American and Chinese Business Cultures Though there is no universally accepted definition, culture denotes a set of values, beliefs, traditions, practices, attitudes, and behaviors shared by a given group of people (Rodrigues, 2009). Culture defines a people's way of life -- how they do things, communicate, behave, relate with one another, and so forth. Culture theory, especially Geert Hofstede's cultural dimensions theory, illustrates that cultures tend to vary from country to country or region to region (Hofstede, 2001). These differences imply that norms, behaviors, attitudes, and other elements of culture differ across countries or regions. For instance, the culture of Americans tends to differ from that of the Chinese, Africans, or Arabs.

Culture permeates every aspect of society -- from organization and social relationships to communication and business. Business is especially influenced by culture. Culture affects how organizations are structured and managed, how employers relate with employees, how decisions are made, how authority is exerted, how negotiations are done, and so on (Luthans & Doh, 2012). This means that it is common for business cultures to vary across countries or regions. Two countries that exhibit remarkably different business cultures are the US and China. According to Hofstede's model, the two countries have different national cultures: the US is an individualistic society and China is a collectivist society (Hofstede, 2001). This explains the difference in business cultures between the two countries. In this paper, a comparison of the American business culture and the Chinese business culture is made. The paper specifically contrasts the two countries' business cultures, assumptions and characteristics, as well as negotiation styles and techniques.

Business Culture

The theoretical framework underpinning this paper is Hofstede's cultural dimensions model. It is important to describe this model before proceeding further. According to Hofstede, national cultures are characterized by six major dimensions: power distance, individualism versus collectivism, uncertainty avoidance, masculinity versus femininity, long-term orientation versus short-term orientation, and indulgence versus restraint (Hofstede, 2001). These dimensions define how societies view group identity, authority, ambiguity, success, time, and human desires. Full description of these dimensions is beyond the scope of this paper. The paper mainly dwells on the dimension of individualism versus collectivism to explain business culture differences between the US and China.

Individualism versus collectivism defines the extent to which members of a society identify with groups (Hofstede, 2001). Accordingly, an individualistic society is a society in which members value self and the immediate family. In such a society, emphasis is placed on individual happiness and autonomy. On the contrary, a collectivist society values interdependence -- members emphasize group belonging and strong relationships with the extended family. Based on the individualism versus collectivism dimension, the US is a highly individualistic society (scores 91 on individualism), while China is a highly collectivist society (scores 20 on individualism) (Geert-hofstede.com, n.d.). These different scores on individualism explain the outstandingly different business cultures between the two countries

American Business Culture

As members of an individualistic society, Americans place relatively little value on relationships (Cook, 2012). Nonetheless, this does not necessarily mean Americans are opposed to strong relationships. It means that in business transactions, Americans prioritize the transaction at hand as well as speed and efficiency. It is quite uncommon for Americans to focus on personal matters or relationships during business transactions or meetings (Rodrigues, 2009). Americans will generally be less concerned about such matters. In fact, Americans will often interpret questions about personal matters as being disrespectful or intrusion of privacy. For Americans, one's personal life and professional life are distinct entities, which should not mix (Luthans & Doh, 2012). Colleagues may often participate in office parties and other events that bring them together to know one another better. Nevertheless, individuals may not necessarily want to socialize with one another beyond such gatherings.

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For Americans, it is normal to openly show disagreement or frustration. Indeed, it is common for people to yell at each other during meetings. When a person is in disagreement, they will directly express their thoughts, with little or no concern about interpersonal relationships. This makes Americans quite different from the Chinese in terms of expression of thoughts or emotions. The Chinese are likely to be offended by or to view as unprofessional Americans' aggressive style of communication.
How Americans express their thoughts often does not depend on who the thoughts are being expressed to. Irrespective of one's age, position, or authority, it is normal for subordinates or younger people to openly disagree with their seniors or even yell at them (Luthans & Doh, 2012). At the workplace, for instance, an employee can question the decisions or instructions of their supervisor or manager. In collectivist cultures, such behavior is generally viewed as disrespectful as hierarchy and authority usually determine how people relate with one another (Hofstede, 2001). For Americans, however, equality is important, and hence authority is not really about age, position, or social status.

Further, as Americans value self and explicitness, bragging may be common. It is acceptable for people to talk about their success and accomplishments (Rodrigues, 2009). Some cultures may consider this self-promotion as pride or lack of humility. They may see it as a weakness as opposed to a virtue. Americans, however, strongly believe that individuals can openly celebrate, showcase, or show off their personal achievements. Doing so creates a sense of personal gratification, which is important for Americans.

Another aspect of business culture relates to gifts. In the US, one may treat a potential client to a dinner with the aim of discussing business matters. Nonetheless, gifts within the context of business are not valued much (Rodrigues, 2009). If one decides to have dinner with a prospective client or business partner, discussions during the dinner would mainly center on business. In other words, the dinner in itself would not be a goal. Rather, it would be a means to achieve a much bigger goal -- business.

The degree of individualism also affects responsibility and accountability within the workplace. Being a highly individualistic society, the US places emphasis on individual accountability (Althen, 2003). This means that tasks are delegated to specific individuals, and that those individuals have responsibility for performing the tasks as expected. In other words, accountability in the US is often established or monitored at the individual level. Specifying who is accountable for what is arguably advantageous as disciplinary action can easily be taken in the event the delegated task is not performed as required.

Chinese Business Culture

Whereas Americans value individuality and autonomy, the Chinese value relationships. They value relationships in not only social, but also business circles (Yui-tim, 2001). Indeed, it common for the Chinese to ask questions about personal matters during business transactions. For Americans, this is quite strange or annoying as they tend to be concerned about the transaction at hand. The Chinese value relationships during business transactions because they will often want to better know who they are dealing with. The Chinese view this as trust building (Alon, 2003). They tend to be more comfortable doing business with someone they can trust. Therefore, for the Chinese, asking about personal matters is usually an indication of interest, not necessarily disrespect or impoliteness.

Owing to the innate need or drive to build strong interpersonal relationships, the Chinese tend to communicate and behave in a certain manner during business transactions. While Americans communicate explicitly, the Chinese usually communicate in a somewhat indirect or implicit manner (Alon, 2003). For instance, during a business meeting the Chinese may prefer to show disagreement or frustration by remaining silent rather than saying "No" straightforwardly. Additionally, saying "Yes" may not necessarily mean agreement with an idea or opinion. However, Americans will directly say "No" when they are in disagreement or "Yes" when in agreement. For the Chinese, saving face or remaining calm during business transactions is important. They believe that expressing thoughts in a certain manner may ruin relationships, hence strive to maintain positive emotions.

The Chinese way of expressing thoughts is particularly dependent on whom the thoughts are being expressed to. While Americans are not authority-oriented, Chinese place emphasis on authority (Alon, 2003). This means that a manager would feel disrespected if their instructions or authority was directly challenged by their junior. If in disagreement or disappointed, a subordinate or any person with less authority is culturally expected not to show the disappointment or disagreement openly (Hofstede, 2001). This is crucial for fostering a healthy relationship between superiors and subordinates at the workplace. An American is likely to find the expectation to not question authority from a superior difficult. Broadly speaking, Americans value collaborative decision making and it is common to observe managers and employees engaging in heated debates prior to reaching consensus.

The Chinese maintain collective happiness further by fostering humility. While Americans are likely to brag about their personal accomplishments, the Chinese are likely to not talk about them (Yui-tim, 2001). For the Chinese, humility is a virtue, and self-promotion is likely to be frowned upon or viewed as humiliating. This means that the Chinese are likely…