Author Archives: Keith


In this last post in this series I cover a few of the ‘other issues’ we would look at in a typical China cultural awareness training programme we deliver to a client. The issues outlined below should never form the core of a China cultural awareness programme, but they are areas which people are interested in and which usually provoke a number of interesting questions.

The Communist Party

There is no point worrying over the apparent contradiction of a country which exhibits a rampant capitalistic approach but which, at the same time, is ruled by an autocratic Communist Party. This apparent contradiction seems to excite people in the West far more than it does most Chinese people who are mostly concerned with going about their daily business and in maintaining social order. Maintaining good social order is a primary concern of Confucian philosophy, the government and most of the population of China – many of whom lived through the excesses and turmoil of the Cultural Revolution. (When you investigate it, the history of China is littered with examples of the disastrous effects of the breakdown of civil order).

The Communist Party is in power and looks set to remain in power for the foreseeable future and therefore must be recognised in that light and its influence understood. There are many books written on influence of the CP but some key points to bear in mind are:

  • The Party maintains an interest in many private companies or ‘new economic organisations’ as they are called, and many companies contain what are referred to as ‘Party cells’ which usually consist of three Party members.
  • Many owners of private organisations openly welcome the existence of such cells as they feel it puts them in a good position when interacting with local and national authorities or when pitching for government tenders.
  • It is difficult to get figures on how many private companies have such ‘cells’ operating within their organisation, but it is generally viewed that the number is increasing rather than falling.
  • This means that in any business meeting in China (or with a delegation from China) you might, or might not, have official party members present – it is unlikely that you will ever know.
  • Something like 80 – 90% of the richest 1000 people in China were Communist Party members.
  • Ironically, many people join the Communist Party as they see it as a pathway to wealth.

Women in Business in China

Officially, women have the same rights as men in the workplace and the party has promoted this sense of equality over the past thirty years or so. However, traditional Confucian thinking does not fit easily with the idea of gender equality and, therefore, it is still possible (but not definite) that foreign business women will be viewed less favourably as business partners than male colleagues.

Major obstacles remain which prevent Chinese women from moving into higher management. These obstacles are probably mainly cultural, resulting from traditional values and received ideas about the place that women and men occupy in the family and in the wider society. There is a body of evidence that the importance and number of women in senior leadership roles has been growing over the past few years and this trend could be driven by a combination of modernisation within the country and demographics (China has a shrinking population and needs good-quality, qualified workers).

Foreign businesswomen will be treated with respect and courtesy. They may find that, within a delegation, the Chinese defer to male colleagues regardless of the actual seniority of the Western party – the Chinese assumption being that the male will naturally be the decision-maker. Although this may be irritating, it is best not to show that irritation in public.

Corruption

In his outgoing speech, former President Hu Jintao stated that endemic corruption (and incompetence) were threatening the stability of the State and the current Chinese leadership have made this issue an absolute priority. However, getting the Communist Party to tackle corruption is a monumental challenge especially as many Party members are numbered amongst the country’s very richest people.

Corruption amongst government officials – both national and local – is widespread and could be said to reflect the worst impacts of the Quanxi system. People in Quanxi relationships often find it simply impossible to refuse a bribe for fear of offending the giver -and breaking down this age-old culture will be difficult. The government has frequent crack-downs on bureaucratic corruption but China is vast and difficult to govern (the police are themselves seen as massively corrupt). The famous traditional Chinese proverb, ‘Heaven is high, and the Emperor is far away’ points to both the historical nature of corruption and the inability of the centre to control such a huge land mass and population.

There is a feeling that Western companies are more likely to be targeted for investigation than local Chinese competitors and, therefore, Western companies operating in the China market need to be ever vigilant.

Keith Warburton

Keith Warburton, Global Business Culture CEO

Entertaining

Business entertaining is a crucial element of Chinese business culture and should not be immediately associated with corruption. Entertaining is part of the relationship-building process and should not be thought of as a bore or as an irrelevancy. The quality of the entertainment provided reflects the seriousness of your intent to enter a long-lasting relationship and conversely, the lack of quality entertainment can be read as a lack of serious intent.

Budgetary considerations come into play here and, whilst Western business visitors to China are usually royally feted by their Chinese contacts, it is sometimes difficult for Westerners to reflect the same quality of entertainment when the Chinese counterparts repay the visit. This lack of reciprocal entertainment can often be confusing for Chinese counterparties and can lead to a loss of face for senior delegates.

If you are invited to a banquet in China, prepare yourself for a meal to remember. The banquet can consist of up to thirty dishes being served over a long period of time and it is therefore wise to pace yourself. Try to eat a little of each dish rather than sticking to the one you recognize. It is traditional to leave some food on your plate — if you finish everything, this can be taken as a sign that you are still hungry.

Banquets and entertaining in general can involve the consumption of large volumes of alcohol and this can be quite a challenge. You may feel compelled to involve yourself in the lengthy round of formal toasts which often accompany every course of a banquet, but it is perfectly acceptable to give an excuse for not being able to join in – saying you cannot drink for health reasons is probably the best option.

Do not be overly worried about the complexities of seating arrangements as these are a subtle art-form probably best left to your Chinese colleagues or local advisors to organize.
The seating arrangements at a banquet relate to perceptions of hierarchy and status. If you are invited, you will be shown where to sit. However, if you are the host it is probably best to get some local advice on the best seating plan if you want to avoid insulting anybody.

Gift-giving

It is important to state that gift-giving in China is a very separate issue from bribery. Small gifts are very often given and received as this is considered an integral part of the relationship-building cycle.

It is probably good to speak to your central BD team if you have any questions about which gifts are appropriate, but a few simple rules would be:

  • Gifts should be wrapped
  • Never give anything sharp
  • Do not give timepieces
  • Gifts will often be initially refused as a gesture of politeness

Conclusion

The advice in this series of posts is meant as a brief introduction to the complexities of Chinese business culture and, as such, cannot be comprehensive and all-encompassing. We go into all these areas in more detail and relate them to your specific business needs in the China cultural awareness training courses we deliver for our clients.

The best advice is to be open-minded and patient when working in China or with the Chinese. Recognise that any frustrations and confusion you may feel are probably mirrored on the Chinese side – they find your approach equally confusing.

If you would like to have a conversation about how our China cultural awareness training programmes might help your business work more effectively in China, please contact us.

In this final blog in our series on global outsourcing we focus on some key internal areas of consideration which are critical but, in our experience, either overlooked or addressed poorly.

Why Talent and Human Resource Management is Key During the Global Outsourcing Process.

Once the decision is taken to embark on a transformational programme such as Global Outsourcing, and everyone from C-level to team member has understood the importance and risk of the programme and their specific role in the project, we enter the phase of execution. At this juncture, the impact of the plans on the teams and the human challenges they present will become magnified and, if not planned for and managed well, can derail even the most carefully thought-out of projects. Getting these elements right is critical and, if not managed with focus and agility on a daily basis, will represent potentially the biggest headache for the project leadership.

