MEMORANDUM TO: FROM: SUBJECT: DATE: MR. JOSE GOMEZ JOSE L.

PEREZ III CHINA: INFORMATIVE MEMO DRAFT NOVEMBER 28, 2013

Chinese Background History China is the oldest living civilization in this world and because their continuous civilization, they contain over 5000 years of recorded history. Their first trace of documented records traces back to the Xia Dynasty (approximately 2100 BC-1600 BC). After the fall of the Xia dynasty, they have been governed by many other dynasties with the final dynasty ending in 1911. During the mid 20th century, China was in civil war between the Chinese Nationalist and the Chinese Communist. This war eventually concluded with the Communist, driving the Nationalist out to settle Taiwan. As we have seen the end of the 20th century and continue to move forward into the 21st century, China has moved from a Communist society into Socialism and now trades with the U.S. and the rest of the world. China is now well on their way to becoming the worlds economic leader. Philosophical Influence Throughout the various ages, the Chinese culture produced many different ideals and philosophies. The one philosopher who remains on the most influential today is Confucius. Jeffery Riegel, contributing writer for the Stanford Encyclopedia of Philosophy, stated that Confucius ultimate goal is to create gentlemen who carry themselves with grace, speak correctly, while demonstrating integrity in all things. Riegel compares Confuciuss philosophies

to the ancient western philosophers such as Socrates, Plato, and Aristotle. His impact is so tremendous that the Chinese developed the spiritual belief system known as Confucianism; over millions of citizens in Asia currently practice Confucianism. Confucianism practitioners worship no deity or religious figures and can be summarized as an ethical system that simply states righteous acts will lead to personal salvation. Uncertainty Avoidance The Chinese culture has very high uncertainty avoidance. High uncertainty avoidance can be easily defined as tendency to anxiety and worry on future/unknown endeavors; therefore China is very resistant towards any changes and can even place laws to govern social norms. In the workplace, supervisors and managers in China tend to be very formal, unapproachable, and are very unlikely to delegate authority to workers than are beneath their positions; having ranks is also very important. With Chinese companies, because of uncertainty avoidance, it is very unlikely that they will conduct business with a company that they have little to no relationship with. Jason Kim, blogger at the WorldPress.com, has stated that establishing relationships is one of the most important factors in Chinese business and that relationship is not based on money. In their culture, they are obligated to conduct business with their friends. So as an outsider, we first need to establish a good relationship with our Chinese companies to form trust and friendship to then conduct business deals. Collectivism China, along with nearly all of Asian cultures, is a collectivist society. The culture seeks to complete harmony, group belonging and achievements. The Chinese are more willing to suppress their own feelings and needs for the good of the group. (The Concept of Collectivism

in the Chinese Culture, 2010). Challenging authority is not common in the collectivist society; putting ones needs first over the group will appear selfish so collectivism simply can be summarized as group needs come first. The authority figures in this society are seen as the more wise and experienced individuals. There are hierarchical structures not just in the social setting, but the business setting as well. This norm goes hand in hand with respecting those with higher ranks. Higher ranking individuals rarely socialize with their subordinates thus keeping it more business than personal; this concept also ties in with China having high power distance. Unlike businesses in individualist cultures, business negotiations on deals or product purchase must satisfy the entire group and are done by those with higher rankings. Particularism The Chinese culture, in contract with the western cultures, is very particularist and like uncertainty avoidance, the Chinese wish to maintain their ongoing relationships as they value that more to universal principles; this is crucial for interactions among business to business or government to business. Only recently, with so many businesses that have been created in China, have lead the government to create a framework of an enforceable legal system. Due to the Confucian and communist background of the country, a judiciary state was not necessary before 1979 when the country began its transition towards a market economy. (Broda, 2013). But even so, a person who is involved with Chinese businesses must understand that problem solving is still resolved amongst those with strong relationships with each other. Time Orientation China is a polychronic culture and it is simply defined as the ability to do many things at once. Again, this is only achievable with strong relationships; so communication and

relationship building is very important in the Chinese society. Monochronic is interpreted negative and mistrustful because it follows more of a straightforward scheduling without much communication. Even though monochronic societies are very strong when it comes to keeping scheduling and deadlines, polychronic societies has the advantage of being flexible in dealing with the changing environments. The Chinese culture follows a more people-oriented practice and looks into the morality rather than statistics; it is seen as mere numbers. it is more important to maintain or improve reputation than actually sticking to the true numbers. (Broda, 2013). Conclusion Only by understanding Chinese philosophies, ethics, and society norms can we better interact with Chinese businesses and citizens. China is amongst the oldest civilization with thousands of years of history and has experienced many reforms throughout the ages: for example, the recent relaxing of the one-child policy limit. "The reason they (China's leaders) have to change the one-child policy is because China has aging population and everybody knows an aging population needs to be supported," David Kuo, CEO at The Motley Fool Singapore. We, Americans, must recognize that the Chinese hold strong relationships in very high regards; having strong relationships can lead you to great success in China as it eliminates the high levels of uncertainty thus creating harmony. Under the concept of collectivism, groups are valued over the individual. Putting the individual first is only seen as unreasonable and selfish. There may be always some issues of conflict and misunderstanding but when dealing with business, both countries needs to understand each others backgrounds. A great rule of thumb to know is that what may be susceptible in one culture may not be susceptible in another. Despite the tension,

the Chinese-American pairing holds many economic and political benefits for both countries. (Seligson, 2009).

WORKS CITED Broda, S. (2013). Knowledge Focus Strategy (KM) in China. Retrieved November 25, 2013, from TNE: http://www.gaoshan.de/kmchina/table.php Kim, J. (2012, October 9). Power Distance and Uncertainty Avoidance in China. Retrieved November 25, 2013, from WorldPress.com: http://jasonkim29.wordpress.com/2012/10/09/power-distance-and-uncertainty-avoidance-inchina-2/ Ranasinghe, D. (2013, November 17). China's economic reforms: What you need to know. Retrieved November 20, 2013, from CNBC: http://www.cnbc.com/id/101205322 Religions & Beliefs in China. (2013). Retrieved November 20, 2013, from Travel China Guide: http://www.travelchinaguide.com/intro/religion/ Riegel, J. (2013). Confucius. Retrieved November 20, 2013, from Stanford Encyclopedia of Philosophy: http://plato.stanford.edu/entries/confucius/ Seligson, H. (2009, December 23). For American Workers in China, a Culture Clash. Retrieved November 20, 2013, from The New York Times: http://www.nytimes.com/2009/12/24/business/global/24chinawork.html?_r=2& The Concept of Collectivism in the Chinese Culture. (2010, February 10). Retrieved November 25, 2013, from PRLOG: http://www.prlog.org/10527661-the-concept-of-collectivism-in-thechinese-culture.html Timeline of Asian History. (2013). Retrieved November 20, 2013, from Ohio State: http://people.cohums.ohio-state.edu/bender4/eall131/EAHReadings/module02/m02chinese.html#