chinese business decision

How Chinese Companies Make Business Decisions?

on July 7 | in Business, Business, Business, Business, Business, Business, Business, Business, Business, Business, Changsha, Chengdu, Chongqing, Dalian, Global Information, Hangzhou, International, Nanjing, Suzhou, Wuhan, Wuxi, Xi'an | by | with Comments Off on How Chinese Companies Make Business Decisions?

by Dr. Vivian Lee, CEO, Global MCN

Ever wonder why Chinese companies sometimes seem slow to make a business decision? In this article, Dr. Vi explains the difference between the individualistic decision making process used by Western companies and the collective decision making process of Chinese companies.

Perhaps the best way to describe and explain individualistic vs. collective decision making process is to compare McDonald’s individual combo meals to a Chinese wedding banquet meal (if you have ever been to one, you will know what I mean). The American business practice is that when you are the manager or director, you are paid to make good decisions yourself to solve problems for the company. You may take on profit and loss responsibility. You may search for options and solutions. You make decisions for the company because you get paid for doing it. Just like one is choosing McDonald’s combo meal with a number 1, 2 or 3. You choose that combo for yourself and you pay for it.

Whereas, the Chinese business practice is that when you are the manager and director, you always consult all the other managers and directors in the team before making any decision. They will have group meetings to share the decision making process. They discuss each problem with possible alternatives and solutions. They will come up with a collective decision at a round table after hours of meeting. The leaders all share profit and loss responsibilities based on company performance. If one disagrees to the proposal, the rest of them will not proceed further until all members in the group agree on the same approach to move forward.

Yes, this can be a very time consuming collective decision making process. Just like a Chinese wedding banquet, it can take 3 to 4 hours to finish a 10-course meal with 9 to 11 other people at a round table. That’s why it is very important for you to know who are the key decision makers at your round table at the very early stage of your negotiation process.

related posts

Comments are closed.

« »