As we creep out of the global recession, employment is rising and businesses from the far-east, notably China, are looking to the west to expand. However, are we at risk of a culture clash between Western and Chinese culture and what effect could this have upon corporate culture overall in the UK? Tom Heys gives his opinion.
The world continues to creep out of the worst global recession of modern times. Employment is on the up and companies are beginning to grow again. The mega-businesses of the far-east are now looking west for their expansion plans.
With the Government lifting many of the old barriers to Chinese business, the UK is poised for a glut of Chinese expansion. Recently, we’ve seen visa rules eased for Chinese visitors to the UK and the relaxation of rules allowing Chinese investment in UK infrastructure, including nuclear power and HS2. Already, the top 25 fastest growing Chinese companies employ over 2,600 people in the UK and generate revenues of over £17bn – 27% up on the year before.
Chinese acquisitions such as Bright Food’s takeover of Weetabix will continue. But data suggests that Chinese expansion into the UK is less acquisition based and more focused on organic growth. Rather than simply buying up an established business that already does what you need to do and sticking a different label on it, Chinese firms are increasingly likely to start from a blank slate.
The risk and expense of setting up a new business in this way means that these companies will want trusted leaders to set up and run the UK operations. It is likely that senior figures will be sent from China to establish operations, with local UK hires making up the rest of the staff. If this does happen, two very different corporate cultures have the potential to clash.
Simply exporting the Chinese way of doing business to the UK is likely to conflict with Western corporate norms, creating potential legal and HR headaches.
For example, Chinese communication can be more subtle and complex - with action, attitude and body language playing a far greater role. For example, when asked a direct question, someone might answer "yes" but act as if they have said "no." This deliberately ambiguous communication is designed to let the questioner know that the real answer is "no" but the relationship is worthy of preservation. The purpose of communicating in this way is to avoid creating conflict and disagreement, which could lead to disharmony. Yet the miscommunication caused by a failure for local UK staff to pick up on these subtleties could ironically create the confusion, dissatisfaction and disharmony this behaviour is trying to avoid.
Despite its ancient Confucian origins, the concept of harmony is still very important to social relations in China today. Standing out from the crowd causes disharmony and is to be avoided. Independence can be misinterpreted as showing off and arrogance. Being the first to come up with an innovative idea in a group setting can have significant social implications. Although being reluctant to stand out is not a British trait, perhaps there are some similarities here given that the British are well known for their self-deprecative nature - showing off doesn't come naturally.
One of the most important concepts is mianzi, or “saving face”. It has existed for centuries and concerns dignity and respect - going above and beyond to maintain and preserve your own face, as well as someone else’s. To do otherwise is seen as disrespectful. This could cause issues when it comes to appraisals. Where Western appraisal systems have been adopted by Chinese companies, there is a risk that the need to save face may lead to only positive information about staff performance being shared by managers. Any issues or problems are simply glossed over, creating potential legal problems for the future should redundancy or dismissal become necessary; selection for redundancy or dismissing for poor performance can be hard to explain when there is a paper trail of glowing appraisals.
Related to mianzi is guanxi. It is a centuries old system of networking which arises from a time when China had no rule of law. Relationships are built on trust and developed from gift giving and favours. No business will be done unless the level of trust is strong enough. Whilst there is nothing wrong with gift giving to develop relationships, the Bribery Act 2010 makes it a criminal offence where the gift is given with the intent of bringing about improper performance of a function or activity. It’s easy to see how someone looking to develop good Guanxi with others in the UK might fall foul of this, either naively or not.
By Tom Heys, Lewis Silkin
Do you think Western corporate culture clashes with that of the East? Leave your thoughts in comments section below.
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