Key issues to consider at this stage are:

  • Secondments: It is clear that global outsourcing programmes will cause a certain level of individual and team stress, often merely through fear and mistrust of the unknown. These challenges can be reduced through implementing cultural awareness and mentoring training but additionally, and critical to the success of the programme, is the development of a secondment plan – sending people to and from the chosen outsourcing entity. This not only facilitates process transfer but will also facilitate the development of the necessary cross-company relationships, cultural awareness and basic trust in the partnership – a trust which is so often missing at the outset such projects.
     
    Central to the success of any good secondment plan is buy-in from senior leadership and team members who will need to offer up their best people to be 100% committed to the programme – whilst at the same time maintaining the delivery or service levels of the current environment. It will require a great deal of “hands-on” flexibility and agility from the project team to adapt the secondment plan to the real-life requirements of the programme as it evolves.

    It is also really important to choose secondment candidates carefully – not only do they need to be process experts but simultaneously have to be ambassadors for the company, the programme and, in addition, need to be culturally aware. This combination of skills is a rarity in most companies and finding this combination in an often “threatening” change environment can be difficult.

  • Attrition/Retention: Most carefully planned projects will usually have a workstream on managing attrition in the “home” environment – however it is important to think about this in the outsourced/offshored environment as well. Often, due to language or differing management styles or simply a set of cultural blockages, people will decide this programme is not for them and move on – particularly if the local labour market is tight. If the focus on attrition is “undercooked” then it can be a major cause of programme failure due, not just to a lack of resources, but can also potentially lead to spiralling programme costs with extra training, additional secondments and added replacement resources all required both at home and in the new environment.
     
    Keith Warburton

    Keith Warburton, Global Business Culture CEO

    An area of specific focus should be potential attrition of key skillsets in the “home” environment (which long term may be a desired outcome) but attention to retaining these key skillsets in the transition phase is fundamental to the delivery of the programme due to the criticality of process knowledge as a success factor for the project. Keeping on top of this is hugely important and specific HR programmes to hold on to these key skillsets through reward schemes and the structured management of each individual involved will be necessary.

    It is also extremely important to have retention plans for key leaders in the organisation, some of whom may feel disenchanted and at risk – and even the project leadership which is 100% focussed on delivering a successful programme may well have some concerns for their own future despite the fact they are leading a high impact programme such as this. Once again, specifically tailored career pathing and/or reward schemes are important here and special care will be needed if the individual leading the project has already been identified as a C level leader of the future or is critical to the client base.

  • Outplacement: During the project execution phase there will normally already be a plan for a certain level of workforce reduction in the “home” environment. This, as we have said before, will create a level of uncertainty and fear which is understandable and has to be managed well if it is not to derail the project. A key element to managing this risk well is a carefully designed outplacement programme for those concerned. Teams will want to understand how they or their colleagues will be treated, and a well thought-through outplacement programme is essential to keep people as motivated as possible. Additionally, it will help to avoid workplace conflicts both on an individual basis and at the team level. Wherever possible, additional individual and/or team mentoring from an external source is advised to help people accept the consequences of the programme – even if the individuals concerned are not directly affected.

Pack and Ship

Once your project to outsource, offshore or centralise work is underway you will face the task of packing and shipping the selected work. The ability of your organisation to handle this will depend upon the experience in the organisation, the mood around the specific offshoring initiative and the strategies that you put in place to support this phase. Assuming that you have made good decisions about what work to move then this phase is essentially a case of describing what you do in sufficient detail to train new people and providing the correct equipment and infrastructure for them to deliver a service at least as good as todays.

Here are a few of the factors to consider in this phase:

  • How are levels of service currently measured? If there are not robust and accepted metrics in place that describe the current level of service, then you will not be able to make comparisons once the work is shipped. As you pack the work to ship make sure these are in place, accepted and communicated as the baseline before the move.
  • How well do you transfer knowledge to people in new roles or who are new to your organisation? Your ability to define the work, train people and give them access to on-going support will depend upon what systems you currently have in place for knowledge transfer and training. With a move, you have the added challenge of needing to work across geographies and perhaps, company boundaries if third parties are involved. Detailed documentation, effective training and ongoing access to knowledge are key to success. This may also require you to establish new on-line collaboration and learning tools.
  • To what extent do existing teams and functions trust each other? When this is at its best then work can flow without friction through an organisation. Once you pack up work and ship it how can you ensure that there are steps in place to build trust between the new contact points? Solutions such as rotational moves of leaders can go a long way to help build trust between teams.
  • When you ship work it will take some time to unpack and for services to be fully functional. During this period, you need a parallel approach to ensure there is no disruption to the business and this needs to be as short as possible to avoid unnecessary costs.

There are many more things to consider when it comes to packing up the work and shipping it. By being broad in your thinking and systematic in your approach you can ensure a good result for this move and create a capability for future moves.

Project Management

When embarking upon offshoring, outsourcing or centralisation of work there will be multiple projects and workstreams to manage with high degrees of interdependency. An approach to project management that balances rigor with outcomes and is supported by strong communication will be key to the success of your overall programme. If you don’t already have these skills in-house then acquisition of them should be a key consideration as part of your processes for selecting partners to work with on your programme.

Some factors to consider in your approach to project management:

  • Strong beginnings and strong endings to projects ensure that what happens in the middle happens well. A clear and simple objective for each project along with the right team and clear scope will help build success. Being prepared to have succinct and open management review of projects can ensure that the approach to project management can evolve and improve based on experience gained.
  • Project teams may involve staff from partners as well as your own teams. Developing a common language and understanding of the approach to projects is important to minimise the risk of failures.
  • How can you strike a balance between team size and autonomy versus the need to ensure the overall programme is on track? Small teams with a well-formed objective can be very agile and adapt to change quickly. They need to be able to do so within a framework that will ensure their results are aligned to the overall programme.
  • The nature of this work can be very challenging for teams and individuals. This makes it a great opportunity to develop people in your organisation by providing them with stretching assignments and giving them support to develop their skills. You can use these projects as a way to develop high potential people in your organisation for future roles.
  • How to find a balance for progress reporting and governance? Too much and it won’t get used, too little and teams and stakeholders will lose direction. It is vital to build a culture of transparency so that any issues can be spotted very early and success acknowledged as it is achieved. Steering groups have a key role to play in ensuring they guide, challenge and encourage teams while being ready to make tough calls when needed.

There are many other aspects to consider – the detail will be important, and it will depend on the context in which your projects are happening. We would love to talk to you about how you can prepare this aspect of your programme.

We hope this series of blog posts on key aspects of global outsourcing have been helpful. If we can be of any further assistance, please contact us.

In this series of blogs, I am focusing on some of the key areas we look at when running China cultural awareness training programmes for our clients. Of course, you can’t go into the same level of detail in a post such as this, but it hopefully gives a flavour of what we would cover and what might help your colleagues interface more effectively into China.

In this piece I’m looking at a whole series of issues such as meeting styles, decision-making, long-term thinking and communicating in China.

Meetings Styles:

In any meeting situation, it is important to show respect to those to whom respect is due – this is one of the ways in which you can show yourself to be honourable and in turn worthy of respect. Respect should be shown to age, seniority, party membership, the history and traditions of China, political sensitivities, the company, the region……. the list is almost endless. Stand up when a senior person enters the room, offer the ‘seat of honour’ (furthest from the door) and be attentive even if the key person’s English is weak.

