Business and Management Practices in China

When, in 1793, Earl Macartney, first envoy of Britain to China appointed by George III, set sail from China back to England after his spectacularly unsuccessful attempt to strike diplomatic and business relations between the two countries, the letter he was carrying to the king from the Chinese Emperor, Qianlong (乾隆), seemed to summarize well the attitude of the Middle Kingdom to the outside world at the time:

"The virtue and prestige of the Celestial Dynasty having spread far and wide, the kings of the myriad nations come by land and sea with all sorts of precious things. Consequently there is nothing we lack, as your principal envoy and others have themselves observed. We have never set much store on strange and ingenious objects, nor do we need any more of your country's manufactures." (Bamber Gascoigne, A Brief History of the Dynasties of China, 2003)

Now, more than two centuries later, the situation is certainly different. While the tendency for national self-sufficiency and pride remains strong in China, as it has always been, the international exchange of goods and services - and with it also concepts and ideas - is accelerating. As foreign companies continue to establish their presence in China, native Chinese enterprises become stronger at home and look increasingly toward international - and hence multilingual and multicultural - markets.

This is either through international partnerships, establishing offices abroad, or increasingly also by way of acquisitions. We don't need to go as far back in history as the Celestial Dynasty to recall Lenovo's May 2005 acquisition of the PC division of IBM for US.25 billion or the acquisition of the British car-maker MG Rover by Nanjing Automobile a few months later. All this creates an interesting background against which to compare the different approaches to management and management styles in China with those in the West.

History and culture continue to have a profound effect on how business is conducted and managed in China. And now, as so often in the past, the Chinese are adding a new dimension and perspective to the international scene, one which ultimately enriches us all.

Here are some observations from the Western perspective, collected as our company has established offices worldwide over the past 15 years, including a production center in Nanjing, China. This led us to spend considerable time abroad and has enabled us to compare the differing management approaches and cultures in North and South America, in European countries, and in Japan and China.

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