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Doing Business in China
How Cultural Differences Can Impact Profit Margins

All people are basically the same ˇ§C right? It is true that all people have the same basic needs and instincts. However, the culture that we are raised in and reside has a huge impact on our thought process and how we react to certain situations. These ¡ˇăcultural differences¡ˇŔ have more of an impact on the bottom line than most people realize. With the rapid increase in today¡¯s global market, especially in China, our cultural differences have a major influence on our businesses and our global economy.

Western businesses are emerging in China daily. The National Bureau of Statistics of China reported that at the end of October 2006 industrial profits in China grew 30.1%. The profit of state-owned and state-controlled enterprises in the industrial enterprises soared 22.0% from the same period last year.

China is a booming global market and the opportunity for profit is significant. China has been referred to by some market analysts as the ¡ˇăsleeping giant¡ˇŔ and companies are being drawn into the market daily with a vision of great financial gain. Palmer Greene, Vice President of Pegasus Consultants Limited says ¡ˇăDoing business in China holds many opportunities for growing companies and can result in growing profit margins¡­however, it is critical that decision makers enter this market with caution, a carefully planned strategy, and a clear understanding of the culture.¡ˇŔ The risks involved in setting up shop in a foreign land without truly understanding the cultural differences are substantial. Many businesses have attempted business ventures in China, and have failed, simply because they don¡¯t understand the cultural differences. The slightest misconception can destroy a business relationship, consume a lot of time, and have significant financial ramifications.

Let¡¯s say that you are considering a business venture in China ˇ§C and before you is a resource that will help you understand the culture, etiquette, negotiation process, and significantly improve your potential for success ˇ§C you would want to utilize that resource ˇ§C wouldn¡¯t you?

Pegasus Consultants Limited (PCL) trains and consults with Fortune 500 companies, start-up companies, and established businesses on doing business with China. Jennifer (Fan Jing) Greene, President of PCL says ¡ˇăIt is recommended that employees are trained on effective business practices for doing business with China even before initiating discussions or traveling to China.¡ˇŔ Jennifer adds, ¡ˇăProper training will prevent problems and misconceptions before they happen, creating a more pleasant experience and greater success.¡ˇŔ

Jennifer Greene, an expert on doing business with China, has developed a cross-cultural business training seminar that is packed full of critical information that decision makers need to know before doing business with China. Companies like Motorola and other businesses of varied sizes and industry are benefiting from the knowledge of PCL¡¯s cross-cultural training and consulting. 

PCL¡¯s seminar topics include essential background information on China¡¯s government and history, Chinese culture and traditions, verbal and written communication skills, business etiquette, negotiation techniques, quality control, risk management, the Chinese decision making process, travel, health and hygiene, and proven case studies.  Palmer Greene says, ¡ˇăEach topic covered in our cross-cultural seminars are critical for success in China; however, sharing our proven and successful case studies and techniques is what makes this training invaluable and unparalleled.¡ˇŔ

China is a land of contrasts with ancient and modern cultures existing side-by-side still today. Chinese political, economic, government and religious history have shaped today¡¯s China. Therefore, it is important to take a look at the past and sequence of important events in order to understand today¡¯s culture. Confucianism, the Dynasties, the Republic of China, Buddhism, and Communism have all influenced the beliefs, behaviors, and practices of the Chinese people and businesses.

There are so many different aspects of culture to consider while exploring our differences. ¡ˇăWe help our customers understand their own culture as well as Chinese culture to provide a clear understanding of the differences.¡ˇŔ mentions Jennifer Greene. Chinese political, traditional, and business cultures each have their unique distinctiveness. Learning how to greet people, understanding eating customs, and knowledge of critical information on gift giving can be the difference between developing a prosperous and long-term relationship ˇ§C or sending your deal to a screaming halt. Oftentimes, it is simple and well-meant gestures that are the basis of serious misconceptions. 