Business cards are always exchanged on first meeting a new contact. Cards are held in both hands when exchanging them and then inspecteded in detail. You should have your card printed in Chinese on the reverse and always offer it Chinese-side up (as it’s obviously easier for the Chinese to read Chinese). Treat the card with great respect as the card is the man.

Handshaking is normal in China, but a Chinese handshake tends to be soft and lingering. As it is considered impolite to look people straight in the eye, it is customary to look down, lowering the eyes as a mark of respect.

Meetings are circular and you are likely to find yourself involved in a whole series of meetings rather than just one big meeting at which all major issues are disclosed and assessed. Meetings are more about building relationships and exchanging information and it is rare for a decision to be made within the meeting. Decisions will be made elsewhere in consensus-style discussions, which involve all the relevant people (including possibly a Party member). As a result of this approach to meetings and their serial nature, patience is very definitely a virtue. Impatience will achieve nothing other than delaying things even more.

Decision-making Styles:

Decision-making processes are lengthy in China as they usually focus on the complexity of an issue and people want to be sure that every single angle is considered before coming to any conclusion. This process very often involves revisiting issues already covered at the beginning and starting the thinking process and the whole chain of discussions again. In meetings you can find issues being revisited which you thought had been settled long ago. The Chinese want to be sure every aspect of an issue has been analysed in depth and then re-analysed. This approach can often lead to frustration for Western counterparties.

The Chinese are holistic thinkers. This allows them to view an issue at once in all of its complexity. Westerners tend to be more linear in their thinking and use a more processed approach to tackling a problem. This usually involves a beginning, a middle and an end.

China is a collectivistic culture which leads to a consensus building decision-making approach. Westerners view this approach as inefficient and too slow. It is usually slow but not necessarily inefficient. Again, as in many aspects of doing business in China, patience is not a virtue – it is a necessity.

Keith Warburton

Keith Warburton, Global Business Culture CEO

Long-term Attitudes:

All of the above Chinese characteristics point to a business culture that is long-term in outlook. Relationships take time to nurture and develop, decision-making is hierarchical and consensual, senior leaders tend to be older and people develop Quanxi relationships which brings life-long obligations. China is also an ancient civilization and the Chinese think in millennia not decades or single years.

Thus, taking a long-term perspective when working in the China market is an absolute imperative. Be patient and expect things to take longer to come to fruition. Plan on making several relationship-building trips before you see any tangible progress made or deals won. (This is not always the case but any ‘quick wins’ are best seen as an exception rather than the rule).

Always emphasise your long-term commitment to any Chinese counterparty, their organization and to China itself. Try to work out why working with you would be good for China and the development of China – this may seem irrelevant to you, but it definitely is not to the Chinese.

Communication in China:

Mandarin is the official language of China, but it is not universally spoken or understood. Chinese should be seen as a family of languages – a little like the Romance languages of Europe. There are ten major languages in China which include Mandarin, Cantonese, Shanghaiese, Fukienese, Hokkien, Hakka and Chin Chow. On top of these there are dozens of minority languages, some of which are spoken by millions of people.

A major difference between the Romance languages of Europe and the Chinese family of languages is that there is just one writing system for all major Chinese languages. This means that the Chinese can read other Chinese languages without being able to speak them – the written language therefore becomes a unifying national and cultural factor. Indeed, it could be said that it is this common writing system which has held the Chinese people together over thousands of years. (The current writing system was standardised in the 3rd century BC and has remained virtually the same ever since).

Although English language levels are rapidly improving in China, it can be difficult to do business in many parts of China without the aid of a translator. English language levels are very patchy and, although a layer of fluent English speakers exists, the layer is quite thin, and levels fall away very quickly. Communicating in China can, therefore, be a slow, laborious activity and fraught with constant dangers in terms of misunderstanding and mistranslation. Don’t assume comprehension. Cover the same ground several times and constantly check for understanding.

One of the reasons that communication can be such a problem in China is that along with many other Asians, the Chinese find it extremely difficult to say ‘no’. Saying ‘no’ causes both embarrassment and loss of face and it is therefore better to agree with things in a less than direct manner. Thus, anything other than an unequivocal ‘yes’ probably means ‘no’. Be very wary of phrases such as ‘Yes, but it might be difficult’ and ‘Yes, probably’.

It is also difficult to deliver bad news and this is often done through the use of an intermediary who can soften the blow and try to preserve as much good will within the relationship as possible.

The Chinese have a reputation for ‘impassiveness’ and this is largely based on Western misinterpretation of Chinese body language. The Chinese use a very limited amount of visual body language and Westerners often interpret this rigidity as a lack of responsiveness and emotion. Lack of overt body language does not mean that the Chinese do not show their reactions – it is more that Westerners are not skilled at reading it across the cultural divide.

All these issues point to the need to be very thoughtful in your use of language in China. Do not assume they have always understood what you have said (even when they tell you that they have) and never be afraid to go over things several times. The Chinese will very often go over issues many times – even when speaking in Chinese amongst themselves.

When speaking or writing English to the Chinese:

  • Watch your speed – it is difficult to speak slowly over long periods of time but beware of starting off at a slower pace only to speed up when you start to get interested in what you are saying.
  • Use a limited amount of vocabulary – don’t feel the need to be overly eloquent. Using the same vocabulary over and over again is helpful to weaker non-native speakers who have a limited vocabulary.
  • Avoid colloquialisms – everyday phrases such as ‘back you to the hilt’ or ‘throwing a curve-ball’ are confusing. Non-native speakers either know them or they don’t. It is very difficult to try to work out their meaning, especially in a meeting when the speaker is quickly on to the next point.
  • Ask open questions – the Chinese rarely tell you when they haven’t understood what you are saying so it is important to ask a series of open questions throughout meetings to check for understanding.
  • Keep written materials as short as possible – it can take a Chinese reader many times longer to read a page of writing in English than it takes you. The more complex and long the written material, the more the need for the safety net of a translation. Anything that goes for translation lengthens the timeframe and adds to the risk of confusion.

If you would like to have a conversation about how our China cultural awareness training programmes might help your business work more effectively in China, please contact us.

Much of the training and advisory work we do at Global Business Culture is focused on making global outsourcing projects work more effectively. We run many cultural awareness training and global virtual team programmes for clients who have embarked on a large-scale offshoring arrangement only to find that getting people to work efficiently across the barriers of time, culture, geography and language is very challenging.

Here are a few of our thoughts on what you need to factor into the process:

Virtual Teams and Global Outsourcing

Transitioning work from one country to another inevitably results in teams needing to work in an increasingly virtual environment. Tasks that used to be undertaken in one location are now passed on to another country to be performed by colleagues from a different cultural background who often have a different first language.

Working across the barriers of time zones, culture, language and technology will almost inevitably throw up a range of new and challenging situations which are going to require people to reassess the way they perform key tasks. Teams will be re-constituted, and tasks reassigned. Leaders will be asked to manage people who are located thousands of miles away, who they don’t know and probably (from a cultural perspective) don’t understand.

