IBSM Presentation

Chew Aik Sian Dickson – S10026516HLee Rong Ai Denise – S10025788KNg Wen Song Ryan – S10024938HNg Xhi Ween – S10027234BTan Shi Min Evelyn – S10026481CTay Yilin Vanessa–S10022530D

Hong Kong & Pearl River Delta

International Business Study Mission

Research Topic 2

• Implications for Foreign Businesses – Chinese History– Business Culture– Local Customs– Etiquette

Outline

• Chinese History– Inferior Goods

• Business Culture, Customs and Etiquette

• “Guanxi”关系

• Sunten Electric Co. Ltd– Setup 1988; Listed 1993– Electricity equipment supplier– Great emphasis for quality

• 40% of 1500 employees University Graduates• Population Test for QC/QA• First to have R&D within industry in China• Close relations to keep up with fast moving industry

Inferior Goods?Inferior Goods?

State Predominant New Product of Dry Type Transformer

Guangdong Name Brand Product Certificate

Guangdong Famous Brand Certificate

ISO9001 Certificate in 1994

Top100 State High & New Technology Enterprise

Outstanding Supplier for Three Gorges Project

Top 10 Chinese Brand for Electrical Equipment Certificate

Inferior goods?

Pearl River Piano Group

Chinese manufacturer of pianos

Established in 1956 in Guangdong

Owns the world's largest piano factory

Imported German manufacturing technology

Boasts an ideal balance of old-world hand craftsmanship & advanced technology

Why is it a world’s bestselling piano?

50 yrs of craftsmanship

Affordably priced with features of expensive brands

Featured in “ Forbes International”

Awarded China’s “Renowned Trademark”

Recommended world-wide by professionals

Top-notch Quality

Superior artistry and technical sophistication

Each piano is thoroughly examined by a quality control expert prior to shipment

Pianos are tuned a minimum of 7 times during production

In 1998, earned the International Standards Association ISO 9001 Certification

1st piano company in China to receive this prestigious independent certification of quality

“By striving to compete with other manufacturers that have a much longer history of building pianos, Pearl River has put its employees and management on notice that we will accept nothing short of perfection.”

  Zhi Cheng Tong, President

Pearl River Piano Group

Business Culture, Customs and Etiquette

• Appearance

• Behaviour

• Gift-giving

Business Culture, Customs and Etiquette

• Appearance– Conservative suits for men with subtle colors– Women should refrain from revealing clothes– Jeans are not acceptable for business

meeting

Business Culture, Customs and Etiquette

• Behavior – Arrive early if you are a guest– Acknowledge the most senior person in the

group first– Wait for the Chinese to offer the handshake

first– As a cultural courtesy, you should taste all

dishes offered– Do not use large hand movement

Business Culture, Customs and Etiquette

– Do not point using index finger– Avoid acts that involves the mouth

Eg. Biting of nails or removing food with hand– Personal contact or display of affection

between different sexes should be strictly avoided

– Gift-giving• Official business policy consider gift as bribes• Getting more common• Gifts will often be rejected at least 3 times before

acceptance• Should not open immediately and express honor

when being accepted. • Offered using both hands • Wrap in red paper• Avoid sharp objects like knives or scissors

Business Culture, Customs and Etiquette

Main Secret to Success?Main Secret to Success?

“Guanxi”

Under Under table table

Money?Money?

Bribery?Bribery?Or even this!?Or even this!?

What exactly is “Guanxi”?

• Translated as– “networks”– “connections”

• Mechanism– Deal with social uncertainty in complex social

environment

• http://guanxi.pbwiki.com/

• BanksBanks• Friendly lunch, brunch, dinner Friendly lunch, brunch, dinner • Golf sessionGolf session

How to establish “Guanxi”?How to establish “Guanxi”?How to establish “Guanxi”?How to establish “Guanxi”?Secret Recipe by Aztech:Secret Recipe by Aztech:Secret Recipe by Aztech:Secret Recipe by Aztech:

Importance of “Guanxi”

• Determines– Organisation’s long run competitive standing

• Crucial to possess right “Guanxi”– Minimise

• Difficulties• Frustrations• Risks• Barriers

Mr Jeremy Mun, CEO Aztech

Practical ExamplesPractical Examples

• Good relationship with the village Good relationship with the village in-chargein-charge– Allocated land for Aztech’s future Allocated land for Aztech’s future

expansionsexpansions

• During export/importDuring export/import– Talk to custom officers for latest on laws and Talk to custom officers for latest on laws and

regulations to avoid brushes with authoritiesregulations to avoid brushes with authorities

Limitations of “Guanxi”