Good People

International Business Stereotypes: Enlightenment Needed

International business stereotypes

A couple days ago, we did a post, Outsourcing IT To China. Fear Not? The thrust of the post was whether it is safe to outsource IT to China. The post was based on that question asked as part of a Computer Weekly survey. In our post, we talked of how on many important statistical measures China scores considerably better than India, and yet one rarely hears businesses talking about being afraid to outsource their IT to India.

At one point in the post I noted how “I am of the view that in the end the best analysis is by company, not by country.” In response to that, a very worldly client-friend of mine called to say that not choosing by company is a common form of stereotyping and then talked of how that sort of thing goes on all the time. He’s absolutely right and I have to admit I have been guilty of that same sort of stereotyping myself.

I own two German cars and one Japanese one. True to stereotype, the German cars have amazing engines, but mediocre electronics and ergonomics and the Japanese car has a good engine with excellent electronics and ergonomics. For years, I took the German cars to a repair shop run by a Teutonic looking older guy who spoke with a German accent and looked like he stepped out of a TV Ad as the head engineer at Mercedes. Then he retired and a Greek guy took over. The changing of the guard gave me pause.

I used to occasionally buy lunch from a small local European grocery, with a really good gourmet food counter. The grocery was run by a very polished looking woman with a French accent. When it was sold to a Korean couple, I immediately worried the food might go downhill.
I would like to think (and claim) that my worries were just about going from one owner to another, but I have to admit they went beyond that. I mean, if we are being honest here, we would admit to a certain comfort in having a German fix our German-made cars and a Frenchwoman fix our lunch. Ugh.

One of the great things about China is that it is so huge and so diverse that stereotyping becomes more difficult, but it happens nonetheless. I cringe every time one of our clients proclaims how “the Chinese just can’t be trusted.” I virtually always counter that by saying that my firm has had long-term great relationships with a number of law firms in China and trust has never once been an issue. I then usually follow that up by saying that we have a number of clients that have had 20+ year relationships with their Chinese factories without a single incident involving deception. This is but one common example.

What stereotypes have you found yourself harboring about Chinese companies that you know to be unfair or just plain irrational? What China business stereotypes did you once harbor but have been proven wrong on so many times that you have managed to banish them from your thoughts. The last thing I am asking here is for China-bashing and I will delete such comments. What I am seeking here is comments that will help all of us expand our minds when it comes to doing business with China. Enlightenment sought here. Please help.

UPDATE: I knew my reactions were unfair and so I kept going to both places and both new owners actually infused their new businesses with positive changes while keeping the good things from the past. But, of course, even if that had not been the case, it would not have justified by stereotyping.

9 responses to “International Business Stereotypes: Enlightenment Needed”

  1. I understand that this comment may not suit your obvious agenda, but after a few years of business in China, as a partner in a Quality Assurance company aimed at European SME’s, I can say that manufacturing here is very dangerous and we have suppliers trying to cheat the buyers, to a different extent and in different ways, on almost every order. I admit that the difficulty of doing business in China is partly the reason that we scan stay in business – but not one of our long term clients have not been exposed to very serious issues or fraud regarding product certificates, materials, products or supplier documentation.
    On an individual level I try to not judge or stereotype the country as a whole, even though its very hard to not slip sometimes, but I find it offensive when an otherwise good blog tries to play down the hardships businesses are facing when doing business here.

    • I’m not trying to play down any hardships. Not at all. My pointing out that there are plenty of honest Chinese does not mean for one second that one should be anything but constantly vigilent and to act accordingly. As a lawyer, I firmly believe in trust but always verify. Or trust, but always set up contracts to confirm. You read both my post and me all wrong.

  2. It seems many Chinese stereotypes arise from a misunderstanding of Chinese business culture and perhaps culture in general. For example: Some might say that the Chinese are evasive, particularly in business, because of a reluctance to get to the point. A meeting might begin with tea, an hour of chit chat etc. The logic of doing this is to facilitate a good relationship, that expands beyond just business. Looking at the situation with this perspective, it seems downright polite and the flipside, what Westerns consider normal, seems harsh. Most of the time, it comes down to different ideas of normal and a lack of explanation.