The issues of virtual working are not ‘soft’, and they are not peripheral to the process – they lie at the heart of how successfully you can make any outsourcing project work. If you can make virtual teams as effective as co-located teams, then half the battle is won – however if your virtual teams become malfunctioning the results can be enormously damaging and very costly.

Senior leaders need to recognise the critical nature of virtual team working and the need to give people the knowledge and skills to operate effectively in such a challenging environment. Emphasis should be placed on the following areas:

  • Developing virtual leadership skills: Just because somebody has successfully managed a team in their home location does not mean they automatically understand the dynamics of virtual team working. Virtual team leadership demands a whole new set of skills and also requires people to develop new levels of global cultural fluency and awareness.
  • Agreeing team protocols: Multi-cultural virtual teams will be made up of people with different cultural backgrounds and different corporate experiences. They will bring their own assumptions about ‘how things work’. Everybody will have a different expectation around what a good meeting looks like or how decisions should be taken. Global virtual teams need to establish agreed team protocols and they need to do this right at the outset of the project. Fail to address this issue and you automatically build-in inefficiencies.
  • Improving communication skills: Different countries have very differing views around how to communicate effectively. Each team member might have a different view about how they want to communicate with the leader. Some cultures like instructions to be given in great detail; others like to be given an objective. Consistent, clear and comprehensive inter-team communication is a must if the team is to function to full capacity.
  • Great technology: Global virtual teams rely on the use of technology in almost every situation – you cannot shout to a team member in another country. This complete technological dependency means that your technology has to be good and it has to be robust, but it also means that all team members need to be comfortable using it. Outsourcing projects often introduce people to new technologies but training on these new technologies is often overlooked because there are so many other things happening at the same time. Appoint technology champions and make them accountable.

If you fail to address these issues you will regret it down the outsourcing line. Getting this right requires time, training and budget – so factor those things into you plans from the start to avoid any unpleasant surprises.

Keith Warburton

Keith Warburton, Global Business Culture CEO

Cultural Awareness – a Key Ingredient of Global Outsourcing Success

Increasingly, outsourcing projects happen cross-border which inevitably results in an increased amount of cross-cultural interaction. Any international shared-service centre environment must inevitably involve a high level of complex, multi-cultural interaction and, if the bulk of your off-shore development or back office processing is India, you are likely to encounter inter-cultural challenges.

How culturally fluent are your home teams prior to any transition activities? What have you done to ensure that your new outsourced resource has a good understanding of the cultural expectations of your home teams – and more importantly of your clients? Are you even aware of what some of the key cultural challenges you are likely to encounter might be or do you prefer to pretend that everything will be fine?

In our experience, managing global cultural complexity is one of the key difficulties any major cross-border outsourcing project is likely to face. These challenges are both strategic and interpersonal but all of them can have a dramatic impact on the overall effectiveness of your operation:

  • Aligning structures: How will you structure your organisation in the new territory? This is a key strategic decision when opening a captive in another country and can also have a significant bearing if using a third-party provider. Many Western operations want to recreate their own flat systems around the world but this can cause chaos if your chosen outsource destination is a rigidly hierarchical country such as India. Get this decision wrong at the outset and you will live with the consequences for years.
  • Leadership style: If you have people in the home teams’ leading team members in the outsourced destination then you are very, very likely to have a clash of leadership styles. Leadership is geographically conditional – what is good leadership style in one country is often viewed as poor leadership in another. Both leaders and team members need to understand these dynamics and adapt their approaches accordingly.
  • Cultural bias: Home teams are prone to equate ‘different’ with ‘wrong’. If colleagues in an outsourced destination have an approach to any specific task which is different from how it is normally performed ‘at home’, the new approach is often felt to inferior (even if it is, in fact, better). All parties need to learn to shed their natural unconscious bias and develop very high levels of objectivity when appraising the work done by new overseas colleagues.
  • Effective communication: Communication is difficult enough within single-country organisations but is obviously much more complicated across cultures and language groups. Add the necessity for almost all communication to be driven through technology of one form or another and you have the perfect recipe for confusion and misunderstanding. Focus on effective communication is essential from the outset.

Global cultural differences challenge you in a way that is complex and often concealed. Our experience is that many organisations only become fully aware of cross-cultural challenges at the point when things are starting to go badly wrong and starting to impact negatively on a host of critical metrics.

Managing Distributed Processes

As you move work, you might find you have different parts of a process in different locations. It is always best to keep work hand-offs and feedback loops between different people in a process simple and tightly connected. Think about how the best relay teams in athletics succeed. The baton hand-offs are as important as the individual performances between hand-offs. With a change such as off-shoring you will have changed the context in which this happens for some people and they will need to develop the skills to manage a distributed process.

Here are a few considerations to bear in mind. They are important when you have a single location structure, even more so when work is distributed.

Who is the end-to-end owner of the process? Developing this role and the skills it requires are vital to bring together the different people in the process especially when there is change or improvement happening. The owner needs to have a grasp on how things are running today, a future vision of how the process should evolve and the ability to influence across functions, countries and partner organisations.

If the work hand-offs have changed then you may need to re-define what good looks like in the new context. This would cover aspects such as metrics, communication and escalation procedures and support to help implement these changes. Having people with the skills to facilitate the design of the new situation will be important.

With a distributed process and team, you might need to re-think how collaboration takes place. How will teams share simple visual performance data? How will teams carry out regular progress meetings to ensure the team is connected and working on the right topics?

When you move to a distributed process, leaders will face new challenges. It’s often the case that leaders who are already strong at delegating effectively will thrive in a distributed process. Leaders who get too involved in the work of their teams may need time and support to adjust.

Managing Attrition in Outsourcing

The decision to outsource work to another geographic location is often predicated on the expectation of large potential cost savings and access to scalable talent pools. Whilst both goals are achievable, they can be severely impacted on by high levels of attrition at the outsourced destination (and even at home). Without wanting to sound alarmist, your approach to managing attrition could make or break your plan in the medium to long-term.

All the evidence shows that rates of attrition are higher in the outsourcing world than in other areas of business and there are a number of factors which contribute to these disappointing statistics:

  • Competition for talent in the outsource market
  • Lack of promotional opportunities because of flat corporate structures
  • Wage inflation in-country and an unwillingness to keep pace with this
  • The nature of the work which is outsourced – which is often quite boring
  • Recruiting overly qualified staff for mundane tasks
  • Lack of a sense of inclusion within outsourced teams
  • Outsourced partners moving their own staff around as new clients are onboarded (you wanted their best people but so does everybody else).

Any outsourcing project needs to have the management of attrition at its core. It might sound pessimistic to start the process by assuming that many of the people you recruit will leave but unfortunately experience proves that is exactly what happens.

Ask yourselves a series of basic questions:

  • What is the cost of attrition to my business and how might that offset any cost benefits you are expecting (include in this calculation recruitment, training, opportunity cost, impact on clients and the home teams etc.)?
  • At what level of attrition do I lose any cost savings I am expecting from the transition process?
  • Why would people want to work for us?
  • Why would they want to stay long-term once they have joined?
  • What is the clear career path I can show new joiners?
  • What incentives can I offer to make retention more likely (things other than cash often go a long way)?
  • How will we manage at a distance and promote an atmosphere of inclusion?

