Chapter 6

Relationship
Chapter content
 The Dutch and Chinese Cultural Exchange
 How do you recognize the Relationship

dimension?
 Relationship and Trust
 Expectations of Relationships
 How Relationships Win Business?
 Team Behavior
Review Case: The Dutch and Chinese
Cultural Exchange
 Anke Pushcer is a Dutch National, worked for a leading
multinational postal and direct marketing company in
Holland. She knew little about China.
 She was assigned to go to China to develop Chinese market
penetration strategies to win business from competitors.
 Her action plans: research and study the market place
carefully  conduct market segmentation identify
customers’ needs and develop focused products uniquely to
meet the customers’ wants.
 Results:
◦ Although Chinese colleagues greeted her proposed strategy, no one
followed it.
◦ No market segmentation was conducted. Chinese colleagues
continued to contacting the same people they knew before for doing
business.
 Lessons learned from Anke’s case:
◦ Even when the Chinese colleagues recognized that
Anke’s strategy was wrong they would not tell her.
Because it was not polite to tell their boss about her
mistake.
◦ Business success in China was based on a
relationship-based approach rather than the a
pure-market approach.
◦ Chinese sales people start to find customers by
calling on the people and friends they know and
ask for their referrals to individuals within the
market segmentation they are focusing.
Country ranking : Relationship
Transactional/ Low- Interpersonal/ High
relationship culture Relationship Culture
 Canada  China
 United States  Iran
 Australia  India
 Czech Republic  Saudi Arabia
 Denmark  Korea
 Finland  Vietnam
 Netherlands
 Norway
 Poland
 Russia
 Sweden
Relationship Cultural Dimension
 “Relationships dimension describes the
importance a society ascribes to building
extensive connections and developing trust
and how central relationships are as a
prerequisite to working with someone”
How do we recognize the
relationships dimension?
 Some cultures require a level of trust before
entering into business affairs.
 Some cultures are so transactional that they

are able to get down to work without having

to know the other parties before.
 In some culture people don’t need to know

well before they do business

 In some cultures, knowing the “right” people

and being networked with them is an

important part of business life.
Relationships and Trust
 In relationship cultures, trust is critical for successful
business transactions.
 In transactional cultures. Trust is just assumed.
 There are three aspects of trust evaluation:
◦ Ability: an assessment of the other’s knowledge, skill, and
competency. The other is able to perform in a manner that
meets someone’ expectation.
◦ Integrity: the degree to which the trustee adheres to principles
that are acceptable to the trustier: consistency of past actions,
credibility of communication, commitment to standards of
fairness, the congruence of the others’ words and deed.
◦ Benevolence: honest and open communication, delegating
decisions, sharing control, etc.
 Ability and Integrity are the most important of trust.
Expectations of Relationships
 In relationship cultures: friends are expected
to put friendship above business transactions
and some cases even above the Laws.
 In transactional cultures you are not obligated

to take personal interest in the people with

whom people work.
 Example: An individual is the cause of

automobile accident. Should his friend testify

in his favor regardless of his responsibility or
is the friend supposed to tell the truth?
Concept of “Guanxi “ in China
 Guanxi means more than just close and
trusted relationships.
 In Vietnamese: “Guanxi” means “Bạn vào sinh

ra tử”, “bạn chí cốt”: live and die together in

all situations.
 “Guanxi” is built and deepened over time and

carries with a profound sense of

responsibility.
Hospitality and Extended Family Ties
 Hospitality is one to strengthen relationships.
 India, hospitality is the central value. Not only does a
person warmly welcome his foreign partner but also his
family members treat the partner as their “family
member”:
◦ Welcome the partner at the airport and arrange all the hotels
and entertainment during his/her stay.
◦ Take the partner to sightseeing, travelling together with the
family.
◦ Invite the partner to take part in the family’s events: cousin’s
wedding, birthday party, etc.
 Some Indians were shocked when taking business to the
united states because the American partners were so
superficial( not care about relationship)
How relationships win in business?
 In the early 1980s two multinational corporations were
competing for a $600 million contract in Malaysia to upgrade
that country’s power-generating system: American and
European ones.
 The American corporation was well known for its competitive
advantages in product quality and prices over the European
corporation.
 The European corporation has built a long-time relationship
with the Malaysian officials: met frequently with the
government and other decisions makers. The Malays knew it
better than the American one. It won the contract.
 To some Western cultures: nepotism(accept cho ng nha vao
lam, nang do) is negative
 To some Asian cultures: nepotism is necessary as they would
never do anything injurious.
Team Behavior
 In transactional cultures: selecting their team
members on the basis of their relevant
experience and technical competence.
 In relationship- cultures: selecting the team

members whom they like to work with.

Relationships: Beliefs and Behaviors
 Relationship and  Relationship and
Business agreements friendships are extremely
may last for only a stable over long periods
short period
 Trust is prerequisite to
business dealings and
 Individuals are must be established over
engaged in many time
activities immediately  Trust and close
 Business Agreements relationship is sometime
must be protected by more important than
contracts and lawyers contracts and lawyers

Low- Relationship Culture High- Relationship Culture

IN-CLASS GROUP ASSIGNMENT
 Discuss in groups and answer the following
questions:
 1. Explain the word “Guanxi”. How Guanxi affects
doing of business in Vietnam (Turkey?)? Give an
example for illustration.
 2. Explain the concept “Hospitality” in Relationships.
How do people use hospitality in business
relationship in Vitenam?
 3. Does Vietnam characterize a relationship culture
or transactional culture? Explain (Table 6-1).
 4. Give advice on how an American partner can be
successful in doing business in VN. (Table 6-2)