Western managers in China joint ventures should take advantage of their positions, as representatives of a prestigious entity, to store up capital with local decision makers through quanxi, or relationships. These are a potent instrument in protecting one’s interests. In fact, they are more powerful than written documents, which are seen as a necessary ritual when dealing with Westerners.
There is a fundamental difference in the way Western and Asian firms approach business. Basically, for Western companies the business comes first and then the relationship follows. With Asian firms the relationship is developed first and the business flows from the relationship. Thus, a basic strategy for Asian organizations is the development of a web of relationships, or guanxi, that will eventually pay off with business opportunities. The development of long-term relationships requires time and patience, but in them Asians find commercial security. As Asian firm that really knows the people and companies it is doing business with reduces its business risks, as opposed to dealings with unknown, untried individuals and business organizations.
Western companies, on the other hand, seem not to have the desire, patience, or time necessary for Asian-style networking. Part of the reason may be traced to the relatively short stay of Western executives in Asian assignments. The typical stay of 2-4 years is not sufficient for the development and nurturing of long-term relationships. A more desirable strategy would be for Western firms to consider investing human resources over a 10-20 year time span. In a similar manner, many Western firms position executives in Asia without giving them decision making authority. This requires the executives to constantly confer with headquarters for advice and approvals – undermining how they are viewed by Asian business leaders and causing, in effect, a loss of face in a land where saving face is everything.
Winner takes all. One key Western marketing dimension is the glory of victory in competition. Such an adherence to victory often means that, akin to Atilla’s hordes of yesteryear, there is no mercy for the vanquished. Not everywhere are such approaches supported, desired or accepted. Often, the goal becomes for the victor to mend fences, reinvigorate a feeling of togetherness and provide a cause for standing together. In many societies it is expected that one not take advantage of what could be done, but rather consensually do what ought to be done. Such context makes it far less acceptable to practice what we have called “vampire marketing,” where the airline or hotel extracts blood-sucking prices for additional services or products from its captive audience after the major purchase decision has been made. Perhaps Western marketers can learn valuable lessons from this context and consequently make themselves more valuable to their customers.
Who is on the pedestal? Particularly in the United States, we think of the individual as the key component of society. But such a perspective is not uniformly taken around the world. For example, in socialist or tribal societies it is typically the group that receives preference over the individual. Society can also be seen as the key shaper of the individual. Or perhaps the family is accorded top billing. In such cases, just imagine how different emphases in making financial decisions can be re-interpreted in various settings. What may be corruption and bribery to some may turn out to be filial devotion to others. With the strict administration of the U.S. Foreign Corrupt Practices Act and the new, more stringent U.K. anti-bribery law about to take effect, there may be harsh consequences to businesses and individuals who are not attentive to the laws governing that contradiction.