Unfortunately, attrition is often treated as a HR issue and fingers are pointed if attrition rates are high. The management of attrition is a whole organisation priority and senior leaders need a laser-like focus on this throughout the lifetime of the project. If fingers are to be pointed over this issue, then they should be firmly pointed at senior leaders.

We have helped dozens of organisations rise to the challenges outlined above which are inherent in any cross-border outsourcing project and would love to talk to you about how we can help your organisation become more culturally fluent.

China remains front of mind in terms of global trade and this is certainly reflected in the work we are doing with our international client base. We are increasingly being asked to run China cultural awareness training courses by organisations who find themselves in contact with the world’s second largest economy.

In this second blog post of this series on Chinese business culture I look at a couple of key areas we would always explore in depth in any China cultural awareness training programme we deliver – these issues are face and hierarchy.

Face (Mianzi):

Everybody knows that it is important not to do things that could make Chinese counterparts lose face. But what, exactly, is ‘face’ or Mianzi? And that question is exactly where the problems start. Most Chinese (and many other Asian business people) are very quick to tell you how important ‘face’ is – but most of them find it very difficult to explain exactly what it is.

What Mianzi is not, is the slight degree of embarrassment a Westerner might feel when they make a mistake – the sense of Mianzi impacts much more directly on the sense of self-esteem somebody feels about themselves and the way in which they perceive they might be viewed by the people in the various groups they belong to. (Remember that China is an ultimately group-oriented culture and people belong to a myriad of groups – family, university peers, the Party, work teams, social club, the Party etc.).

Keith Warburton

Keith Warburton, Global Business Culture CEO

The idea of face can probably be better understood through reference to China being an extremely hierarchical society. The relative position a Chinese person occupies in relation to another (e.g. a boss to an employee, or a parent to a child) demands a certain degree of respect and demands certain behaviours. Thus, a leader of a local Chinese company will expect their lower ranking colleagues to politely greet them in ritual fashion on arrival at work in the morning and a parent will expect his or her child to achieve high marks in school. If these expectations are not met, the leader or the parent will potentially feel slighted or embarrassed. This would then mean they potentially lose “face” in the eyes their co-workers or family.

The great danger of being seen to make somebody lose face (even unwittingly) is that the ‘victim’ might not want to do business with you in the future and, in addition, their peers are likely to view you as a potentially ‘dangerous’ person. If you can make one person lose face, will you do the same to others?

The type of typical actions which a westerner might undertake unknowingly which might make the Chinese lose face are:

  • Directly pointing out people’s mistakes (especially of a senior in front of subordinates)
  • Directly disagreeing with a senior person in a meeting situation
  • Becoming overtly angry or overly emotional in a meeting
  • Addressing junior people rather than the senior people in a meeting (possibly because their English is weak)
  • Over-use of humour in serious situations – this could be insulting to senior people
  • Pushing hard for a decision whilst the Chinese are in the middle of their lengthy complex decision-making process
  • Asking for things to be done which are outside of the ability or remit of the person you are asking

Of course, along with the concept of losing ‘face’, sits the concept of gaining ‘face’. Many things can ‘give face’ including being praised by a boss, having a well-respected job, working for a powerful company, becoming a Communist Party member or even driving an expensive car – all of these can lead to being admired by one’s peers and society in general which leads to ‘gaining face’. It is probably a good idea to help counter-parties gain face because they are much happier working with someone who is a known as a face-giver than somebody who is oblivious to face-related issues.

Hierarchy and its impacts:

Many companies in China are either family-owned or government run and therefore tend to operate within a hierarchical structure. This hierarchical approach is then underpinned by the all-pervasive influence of thousands of years of Confucian philosophy and teaching and a strongly hierarchical, bureaucratic Communist Party structure. The combination of these elements means that local Chinese hierarchies need to be understood and interacted with appropriately – they simply cannot be ignored or wished away.

Many Western business people have been taught to view hierarchical business models as inefficient and slow – this may or may not be accurate, but hierarchies exist and cannot be ignored. The key impacts of hierarchy on day-to-day business issues which need to be addressed are:

Information flow:

Information tends to flow less freely within a strong hierarchy – information follows the hierarchical lines. Thus, a subordinate will give information upwards to their boss (who may pass that up to their boss) who will then pass it horizontally to a counterpart in a different function before it is sent down the chain again to the relevant party in the other function. When the information returns, it follows the same path in reverse.

This means that information flow around a local Chinese organisation can be slow – from a Western viewpoint. It also places an emphasis on getting the information to the right person first time (otherwise even more valuable time could be lost) which in turn means you need to understand their hierarchy and who the key contact people are.

A good piece of advice would be to take time in the early stages of any project to talk to senior management in your counterparty about how information flows. ‘If we want information about something, where do we go to find it?’

Showing respect:

Senior managers do not expect or appreciate being directly disagreed with by more junior people from outside organisations. Your senior leaders should deal with their senior management – even, sometimes, regarding quite minor matters. This can put additional resource pressure on your senior leaders who may need to become involved in issues they would normally delegate to more junior people. Senior leaders also need to understand that if junior colleagues ask them to do something which ‘back home’ should be done by somebody more junior, it is not because the junior staff are hiding from their responsibilities – in fact they are taking real responsibility by acknowledging the need to respect the Chinese hierarchy.

Senior Chinese management:

Senior Chinese managers will be friendly and respectful of senior western business people but probably not overly impressed by them and are definitely not overawed by them. The meeting of very senior western business people and senior Chinese corporate leaders are often purely formal events in which work done before the meeting by more junior staff is celebrated and approved. These meetings are often not really used for real business discussions or decision-making.

Leadership style:

Leaders are expected to lead in China and leadership style can therefore appear paternalistic with leaders telling people exactly what to do and subordinates doing exactly as they are told – unquestioningly (even if they think the boss might be wrong).

Initiative:

Strongly hierarchical cultures often produce a lack of initiative at the lower levels. Subordinates undertake the tasks they are told to by their leaders but tend not do anything else. If the leader wants something to be done, they will give those instructions and if the instructions are not given the boss doesn’t want that task to be undertaken. To perform a task unasked by the leader might be appear as insubordination.

Age:

Age is worthy of respect in, and of, itself. Age produces wisdom and older people are to be respected because of their age. This has traditionally meant that most senior people in China were older men. Demographics in China seem to be affecting this traditional approach with younger people being promoted earlier as the older generation retires.

If you would like to have a conversation about how our China cultural awareness training programmes might help your business work more effectively in China, please contact us.

In our previous blog post on global outsourcing we looked at some key issues such as strategic fit for the business, selection locations and keeping the clients in the loop. In this second blog in the series we move the process on and look at the critical challenges of partner selection and management buy-in. In the work we have done on major global outsourcing projects, these are phases which have the potential to go badly wrong.

Partner Selection in Global Outsourcing

The reasons for deciding to outsource work can be many and varied. Often the move is driven by cost concerns, but this is not always the case. Many organisations, for example, find that they need to outsource to a secondary location to find scalable talent or to be near to a key client.