Let¡¯s look at an example of one very well intended gesture that turned into a disaster. Mr. C had some very nice shirts and hats made with their company logo to give his new Chinese partners. He chose the color green to show his environmental awareness and everybody in the office thought that was a great idea. Mr. C humbly presented these gifts to his new partners when he arrived in China and was surprised at the response he received. When his Chinese associates saw the hats they looked very distraught and would not take them. What Mr. C didn¡¯t understand was that in China when a man wears a green hat that indicates his wife has been unfaithful to him. Oops! Not a good way to begin a relationship. This is just one of many examples of a well-intended but misconceived gesture that has a negative end-result.

Basic verbal and written communication skills and styles are enormously beneficial in dealing with Chinese business professionals. Learning and using specific common Chinese phrases and a few Chinese written characters can go a long way in relationship-building with your new Chinese partners. Other important factors to consider in cross-cultural communications are voice tone and matters of saving face. Jennifer Greene articulates that ¡ˇăsaving face is extremely important with Chinese people. If you can learn the issues and skills concerning ¡®saving face¡¯ that will go a long way in developing long-term relationships.¡ˇŔ

Quality control and risk management are also critical areas that need careful attention while conducting business in China. Learning what to expect and how to manage the differences and risks are vital to success. ¡ˇăBefore one can control quality and manage risks you need to understand the decision making process in China and have obtained essential negotiation skills.¡ˇŔ says Palmer Greene. Palmer adds ¡ˇăBudgets can be overrun and schedules can slip drastically due to false expectations and a lack of understanding of Chinese negotiating techniques. We cover these areas in-depth during our training so that our clients are well prepared to identify and counteract dangerous negotiating strategies and know how to reach agreements that will keep costs down, and minimize surprises.¡ˇŔ

What makes PCL¡¯s principal advisors, Jennifer and Palmer Greene, experts in doing business with China? This dynamic team¡¯s background and experiences put them in a unique position to give the very best cross-cultural training and consulting services available.

Jennifer Greene (Fan Jing) was born and raised in China, and is now working and living in the United States. Ms. Greene was educated in China as a teacher and international business manager. Jennifer began her international business career by working for an American company in China as the Chief Representative Officer. Throughout her career, Jennifer has successfully facilitated Sino-American joint ventures, recruited and managed Chinese and American staff, and has negotiated multi-million dollar business transactions. Jennifer¡¯s unique understanding of both Chinese and American cultures and business practices have been the driving force behind her success, which makes her services a valuable asset to any international business. She has consulted with US firms and governmental agencies on ¡ˇăDoing Business with China¡ˇŔ for more than 12 years including cultural and language issues as well as China business development and implementation issues.

During Palmer Greene¡¯s career he has lived, worked and traveled in more than 100 countries. Palmer has held top-level management and board positions for leading international geophysical corporations, oil and gas companies, as well as staffing and running his own international agency and consulting firm with a very diverse set of clientele. The key to Palmer¡¯s long history of success is the depth of his understanding of the importance of communication skills and dealing with cultural differences of foreign lands.  Although Palmer has worked in and studied Asian business for 20 years, the five plus years living in China helped to catapult his understanding of this land of great contrasts and how to help Western businesses capitalize on the opportunities that lie within and around China¡¯s borders. 

Pegasus Consultants offers local training, on-site training, and live web-based seminars on Doing Business in China. Who should receive training on doing business with China? Basically all personnel that will be traveling to China or dealing with Chinese businesses including Presidents, CEO¡¯s, Vice Presidents, Business Development Managers, Marketing Managers, Program Managers, Contract Managers, Operations Managers, Manufacturing Managers, and Procurement Managers.

In addition to training businesses in effective techniques of doing business with China, Pegasus Consultants Limited offers adaptive consulting for international business, due diligence, and expatriate services. Translation, interpretation, voice over, outsourcing, import/export and representation are also among the services provided by Pegasus Consultants. For more information on Pegasus Consultants visit www.pegasusconsultants.com or call +1(832)237-4888.

Questions?  Call (832) 237-4888                   Copyright © Pegasus Consultants Limited

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