This article has previously been published in the May 1998 edition of European Rubber Journal.
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We learned a lot
By David Shaw, ERJ editorI just came back from China. I learned a lot - but then, I had a lot to learn. One of the first things you learn in either China, or Japan, is that relationships are very important to good business.
I still donÕt really understand what is involved in this. But a lot of presents are exchanged; a lot of alcohol is consumed and, most important, a lot of time is spent on ensuring that the business partnership grows and develops.
It is a different culture from Europe, even more different from the US. In the so-called developed world, we can start doing business almost within a few minutes of first meeting one another. We often do. We have our job titles and job functions, and as business partners, we begin by dealing with the organisation that these titles and functions represent, rather than with the individual who bears the title and the function.
As time goes on, we start to say that we will choose - or at the very least, that we preferÑto do business with this person or that person within an organisation. A relationship has developed. A friendship has developed.
Of course the time taken varies a lot. Sometimes you can strike up a friendship in no time at all - other times, it happens more slowly, or after you have been in some kind of extreme situation together, and some deep or hidden qualities of your counterpart are suddenly revealed.
And as people ascend the corporate tree, these relationships seem to become more important. We hear of business leaders hand-picking particular people to work with, and taking them along whenever a new role beckons. We hear that when new companies are established, one of the great benefits is that the top executives can choose the people they work with. So the business of developing long-term relationships with trusted individuals is just as prevalent in the 'developed' world as in the East.
One difference is that many of the Chinese companies are family-owned, and so job titles and job functions are much less clearly defined than in US organisations. This means there is no title or function to hide behind. You are dealing with the person; not the job function, and the Eastern way of doing things is a better reflection of how business works. It is only in the USA, and to a lesser extent, Europe, that we pretend that any one person in a given job function is just as good as the next.
Perhaps it helps us to reach a conclusion a bit quicker, but it quicker always better? And do all parties understand the conclusion in the same way?
One of the interesting things about writing a magazine is that you discover people can come away from a meeting with totally contradictory ideas of what was said and agreed. Even though both parties were present and heard the same words, they came away with different impression of what was agreed.
One aspect of doing business in Japan - and, I guess, China - is that people spend a great deal of time discussing how something will be done. Thinking through the consequences; planning appropriate strategies, coming to a broad consensus. Western partners often complain that the process is full of paperwork and it is all talk, with no action. Once the strategy is eventually decided, however, it is rare to find things going wrong.
By contrast, we Westerners tend to make quick decisions and then spend time putting things right when the unexpected eventually happens. Overall, I think the car industry has shown us that the Japanese model can bring an idea to market just as quickly - quicker even - and certainly at lower cost than the West has ever achieved.
I may be naive, but I happen to think that the time spent at developing those relationships in China and Japan is related to the time taken to plan out a complete strategy.
So which way is better? Both and neither, of course. But I have met a number of people who believe that that the Chinese and Japanese will eventually learn that the Western way is better. "We went through that process a hundred years ago," they say, "And we learned that our way is more efficient and more successful."
Personally, I feel the opposite. I think relationship-building will be given greater priority in the West, and will remain the dominant business model in the East.
China is a big country. South-east Asian business is run by the Chinese, and finally, India, might speak the English language, but they do business in the Asian way, and that means strong relationships allied to effective business performance are the only routes to long-term business success in that whole region.
ERJ welcomes submissions for its postscript feature. Please E-mail the Editor with your ideas.Tel: +44 171 457 1408
Fax +44 171 457 1440European Rubber Journal, editorial department
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