Whatever the reason for the transition, you will need to select an outsource partner (unless you decide to open a captive operation) and the future success of your entire organisation could then be heavily dependent on how that partner performs. Therefore, selecting the right partner is a very critical process.
What do you need to consider when going through the selection process?

  • Cost: This is obviously a critical consideration, but ongoing costs are notoriously difficult to determine. What is certain is that costs are not simply related to the monthly bill you get from your outsource partner. Other intangible costs such as drain on management bandwidth, attrition and training are often very significant – but problematic to quantify. If you chose the cheapest option might this radically increase these intangible costs?
  • Management Capability: It is critical that you assess the management capabilities of any outsource partner. Offshore business in countries such as India and Romania have grown exponentially over the past decade or so, but management capability has not necessarily been able to keep pace with that growth. It is not a question of education or technical ability; it is more an issue of commercial experience and acumen. Most organisations who transition work abroad are looking for people who can operate with a knowledge of their home country market conditions and – even more difficult – an understanding of home country cultural expectations. How do you assess management capability in advance of working with people?
  • Attrition Rates: How does your potential partner manage its attrition rates? Attrition rates are notoriously high in the outsourcing sector in and this can cause serious difficulties on an ongoing basis. Attrition leads to knowledge and skills seepage, and massive recruitment and re-training costs (which can eat away at any cost arbitrage you were looking to harvest).
  • Size: Should you team up with a large, well-established player in the market who has size, scalability and well-tested procedures, or with a smaller outfit which is growing and hungry for your business? With a larger player you might end up being a small fish in a very large pond and feel you are of little importance whereas a smaller partner may see you as strategically vital but lack the sophistication you are looking for.
  • Cultural Affinity: Your home team will need to work closely with offshore colleagues and vice versa. Often, however, the outsource location is in a country with a completely different cultural approach to all aspects of business. You cannot expect your colleagues in India or Romania to automatically understand your expectations of them. Left unattended, the cultural gap often becomes the biggest barrier to effective cross-border working.
Keith Warburton

Keith Warburton, Global Business Culture CEO

The Importance of Leadership and Organisation “Buy-in” to the Outsourcing/Offshoring Process

When embarking on a transformational programme such as this, all companies are confronted with many organisational elements which need more attention than usual – managing change, staffing, project management and execution, learning how to manage virtual teams, communication –and each of these elements have to have total focus from the leadership team for the project or projects to be successful. In light of this it is evident that the most critical factor for any successful offshoring/outsourcing programme is the buy-in of the Senior Leadership team and the subsequent total involvement of all levels of the organisation. Even those business teams not directly involved in the process under transfer will have a role to play to ensure a timely, high quality and cost-effective outcome.

This ‘buy-in’ is critical for several reasons:

  • These kinds of programmes, more often than not, constitute a fundamental transformation of the enterprise affecting employees at all levels – changing organisational structures and work practices, building new relationships – and it is impossible to over-estimate the impact this can have on the business. Therefore, it cannot be a ‘business-as-usual’ approach and demands full-time senior management attention to enable success.
  • Often these programmes are launched as a means to reduce cost and/or improve delivery quality. These deliverables are in turn factored into future business plans which drive shareholder value. So, expectations are often huge and are at risk unless the attention of all functional leaders is fully focussed on delivering the resources and support necessary to achieve the planned outcomes.
  • Normally the accountability for the process being outsourced/offshored is a held by a specialist area of the organisation, be it Operations, Sales Administration, Client Service, Accounts Payable/Receivable etc. However, delivering the required results can only be achieved if the Senior Leadership is involved in driving all parts of the organisation to support the programme, through shared goal-setting, reward and recognition schemes, skills development and all other parts of the change management process. Good outcomes generally always require the total involvement of all concerned and full corporate motivation around this kind of programme is essential to its success.
  • It is vital that the Senior Leadership ensure that commercial teams understand the importance and progress of the programme, and that they are able to help support the business in front of clients who may feel their service is under strain during this offshoring/outsourcing process.
  • These kinds of programmes can at times produce a level of demotivation, even resentment, in the organisation whether the teams are directly or indirectly involved. Senior Leadership involvement is key to managing this and they will need to manage and control the internal messaging at all stages of the programme to keep teams focussed and motivated.

The success or failure of transformational programmes is nearly always down to the level of business leadership engagement and how that is seen and felt within the organisation. Having your teams feel comfortable about the upcoming and ongoing changes is essential. Your messaging needs to be well thought through and consistent and everybody within the organisation needs to be aware of what is being communicated both internally and to the client base.

We would love to talk to you about the importance of Leadership and Organisational Buy-in as key enablers to a successful outsourcing and/or offshoring programme – please get in touch if you would like an initial discussion.

I’ve been running cultural awareness programmes for major global corporations now for almost two decades and India has always seemed to loom large in my work schedule. I have noticed clients’ interest change from seeing India as purely a cost-saving outsourcing destination to a keener interest in India as a potential future mega-market. During this period, we have run India cultural awareness training programmes all over the world and client interest mainly stems from the following areas:

  1. A client has outsourced work to India either with its own captive presence or through a third-party partner.
  2. A client has a significant supply chain in India.
  3. A client has a subsidiary operating in India – be that manufacturing or sales.
  4. A client is looking at India as a potentially lucrative future market.
  5. A client has been acquired by an Indian parent company.

Whatever our clients’ relationship with India might be, we know that a better understanding of cultural expectations in India will make any relationships run smoother. When operating in such a totally different type of market, cultural awareness and knowledge are vital.

Keith Warburton

Keith Warburton, Global Business Culture CEO

We have thought a great deal about what a good India cultural awareness training programme should focus on and I’d like to share a few thoughts with you on this topic in this blog post.

However, I’d first like to start by covering what it definitely shouldn’t be focused on – unimportant superficial issues! We are often asked to cover such issues as:

  • Names
  • Dress code
  • Spicy food
  • Traffic
  • Etc

These are the type of areas I would consider to be trivia and they will not have a significant impact (positive or negative) on your business going forward. Indians will look after you and help you with these issues. They know you are not Indian, that a lot of what you experience will be new to you and will, therefore need explanation. By all means include these areas in a training programme but don’t make them the focus.

In our view there are five key areas that a training programme should focus on. There are others, but time is always limited so these are the essential topics:

1. Hierarchy:

Business structures in India mirror Indian society. Both are hierarchical in nature. This is not a good or a bad thing – it is just a fact and it is essential to understand the ways in which this hierarchically-based approach impacts on Indian attitudes to business. In our experience, the failure to take this issue into account is the direct cause of untold cultural misunderstandings when working with India.
 
Information tends to flow up, down and across organisations with a clearly defined and well-understood structure being seen as the key to efficiency and aligned with this structural approach come a leadership style where the boss is the boss – his instructions are assumed to be correct and it is unlikely that they will be questioned even if it might appear that the instructions are wrong.
 
We find that many international companies want to introduce a flatter structure in their Indian subsidiary so that it is closely aligned with other offices in the group. This often proves difficult in a country where hierarchy is the norm.

