Topic 6 - Culture and business in Asia Flashcards
Chupa Chups:
- 1994: creations of a joint venture – (67% with Tian Shan)
- 1998: purchase of a partner’s shares and enlarges facilities
- 2003: liquidation of the plant
- 2004: liquidation of the subsidiary, creation of a joint venture for distribution with local partner Tingyi. It keeps the right of acquiring of 50% Tingyi’s stake before 2008.
- 2006: Chupa Chups is sold to Prefetti Van Melle
Mao – the communist revolution:
- Central planning
- Economic growth and structural change
- Drawbacks of the system
After Mao – the journey towards capitalism:
- Modernisation and open - door policy
- Consequences of reforms
- Entry into WTO
- 2nd largest economy in the world since 2008.
Dark – side to Chinese economy:
- Bureaucratic single party system
- State control over key industries
- Social inequality
- Large – scale corruption
Entry modes to the Chinese market:
- Exports (direct vs indirect)
- Licenses (problems with intellectual property protection)
- Direct investment (joint venture or wholly owned subsidiary)
Connections or relationships…
among individuals based on a system of an exchange of favours.
Main differences between Europe and China:
- EU = deal focused / China = relationship focused
- EU = direct language / China = indirect language
- EU = equal treatment / China = very hierarchical
- EU = Monochronic time / China = more reserved
- EU = short – term orientation / China = long – term orientation
Deal Focus (EU) vs Relationship Focus (China):
- Open to do business with foreigners / Less open to do business with foreigners.
- Direct contact / Indirect contact
- Get to the point quickly / Negotiations take time
- Less face to face contact / Frequent face to face contact
- Contracts mean the end of negotiations / Contracts can be renegotiated
Equality (EU) vs Hierarchy (China):
- Low difference in status / Status assigned
* Status achieved / Showing respect is VITAL
Low context (EU) vs High context (China):
• Language direct / Language is often indirect
Inappropriate gestures in China:
- Beckoning people with hand or fingers
- Touching another person’s head
- Giving gifts with one hand
Japan has the…
• 3rd largest economy in the world
Business culture:
- Homogenisation – Japan share same cultures & traditions, as well as education system; common code of conduct
- Hierarchy – language varies when addressing people of different ranks, hierarchical status apply even for relationships among firms and negotiations are usually between people of the same rank and age.
- Men prevail over women in the workplace
- Collectivism, team spirit
- Harmony, need to avoid conflicts and confrontations
- Modesty
- Use of time is absolutely RIGID
- Info must be detailed and error free
- Personal relationships are very important
- Language is AMBIGUOUS
- FORMAL behaviour
South Korea:
PD – 60, AI – 85, IDV – 18, MAS – 39
• Characteristics of Chaebols, large conglomerate groups controlled by a small number of shareholders
• Diversified into a wide range of industries
• Expansionist policy and development of foreign markets
• Greater appetite for risk, growth and entry into foreign markets
Main differences between Chaebol and Keiretsu:
- Management of Chaebols has been more professionally managed since 1997 crisis
- Chaebol – activities are more diversified
- Chaebol – react faster when making changes and adapt short – term strategies
- The big five chaebols: Samsung, Hyundai, LG, SK and Hanhwa
Common features with Japan and China (Confucianism):
Authoritarianism:
• Father superior over the mother
• Managers have the authority over subordinates
• Social class divisions are strong
Family:
• Importance of social and class relations
Education:
• Strict educational system based on values
STONG COLLECTIVISM
Differences between Korea and Japan:
- Quicker strategies in Chaebol – quicker decision – making
- ST orientation – both in companies and government economic policy
- Religion: Christian influence
- Increased expression of feelings
Japanese Negotiations:
- Tend to be more direct and less ambiguous
- Save the most important part of the negotiations until the end
- Need to be concise and practical when negotiating
- Hierarchy influences negotiations
Indian Decision Making Styles
- Decisions are made SLOWLY
* Decisions are made at the TOP of the hierarchy
Conversation topics:
- To establish a business relationship, you must talk about family and friends
- Like to talk about religion and politics – must know the topic well
Distinctive cultural attributes:
Values of the state:
• Tendency to engage in unethical practices
• Corruption considered an alternative and accepted institution
Values of work:
• Emphasis on Hindu ideology of Karma
Values of Hedonism:
• Power, status and money are valued
• Rich people considered superior
Values of life satisfaction:
• Focus on maintaining relationships within group members and helping others considered satisfying.
Values of goal formulation:
• Autonomy and success considered important.
• Importance given to upholding the prestige and social status of the family in formulating goals
Kazakhstan:
- 17 million – more than 120 nationalities – only 63% Kazakh origin
- Important influence of Russian colonialism and soviet rules
- Holds many important resources – oil and minerals count for 80% of exports
- High UA and PD