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Enter the Dragon:

Global Strategy of entering

into the Chinese Market

By

Jeremy Broadaway

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Taking into account the cultural considerations that are necessary to be successful within

a foreign market such as China, corporations should be familiar with what it will take to mesh

within the business community and move its product. There are a few main focal points that will

allow a corporation to do this. Using an approach of “go global act local” will be the basic

concept for every practice the business chooses to implement. The best rubric for success in

determining how the Chinese operate culturally is Geert Hofstede’s Cultural Dimension Theory

model of ranking different cultures by things like power distance, masculinity vs. femininity,

individualism, etc. Using this rubric and having an open mind in determining how to handle

business issues through the eyes of the Chinese will allow for growth within the community.

“Research by Newman & Nollen indicated that organization performance is better in the

companies where there is congruency between national culture and human resources practice. At

the business unit level where conscious efforts are made to adopt human resource policies that

are in conformity with the values and prescriptions of a country, the performance of such a

business unit in terms of return on assets and return on sales is better, which may reflect in

bigger and better bonuses for employees”(Dartey-Baah, 2013). Expatriate employees working

locally in China have to take into account that certain cultural values are drastically different

than those of the United States. Some of these

differences are explained in the following

paragraphs.

Power distance is “the degree to which a

culture’s people are (should be) separated by

power, authority, and prestige” (Shi, X., Wang,

J., 2011). According to Hofstede’s model, China

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has a power distance of 80 (Shi X., Wang, J.); meaning that the Chinese believe that inequalities

are acceptable. Performance is often based on behavior rather than results (Dartey-Baah, 2013).

Power abuse is very prevalent in China and people will tend to submit to authority and abide by

social ranking and not strive to go above their respective rank. Loyalty and obedience is a

cultural normal.

As compared to China the United States is at a level 40 (Shi, X., Wang, J.) on Hofstede’s

power distance model; this would imply that the two counties are basically polar opposites when

it comes to equality within corporate society. At a level 40, authority is not as revered. In order

for an effective globalization to take place across an organization, expatriate employees of an

organization working in China must submit to the social norms of submitting to authority and

avoiding confrontation at all costs

Individualism is the degree of interdependence a particular society maintains among its

members. According to Hofstede’s model pertaining to individualism, China ranks at a 20;

which is to say that they are very collectivistic

(Shi, X., Wang, J.). People tend to act in the

interest of the group over themselves. This has a

profound impact on hiring and promotions with

respect to family, friends, etc. getting preferential

treatment.

With individualism, the United States ranks

91 (Shi, X., Wang, J.). This number means that

people look after themselves and immediate family only. Employees are expected to be self-

reliant and show initiative. Within Chinese business relationships, human resources pertaining to

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expatriate employees should focus on group-based training and may respond better to group-

based feedback to mesh with the Chinese norms of helping the fellow man (Dartey-Baah, 2013).

When it comes to masculinity vs. femininity within the scale, China and the US rank

fairly close to one another. This concept on Hofstede’s model shows how competitive or content

a society is. Constantly wanting to be the best, achievement, and standing out pertains to

masculinity, whereas being content where one is on the social ladder and caring for others more

is femininity.

Masculinity refers to the distribution of roles between the genders. Cultures that show

assertiveness are labeled “masculine” and the more modest, caring cultures are deemed

“feminine”. (Shi, X., Wang, J.). At ratings of 66

and 62, China and the US can both be referred to as

masculine societies; although not overwhelmingly

so (Shi, X., Wang, J.). They are both more driven to

success. People will sacrifice relationships to work.

Status is seen as very important within both of these

countries. Job title is often more important than

actual job duties. This is a tough one to balance with individualism. A higher sense of

masculinity makes sense within the US where success is individually based, but in China there is

a balance of lower individualism, yet higher masculinity.

Uncertainty avoidance is a society’s tolerance for uncertainty and ambiguity. It represents

how cultures feel about unstructured situations. China, being at a level 32 of uncertainty

avoidance is not very concerned of change or ambiguity (Shi, X., Wang, J.). Like China, the US

can be described as uncertainty accepting at a level 46. This implies that businesses within both

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countries are willing to try new things and are more tolerant of ideas of others. This similarity of

culture should be taken advantage of by human resources.

Long term orientation as it pertains to a business society means whether or not there is an

inherent focus on the long-term future. In this, China and the US can be interpreted by

Hofstede’s model to be extremely different. The US, at a 29 on the scale, is very short-term

oriented. Businesses and employees alike want fast results. It’s very much a “what have you

done for me lately” society. However, China could not be more different. It ranks at a 118,

obviously meaning that the Chinese are very long-term oriented. This affects most if not all

business decisions.

