1. Issues across cultures: managing the differing perspectives of China and the
USA
US marketers know the US standard of ethics. However, that standard can lead to
ethical conflict when Americans encounter the emerging market giant, China. As smaller
US companies enter China, the potential for ethical conflict increases. Reducing that
potential requires knowledge. Knowing the nature and history of the two cultures can
lead to an understanding of the foundation of their ethical systems. Ethics and the
expectations within cultures affect all business transactions. It is vital for Western
marketers to understand the expectations of their counterparts around the world.
Understanding the cultural bases for ethical behavior in both the USA and China can
arm a marketer with knowledge needed to succeed in cross-cultural business.
Cultural factors
Focusing on the basics makes success in competitive markets possible. However,
serious problems can materialize in business practice between the West and the
emerging market giant, China. The difficulty lies in more fundamental issues than
product, price, promotion and place. With the transition from domestic-focussed
operations to a true worldwide view, other factors are essential for success. One
pervasive factor is culture. Culture and the expectations within cultures affect all
business transactions. It is vital for Western marketers to understand the expectations
of their counterparts around the world. Even at the threshold of the millennium, inability
to master the basic cultural factors still leads to failure.
Examples of differences in the cultures of the USA and China
Chinese self-control - The Chinese typically give hints to others about what they really
want. This contrasts with the frankness in American culture.
Chinese people are pragmatic - Another difference between the two cultures is in the
way the two peoples think. The Chinese people are pragmatic and take actions that fit
the existing patterns. Thus, they prefer the actions that are not too disruptive. In
general, the Chinese do not think linearly. Americans look toward a solution, which may
be innovative, disruptive or revolutionary. Americans believe that most productive
thinking is linear and rational.

2. Interpersonal relations
Chinese and American societies place different emphasis on interpersonal relations, the
individual and the group. In the USA, the rights of individuals are safeguarded and
individual uniqueness and diversity are valued. In China, the individual is less important.
In human resources decisions, Chinese managers may attach less importance to
individual rights. Conversely, Chinese managers may attach great importance to their
network of connections. Outsiders may have difficulty in penetrating the network. Even
lower cost, higher quality, higher profit proposals, may not be accepted in China. This
may lead to the impression of unethical favoritism. In business dealings, change,
especially an increase in prosperity, is valued.
In contrast, US culture values progress and change even at the expense of traditional
values. The implication is that US managers must respect the values of their Chinese
counterparts. This will require Americans to have great patience.
Summary
Culture forms the foundation for ethical behavior and determines what is ethical and
what is considered unethical. We have shown some of the crucial differences between
the business and ethical cultures of the USA and China. In China, the set of
connections or relationships, form the context of business. When Chinese managers
negotiate a contract, they rely not on the content of the contract but the context in which
it was negotiated. What is important is the relationship among the individuals. If a sticky
detail comes up, Chinese managers feel that communication and relationships will solve
it. There is less concern about meeting contract conditions, since the contract is viewed
as a symbol of the relationship among partners.
In contrast, Western managers view the content of a contract as most important. The
specific wording, the dates, the amounts, the responsibilities are spelled out clearly. To
an American manager, negotiating the details implicitly means striving to meet the
demands of the contract. Failure to do so would embarrass an American, a loss of face.
Other potential ethical conflicts arise simply from the different values inherent across
cultures.

3. Task 2
THE IMPACT OF CULTURE
We suggests that an organization's culture develops to help it cope with its environment.
Today, organizational leaders are confronted with many complex issues during their
attempts to generate organizational achievement. Many leaders, when trying to
implement new strategies or a strategic plan leading to a new vision, will discover that
their strategies will fail if they are inconsistent with the organization's culture. Cross-
cultural management concerns the interaction of differing cultures in a business
environment. When businessmen and women meet people from other cultures, varying
approaches to this cultural management allow for enhanced understanding and
cooperation.
Effects of Culture Change
Well-managed instances of culture change can have a positive influence on a particular
culture. For example, The scope of business operations has changed drastically over
the past several decades. Run a successful, growing business has become nearly
impossible without having to engage in the international market. Globalization has
connected us all in ways we never could have imagined. However, this globalization has
also brought challenges regarding intercultural communication and understanding.
"Intercultural communication" refers to communication between parties hailing from
different cultural backgrounds. In particular, intercultural communication occurs when
the communicating parties come from cultures with different communication practices,
expectations and norms. In the business world, cross-cultural or intercultural
communication occurs when business associates from different cultures must
participate in business exchanges, negotiations or partnerships.
Different cultures value different components of these dimensions to varying extents,
and as such, communication can become complicated. For example, Chinese culture,
on the individualism scale, ranks low; the Chinese tend to put more emphasis on the
collective good. American culture, on the other hand, ranks high on the individualism
scale, putting a large emphasis on individual success and prosperity. These cultural
perspectives affect the way we convey messages, as well as the importance we place
on different aspects of business. These differences play a critical role in mutual
understanding if we are to effectively tailor our business-related communications for
success.

4. Impact on Profitability
In a globalized market, businesses have access to a much wider array of raw materials,
supplies, human resources and potential consumer bases. As such, many companies
find it appealing to expand their horizons into other countries. However, companies
must often implement intercultural communication in order to accomplish this kind of
expansion. Failure to take into account cultural differences can create costly mistakes.
Take Wal-Mart's abysmal failure in Germany, for example. In an effort to expand its
global presence, the store sank $1 billion into a German venture, giving the task of the
expansion to an American who did not even speak German. As a result, the
Americanized company culture did not mix well with German mores, and practices such
as greeters and grocery baggers repelled German consumers. The company eventually
left Germany, largely due to the country's failure to take into account cultural differences
in business practices and communication.