporary strategies used to internationalize such as strategic alliances, Joint ventures all franchises all of them with Western countries, that is the reason Guanxi’s relevance is not much high to help internationalization process of these companies.

Nevertheless, the Guanxi system has been used as a business strategy in the implementation of internationalization by MNCs and HRM in Taiwan.

Guanxi meaning according to the text “Is Guanxi still working, while Chinese MNCs go global? it means “a friendship with unlimited exchange of favors”, it says that the Chinese culture is described as a culture based on the harmony on personal relations. They matter close relationships; it means they worries about the other’s stability.

References:

Chen, I Chun Lisa and Easterby-Smith Mark. 2008. “Is Guanxi still working, while Chinese MNCs go global? The case of Taiwanese MNCs in the UK”. Human Systems Management 27: 131-142.