The Significance of Cultural Differences for Foreign Companies

My essay is roughly familyifi advisece of heathenish differences for unusual companies which want to set up a production line in all heavy(p)land mainland chinaware. To do a clearly demonstration, I break it down into 3 start out First is an example that the culture differences act planetaryisticist companies in China Second is the signifi nookyce of these heathen differences Third is how the companies would overcome them. For the first part, on that point allow be examples of international companies which set up a business in China. As we know, since China conjugated the WTO in 2001, musical compositiony unlike companies were draw offed by Chinas immense foodstuff place and lower childbed cost.But nigh of them experienced hard times when they came into Chinese market. The foreign of the cultural difference is a truly important factor. From their experience, we enkindle stupefy a direct impression of how the culture differences would trouble for fore ign companies in China. Second part is genuinely important. As I choose China as the coun smack. I will try to show some(a) Chinese features, which are the Chinese cultural difference from differents. I will to abridgment why the cultural differences are significance and what effects they will cause. corporeal order will be given to support my idea.The third part is most critical, because it is not enough for us expert know roughly the problems. We should find out ways to solve them. I will from intravenous feeding parts to demonstration, and try to cover the ways which can both make better the ability of foreign companies to deal with cultural difference in China as possible as I can. Example that the culture differences affect international companies in China Looking back at past, we can find that China has been the first place of absorbing international roof in all developing countries for nearly 18 forms.Since China joined the WTO in 2001, many international companies had been attracted by Chinas huge market, lower labour cost, preferable government policies for foreign investors. But in fact, we can comfortably find some of them had come across a hard Why KFC had a better education than McDonalds? The reason is KFC was more than(prenominal) careful to deal with culture difference in China. Before the year 2004, the McDonalds centralize their customer group on children, and then parents and young tidy sum. Mean while, KFC focus on young people, then children and parents.We cannot say McDonalds strategy was wrong, because it brought great prospered for it in USA. But it is not suitable in China. A hatful made by China Chain Operation Association (CCFA) showed that no matter in the ratio of customers number or the ratio of bullion consume, the young people account for more than 60%. After 2005, McDonalds push-off its refreshful series called I respectable like it, and changed their strategy to young people, the shoes came better. This is an example of difference of the market positioning caused by the culture difference. 3 The McDonalds blow was not plainly because of this.It alike ignored that people in unlike culture background may aim different tastes. The GADLING website (2005) 4 showed that before 2005, while KFC began to create some news kinds of foods which were fit for Chinese peoples tastes, such as the Traditional Peking Chicken Loaf, Tomato and clump Soup, the McDonalds still insisted on its western taste hamburger. In this period, the McDonalds had to cut half price to attract customers. And there was a thing which had a very bad bring somewhat McDonalds. The Sina website 5 has some details about it. In June, 2005, McDonalds pushed a new advertising.One scene of this advertisement is a man kneels down to beg the McDonalds lengthen the promotion period. This advertisement caused a very bad effect. Because in China, kneel down is very important and flagitious thing. Chinese people think kneel down to others is a sign of lost dignity. In some countries, people may regard it just as a funny advertisement. But in China, this kind of advertisement should be avoided. This is the difference of philosophy caused by different culture. It is in addition which the international connection should be careful. The McDonalds example shows us how the cultural differences affect international companies in China. hence, in the following part, I will give a more clearly demonstration ground on real evidence and shows what are the Chinas specificity and why the culture differences is significance for international companies in China. Significance of cultural differences in China Culture is a very widely identity. For a company, we usually consider two main parts the national culture, and the corporate culture. So when talk about Chinese cultures influence to international firms, I will accept both Chinese national culture and Chinese corporate culture. For Chinese national culture, we need to consider many parts, such as the philosophy.Because of the eagle-eyed history, China has formed very complete and complicated philosophy, which has a great different from western countries. Some traditional ideas are still unploughed in every Chinese peoples mind. A simplistic example is the advertisement of McDonalds menti one(a)d above. Kneel down in China could never be a joke or used in an advertisement. Because of the influence of Confucianism, Chinese people in some parts are more conventional than western people. Some things which have a strong finish and violence implication may be forbidden by the government.The Techcn website (2009) 6 has showed that one of the reasons why Google suffer from a failure in China in 2007 is the Chinese most powerful media CCTV made it public that Google can liaison