Guanxi for the Busy American
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About this ebook
What Do Busy Americans Need to Know About Guanxi?
Busy Americans want to transact business and move on to the next challenge. When it comes to doing business in China, busy Americans respect the local feelings, attitudes, customs, culture, history and society – but also know that they are not Chinese and never will be, no matter what they do. They want to master the skills and learn what is needed to get the job done as expertly and competently as possible. To them culture is one of many skills that needs to be mastered. They do not need get a PhD in mathematics in order to fill out an invoice, and they are confident operating a telephone without being able to design a microchip. Busy Americans approach culture as one of many factors necessary successful management.
The goal of "Guanxi for the Busy American" is to help over-scheduled, sleep-deprived professionals learn exactly what they need to do business in China effectively and efficiently. There is not enough time to explore every facet of Chinese culture and history – but you do not want to be unprepared, naïve or buffoonish when meeting with Chinese colleagues and partners. Busy Americans have the experience and intelligence to know that one cannot be an expert in everything, and should not try. The main skill of executives is knowing what questions to ask and where to find the expertise to get answers.
Download this short e-book before your flight, and check "Prepare for Chinese Negotiation" off your very long to-do list.
Andrew Hupert
Andrew Hupert is founder and CEO of Best Practices China Ltd., based in Hong Kong. Since 2003 he has been advising training, and coaching executives and managers in multinationals to improve their deal-making and negotiating skills with Chinese counterparties. He is a sought after speaker at corporate events and EMBA tours. During his time in Shanghai he served as an adjunct professor at New York University (Shanghai campus) and lectured at Strathclyde University’s EMBA program. Andrew first came to Asia in 1990 after receiving his MBA in Finance from New York University Stern School of Management. He gained extensive senior sales and management experience in Taipei, Hong Kong, Kyoto and New York before settling in Shanghai as a consultant and lecturer. He has published articles in business journals such as, Business Forum China, Shanghai Business Review and the China Economic Review. Companies around the world follow his discussions about negotiation tactics in China on ChineseNegotiation.com. He can be reached via email at andrew.hupert@gmail.com or online at www.AndrewHupert.com
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Book preview
Guanxi for the Busy American - Andrew Hupert
Guanxi for the Busy American
By
Andrew Hupert
Smashwords Edition
Published by:
Andrew Hupert on Smashwords
Guanxi for the Busy American
Copyright © 2012 by Andrew Hupert
Table of Contents
Chapter 1 Guanxi for the Busy American - Introduction
Chapter 2 What Is Guanxi? A Closer Look
Chapter 3 Is Guanxi Unique to China
Chapter 4 Guanxi as Due Diligence
Chapter 5 Guanxi Rules
Chapter 6 Guanxi Myths and Realities
Chapter 7 Guanxi Caveats for Americans
Chapter 8 Types of Guanxi Relationships
Chapter 9 Guanxi Best Practices
Chapter 10 Final Warnings
The Guanxi Joint Venture - A Case Study in Truth or Consequences
About the Author, Andrew Hupert
About ChinaSolved
Chapter 1 Guanxi for the Busy American – Introduction
Americans doing business in China constantly grapple with issues of culture, language and tradition. Shortly after I first moved to Shanghai in 2002, I heard a Chinese professor from Australia tell an audience of Western executives that the best way to learn about doing business in the mainland was to spend a year living in a Beijing hutong, or traditional residential housing development. One of her main examples was the concept of guanxi
- that mysterious, illusive, wealth-bringing force that Westerners could never quite fathom. I nodded along with the rest, admitting that the logic of her position was undeniable. After all, the cultural barriers between China and the US are formidable.
A few weeks later my brother, who works in the bulk chemicals industry, came to visit some factories in China for a few days. He has a wife, two kids, a house in the suburbs, and a very busy schedule involving trips all over the US, Mexico and Latin America. It dawned on me that it would be hard for him to find a spare afternoon for hutong-time, much less a year. So what is the modern businessperson – the busy American
- supposed to do to manage the challenge of cultural divide and still make profitable deals with Chinese counterparties?
The subject of guanxi makes a great starting point for Americans to begin exploring and unraveling the mysteries of Chinese business culture. There are few ideas so wrapped in mystique, misconception and miscalculation as guanxi – yet at its core it is quite simple and universal. I have guanxi
is one of the most loaded phrases in modern international business – it can signal the start of a life-long union or the termination of the discussion, the partnership, and the opportunity. Traditional Chinese swear that guanxi – a network of connections – is the one true key to riches and power. Modern Westerners swear that it is a code word for fraud, corruption, and larceny.
This short book is going to answer all of the key questions facing Americans managing teams, negotiating deals, and building profitable partnerships in China. By way of introducing the often-misunderstood topic of guanxi, we are going to answer five key questions.
What is guanxi?
What are the important functional differences between doing business in China and the US?
What is the relationship between guanxi and negotiation in China?
What is the role of guanxi in 21st Century China?
Can guanxi help me succeed in China?
What is Guanxi?
Guanxi is a Chinese concept that describes personal business relationships and networks of contacts. Technically, it translates as connection,
but the true meaning is much deeper and more dynamic to the Chinese. Guanxi is a bond of trust and understanding between two individuals that opens the door to networks of professional contacts and connections. It is a counter-balancing system of favors and obligations that serves an integral yet informal role in traditional Chinese business. Many Americans and even more Chinese tend to obscure this basic meaning and confuse it with the rituals, ceremonies and customs surrounding it. Guanxi is not the same as banquets, toasts, dinner parties, KTV sessions, or casual small talk, though all of these activities are used to build the personal connections that ultimately form guanxi. For you, the important thing to understand is that the Chinese do not begin a serious negotiation without spending time on the personal relationship. It is part-and-parcel of Chinese negotiation, and if you drop the ball in the early relationship-building phase, then you (and your company) will pay for it in the end.
What are the main differences between Chinese and American business?
One of the main differences between Chinese and American business cultures is that China is a relationship-based deal environment, while American business is based on transactions or contracts. Americans begin new business with a test order or a contract negotiation, and if the initial transaction works out well it will be followed up with other successful deals. A relationship will develop over time - possibly. We view friendly connections as an organic process – a natural outgrowth of positive