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INTERNATIONAL BUSINESS

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Through intercultural understanding, the global nations cannot avoid anticipating

similarities and differences in how they execute business operations. In modern business, the

workplace is spurred with individuals who are from diverse cultural backgrounds. Therefore

there is a need for business professionals to have an excellent grip on cultural intelligence.

Therefore, to determine when a country is suitable for expanding business operations, cross-

cultural literacy should be prioritized. This prioritization enables an increased understanding of

how the countries involved and their respective value systems will affect the business practices

that would potentially follow.1. We will discuss the cultural values, the benefits /risks/

educational levels and the labor environment, and the customary business, management, and

negotiation practices in China.

To begin with, the specific value system that must be understood when considering China

is Confucianism. “For more than 2,000 years until the 1949 communist revolution, Confucianism

was the official ethical system of China. Confucianism is not a religion, nor is it involved with

any form of supernatural being. Rather the ideology is centered around a code of ethics. The

Confucianism code of ethics provides values that serve as guidelines to lead a life worthy of the

Confucius ideology, three of which values pertain directly to business. These three values are

loyalty, honesty in dealings, and reciprocity.2. First, in Confucian teachings, loyalty is viewed as

a sacred relationship between someone, and their superior. This emphasis on loyalty diffuses

1
Johnston, Kevin. “Why Is It Important to Gain Cultural Literacy in International Business?”

Small Business - Chron.com. Chron.com, November 21, 2017.

https://smallbusiness.chron.com/important-gain-cultural-literacy-international-business-

69605.html.
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most authoritative issues before they arise. Honesty is seen to reap long-term benefits that

increase the probability of net gains in relationships. Dishonesty only provides a short-term

advantage that eventually leads to dismantling the foundation of the relationship. The idea of

mutual benefit is of great intrigue as there is little to no downside that outweighs or discourages

the trade. This value may be the most important as its presence is interdependent with the other

two values. If one party does not provide their end of the benefit, they will be viewed as

dishonest and deteriorate their loyal connections.

Secondly, the Chinese impose several customary businesses, management, and

negotiation practices strategies in unique ways. First, the customary practices, for instance,

include the user-friendly means to negotiate specific issues within the employment zone. This

means that when the Chinese Company boss visits the workers and gets ideal treatment, they

assume that the negotiation grounds are easy provided as they have received special treatment.3.

Secondly, Chinese management practices are also unique. The management practices that we

can learn from the Chinese companies include responsiveness, speed, flexibility, and

improvisation. It is through these imperatives that Chinese businesses have acquired a critical

edge. The capitalism ideology in China has resulted in a quick and enormous evolving market

ecosystem forcing the companies to devise diverse management practices that will enable them

2
Hill, Charles WL, and William Hernández-Requejo. Global business today. New York:

McGraw-Hill Irwin, 2008.

3
Fernandes, Ana Sofia, Catarina Pinto, Cristina Maria Alves, and Aleksandra Gulc. "Business

savoir-vivre and culture: differences between Portugal and China." (2021).

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to cope with massive urbanization, dramatic slowdowns, runaway growth, and huge rural

markets.4. Thirdly, negotiations in the labor industry in China entail the execution of decisions as

a panel group for the company. The establisher of negotiations explains communication

relevance and the theme present in the meeting, and a collective decision is established to

identify the seriousness of the aspects. When the management agrees on a specific decision, that

decision takes the course, and the employees are affected immediately.

Finally, the Chinese differ from other nations regarding education levels, the labor

environment, and how they manage benefits and risks. Firstly, the Chinese education system is

the largest state-run education system in the world. Over the years, the Chinese government has

placed a notable amount of attention and focus on their educational system to develop their

economy and nurture an innovative environment.5. Generally, students must take six years of

introductory primary school and three years of junior and senior high school. Secondly, China's

vast workforce is the number one reason they have reached the high degree of economic

development they have achieved. With a population of 1.4 billion individuals, labor costs are

low, allowing China to lower the fixed manufacturing costs of international and domestic

organizations.6. Finally, doing business in China today can benefit organizations largely due to

their rapidly growing middle-class population and low economic restrictions. In addition to

4
Hout, Thomas. “A Chinese Approach to Management.” Harvard Business Review, February

12, 2021. https://hbr.org/2014/09/a-chinese-approach-to-management.

5
InterNations. “Education in China.” InterNations, November 30, 2021.
https://www.internations.org/go/moving-to-china/education.
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demographics, China is known for providing the lowest labor costs globally, while its

manufacturing economy is fifty percent larger than the United States. Meanwhile, though China

possesses' numerous attractive traits for conducting business, there are numerous risks associated

with moving new business operations to China. One of the most prominent risks of conducting

business in China is their lack of enforcement of intellectual property laws. This places an

organization's patents, copyrights, trademarks, and other intellectual property rights at risk,

potentially costing an organization millions of dollars in damages. More notably, today, we see

the U.S. and China trade war become increasingly tense, which began when President Donald

Trump placed tariffs on incoming Chinese imports.

In conclusion, different nations have diverse cross-cultural practices which guide the

country in carrying out business operations. China has been used as an affirmative example of

how different nations execute their business operations. Chinese have unique business cultural

values, different customary business, and negotiation practices. Also, the Chinese have a unique

labor market, perceive benefits and risks differently, and emphasize education uniquely.

Therefore, to participate in the international market well, a country needs to understand cross-

cultural literacy. For instance, the Chinese are guided by the Confucianism codes in executing

their business operations. The Chinese customary business practices include the use of friendly

means in executing business operations. Chinese also have current management imperatives such

as speed and responsiveness. The Chinese have also intensively invested in their education

system to enhance economic growth. The growth of the business is fueled by a vast population

6
Worldometer. “China Demographics.” Worldometer, November 30, 2021.

https://www.worldometers.info/demographics/china-demographics/.
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that ensures labor availability and productivity. The Chinese population offers a large market for

products and services, thus a pull factor to investment. The risk of investing in China is the fact

that the intellectual laws are not fully reinforced.

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Bibliography

Fernandes, Ana Sofia, Catarina Pinto, Cristina Maria Alves, and Aleksandra Gulc. "Business

savoir-vivre and culture: differences between Portugal and China." (2021).

Hill, Charles WL, and William Hernández-Requejo. Global business today. New York:

McGraw-Hill Irwin, 2008.

Hout, Thomas. “A Chinese Approach to Management.” Harvard Business Review, February 12,

2021. https://hbr.org/2014/09/a-chinese-approach-to-management.

InterNations. “Education in China.” InterNations, November 30, 2021.

https://www.internations.org/go/moving-to-china/education.

Johnston, Kevin. “Why Is It Important to Gain Cultural Literacy in International Business?”

Small Business - Chron.com. Chron.com, November 21, 2017.

https://smallbusiness.chron.com/important-gain-cultural-literacy-international-business-

69605.html.

Worldometer. “China Demographics.” Worldometer, November 30, 2021.

https://www.worldometers.info/demographics/china-demographics/.