to some porn websites. It would be a common thing in some countries, scarce in China, this let Google at the disadvantage. Abstract, Characteristics of national cult ures have frequently been claimed to influence the selection of entry modes (Bruce Kogut) 7. After these years of developing, Chinese market has formed its own potential market culture. It means the gross gross revenue models which are successful in other countries may not piddle in China.To take trump out debauch for an example, as the world kitchen range electronics giant, the scoop Buy didnt have a satisfactory writ of execution in Chinese market. An report on Netease website (2010) 8 shows that after Best Buy opened the first shop in China in 2006, it wholly opened 7 shops in the following 4 years. And in the 2009, while the Best Buy had done a good job in global market, which has about 45 billion dollars sales, it didnt make a profit in Chinese market. One important factor is Best Buy insisted on its traditional model, decorated the shop and hired the sales promotion person by themselves.But in China, these things are perpetually hand to the suppliers. This cause high cost for Best Buy and also caused for discontent of the suppliers. The suppliers in China were not like the ways which Best Buy play down the publicity of product brands, while bring up the publicity of its own brand. If Best Buy can not get down the support of Chinese suppliers, its failure is an understandable result. This kind of potential market rules are critical but easily to be ignored. How to overcome cultural differences After discussed the significance of cultural difference, and the bad effects they will make, we should try to find ways to overcome them.To deal with this, I will from 4 parts to analysis. First is the foreign companies should find a suitable way mode. The reason of some foreign companies failed in Chinese market was their steering mode didnt adapt to Chinese market to a oversize extend. Like Best Buy I had mentioned above, even though its steering mode had been proved successful in North America. It didnt manoeuvre rise in China. In my personal vie w, the main advantage of foreign companies is their tremendous capital and their foreign background.So when the foreign companies enter Chinese market, they can learn the management mode which Chinese native companies have. Then they can use their advantages to have a foothold in the Chinese market, and continuing complete their management mode based on their alter understanding about Chinese market. Second is the companies should do clearly and blanket(prenominal) market interrogation before they come into Chinese market. The researches which are just about the market prospect are not nearly enough. They should check up on other things like Chinese culture, government policies, the operating mode of market.These kinds of research can provide the companies much more clearly understanding about Chinese market. At least they will not make some silly mistakes when they enter Chinese market. Third is about the make use of of staff. To employ staff, the companies can give priority t o overseas students and the people who had the experience of on the job(p) in other foreign companies. These kinds of people are more easily to adapt to the different kinds of culture in the companies. Meanwhile, they can deal with things based on Chinese practical situation, which means more efficient in sometimes.And in my opinion, the top level of the companys Chinese branch should have at least one Chinese people, it is not only because he or she has a deeply understand about China, but his or her personal networking with others can bring some help for the company. It is also kind of Chinese specific culture, networking with others sometimes are as important as own strength. The last one is staff organiseing and versed management 10. The foreign company should pay attention on the training of staffs. For the Chinese staffs, the training should include the part of training them to adapt the companys culture and ways to deal with things.For the staffs from the home country, th e company should train them about the Chinese culture, at least the part in similarity to their professional business. And the internal management should consider about Chinese peoples value view and norms, it should be more humanization and can provide the staffs a more stable life, thats what most of Chinese people desirous. Conclusion To summarise, the cultural different is a very important problem which troubles most of foreign companies. For these companies, the incomprehension of Chinese peoples and markets view about value and norms is one of the factors which limit their development in China.Things like the potential market culture of China the cultural conflicts inside and outside the company the different taste and tendency for Chinese people had brought a lot of problems for the foreign companies. Thats why some foreign companies which are very strength didnt perform well in China. To overcome those problems caused by the cultural difference, the companies should do clea rly and encyclopaedic researches for different parts of China and Chinese culture, and they should not overconfidence about their management mode even they are successful in other countries.Meanwhile, the companies should try to employ the people who are familiar about China. It can help the companies blend in Chinese society and market. The companies should also heighten the training of both Chinese staff and staff from home country. It will reduce the conflict between two cultures in the company. A change internal management mode and treatment which can provide staffs more stable life will also be helpful to attract Chinese people and reduce the rate of job-hopping.