Expanding your business to China Essay Example for Free

Expanding your pedigree to china EssayThere ar m some(prenominal) advantages to expanding your short letter to china. Not single is mainland China considered one of the largest economies in the world, it too has a big emerging market that is still growing (Startup Overseas). Although China has embraced many Western Business ethics and practices, thither ar still numerous cross-cultural differences that can accomplish it difficult to succeed without sufficient investigate and sleep to get alongherledge of the culture. Examples of these cross cultural differences include the Chinese attitude toward work and workplace, the labor laws, and how Chinese businesses join with other organizations. More differences include how we market and sell a merchandise, and how pricing differs between our two countries. by chance the most important differences are those of ethical positions, much(prenominal) as pincer labor and sexism.A Chinese workers attitude toward the job and t he workplace depends on what position they have in an organization. China is considered a collectivist society, which tights the studyity of people indoors the society act in the interests of the chemical group and not necessarily themselves (Geert Hofstede, 2010). The join States is considered an individualist society and emphasizes the importance of the individual. This likewise applies to the way these countries do business. A collectivist business may have a team of workers contributing to satisfy all the customers, whereas an individualistic business may have several individual representatives who each have their own client list. another(prenominal) difference in the workplace is how large an organizations Power Distance is.Power outdistance is the acceptance that all individuals in the society are not equal (Geert Hofstede, 2010). China has a really large power distance, which means its workers accept the fact that at that place is a hierarchy within the organization, and they hit the sack their place within that organization. They tolerate power within the business to be distributed unequally. The coupled States has a note Power Distance acceptance, which means that workers dont accept that power is distributed unequally within the organization, and they expect to be treated as equals to even the people in the highest positions of the business. The Chinese also accept that purpose making comes from the top, whereas in the U.S., everyone wants their suggestion and opinion to be heard, and they do not always accept decisions that are made within the organization.Thedifferences between Chinese and U.S. labor laws are subtle, but still worth mentioning. In China, a normal working week is 44 hours, with a maximum of 48 hours (only 4 hours of extra time is allotted). In the U.S., a normal working week is 40 hours, with overtime paid on any hours worked over that 40. Maternity return is up to 3 months paid in China. In the U.S., Maternity leave is up to 12 months unpaid (at the go withs discretion). Surprisingly, women in China make 80.5% of what men in the aforementioned(prenominal) position make, whereas in the U.S., women only make 70% of what men make in the same position (Guo).In China, businesses tend to put an emphasis on personal relationships between business partners. An initial business meeting will consist of getting to know the personality and lifestyles of the one you are incoming into a relationship with (Graf). Chinese business owners will want a loyal friendship when considering associations. This establishment of social networks and influential relationships that facilitate business andother dealings is called guanxi (Mah, 2012). In the United States, owners of a business as well as the workers within that organization strive to keep their personal and professional lives different. though some partners end up being friends, and many workers build friendships outside of the workplace, it is not the int ention at the beginning of a business relationship.Gift giving is also a large cultural difference. In the United States, if a gift is given at the start of a business meeting, or the start of an association, it can be seen as bribery or a way to make businesses feel make in working together. Chinese organizations are much more accepting of gifts although certain etiquettes mustiness be followed in tack together for the gift to be given in good faith (Culture go across Guide). For example, gifts must be nicely wrapped and may not be opened right away unless prompted to do so. Also, do not give any gifts such as clocks, flowers, or cutting instruments as it is considered disrespectful. dialog style is a major difference between the United States and China. In China, social context, personal relations, and non-verbal deportment are very important in negotiation. There are usually many people from thecompany who attend the meeting to discuss any topics that need negotiation. the Statesns value legal contracts and documents over personal relationships, and do not put as much stock in body language. American businesses usually only send one or two people do the negotiating on behalf of the entire company.For the purposes of this paper, let us assume that an American Company has seen great success with its toy product. This company is looking to expand its business to China. There is usually a demand for toys in any country and in China, 17.1% (roughly 223 million) of the nations population is under 14 years old ( important Intelligence Agency). Research also shows that the total sell sales of toys in China have make upd by 14.2% since 2010 (HKTDC Research, 2014).The Design of this toy would have to be carefully rethought, particularly if it is a doll or Barbie type toy. The doll would have to be remanufactured to event the needs of the children in China. Skin Color, Clothing, and accessories would all need to be redesigned. For example, although most girl- intended American Dolls wear beg, pink is considered a gender-neutral color in China. The color white is also associated with death and mourning, so any conjoin dress dolls would need to be recolored to the traditional Chinese color of red (KaiWen, 2010).The clothing of the doll would probably have to become more modest. In looking at Chinese dolls, most are robed in Geisha style robes. The United States dolls tend to show more skin. The packaging of the doll would also have to be translated to Chinese. The company would also need to avoid any symbolism that might suffer Chinese parents or even the government, such as any American paraphernalia, like the flag, or anything with a religious context, like a cross.Imagine the price of this toy is $5.00. The value of a $1.00 is equal to 117.78 (). That would mean that the exchange rate on the toy would be $588.90. But with the Purchasing Power Parity (PPP) factor, we know that Chinas market exchange rate is .6 (World Bank, Internati onal Comparison Program Database, 2014). This means that China would actually generate 60% of what the United States would pay for the toy. The price of the toy would be353.34 . This price could be adjusted depending on competition in the Chinese market. The American company would also need to increase the price based on exporting costs.A sale price, or discounted price, in China is also different from what a sale price would be considered in the United States. In the U.S., if a product is on sale, the advertisement might say 10% off. In China, they advertise the percentage of the price that you would pay for, in this example 90% (Tyson, 2014). Good times for sales would be around National Chinese Holidays, such as the Chinese New Year (Spring Festival), May Day, or the Mid-Autumn Festival.Several sales carry can be commitd to promote a product in China. Traditional avenues include major shopping centers, specialty stores, and franchise chains. There is also the internet platform and many sites such as Amazon or Baby.tmall.com. One of the best ways to break into the toy market in China is to have the toy include educational or technological aspects. This would help broaden the available take of the toys to include museums, zoos, and electronic stores. This is very different from the United States, who tends to promote and market to the different genders. Most American toys are either for girls or for boys there arent very many gender-neutral toys.Just like in the United States, China has import and trade regulations. Some of these regulations include import inspection (Regulations for the Administration of watchfulness of Toy Imports and Exports), attention to the potential danger of toys, China Compulsory Certification (CCC), and standards such as unstinting toy fillings should be even and of an appropriate softness with no hard objects inside. It is also worth noting the normalisation legality of the Peoples Republic of China, where four levels of st andards are stipulated national standards, industry standards, local standards, and first step standards.This company will have to adhere to all of these standard and regulations in order to export the toys from the United States to China. Another option for the company would be to open a manufacturing plant in China, or use a preexisting Chinese toy factory to manufacture the toys and sell / distribute locally. In order to reach the more ruralareas of China, this company might consider making a deal with a Chinese company that already distributes to those small towns and rural areas. If this company does decide to open a factory in China, or utilize a preexisting factory, it will have to deal with ethical issues such as child labor, and sexism. Childlabor has been a widely controversial issue for many years. The chinaware Law on the vindication of Minors was first passed in 1991, and the newly revised Minors Protection Law entered the force in 2007. Many International rights doc uments have also been implemented by the UN (Library of Congress). Although the child labor conditions have been described as improved in China, there are actually no statistics or documentation to back it up. We still hear reports of Child Labor issues existing in China. As a company looking to do business in China, it is important to set certain standards within the organization that do not support and do penalize child labor. Although women in China make a higher(prenominal) percentage of what men make (80.5%) than what women in American make compared to men (70%), there is still a lot of sexism in the society and the culture of Chinese businesses.For example, women must always accredit men first, and it is not acceptable for women to look men in the eye. Women are not allowed in higher or executive positions within the organization. Women are still expected to meet a nice man, get married, have children, and take care of the household. Not to mention the fact that having a son is extremely favorite(a) to having a daughter in most Chinese families. While this behavior would be considered abhorrent (mostly) in Western cultures, foreign businesses may actually benefit from Chinas oversight in regards to women. extraneous businesses may hire the talented women for executive positions that Chinese businesses have ignored or cast past (Harris, 2010).While there are many differences between the Chinese culture and ethics from those of the United States, expanding a business in China can be mutually beneficial and successful. There is a residue between Chinese and American societies and laws that must be found, or all parties may be unhappy. ahead growing your business to a foreign country, much research and planning must be done. Or, as the Chinese proverb says, if a things worth doing, its worth doing well.Works CitedCentral Intelligence Agency. (n.d.). The World Factbook China. Retrieved from Central Intelligence Agency https//www.cia.gov/library/publicati ons/the-world-factbook/geos/ch.html Culture Crossing Guide. (n.d.). China. Retrieved from Culture Crossing Guide http//guide.culturecrossing.net/basics_business_student.php?id=43 Geert Hofstede, G. J. (2010). Cultures and Organizations Software of the Mind. New York McGraw-Hill USA. Retrieved from The Hofstede Centre.Graf, R. (n.d.). 10 Major Cultural Differences Between China and the United States. Retrieved from Hubpages http//hubpages.com/hub/10-Major-Cultural-DifferencesChina-and-the-UnitedStates Guo, B. (n.d.). Chinas Labor Standards Myths and Realities. Retrieved from academia.edu http//www.academia.edu/165449/China_s_Labor_Standards_Myths_and_Realities Harris, D. (2010, 12 16). Sexism in Cina. A Good Thing for Foreign Business? Retrieved from China Law Bloghttp//www.chinalawblog.com/2010/12/sexism_china_style_a_good_thing_for_foreign_busine ss.htmlHKTDC Research. (2014, 09 18). Chinas Toy Market. Retrieved from HKTDC Research http//chinatrade-research.hktdc.com/business-news/ article/China-Consumer-Market/China-s-toymarket/ccm/en/1/1X000000/1X002MRF.htm KaiWen. (2010, 11 09). Ask the Chinese Girl. Retrieved from Blogspot http//ask-a-chineseguy.blogspot.com/2010/11/colors-in-chinese-culture.html Library of Congress. (n.d.). Childrens Rights China. Retrieved from Library of Congress http//www.loc.gov/law/help/child-rights/china.phpMah, R. (2012, 11 23). Cultural Differences Between America and China. Retrieved from World-Class Business Etiquette http//www.etiquetteoutreach.com/blog_new-york-etiquetteguide/bid/92662/Cultural-Differences-Between-America-and-China Startup Overseas. (n.d.). Expanding a Business in China. Retrieved from Startup Overseas http//www.startupoverseas.co.uk/expanding-a-business-in-china Tyson, K.