The Changing Impact of Western Culture | DOING BUSINESS IN CHINA

Doing Business In China with Dan Paulson

In order to be successful, Western approaches to management in China will need to change.

I recently read an article published by McKinsey Quarterly that discussed the impact of expatriate managers in China (Beyond expats: Better managers for emerging markets). Multi-national companies face specific cultural challenges when bringing in an expat. Not to mention that local talent will look elsewhere for opportunities to take a greater leadership role. In other words, as you seek to grow your business in China, it is more important than ever that you find ways to tap into the local talent pool.

As a business that helps companies expand into China, I believe there is a collaborative approach that needs to be taken. We need to show our willingness to give local leadership a chance to grow within our organization and we also need to transfer a little of our own cultural values as part of the process. For that reason the duties of an expat leader may change.

It's been no secret that keeping talent in China can be tricky. A recent study claimed that as many as 50% of the expatriates that come to china leave within the first year. That's one out of every two people who are not fulfilling their commitments! Think of the costs associated with hiring, relocating, establishing, and training someone to fill what is often a minimum two year commitment. Not to mention that many times these people come back early knowing they are unemployed. It is common practice to build a dis-incentive that if you return early, you give up any employment with the organization you work for.

So what might be a better approach. Here is where we need to find balance, understanding and good communication. The balance comes from having just the right amount of Western interaction with the foreign leadership and the Chinese leadership. We see similar things going on in our own country. Many foreign companies understand the value of hiring local talent instead of importing management from abroad. When tapping into the local pool, you don't necessarily have to worry about culture shock for a new candidate coming in. Here it may be easier to bring in talent for extended stays, but not for a two or three year window where you risk losing good talent.

For me, it is always important to graft in a piece of your corporate culture. In China, it's a matter of adapting. The Chinese have a very powerful cultural presence. You aren't going to change it. However, to some degree you need to be able to carry over your Vision and corporate values. This is why I believe it is important to create a strong interrelationship with local and Western management. Any staff that travels abroad needs a thorough education of the culture and how business is handled. In addition, each expat should have a solid understanding of customs and behaviors so they are able to find ways to adapt while they are on site.

Finally, communication is essential. Without good communication, it's hard to build trust. It is also difficult to deliver the quality and service you are known for. This is closely tied to understanding the culture. Remember, what you believe is important may not be the same in a foreign market. You really need to share what you place value on.

Any organization seeking to do business in China could have a great opportunity. That opportunity will be weighed against their willingness to adapt to a new market they may not fully understand. Educate yourself and understand how you can collaborate for success. The potential to grow your business can be great!

www.invisionbusinessdevelopment.com

For more information, please visit Dan's TNNWC Bio.

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The Changing Impact of Western Culture | DOING BUSINESS IN CHINA

Tied Together Globally: Natural Events and Their Impact on Us | DOING BUSINESS IN CHINA

Doing Business In China with Dan Paulson

The earthquake and tsunami in Japan demonstrate how globally connected we are. In business, this presents risks and opportunities.

Our world is constantly changing and much of that is beyond our control. That became very apparent this March when a large earthquake followed shortly by a massive tsunami hit the coast of Japan. To our friends and colleagues, our hearts go out to you, and we wish only the best.

Besides the physical damage created and the tremendous number of lives lost, there is also an economic ripple that impacts virtually every country. Japan is a major supplier of semiconductors and automobiles. Early predictions are to expect cost increases and production delays at least for the short term. The bigger impacts may be felt in Japan’s economy for years to come.

Recently, China surpassed Japan to be the second largest economy in the world. The current situation presents both challenges for China and possible opportunities. One of the greatest challenges that China will face is importing. Japan is China’s largest import partner with 13% of products coming from there. The short-term impact is already being felt, as needed components are not shipping. The parts shortage will slow down China’s industrial engine that it has built so much of its economic growth on. While this is expected to be only an immediate problem, the long-term affects could strengthen China’s position as an economic superpower. Japan, which already had its own economic woes is not helped by the latest turn of events and while they will recover, one has to ask to what level.

For other countries, they too will experience short-term problems with the interruption to the supply chain. However, this may also be an opportunity for other countries to increase their import power to China. As a developing nation, China still has many needs to fill. With the current situation, China may choose to seek components from elsewhere in the world and some companies may want to take advantage of this.

Our role as a nation is to help Japan get back on its feet as quickly as possible because the biggest challenge globalization presents is the impact of one economy on another. Yet we also need to look at ways we can strengthen our business growth. Emerging companies could reap the greatest benefit from this. It just depends on what you are willing to do.

http://www.invisionbusinessdevelopment.com/

For more information, please visit Dan's TNNWC Bio.

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Powered By TNNWC Group™

For complete tactical and strategic business planning, marketing, media, lead-generation, technological and capital resources, scalable solutions and tools to support every entrepreneurial start-up, young enterprise, small- to medium-sized business and emerging high-growth company, talk to The National Networker Companies™/ TNNWC Group, LLC.

We are a collaborative entrepreneurial, creative organization offering you hands-on, personalized assistance in every aspect of achieving your monetization, profitability and financial sustainability objectives, domestically and globally.

