Understanding the Cultural Differences While Operating In China

As the second biggest economy in the world, China poses significant opportunities as well as challenges for startups from the west, including the United Kingdom. The opportunities that await startups in China needs no introduction - Sam Michel wrote about this recently in his column for Chinwag.

Among the challenges that exist, the prominent ones include communication barriers and the relatively closed nature of the Chinese economy. Even the likes of Google and Facebook have had trouble succeeding in the Chinese market.

As a global startup, it is difficult to ignore China. A hardware startup may need to deal with manufacturers and suppliers who have their bases in Shenzhen. Shanghai is among the largest emerging hubs for Fintech. China is among the largest contributors of entrepreneurs who have launched startups in the UK. Most importantly, an increasing number of investors pouring money into startups in Silicon Valley and other major startup hubs in the west are from China. As a result of all this, it is important for startup entrepreneurs to understand the cultural differences while working with colleagues, investors and vendors from China.

Workplace Accountability

In the west, it is common to delegate tasks and responsibilities to individual workers and hold them responsible for the results. While many modern startups worldwide follow a similar approach, it is more common among Chinese organizations to assign team goals. According to an ELM report, employees are evaluated as a part of a team or group rather than as an individual for the results. Understanding these differences in the way employees operate is vital when you are operating offices in China. The emphasis should therefore be on building stronger teams rather than on individuals. According to Professor Kim Cameron from the University of Michigan, positive workplace practices can improve trust and competency in the workplace and this is vital for a happier, hard-working team.

Transactional Relationships

Numerous studies and articles have been published comparing the western concept of individualism with the Chinese concept of collectivism. One by-product of this cultural difference is the emphasis on social networks and relationships, known in China as ‘Guanxi.’ In western workplace culture, the relationship between the manager and the worker is often transactional in nature - there is no real intent to build a relationship. This can be quite different in China where there is a greater need to establish a social relationship between the manager and the workers. If you are setting up an office in China, it is important to know this critical cultural difference while working on your HR practices.

Communication channels

Empirical studies conducted on Chinese students in the United States showed that these students were most proficient in their English reading ability and grammar. At the same time, these students had trouble with listening and English speaking skills. Given the vast pool of Chinese talent emigrating to countries like the United Kingdom, it is important to build a workplace environment that is better suited to their strengths. One recommended strategy is to move most of the official communication to email or other collaboration tools and cut down on verbal instructions. This ensures better comprehension among the workers and brings down miscommunication.

Do you work with vendors, investors or workers from China in your line of business? Share your observations and inferences in the comments.

Photo by Louis Lo on Unsplash