For global firms, universal

core values need to be established

and taken into account to bridge

cultural differences (Yeung, Xin,

Pfoertsch, Liu, 2011). Human

Resources should employ staff that

have experience and knowledge of

local customs and resources and take all of the differences in Hofstede’s cultural dimensions into

account when setting up policies.

The type of strategy the corporation chooses to use will either make or break them when

it comes to expanding globally into China. We must understand in which ways China is different

than we are in the United States in order to communicate and sell successfully to their people.

The simplest way to do this is to exploit the capabilities that are first developed at home. If a

business started their company in the United States, which is their home, in order to expand into

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China we must take what we already know has worked in our country and go from there.

Corporations need to understand the types of commercials really attract the attention of

the Chinese people and country and get many commercials on the air to get the word out and

about of their company name. Obviously, China is a very large country and very overpopulated.

The word of the company should be able to get out much quicker to many of the country’s

people rather than if we were to try to globally expand into a smaller country. There is no doubt

we will be successful just by the means of how many people live in China compared to the

United States.

The product chosen for this assignment is chocolate. There are many, many people in this

world who enjoy nothing more than a quality chocolate bar. The Chinese chocolate market totals

about $943 million a year (Shen, 2008). This equals to be 1.1 percent of the world’s total. While

this may not seem to be much, we need to look

at the type of chocolate that the Chinese enjoy

the most, which is mostly chocolate with

mangoes, peanuts and strawberries. We have to

be sure we focus on what the Chinese want, not

just what we are used to.

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People are more drawn to products that they become emotionally attached to. In our

advertisements and commercials, we must try

to understand what hits home with them. A

big aim for the business is to focus on the

younger generation people of China. The

younger generations are tomorrow’s loyal

leaders. Younger people are much more

easily influenced by commercials and advertisements. Chocolate may also be easy to make it

look good to the younger crowd. Most kids love chocolate.

In conclusion, any business entering the Chinese must understand that in order to be

successful they must understand and relate to customers. They must know what our chocolate

company stands for and what we have to offer that the other chocolate companies do not. The

Chinese are concerned about their family, safety and appearance. If we can incorporate these

aspects into the advertising, we should be in good standings among the other chocolate

companies they have in China.

We should also consider going and talking to the people of China in order to hear directly

from the source what they want when it comes to their chocolate. This would help the business

get ahead of some of the other competition they have. A multi-domestic strategy would be most

effective for this business to use while expanding into China. We want to achieve the maximum

local responsiveness and we must do so by customizing our product offering and our marketing

strategy to match the different conditions that we will come into contact with in China.

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References:

Dartey-Baah, K. (March 14, 2013). The Cultural Approach to the Management of the

International Human Resource: An Analysis of Hofstede’s Cultural Dimensions.

International Journal of Business Administration, Vol. 4 Issue 2, p. 39-45.

doi:10.5430/ijba.v4n2p39. Retrieved from MTSU library.

Lessard, D., Lucea, R., & Vives, L. (Oct. 25, 2012). Building Your Company’s Capabilities

Through Global Expansion. MITSloan. Retrieved from

http://sloanreview.mit.edu/article/building-your-companys-capabilities-through-global-

expansion/

Rein, S. (Sep. 25, 2007). The Key to Successful Branding in China. BusinessWeek. Retrieved

from www.businessweek.com/stories/2007-09-25/the-key-to-successful-branding-in-

chinabusinessweek-business-news-stock-market-and-financial-advice

Shen, S. (July 3, 2008). Chocolate makers try to satisfy a picky Chinese palate. The New York

Times. Retrieved from www.nytimes.com/2008/07/03/business/worldbusiness/03iht-

choco.1.14202940.html?_r=0

Shi, X. & Wang, J. (Feb. 28,2011). Cultural Distance between China and US across GLOBE

model and Hofstede Model. International Business and Management, Vol. e, No. 1, p. 11-

17. Retrieved from MTSU library

Yeung, A., Xin, K., Pfoertsch, W., Liu, S. (April, 2011). The Globalization of Chinese

Companies: Strategies for Conquering International Markets. John Wiley & Sons (Asia)

Pte Ltd 2 Clementi Loop, #02-01, Singapore 12.9809. Retrieved from

http://site.ebrary.com.ezproxy.mtsu.edu/lib/mtsu/docDetail.action?docID=10484631#?