International Management as the World

International Management

As the world evolves and the economic, social and technological contexts change, the economic agents are presented with opportunities to capitalize on the liberalization of the markets. For the current entity, this possibility is reflected at the level of launching manufacturing operations in China. In other words, the company wishes to engage in outsourcing processes, but to increase the efficiency of the decision, it is necessary to conduct a fourfold analysis of the country, its cultural factors, its negotiation etiquette and the strategic partners.

Introduction to China

China, short for People's Republic of China, is one of the largest and fastest growing economies of the globe. The country was once enclosed, relying on internal affairs to provide economic and social stability. Throughout the past decades however, the country has opened its boundaries to international investors and has liberalized its trade. Today, China is part to several international institutions, such as the World Trade Organization, which continually ensure that the region is liberalizing its trade and opening its boundaries.

Similar to other states, the focus of China would be that of maximizing its exports and minimizing its imports. The Chinese government even sought to increase domestic consumption of local products in the detriment of foreign imports, but such a measure was frowned upon. These measures are furthermore supported at the political level (communist), but the appurtenance to the international institutions then ensures that the country remains committed to its market liberalization standards.

China has one of the fastest growth rates of its gross domestic product in the world, and, by size of its GDP, it is currently the third largest economy of the globe, preceded only by the European Union and the United States of America. This leading position within the global market places is due to a wide array of elements, such as its wide and cost effective labor force, its manufacturing advantages or its recent liberalization. These competitive advantages also constitute reasons as to why the companies across the globe seek to develop partnerships with China. Aside from manufacturing and other outsourcing contracts, China is now becoming an attractive source of retail businesses, which recognize the Chinese population as a powerful potential customer base, with increasing revenues and demands to satisfy.

From a technological standpoint, China is also a leading country, characterized by the following:

The country is the largest state by number of telephone lines in use, as well as by number of mobile telephones owned and utilized by the population

By number of internet users, China is the largest country in the world

By number of internet hosts, China is the sixth largest country of the globe (Central Intelligence Agency). This final measure is indicative that improvements till have to be created at the level of infrastructure.

Finally, in spite of all advantages and advancements made in China, the country still presents an increased risk, revealed at several levels. For instance, there are still high levels of corruption of top levels in the country, including political leaders, as well as corporate leaders. Then, the legislative system is a combination of Soviet and European systems, allowing the Chinese authorities to interpret each situation (Central Intelligence Agency, 2012). Also, there are human rights concerns in China, as people continue to be subjected to limitations of their freedom speech, religion and movement.

"Against a backdrop of rapid socio-economic change and modernization, China continues to be an authoritarian one-party state that imposes sharp curbs on freedom of expression, association, and religion; openly rejects judicial independence and press freedom; and arbitrarily restricts and suppresses human rights defenders and organizations, often through extra-judicial measures" (Human Rights Watch, 2011).

Part 2. Cultural factors in China

The Chinese society is normally rather homogenous in terms of ethnicity and religion, however several dialects of the language exist and are spoken across the country. By the size of its population (1,343,239,923), China is the largest country of the world, and there exists a balance between the urban and the rural populations as these are relative equal halves.

The life expectancy at birth for the average Chinese individual is of 74.84 years and the school expectancy is of 12 years; 92 per cent of the population can read and write and the risk of contracting infectious diseases in the country is an intermediate one. The obesity in adults is of a 2.9 per cent rate and 8.7 per cent of the Chinese children are underweight.

The income per capita is of $8,500, lower than the global average of an estimated $10,500, and significantly lower than the American average of $49,000. In China, unlike the United States, where the services sector employs most individuals, the laborers are equally distributed across the agricultural sector, the industry and services. 13.4 per cent of the population lives below the poverty line (Central Intelligence Agency, 2012).

The Chinese population lives and functions by the teaching of Confucius, which virtually point out the expected behaviors based on the nature of the relationships between the parties. In other words, there are distinctive responsibilities and obligations as a result of superiority or inferiority in relationships. Within the Chinese culture, five distinctive relationships are identified, as follows:

Relationship between ruler and subject

Relationship between husband and wife

Relationship between parents and children

Relationship between brothers and sisters, and last

Relationships between friends.

