BizOp Blogs

BNET:

If you’re outsourcing to Chinese manufacturers for the first time, you’re bound to make a few gaffes when dealing with a business culture so different from your own. Here are some rules of the road:

1. Never criticize the government
In the United States, taking verbal shots at the government is almost de rigueur in business conversation. Not so in China. While savvy Chinese are well aware that their government has problems, openly criticizing the government, or even being on the scene of criticism, is a good way to end up with innumerable troubles when it’s time to make the obligatory kowtows. “The last thing you want is to be seen as a troublemaker,” says Usha Haley, professor of International Business at the University of New Haven in Connecticut.

2. Understand the limitations
There are still many industries in China where the organization and ownership structure reflects the old communist system. The government is reluctant to restructure and privatize these firms, possibly creating unemployment. When dealing with such bureaucrats, you may need to understand the constraints under which they are working (such as the need to maintain full employment) in order to understand how to work most closely with them, according to James Mulvenon, a former China expert for the Rand Corp.

3. Don’t assume the contract is final
In general, the Chinese place greater reliance upon personal connections and personal commitments than on what’s written on a piece of paper. As such, terms that are discussed prior to the signing of a contract often are only distantly related to the actual terms under which the deal will move forward. “After you sign the contract, there will likely be multiple requests to change the terms in order to make the deal more advantageous to the Chinese suppliers,” says Brad Finn, president of Marlboro Corporation, a wholesaler that works with Chinese manufacturers.

More rules here.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.