Jul 29, 2017

Cultural Differences in Business: Canada x China

*Disclaimer: Please, make sure to appropriately cite this publication when using it as a reference in your assignments/projects. Otherwise, it will be considered plagiarism! 


Doing business in a global environment brings cultural impacts that must be taken into consideration by managers around the world. Supporting the diversity of the cross-cultural corporate environment and respectfully dealing with people's differences while managing a team is a big challenge for managers.

Thus, having the knowledge about the business etiquette of different countries is a great start. Ultimately, it is very interesting to see how different cultures can be and learn the best way to deal with these contrasts represent a highly useful knowledge not only for managers. This article aims to identify contrasts between Canada and China in a business perspective.

Canada 

      Canada is the second largest country in the world, with a 9,984,670 sq km of total area. However, “nearly 90% of Canadians live within 200km of the border with the United States” ("BBC News - Canada country profile", 2017, para. 2). Ottawa is the Canadian capital and the population is of 35,362,905. The official languages are English (58.8%) and French (21.6%). The major religion is Christianity and the governmental system is the parliamentary democracy. Finally, “there is virtually no illiteracy among people aged 15–24” (Commonwealth of Nations, 2015, p. 2).

     Canada’s main economic contributions are machinery and equipment, automotive products, metals and plastics, forestry products, agricultural and fishing products. The monetary unit is the Canadian dollar (C$) and the GDP per Capita is 43.248,53 USD. Regarding its labor force, Canada has 17,990,080 labor force participants ("Portrait of Canada's Labour Force", 2017). The hours of work are usually from 9:00 am to 5:00 pm, Monday to Friday and mornings are often the time for meetings ("Business Culture and Etiquette in Canada", 2017).

Business Approach

     Canada has an individualist approach to business. The power distance is moderate since Canadians are not much concerned about titles, rank, and status if compared with other countries. The uncertainty avoidance has a moderate impact in Canada. Thus, the Canadian culture is relatively open to accepting innovative ideas and trying something new. Finally, the Canadian culture is highly focused on achievements instead of nurturing. This means that Canadians work for short-term compensations instead of long-term goals ("Canada - Geert Hofstede", 2017).

Verbal Communication. The major characteristic of business culture in Canada might be the direct manner of communication. It doesn't matter if it's a call, email or in person meeting, Canadians are usually straightforward and very succinct ("Business Culture and Etiquette in Canada", 2017). Besides, Canadians rely more on low-context communication, which means that they focus their messages on words rather than nonverbal clues.

Nonverbal Communication. For greetings, a handshake and strong eye contact are enough. Canadians give high value to eye-contact; if you don't look someone in their eyes it means that you are not confident about your points or uncomfortable with the situation. There is low physical contact during conversations with Canadians; generally, they are quite conservative with their personal space. Therefore, the main rule of nonverbal communication with Canadians is to maintain eye contact and avoid touching (Martin & Chaney, 2012).

Meetings. Punctuality is a major factor for Canadians. People will not wait more than 10-15 minutes of delay for a meeting. It is important to remember that Canada is a bilingual nation, which means that the language used depends on the region where the meeting will take place. Besides, businesses card have to be translated in English and French. It is not recommended to wear a strong perfume or scent. “It can be a threat to people with asthma or allergies, which are common with Canadians” ("Business Culture and Etiquette in Canada", 2017, para. 17). In relation to business clothing, in Canada, the standard business dress code is conservative and often people dresses according to the weather ("Canadian Business Culture", 2017).

Negotiations. “Business people negotiating with Canadians should be well informed and knowledgeable about the details of their proposals” ("Canadian Business Culture", 2017, para. 20). As an overall rule, it is important to be direct and concise on your points. Regarding gifts, usually, they are offered after finalizing the negotiation and unwrapped promptly. Finally, respect to other opinions is also another important principle of business in Canada and trying too hard to show the benefits that you are bringing is considered desperate.


China

     China has a population of 1.35 billion distributed in a 9.6 million sq km total area. The major language is Mandarin Chinese and the main religions in the country are Buddhism, Christianity, Islam and Taoism. The monetary unit is the Renminbi (yuan) and the capital is Beijing. China has a literacy rate of 96.4% and the government system is a semi-presidential socialist republic ("China country profile - BBC News", 2017).

     China’s GDP per Capita is of 7.924,65 USD. The mains international economic contributions of China are electronics and machinery (55% of exports). “Sales to Asia represent over 40% of total shipments, while North America and Europe have an export share of 24% and 23%, respectively” ("China Economy - GDP, Inflation, CPI and Interest Rate", 2017, para. 17). China’s economy is growing quickly largely due to its work force. The country has about 774.51m employees that work an average daily of 8.89 hours. ("Employment in China", 2017). Business hours are 8:00 am to 5:00 pm, Monday to Friday; and the lunch break is usually between 12pm and 2pm ("Business Culture and Etiquette in China", 2017).

