Chinese Business Etiquette Analysis as per Hofstede’s Cultural Dimension

Chinese Business Etiquette analysis as
per Hofstede’s cultural dimension
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Introduction
Business etiquette becomes critical to understand in cross cultural settings (Leung et.al.,
2011). In this business case analysis, Mary, an Australian owns “The Aroma Shop” with small
factory in Wagga Wagga, has decided to expand her business to China. She has decided to meet
her business partner Mr. Lau based in China. In order to conduct business in China, Mary needs
to understand Chinese business etiquette for making positive impression. Mary has to understand
cross-cultural communication gap by incorporating Hofstede’s Cultural Model (Hofstede, 2011).
This will increase business effectiveness and success of meeting.
Analysis
Chinese business framework differs highly in cross-cultural framework and in their cross
cultural communication as compared to Australia. Hofstede’s cultural dimensions as individual-
collectivism, masculinity-feminity, uncertainty avoidance and power distance (De Mooij &
Hofstede, 2010). These social dimensions of culture vary across cultures in Australia as
compared to China. Australia is a westernized democratic society whereas China is an Asiatic
society with a conservative outlook. Business ambience differs in both the countries, hence
following such cultural traditions while operating in China can lead to business success. Firstly
power distance index (PDI) is an index that defines power distribution. In Australia power is
distributed evenly, as a junior person can easily question the authority of a senior member. In
organization or across business relationships, power is evenly distributed in Australia. There are
more open lines of communication amongst business participants with limited gaps in their lines
of communication (Jin Hoare & Butcher, 2008). In China power is not distributed evenly, and
juniors are expected to show respect towards decision of seniors. Business partners are expected
to provide respect to other business partners in various manners as by arriving in time,
composure at business opportunities. However, it is best to avoid much emotion during a
business meeting. Implying, Mary will have to adhere to professionalism strictly while meeting
with her business partner. Moreover, Mary will have to maintain steady lines of communications,
indulging in small talk whilst dealing in her business meeting (Minkov & Hofstede, 2011). A
potential area for miscommunication can exists in case Mary carries gifts or expresses her
appreciation in case of closing of a business deal, which is greatly disliked by Chinese business
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persons. In case they like the business deal, they are most likely to have a small smile to reflect
their appreciation.
Individualism and collectivism (IDV) another factor of Hofstede’s cultural dimension
that explores manner in which a society’s member is integrated. Australia is an independent
society, where members enjoy freedom (Manrai & Manrai, 2011). They are less likely to be
closely associated in family relationships or any other bindings. On the contrary, Chinese people
are closely integrated society, where they firmly believe in having strong relationship prior to
extending business relationship. One positive aspect of Mary’s business is that her family is also
involved in it in some form. There is immense respect for family in China as they are a closely
knit society. One probable miscommunication that can hamper the business deal at this stage is
Mary’s disregard for family members or failing to extend the importance of relationship in
business association.
Uncertainty avoidance index (UAI) is a critical factor in Hofstede’s cultural dimension
and signifies society’s tolerance towards uncertainty. Mary comes from Australian society,
where entrepreneurs have high risk taking capabilities. Australian society is much more
westernized with lesser strict codes. On the other hand, China has lesser tolerance for
uncertainty; therefore there are stringent codes and restrictive practices. In order to conduct
business in China, Mary needs to conform to codes of business prevailing within the country
(Signorini, Wiesemes, & Murphy, 2009). Their societies have stringent restrictions and customs
while conducting business, as they need a major shareholding from a Chinese person. Mary can
easily get into miscommunication in this regard by avoiding certain regulations or norms of
business present in China. Mary can even ask her Chinese business partner to avoid certain
norms for benefits of the business. Such disregard will be treated in a negative manner by the
Chinese business partner.
Masculinity and Feminity (MAS) aspect of cultural dimension as defined by Hofstede
includes a society’s preference for assertiveness, material success and heroism. Feminity
characteristics include modesty, caring for one another, caring for weak and so on. In Australia
feminity characteristics are present, that represents caring towards weaker section of the society
and modesty. In China, people are more focused on achievements and material success. It
implies that profits or material success for the business will be important for Chinese partner and
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