We don’t just coach you or offer you pre-packaged, push-button solutions – we listen to you, analyze your exact needs, and work within your budget to: 1) create your tool kit and 2) work as your partner to implement your plan by supporting you in the most efficient and productive use of every tool.

Visit our website, which is located at http://www.TNNWC.com .

To receive our newsletters, publications, information bulletins and alerts, simply join us as a Member. Membership is free and the benefits are unequalled anywhere.

Just go to our home page, and click on the “JOIN US” button.

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The National Networker Publications™ produced by TNNWC Group, LLC

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Tied Together Globally: Natural Events and Their Impact on Us | DOING BUSINESS IN CHINA

DOING BUSINESS IN CHINA: Opportunities are Everywhere. Just Make Sure They are the Right Ones.

Doing Business In China with Dan Paulson

Many companies are looking to expand globally. While this could create new sources of revenue, it is important to understand what you are getting into first.

Over the past few years I have met with several business leaders who either have expanded internationally or are seeking to. Some have been very successful in making the move and others struggled spending valuable time and money with no results.

A few months ago a colleague of mine contacted me about formulating business in China. As it turns out, they were actually contacted by a Chinese company and asked to collaborate on several projects coming up in the near future. This Chinese “partner” even paid to fly a delegation from the US company to meet and discuss these plans.

The company I am talking about has a very unique set of talents in their industry. In some cases they were pioneers for what they did and opened up a whole new market for their service in the US. Now they got the attention of a company in China and it seemed like a match made in heaven. The Chinese told them how great they were and how they needed their expertise. They conducted several meetings where a lot of questions were asked ideas were discussed and concepts were shared. After a few months, my American colleagues made their way over to China for the signing ceremony and the deal was inked making for a storybook ending… Or so they thought.

The executives returned from the signing ceremony excited to start on this new venture, which looked to be profitable. Their initial investment of time was going to pay off. After all, this Chinese company sought them. Days went by. Then a few weeks after not hearing anything, the US company reached out. The response they got was shocking. They were told that the Chinese company chose a different direction and they would not need the Americans’ service. What?!? Just a few weeks ago everything was a go. Now all their efforts were wasted.

We often hear about stories of deals in China going bad. Many times this happens because of a failed understanding of how to do business in China. The good news is there are ways to prevent you from getting burned. What it takes is a better understanding of the culture and how you approach business there. After all, we only seem to hear about the times where the venture doesn’t work. We fail to find out all the times that the deal does close without issue.

First let’s look at our scenario above. There are some critical things to watch for here. First off, why the sudden change? One reason is being over-zealous to share information. In this situation, an outsider reaching out to do business flattered the American company. In the US, we wouldn’t think much of it. If we are perceived as the experts, we can often readily share information and it actually helps close the deal. In China, until a trusting relationship is established, you may just be a source of information. That’s what this US company was. They were wined and dined to get information. The Americans had no skin in the game and once they shared their knowledge, they were left out of the picture. Knowing who you're doing business with is very important, and it is often necessary to move slower than you may want to in order to be successful.

Here are some tips to be aware of if you wish to have success in China:

· Have a very clear plan – Strategy is key anytime you expand internationally. China is no exception. Know your moves and what relationships you will have to build before getting started.

· Begin building relationships – Get to know the business climate. Do more than just research online; actually visit the country you are looking to do business in. China is very much a relationship culture. Build those relationships early. Find people who can help connect you.

· Know your investment and milestones – Have a budget and timeline (back to strategy). Have steps along the way where you can stop and re-evaluate each investment point.

· Seek out resources – Companies like mine are structured to help you increase your chances of success in China. Meet with other trade groups and organizations as well to learn about their experiences.

· Keep the interest – When working in China, you need to bring value. Avoid sharing too much. Peak their interest. Let them know what you bring to the table but maintain your value position. If you share too much, your connection may try to copy your work and remove you from the deal.

· Understand Intellectual Property – If it is an issue, know what you need to do to protect yourself. IP is a challenge, but not impossible to overcome. Work with an experienced legal team to protect your rights.

· Be willing to travel – If you are going to have an international operation, make sure you are willing to spend some time on a plane. Remote management is possible, but travel will be necessary periodically to keep up on the operations. Having talented people in China (and the right people) will also avoid some headaches.

· Be willing to walk away – If the deal doesn’t seem right, be willing to walk away. Especially if you do not have an advocate working on your behalf and assisting you. The costs of going through with a bad deal could be much greater than if you get out when you can.

· Get good talent – Besides lawyers, you should have a good accountant, logistics, or other third party advocates that will work on your behalf.

· Learn all sides – What I mean here is get all the information. Popular media will share all the horror stories. Those things do happen, but there are still many companies that can tell you about the successes. Seek to learn and seek to understand.

Remember, growing internationally can be a wonderful experience. It is just a matter of you taking the right steps. Now go out, grow and prosper!

http://www.growinchina.com/

For more information, please visit Dan's TNNWC Bio.

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DOING BUSINESS IN CHINA: Opportunities are Everywhere. Just Make Sure They are the Right Ones.