Intercultural management cultural and strategic plan for setting up a subsidiary in China

Résumé du document

In this document, we analyze the various risks and challenges that arise while conducting a business in a foreign country. In fact, a company which wants to integrate a foreign market is confronted with a lot of difficulties. As each country has a different culture, history, values, evolution and a different position on the market, there will be a lot of adjustments and coordination involved to facilitate smooth flow of the business. We examine the case of the French company Carrefour trying to explore the Chinese markets. In this case, Carrefour has to understand the cultural differences between them and the Chinese culture in order to avoid the maximum of problems in their expansion into the Chinese markets.

Extraits

[...] Now we identify problems, we will find out which suggestions and solutions can lead to a better business adaptation, and how a French company has to adapt its behaviour, and learn how Chinese society is working. Regarding to cultural differences, there is many “does and don't” to use in business. And companies, in order to establish their subsidiary, need to respect those points to be respected. In order to negotiate with Chinese businessmen, men have to wear conservative suits with subtle colours, and women must avoid high heels and short sleeves and also wear casual dress with subtle colours. Chinese people are quiet and not really expressive. [...]

[...] Chinese will also not answer with They will say it in a more soft and indirect way such as “perhaps, maybe, we will see, let's talk about that later, I am not sure”. Those answers mean for Chinese. So French has to take care about manner to answer, to be patient and to show little emotion, and to answer with will look into that” rather than saying Concerning the behaviour, it is essential to arrive on time or early as guest and to not start eating or drinking prior the host. [...]

[...] Foreign companies have to be sure to insure their activity by self-financing because the Chinese government holds of the stock market Strategies to enter into the Chinese market The aim of many companies is to develop them and to establish theirs activities on the Chinese market thanks to geographic subsidiaries. There is three main ways to enter the market: create a company, do a joint venture, or establish a representative office. For example, Carrefour did not opt for a joint venture, because it wanted to be present under its real brand name. Carrefour had preferred to establish a subsidiary of its brand. [...]

[...] So, it needed patience to settle a strong business because rights and licensing are tough to master. Companies have to protect themselves from product imitation and other illegal activities that constantly appear into the Chinese market. They have to take care about the intellectual property, as well as government policies. It is recommended to establish relationships with Chinese companies in order to be aware of Chinese way of work, or to work with a local distributor which would bring you his help. [...]

[...] Chinese people are also thrift and perseverant, as showed in their high long-term orientation.2 b. Cultural differences between France and China3 French and Chinese cultures are different. The French way of doing business comes from Latin culture, which is kind of individualistic. The hierarchy is very important as well as power. French people are in the habit of making many things in the same time, and they did not really respect schedules. They are flexible and productive but work at the last time, and also often interrupted persons. [...]