2. Leadership:

As with many hierarchical societies, it is important that the manager acts like a boss. The position of leader demands a certain level of role-playing from the boss and a degree of deferential behaviour from team members. The boss is not expected to perform any minor tasks such as making coffee or moving chairs in a meeting room. Western concepts of egalitarianism where the leader is viewed as the first amongst equals don’t sit easily in a country still impacted on by the historical conventions of the caste system.
 
The boss is expected to give explicit instructions which will be followed precisely – even, as I said earlier, if people think that the instruction might be wrong. Imprecise instructions are likely to result in inaction because team members will be left confused as to what exactly needs to be done. Managing people in India often requires a level of micro-management which many western business people are uncomfortable with – this approach however is likely to bring the best results.

3. Initiative:

In the India cultural awareness training programmes we run, the most consistent ‘criticism’ we get from people about their India colleagues is that they just don’t show any initiative. They do exactly what is asked of them and no more – and won’t do anything unless explicitly asked to do so.
 
This is a strongly cultural issue. If you are from a culture in which the boss is expected to give direct, precise and detailed instructions, the expectation is that you do what your boss has asked you to do. To do more could almost be seen as insubordination – the boss had wanted you to do other things, he or she would have given that instruction. Therefore, if things don’t get done it is a failure of leadership for overlooking things.
 
This single misunderstanding leads to endless cases of missed deadlines, unhappy colleagues and feelings of mistrust amongst the teams. Any good India cultural awareness course should address this issue head on.

4. Relationship-building:

India is a very relationship-oriented country. Family ties are extremely strong and influence the career path of individual employees. A recent global survey showed that Indians are under greater parental pressure to succeed than in any other country in the world. It is important to make your parents proud of you – and this is one reason why job titles are so critical. The better the job title, the more prestige you have amongst family and friends.

Relationship-orientation however extends beyond the family and into the work place where employees are keen to develop close personal relationships with both peers and leaders (in fact the leader can very much be seen as a mother or father figure who is charged with looking after, supporting and guiding their ‘children’.) A great deal of emphasis is placed on promoting the company as a place that you not only work at but also belong to – birthdays and team social events are really important in an Indian working environment.
 
Western colleagues need to recognise this and develop strategies for building relationships with Indian colleagues, but this is not always easy when those colleagues are thousands of miles away and working in a different time zone.

5. Communication:

It might be assumed that, as most India colleagues speak almost perfect English, there will not be any communication difficulties, but this would be far from the truth. Indian colleagues have a different style of communication which is rooted in non-confrontationalism and wanting to please people. One of the most common questions we get asked on an India cultural awareness training programme is ‘when does yes mean yes and when does yes mean no?’Any good training programme should focus on:

  • India communication styles
  • Using English effectively in India
  • Vocabulary anomalies
  • Body language issues
  • Email communication

Improved communication with India results in improved relationships and efficiencies.

An India cultural awareness training (or a series of interventions aimed at different areas of the business) can have a massively positive impact on your business performance if done well; it can also possibly have a negative impact if delivered in a way which alienates the audience and doesn’t focus on key commercial issues.

The art of delivering a good programme is in being able to relate generic India-based cultural points to the strategic and tactical objectives of the business – if these links are not made, the training might prove pointless.

If you would like to discuss how Global Business Culture could develop and deliver meaningful training programmes for you, please contact us.

Argentina is the second largest country in Latin America and the eighth biggest countries in the world. It is a high-tourism location and a hub of industry. Expansion, investing in a business or simply wanting to find out more about the corporate culture in this country will require you to have some knowledge of the role of women in business in Argentina. Understanding the beliefs of the local culture, along with the underpinning values of the country is key as they can impact anyone looking to do business in Argentina.

Fewer Women in Senior Job Roles

Since the return of democracy in 1983, women in business in Argentina have achieved a relatively good level of equality. While women who do business here should not have to deal with any major gender bias, there are still far fewer women in senior positions than their male counterparts. Statistics indicate that more than 50% of businesses in Argentina have no women whatsoever in their senior management team.

Although significant progress has been made, it is public knowledge that in specific contexts, there is still a noticeable level of inequality between men and women in the workplace. In the 2018 Global Gender Gap Report, Argentina ranks reasonably well, considering its past, and takes its place in the upper section of the table, ranking 36th overall out of 149 countries.

Women in Lower Paid Positions Despite Being Highly Educated

With around 70% of women being employed in unskilled jobs, women in employment in Argentina hold a disproportionately high level of lower paid positions. This is still the case, despite the fact that more women than men have obtained university degrees. However, it is still more challenging for women to obtain a good position, with more being demanded of women in terms of their educational attainments than is demanded of men.

Doing business in Argentina, Women in Business Argentina

Women who hold senior positions in Argentina still report there to be a significant level of sexist stereotypes in play. For instance, when in a room with other senior managers, the people who address management will usually address the men directly. For business trips or projects that might require travel, because women are still expected to manage and organize their households, men would often be chosen over women. This prejudice still exists largely because cultural conceptions about men and women are translated from the home and into the working environment. In terms of gender roles, there are no specific legal impediments that prevent women from performing most roles yet there remains limited access to positions of power.

Macho Culture as a Challenge for Women in Business in Argentina

On a slightly darker note, there is still a highly macho culture in Argentina, and this is something which cannot be overlooked when discussing the place of women in business. Outside of the workplace, the country has serious issues with domestic violence. Inside the workplace, it is commonplace for women to be subjected to supposedly harmless everyday sexism. Males in Argentina feel entitled to deliver somewhat lewd comments or whistles of intent, and while in many corporate cultures there are efforts being made to wipe out this behavior, it still happens, and it is a real challenge for women in business here.

The early retirement age for women in Argentina can limit the potential opportunities for advancement and career development; it also reduces the value of their pension or social security benefits. Women will normally retire at least five years earlier than men.

In Argentina, and indeed, many Latin American countries, one’s family is the most important part of life. Both men and women alike are expected to be fiercely loyal to their families, and the needs of the family unit are always placed before the needs or career aspirations of the individuals.

Doing business in Argentina, Women in Business Argentina

Due to the macho culture that prevails, men are expected to provide for their families and be the primary earner in their respective households. The specific structure of the households will vary somewhat depending on their social classes. In the lower social income groups, you can expect the household to be larger, and the mother will usually stay at home to raise the children while the father will go out to work. Government subsidies are still provided to help financially with raising children. Middle and upper social income groups will usually have only 1-2 children, and for the more affluent, regardless of whether the mother is in paid employment, there will often be maids or childcare providers hired to care for the children. All childcare, maids, and babysitters are notoriously positions held only by women, which further increases the gender bias towards women at work.

Global Business Culture runs China cultural awareness training programmes for a wide range of different clients. These clients come from a variety of sectors but all share one thing in common – they have all realised how important it is to understand the local business mindset when doing business in China.

China is always in the news whether it is due to an apparently slowing economy, political and trade tensions with the USA or Chinese companies being seen as the ‘enemy’ in the West. There certainly seems to be very little good news coming out of China at the moment – at least as reported through Western media. Nonetheless, the Chinese economy continues to grow quite quickly (at a slower rate than previously but all economies do that as they mature) and so massive opportunities remain in what is the world’s second largest economy.

