The Business Relationship Between China and Hong Kong

Cultural differences within the society and businesses are inevitable. Given the relevance and significance of the issue, there is need to have holistic analysis carried out in the society and business. Comprehending the impacts of the cultural differences helps to fulfil the goals and objectives in most of the organizations that work in cross cultures. Normally, most businesses operate closely to the culture of the society where they are in. Mainland China and Hong Kong share numerous similarities and also have a couple of differences that must be addressed adequately to have smooth operations between the countries (Alford, 200).

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Even though it is widely acknowledged that Hong Kong and Mainland China have similar origins in terms of culture and common ancestry, their negotiation styles nonetheless have been largely impacted by the differences that they have in terms of the socio-political systems. Within the past few years, Mainland China has had a wide separation in political and economic dimension, a trend that has led to great influence on the development of business climate in each of the regions. Further, the increased and competing evaluations of the two areas are also indicative of influences in terms of culture and ethnicity while developing the business climates.

Often, the different countries and different regions that are in a given country harbour differences in cultures and this raises the need to understand the effect of the cultures on international communication. International communication often is critical in any business and the manner through which it is executed determines the overall productivity and the success of businesses. As captured by Killing (2012, p. 43) shared organizational culture often ensure that there is management of international relationship. The managers are thus put in a position to understand the national cultural value and the traits of the concerned individuals.

Overtime, most of the studies that have been done have tried to link up China and Hong Kong in business relationships without a clarity on the composition. This study explores and brings up a whole new dimension of the perceptions of customers and employees in regards to understanding Guanxi and the impact of Guanxi in the modern society. This new dimension is designed in a manner that the society is left with no choice but to appreciate the impact of Guanxi in china and Hong Kong and the growing business relationships that are in the region. The new construct adopted by the study then helps to address the long-time problem and issue of having or setting up favourable environments on both ends.

Statement of the Problem

Even though there is increased significance and challenges that are linked with managing business relationships globally, limited research has been done and little attention has been devoted to investigating the business relationship between China and Hong Kong. Cultural differences have for a long time been identified as the main factor that challenges businesses across the national borders as compared to those done within the countrys borders and the reasons for the failure of cross-border relationship. Even as most studies note that culture is integral in the determination of relationship outcomes, little attention has been offered as far as relationship marketing is concerned.

Culture is known to be defined and unique for every individual as they shape the manner in which different persons perceive, think and even behave. Research carried out lately indicate that the capability of firm to do away with the barriers in terms of culture and go ahead to forge strong partnerships leads to success of such an establishment in the international context. Therefore, the relationship that occurs between exporters and foreign importers can determine the success or failure of a firm within the overseas market. Further, it is noted that for proper understanding of the case to be done, the case to be presented in context.

In this paper, there is the adoption of interesting research context in need for further exploration. The relationship is in regards to the Mainland China and Hong Kong business links. Given the massive economic growth that has lately been witnessed in Hong Kong, there are prospects and indicators that Hong Kong has the capability of becoming a reckoning force within the business world. Nonetheless there are lot of studies and reports that have been shared that instigate that there are high chances that understanding lacks within the business culture of the two countries, a trait that if not addressed might lead to failure in business in future.

Purpose of the Study

The study examined the impact of cultural differences on business relationship. In doing so, the study is limited within the confines of finding the effect of cultural differences such as language, concept of punctuality, concept of relationship, value of trust and social practices on businesses.

Research Objectives

To carry out a detailed literature review of previous literature concerning the cultural differences in both Chinese and Hong King customers and employees in regards to the concept of Guanxi

To analyse the concept of Guanxi between Mainland Chinese and Hong Kong customers

To analyse the concept of Guanxi between Mainland Chinese and Hong Kong employees

To determine the knowledge on existence of cultural differences between the two countries

To find out the perceptions of employees and customers in regards to concept of Guanxi in both China and Hong Kong

To establish the significance of Guanxi

To determine the effects of incorporating Guanxi concept in different organizations and the effect on business operations

1.5 Research Questions

With much attention given to the research aims and objectives outlined in the previous sections, this study shall be guided by the question, How do the cultural differences that exist in China and Hong Kong affect the business relationship with regards to the concept of Guanxi? To find an answer to this question, answers from several questions exploring different aspects of cultural differences and the effects on business relationships shall be joined together to make a whole complete argument from which a credible conclusion can be validly drawn. These questions are:

What are the cultural differences that exist between China and Hong Kong?

What are the perceptions of employees and customers regarding the concept of Guanxi in both China and Hong Kong?

How significant is Guanxi?

How does incorporation of Guanxi concept affect different organizations?

Does the concept of Guanxi have effect on business operations?

1.6 Scope of the Study

1.6.1 Subject scope

The study was limited to establishing the effect of cultural differences that exist in China and Hong Kong on the business relationship in regards to the concept of Guanxi. In doing so, the study is limited within the confines of finding the effect of cultural differences such as language, concept of punctuality, concept of relationship, value of trust and social practices on businesses.

1.6.2 Geographical scope

The study mainly targeted the employees and customers that are within the mainland China and Hong Kong. The individuals who formed part of the study had witnessed cross cultural working experiences with both China and Hong Kong. The audiences selected were from a wide range of companies, from small medium size companies to global listed enterprises. These audiences all possessed experiences in working with both Hong Kong and Mainland Chinese Companies and their views on the GUANXI element would be valuable for the research.

1.6.3 Time Scope

The study covered the consumers and employees who had considerable amount of experience working across the culture. Considerable amount of experience covered a period of not less than 1 year.

1.7 Significance of the Study

The outcome of this study will be instrumental to the managers, as they would use the various cultural explanations and differences given to act as a guide or help them work within a cross-cultural set up.

Further, the managers will also find the study instrumental as the methods of minimizing the differences that might affect the business relationships are addressed.

Further, from the study, there is emergence of aspect of collaboration and the best way they can be developed and built to ensure strong ties among individuals. Through the created collaboration, there is harmony in the society, which fosters an environment through which businesses can proper. Often, the business environment is considered integral part where there are different dynamics. The dynamics are known to impact on the confidence of the investors and if not properly managed may reduce the effect on the environment.

1.8 Conceptual Framework

The framework adopted shows the different factors that determine the success of businesses even though there are differences in cultures. The model as shown explains the relationship between language, concept of punctuality, concept of relationship, value of trust and social practices on businesses. From the figure, it is clear that that the culture has the deep impact on the concept of Guanxi. However, in Mainland China and Hong Kong, there is also the greater impact of the cultural differences. Since these are supposed to be the dynamic society, therefore, the business interaction within these places is being impacted by the differences in culture. Similarly, the cultural differences also affect the communication of the organisation within the places, which is confirmed by several researchers. Furthermore, Hofstede gave the very clear results of the impact of these cultural differences in Mainland China and Hong Kong. This is the main reason, which is making the societies to be more dynamic.