The first four sets of relationship see the superiority of the first category and the need for obedience of the second category. The fifth set of relationships reveals equality and the needs to behave honorably. The Chinese culture places an increased emphasis on honor, good reputation and respect and it is crucial for the people to act in a way to preserve their "face" and also to ensure that they do not negatively impact the "face" of others.

As a population and a culture, the Chinese are rather collective people, preferring to be part of a collectivity, be it family, workplace or another group, rather than being individualist. The cohesiveness and harmony of the group is as such of pivotal importance for the Chinese, who will avoid public confrontations and prefer to remain silent, rather than create group conflicts or contradict another person in the group. Remaining silent is as such an important statement pertaining to the Chinese culture, as are several other tools of non-verbal communication. The Chinese people often use facial expressions, different tones of voice and posture to sent their messages and transmit what they feel. For instance, when a Chinese individual frowns, this is often construed as disagreement with what the others are saying. The Chinese speakers then strive to maintain an impassive look on their faces. Last, a final aspect of Chinese culture and customs, they often avoid eye contact in order to not intrude in the personal privacy of the other people (Kwintessential).

Part 3. Negotiating and ethical issues

Business processes in China are generally complex endeavors, which have to take into account both the legal aspects, as well as the cultural ones. When participating to business meetings for instance, the parties are expected to first greet the oldest person in the room; between locals and foreigners, the more common form of greeting is represented by the handshake.

As mentioned before, the Chinese people often avoid eye contact, meaning that when greeting, they will often look to the floor. Foreigners are expected to address their Chinese interlocutors by their honorific title, followed by the surname. If the Chinese individual wishes to move to a first name basis, they will initiate the transition.

Within business meetings, it is often the case that the Chinese come to laugh at themselves, their sense of humor and self irony being very developed. American partners and negotiators are advised to able be prepared to laugh at themselves.

When offering gifts to the Chinese partners, the foreigners should know that the locals often appreciate rice and food baskets, but they associate flowers with funerals, alongside with clocks, handkerchiefs and straw sandals. Knives, scissors and other cutting items are perceived as a sign of severing the relationship. Four is an unlucky number, but eight is the luckiest. Gifts should be packed in colors other than white, blue and black paper and they should be presented with both hands. The Chinese can refuse a gift three times before accepting it and they do not open it in front of the giver (Kwintessential).

In business interactions and communications, the Chinese prefer partners they know well, in the detriment of unknown partners; it is as such important for the Americans to construct solid relationships before starting negotiations by sending information on the company, the products, the services and so on. There are high levels of bureaucracy in China and the business process is long and tedious; ranks and authority are well preserved in business relationships and the foreigners are perceived as organizational representatives, rather than individuals.

Business meetings and discussions are often held in formal setting, not during dinner or other social events; the Chinese separate socialization and business. Business communications are official and face-to-face meetings are always preferred to indirect communications.

At the specific level of negotiations, it is important to note that, during negotiations, only the seniors in the team will speak. The negotiation process is slow and advancements are made in an unhurried rhythm. The Chinese people are non-confrontational individuals and they will avoid saying "No." They will, instead, promise to think about the proposition, see about it and so on.

In China, the negotiations do not focus on specific and measurable goals, but their emphasis falls on assessing the negotiation partner and seeing whether the relationship can be further developed. Since the Chinese are calculated people, decision making will often take a lot of time, until the locals are convinced of their future actions. The American counterparts are advised to always remain calm, or they will lose "face" and irremediably damage the relationship. The foreigners are also advised to not use pressure techniques (they might find themselves outmaneuvered), to remember that the Chinese are shrewd negotiators and to always leave room for concessions (Kwintessential).

Part 4. Strategic alliances

The selection of a strategic partner in China is based on the ability of the respective company to support the American organization to attain its overall objectives. At this specific level, the United States-based firm seeks to capitalize on the partnership with China by accessing skilled and cost effective labor force, which will provide high levels of manufacturing volumes, at competitive prices.

Based on these requests, the firm has selected a medium size sewing company in China. The institution employs 101 employees, out of which 90 are women sewing at machines; six are men and women in charge of creating patterns of the materials to be sewn and five are managerial staffs. The managerial staffs are three sewing managers, one accountant and one executive leader. The company is structured into three equal shifts, all working 8 hours a day, six days a week. The shifts are equal in size and number of participants, being formed from 30 sewing women and two pattern creators. The accountant and the executive leader have flexible working schedules, so that they meet the needs of the company across the three different shifts.