Guest post by Maria Pastorelli
China is a complex and ever-evolving culture, and it can present unique challenges for international companies who want to thrive here.
One of the most common pieces of advice for first-time business deals with China is to understand the culture. Understanding cultural differences means becoming familiar with the specific characteristics of the culture that, among other factors, influence people’s behavior.
In my years of experience, most companies face 5 unique communication challenges that impact their business in China:
- High-context communication
- Indirect feedback
- Business Etiquette
- Direct instructions and guidelines
To make it more practical, we’ll take the example of Pacific Solutions Group (name changed for confidentiality), an international manufacturing company that expanded its operations to China to tap into the growing market opportunities. However, the company has faced a few communication challenges while setting up its presence. Let’s see how PSG tackled each obstacle with practical solutions and examples.
Hierarchy is crucial in Chinese culture, both in personal relationships and business settings. Chinese society strongly emphasizes social status, seniority, and respect for authority figures. This is often reflected in the company’s organizational structure in a Chinese business setting. For example, employees are expected to respect superiors and defer to their decisions, particularly in formal meetings and negotiations. Decision-making power is often concentrated at the top of the organization, with senior leaders making key decisions and directing the work of subordinates.
PSG encountered issues with the hierarchical structure in Chinese business culture. It affected decision-making and hindered effective communication across different levels. For example, PSG’s CEO used to have her top analysts take over meetings as they were the most knowledgeable of technical details and have them make decisions, but in China, she noticed that if only her analysts were present at the meeting and no manager was present, the Chinese counterpart (who also had not sent managers) would not be able to make a decision during the meeting but needed to take time to report to their boss, delaying negotiations.
The CEO started appointing Project Managers to be present in meetings with the analysts. This ensured that the hierarchy ranks were perceived as equal and allowed their Chinese partners also to send managers to meetings, creating a quicker and smoother decision-making process.
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High context communication
This style of communication is common in Chinese business culture and it means that messages are conveyed not only through words but also through nonverbal cues, such as tone of voice, facial expressions, and body language. Some examples of high-context communication are: using indirect language or subtle cues to convey a negative response instead of declining directly; not speaking out in meetings despite being given the opportunity, as silence can be used to mean dissent as well as confusion. Such an indirect communication style is often used to avoid conflict and maintain harmony in relationships, which are key in China and in the way business is conducted here.
PSG faced challenges with department meeting deadlines due to a lack of information sharing between different business units. The PSG leadership team noticed that the teams would agree to the plan in cross-functional meetings, but most of the work would not be done on time.
The leadership team organized team-building activities to build trust and encouraged employees to develop strong relationships. This contributed to making it easier for employees from different departments to communicate more informally outside of meetings, which encouraged them to share more information and find alternative ways to keep communication open. PSG also offered all their employees communication skills (active listening, assertiveness, influencing skills) training to enhance understanding.
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In China, feedback is often communicated indirectly to preserve harmony and avoid conflict. Direct criticism or negative feedback may be considered impolite and can damage relationships. As a result, Chinese business culture often strongly emphasizes face-saving, which involves avoiding open criticism and using indirect language to communicate feedback. For example, a manager may use phrases like “Have you considered…” or “Perhaps we could try…” to offer suggestions or feedback. Additionally, it is often expected that feedback will be given in private rather than in front of others as this helps to avoid causing embarrassment or loss of face for the person receiving feedback.
Similarly, PSG managers noticed that their teams and team leaders didn’t offer any questions or feedback on proposed plans, but often problems would pop up at the last minute, impacting business results.
To address this challenge PSG conducted dedicated feedback sessions in small groups where employees could provide feedback anonymously without their direct manager. This allowed a safer environment for open feedback where people could share their ideas without feeling judged. PSG also created a common feedback framework so that all employees, including the leadership team, had a shared model to rely on when conversations could get a bit more challenging.
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Confucianism and the concept of maintaining harmony and showing respect influence business etiquette in China. Use appropriate titles when addressing individuals (using their surname followed by their title or professional designation), presenting and receiving business cards with both hands, and showing respect and politeness. In business meals, waiting for the host or senior person to start eating before beginning and toasting multiple times is common and expected. Also, gift-giving is a common practice to show appreciation and build relationships.
Managers and the leadership team insisted everyone should be on a first-name basis with each other and often organized informal lunches with all levels of the organization to foster collaboration and increase a sense of belonging. However, they noticed that many of their Chinese colleagues didn’t join these gatherings and were not keen to keen to speak out in such situations, which impacted the company environment and morale.
PSG didn’t force the use of first names but made it optional. They also organized bigger and more formal gatherings a few times a year, especially before Chinese New Year, to offer a space to celebrate together and learn from each other. They recognized the importance of adapting to local customs and meeting each other halfway.
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Direct instructions and guidelines
Due to the more hierarchical structure of society and the tendency of most decisions to be taken top-down, in China is common for organizations to have a direct approach to guidelines and instructions. In many situations, team members see their leader as the expert and expect them to provide step-by-step guidance on what is necessary, how to deal with the problem, what to avoid and what exactly is the expected result.
While setting up their plant, PSG had to deal with a lot of inspections and bureaucratic processes with local authorities. The leadership team thought that these matters would be best delegated completely to their local staff, as they were more knowledgeable and could communicate better.
However, throughout the process, they noticed that tasks would often be left undone and issues would pop up weeks later, more urgent and challenging than expected.
In the next few months, the leadership team and PSG management took time to create guidelines, handbooks, and rules with the help of the various departments to ensure there were plenty of examples and details about processes to follow in each circumstance. The project was a big undertaking but it gave everyone involved the opportunity to discuss many potential situations and scenarios and allowed the teams to open up discussions about topics they might not have brought up otherwise.
Maria Pastorelli is an executive coach (ICF ACC) and a TEDx speaker working across China, APAC, and Europe. In the past 12 years, she helped hundreds of professionals and teams from 20+ countries develop the skills needed to work effectively in a global environment. Amongst her clients are Google, SAP, Siemens, Bayer, Shiseido, Covestro, Ctrip, and many more.
Contact Maria on LinkedIn – linkedin.com/in/mariapastorelli