Business Approach
     The Chinese culture presents a high Power Distant, which means that they are very concerned about ranks and status. The unequal relationships between subordinate-superior are totally acceptable and there is a lot of value on titles. Besides, it is greatly collectivities where the group success is more important than the individual interests.  Chinese are also very flexible and entrepreneur with an open mind for new ideas. Finally, the Chinese culture is highly pragmatic and encourages efforts for long-term success ("China - Geert Hofstede", 2017).

Verbal Communication. In Chinese culture the style of communication is greatly indirect. It is not common to directly refuse or accept something. This way is recommended that, when dealing with someone from China, you should be more cautious in saying a straight “no” or “yes”. In Chinese business culture showing too much emotion during the meeting can harm the process of negotiation. “Chinese people will appreciate it if you use a couple of words in Chinese, but make sure you are aware of the meaning and the appropriate occasions” ("Business Culture and Etiquette in China", 2017, para. 6).

Nonverbal Communication. Some gestures can communicate different intentions in China. For example, nodding means not necessary mean agreement and laughing can means embarrassment instead of fun (Advisor, 2017). During the greetings, handshake is also the standard way to introduce yourself in a Chinese business environment. However, it's important to measure the aggressiveness of the handshake, being to pushy is impolite. Further, when giving a gift it is important use two hands always.

Meetings. Many Chinese society characteristics reflect the way people deal with business in the country. Negotiations never keep going during the meals because this is the time to create more personal connections and having fun. “Having a Chinese name, ideally one with meaning rather than a transliteration of your English or French name will be taken as a sign of respect as well” ("Business Etiquette in China", 2017, para. 20). Punctuality is highly valued and they expected the guest to come very well prepared for the meeting. “Note that presentation materials should be only in black and white, avoid colors” ("Business Culture and Etiquette in China", 2017, para. 2). Regarding to dress code, Chinese expects professional business clothing (Martin & Chaney, 2012).

Negotiations. “Chinese prefer doing business with people they are familiar with. This is why most foreign companies have local representatives” ("Tech in Asia - Connecting Asia's startup ecosystem", 2017, para. 17). Although, networking is also common in many other business cultures around the world, in China these connections have a greater impact on the negotiations. Another unique point about Chinese business culture is that the duration of the negotiation process in China is longer than in most of the countries. They need to create a closer relationship based on trust to close a deal.

Comparisons 

     First of all, it is clear that the way of communication between this two cultures is greatly different. While Chinese people prefer being collateral on their statements, Canadians are way more straightforward; if they want to refuse a deal, they will say a direct “no”, without fears or shyness. As in Canada culture, a handshake is also the standard greeting. Besides, meetings also follow a similar structure, but with more ritual elements. Another important contrast is that Chinese is a collectivist and Canadians are individualists. Finally, while Canadians focus on short-term achievement, in China long-term nurturing is more common.


References

Business Culture and Etiquette in Canada | Today Translations. (2017).todaytranslations.com Retrieved 8 June 2017, from https://www.todaytranslations.com/doing-business-in-canada

Business Culture and Etiquette in China | Today Translations. (2017).todaytranslations.com Retrieved 9 June 2017, from https://www.todaytranslations.com/doing-business-in-china

Canada - Geert Hofstede. (2017).geert-hofstede.com Retrieved 8 June 2017, from https://geert-hofstede.com/canada.html

Canadian Business Culture. (2017). Monster Career Advice. Retrieved 9 June 2017, from https://www.monster.ca/career-advice/article/canadian-business-culture
China - Geert Hofstede. (2017).geert-hofstede.com Retrieved 9 June 2017, from

https://geert-hofstede.com/china.html
China country profile - BBC News. (2017). BBC News. Retrieved 9 June 2017, from http://www.bbc.com/news/world-asia-pacific-13017877

China Economy - GDP, Inflation, CPI and Interest Rate. (2017). FocusEconomics | Economic Forecasts from the World's Leading Economists. Retrieved 9 June 2017, from http://www.focus-economics.com/countries/china
Commonwealth of Nations. (2015). The Commonwealth Yearbook. Retrieved from
http://commonwealthofnations.org/yb-pdfs/canada_country_profile.pdf

Tech in Asia - Connecting Asia's startup ecosystem. (2017). Techinasia.com. Retrieved 9 June 2017, from https://www.techinasia.com/talk/8-business-china

Employment in China. (2017).www.statista.com Retrieved 9 June 2017, from
https://www.statista.com/topics/1317/employment-in-china/

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