Clive Haswell, Standard Chartered Bank executive and international business leader, has an important warning for any company attempting to establish business relations in China. His decades of experience in international business relations with Standard Chartered have shown him firsthand that doing business in China is unlike doing business in any other country in the whole world. A two-year project creating a national bank as a joint venture with Chinese business partners only drove the fact home for him.
Mind the Culture Gap
As Haswell discovered, and as any company doing serious business in China will also discover, the gap in culture between native Chinese businesspeople and outsiders of any kind is still very wide. “On the one hand,” says Haswell, “China is a country that remains very mysterious. Many decisions are made behind closed doors. Almost every individual that you’ll meet at a senior level will be a CP member.”
However, says Haswell, on the other hand, China is very eager to open up to the rest of the world and adopt the business practices, among other things, of many major countries on the international theater. “This is part of an organized strategy that the Chinese government has been pursuing since the ‘80s,” explains Clive Haswell, Standard Chartered Bank international business executive. “Likewise, the presence of a large group like this on the other side of the world, eager to fathom these mysteries, means that we too are engaged, one way or the other.”
As a result, while doing successful business in China can prove incredibly difficult, it is also usually incredibly rewarding to those companies that can manage to pull it off.
Three Very Different Generations
“The first step to understanding the cultural differences in business,” explains Clive Haswell, “is to understand how the native people think. In China, this is made more complicated by three very large, very distinct, and in many cases, very opposed mindsets commonly found spread amongst three major generations. China has gone through a great deal of transformative change in recent history, and the current stratosphere of generations in the country clearly encapsulates this change in their approaches to business.”
The Older Generation in China grew up in the time directly following the reconstruction after World War II. Because of this, its members tend to have greater confidence in politics and a higher spirit of optimism.
“In business, this generation makes up a lot of the leadership roles in a company,” explains Clive Haswell. “They bring an often militaristic attitude toward their positions, expecting obedience from their subordinates and readily taking risks if the reasoning is sound enough.
The Middle Generation spent their formative years during China’s Cultural Revolution, which greatly influenced their collective outlook. This particular time period was especially harsh against those who did not conform or who made mistakes.
“Because of this,” says Clive Haswell, “business leaders from this generation sometimes tend toward a blame culture for their leadership style. They also tend not to speak any languages outside of their native tongue, which can make international business that much harder.”
The New Generation in China, however, represents a brand new direction in the overall ideals, both social and business-centered, for the Chinese people. These are the younger business leaders and new entrepreneurs who were more influenced by increasing globalism than the more strict and traditional upbringings of their forebears.
Typically, members of this generation tend to showcase a greater capability with entrepreneurialism and advancing technology. They are also more likely, and more willing, to bend the rules and break the traditional norms of the generations before them. “Especially look for those who’ve spent 5 to 10 years abroad,” advises Clive Haswell. “They will be the best at spanning the culture gap. And indeed, this recent history does define quite the gap.”
While it is important that anybody doing business in China understands how this culture gap applies to their society at large, it is more specifically important that they understand how it affects Chinese businesses and their interactions with foreign companies. “There are huge differences in the way that business is normally done thanks to this culture gap,” explains Clive Haswell, Standard Chartered Bank CIO. Three of the most striking impacts that this gap has on Chinese business can be observed in the following common business structures.
Protocol – This type of business structure depends heavily on a basis of trust between employees and partners. Building relationships is especially crucial, and seniority is held as especially important. This seniority comes with a myriad of common courtesy rules that, when breached, can quickly cause major offense.
Regulatory – This structure type is based heavily on the observance and enforcement of rules and regulations. The central bureaucracies that create these rules are often beyond the influence of most people within the company, meaning that many passed regulations later require major changes or are discarded entirely.
Hierarchical – This type of structure centers all of its authority on a central company leader. Accountability is also completely centered on this individual. These businesses can prove effective, but also severely limit employee involvement, making criticism toward higher levels rare and challenges to executive decisions rarer still.
“While these business practices may seem strange to newcomers to Chinese business,” says Clive Haswell, Standard Chartered Bank international executive, “those who observe them and learn their ins and outs will be well rewarded for their efforts.”
Clive Haswell, Standard Chartered Bank’s Chief Information Officer, is a leading professional in the international banking industry. He began his career history as a technical programmer and software developer before working his way up the corporate ladder thanks to his dedication to meeting business challenges and his insight into creative operational management. Today he leads Standard Chartered’s Middle East, North Africa, and Pakistan region with a budget of $12 million and a team of more than one thousand industry professionals. Haswell has also played an instrumental part in some of the Bank’s biggest success stories, including their development of China’s Bohai Bank and their acquisition of Korea First Bank. In addition to his expertise in doing international business in China, Haswell also founded Standard Chartered Bank’s HIV awareness program and their campaign against international blindness, Seeing is Believing.