December 31st, 2009
12:34 AM GMT
Sam Goodman is a Canadian who went to China in 1995 to study Mandarin. Along the way, a craving for Western sandwiches made him an accidental entrepreneur, as creating food for foreign students turned into the restaurant “Beijing Sammies.” Goodman eventually opened five locations with a 100-person staff and $1 million in revenue. Goodman got out of the sandwich business and is now a management consultant and chief operating officer of Climate Action, an environmental services company. But his experience as an entrepreneur in China – navigating a nuanced landscape of cultural, political and economic hills to climb – led to his book, "Where East Eats West: The Street Smarts Guide to Business in China."
Goodman shares his short list of top biz mistakes Westerners make in China.
1. Any variation of “doing-things-like-you -did-back-home.”
You’re not back home anymore.
2. Overestimating the mystique of Face and Guanxi (network/relationship)
Understanding the concept of face in China is important, but Goodman says don't over-mystify it. To put it simply, face is appearance over substance. Goodman writes, "It's not just what you say, but how you say it. Did you say the right things? (What you thought doesn't really matter.)"
3. Misunderstanding how (much) Face and Guanxi affects your business.
"In the West, if you make a mistake it's understood that this happens. If you fall off your horse, you get back on. In China if you do something wrong, your family loses face. That's much more important."
4. Seeing China as one market
"Western Companies need to understand that China is really many markets (just like Europe) with different characteristics."
China is a “high context” communication culture, which is to say the words used is the least important tool. The situation – how, when and who is saying what – speaks more than words.
6. Thinking a contract is binding
"In the West, a contract is black and white. In China, it's relationship based. Don't be surprised if after you sign a contract in China, the Chinese come back and want to re-discuss a clause."
7. Long term goals with no term implementation
"Large corporations come into China with a 'long term strategy", then bleed money month after month, year after year always thinking that things will turn around in a few years and the bleeding period is necessary to 'lay a foundation'."
8. Confusing language skills with management or business skills
A good Mandarin or English speaker doesn’t necessarily mean they have a head for business.
9. Assuming price and quality are connected
"Westerners tend to think: the higher the price, the higher the quality. In China, asking a high price is an issue of Face."
10. Managing by remote control
In his book, Goodman writes, "Folks here like to make deals eyeball to eyeball with people they know who also know other people they know."
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