  3. I think we must understand the tendencies of the people we work with, but we should always look under the hood. This is great blog that has me thinking,

  4. Kudos, Dan, for your honesty and guts in bringing this up. As you know I do a lot of work in intercultural communication, and we’re careful to distinguish stereotyping from generalization. A generalization is a statistically valid (or at least, hypothetically statistically valid) statement about a group. A stereotype is taking a single (usually negative) member of a group as representative of every member of the group. Stereotyping is wired into the human organism, as a means of survival: when a tiger jumps out of the bushes, contemplating its uniqueness doesn’t pay. Fight, flee or die.
    After 20+ years coming and going from/to China, I have no doubt that there are many significant differences between the statistically valid default mindsets of Chinese and Americans. This is just plain fact. The struggle is to come to terms with these differences in a thoughtful way, as opposed to a reactive way. That’s the only way our businesses / organizations will benefit.
    I’ve found the best antidote to stereotype-based misunderstanding is to get to know people and to listen to their reasoning, keeping our judgments as minimal as we can manage. If we’re willing to accept the possibility that we not have cornered the market on truth, then we can honestly listen to another valid perspective. That opens us to understanding, calms our reactions, and helps us make cool-headed decisions. An added benefit is that it feels good.
    I’m not that good at it myself; always trying to improve.
    I know that’s not what you asked. I hope these perspectives can help the discussion along.

  5. I have found in recent years that some Chinese vendors can be very forthright about their manufacturing capabilities. Hardly a week goes by when I run a project by a vendor who tells me they simply can’t do it because they do not have the know-how or machinery. This is in sharp contrast to those vendors who tell you they can do everything but who really can’t. I had once incident last year with an apparel factory who told a customer of mine they could do a certain type of stitch, so my customer gave them an order. Well, they used the deposit from the order to buy some of the machinery to do the stitch ! In the meantime all the orders got backlogged. It was a mess. I have been working with China vendors in consumer goods mfg for years and I definitely see a trend where vendors are becoming more honest and willing to turn down orders they feel they cannot do.

  6. I’m not sure that it’s an issue of stereotyping, but just the landscape here. You certainly see differences in approach and mindset between western and Chinese companies. However, much of the honesty in the west is due to environment. That is, there are legal consequences (and a perception that consequences exist) in the west as regards breaking of contracts, IP violations, and the like, which are less certain here (presently). European and U.S. companies assume that the protections afforded in the western world are going to be in place here, because similar laws are on the books here. The reality on the ground is rather different from what you’d expect looking at the written rules.
    The courts here and enforcement realities are not the same in China. The uncertainty there (given guanxi at all levels), makes for a climate somewhat like operating in a world where business is done entirely on a handshake. You proceed with much greater caution, tread lightly at first, and watch your partner like a hawk until you develop utter confidence in them, if ever. This is how Chinese companies behave with one another for the most part. Lots of inquiries and “reading” are done on the front end and as the relationship is reinforced. Those who don’t understand these realities end up complaining constantly.
    The same was true in the west prior to the formalization of modern legal structures now relied on by businesses. IP is a good example. Decades (and centuries) ago, designs of inventions were deliberately drawn up with fatal flaws, which the inventor was aware of. This was intended to frustrate theft of the idea should someone steal the design sheet. Over the past few decades companies with their patent rights solidified became less concerned about those types of practical impediments, because of the legal safety net. China choosing to abide only by its own IP rules resulted in a renewed emphasis for many companies on following the old rules of business.
    I think it would be foolish to think that western companies are intrinsically more civilized. They’ve just assumed (catastrophically in some cases) that the environment here is the same as back home. To pose a basic basketball analogy, foreign companies have spent the last several years playing organized basketball with whistle-happy refs. The Chinese companies have been playing street ball where elbows and travels are not called. Sadly, the foreign companies continue to complain about the calls rather than just saying “Ok, this is street ball, not prep school… let’s keep our heads on a swivel and get tough.”

  7. The fact is that stereotypes aren’t just made up, they are however rooted in facts that have repeated themselves enough times that a generalization has been formed about a particular group of people. Now anyone with a bit of common sense knows that you would never apply this to 100% of a certain group but you can be sure that it is a very real thing that exists. Stereotypes can change, although it usually takes many many years for this to potentially happen. All I can say is that all you have to do is read half of the multitude of blog posts here on China law blog and you can see that doing business is potentially very dangerous in a variety of ways, so let’s all be realistic about what really happens and that is that we need to be very cautious, do our research and check everything twice, and be absolutely convinced of the necessity and benefit of doing business in China if you are 100% sure you have every aspect possible of your business covered to protect your interests.

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