Global Business Culture strongly believes that the macro-economic trends – be they positive or negative – are not the reason a company will succeed or fail in China. What is really key is developing the right mindset, skills and knowledge to work effectively with local business partners, customers and employees.

In the following blog posts I will explore some of the key cultural elements which we place emphasise on the China cultural awareness training sessions we run – issues which should be factored in when doing business in China.

Relationships Matter More than Anything Else:

Some cultures tend to put business before relationships whereas other cultures very much put relationships before business.

China is strongly on the relationship-first side of this equation – in fact only Japan and Korea are possibly ahead of China in terms of relationship-orientation. Therefore, the development and maintenance of strong, long-term ties are vital. You will often hear the word Quanxi used when people talk about Chinese business culture and it is worth looking into this concept in a little more detail.

We are often asked what exactly ‘quanxi’ actually is. Putting it simply, quanxi describes the relationship between two individuals. It codifies the way in which they interact together, and their ‘right’ to prevail upon each other to ask for favours or services. Quanxi relationships need not be between individuals of the same hierarchical status (but often are) and when you are in a Quanxi relationship it is virtually impossible to refuse to agree to do something you have been asked to do – regardless of how difficult it might be. (Bear in mind that due to concern for other people’s ‘face’, people are unlikely to ask for things which cannot be delivered.) Favours done must always be repaid which results in people entering life-long cycles of obligation and repayment.

Keith Warburton

Keith Warburton, Global Business Culture CEO

Quanxi not only relates to a person-to-person relationships but can be used to describe a spider’s web of relationships between extended groups of people who are, in some way or another, linked to each other. These Quanxi relationships can include connections with family, school and university peers, members of common clubs or organisations (the largest of which is the Communist Party) and work colleagues.

Interestingly, these Quanxi relationships are personal and cannot be transferred. This is of considerable interest when considering lateral hires into organisations in China as they can often bring with them considerable Quanxi networks – the problem is that these networks will probably leave with them if they move on at a later date.

It is interesting to ponder whether a foreigner can ever really have real Quanxi relationships and experts differ in their response to this. The truth is that a foreigner can probably never have real Quanxi relationships simply because they are not Chinese – or more accurately that it would take a lifetime of effort to develop such a deep network of functioning relationships if you are not Chinese to begin with. Having said that, some foreigners develop better relationships with the Chinese than others and those who work hard to develop and crucially maintain those relationships over long periods of time are the ones who will probably succeed in China.

What does all of this mean in terms of day-to-day business dealings?

Take Your Time:

Small talk should never be seen as unproductive or irrelevant as it is a key ingredient in the relationship development process. Do not show impatience if lots of time is spent talking about non-business or seemingly trivial issues.

Maintain Continuity of Contact:

Generally, people from relationship-oriented cultures do not appreciate frequent changes in key contact people within supplier organisations and partners. They do not want to have the burden of continually going through the relationship-building process. As a result, continuity of contact is crucial. Key contact people should be selected carefully and kept in place over long periods of time.

Contracts are Viewed Differently:

Less emphasis is placed on the importance of contracts when the basis of business is seen as the relationship underpinning that business – the relationship itself is seen as far more important than anything written in a formal contract. In China a contract is often seen as a statement of the best set of circumstances at a certain point in time but that, if circumstances change, it would be unreasonable to expect partners who have a good relationship to abide by the exact terms of the contract. A contract is more of a statement of intent that work will be done together going forward.

Make Yourself Available:

As business is relationship driven, business contacts are friends and friends should be available as and when I need to speak to them or whenever I need to meet them. I expect you to stop what you are doing and help me, and I expect you to answer my phone calls even if you are in another meeting or if it is the weekend.

Be Responsive:

The strength of our relationship means I expect you to respond immediately to requests – even if these requests are last minute or seemingly unreasonable. A common comment made by people working with China is that they wait an age for a response to a question they have sent but that when a response is finally forthcoming, the Chinese expect everything to be completed by yesterday.

Entertaining is Time and Money Well Spent:

Much of the relationship-building process happens through informal and formal entertainment events. Never view an invitation to a lunch, dinner, drinks or a formal function as dead time – it is key to the relationship-building process and often more important (at a senior level) than the actual business meetings you may attend.

Why are things like this in China? Well, in the next blog post I will explore the key concept of ‘face’ – what it means and how it impacts on business dealings.

If you would like to have a conversation about how our China cultural awareness training programmes might help your business work more effectively in China, please contact us.

If you are looking to do business in Belgium, you will most likely already have an appreciation for the country’s open, globalized, and diverse economy. It is a highly multicultural and multilingual nation that performs significantly well in the ease of doing business across borders index, and for effectively supporting start-up operations.

A Lower Gender Pay Gap

While other countries across the globe are only just beginning to make gender pay gaps public, in Belgium this has been standard practice for many years. Interestingly, any companies who have 50 workers or more need to report their pay data every two years as a minimum. In other countries, such as the UK, regulations usually only apply to employers who have more than 250 staff.

Across Europe and beyond, Belgium boasts one of the lower gender pay gaps, surpassing other countries such as Iceland, Norway, and Sweden. For anyone looking to employ women in Belgium, parity in salary between men and women is standard practice.

The history of women in business in Belgium is quite different from the current state of play. It has taken a deliberate and intentional intervention from the Belgian Government via changes to legislation and policy over the past few decades to create today’s environment.

doing business in Belgium, Women in Business Belgium

The Involvement of Trade Unions

Trade Unions play a significant role in this, and if you want to hire people in Belgium, you should be aware of their involvement. Almost 60% of all Belgian workers belong to a trade union. However, there are collective bargaining agreements that are signed by almost 95% of workers in the Belgian workforce. These agreements mean that instead of an individual having to negotiate their salary directly with their employer, there is a framework in place that determines who gets paid what for the specific type of job they do and the tasks they perform. In terms of salary increases, these are typically indexed to the cost of living in Belgium. This avoids employees having to request salary rises in order to meet with the rising cost of living in the country.

These agreements and their somewhat unique way of determining salaries means that regardless of whether you employ women or men, wages are non-discriminatory. While the gender-pay gap is one of the lowest across the globe, there are still some industries, such as the Insurance and Finance sectors where pay differences are still quite apparent.

doing business in Belgium, Women in Business Belgium

Women and Senior Positions

Women in management and senior-level positions are still somewhat unequally represented. In fact, this is one of the only areas of business where women do not have equal or even near equal representation. Nine out of ten CEOs in Belgium are male. The number of management positions that are filled by women is one of the lowest in the whole of Europe. The reasons behind this are nothing to do with wages, but rather point to a number of economic and social factors at play. Childcare prices, adequate childcare facilities, and a lack of flexible working hour arrangements are some of the major reasons cited for this.

If you are considering hiring staff on a part-time basis, then these positions will most likely be more appealing to women in Belgium. Roughly 40% of employed women work on part-time contracts. The retirement ages for men and women in Belgium has remained constant at 65 for both. Again, unlike other countries where women get to retire earlier, this is another example of just how equally men and women are treated.

Additionally, if you are sending female employees or management over to Belgium, you can expect that they will be treated with the utmost of respect.