Following is an essay written by recent grad Joseph Burke who is studying and traveling in China. He describes the importance of “guanxi” or “relationship-building” that he finds pervades the business world in China.
Dalian Nationalities University |
Burke spent three weeks studying at Dalian Nationalities University in Dalian as part of a University of Northern Iowa course in global business. He is still touring Southeast Asia including Thailand, Laos, Vietnam, Malaysia and Hong Kong.
He will return to the U.S. July 20 and will look for a PR post in travel in Boston in August. He received a B.A. in PR with a minor in marketing from the University of Northern Iowa in May 2009.
His website is www.burkeswork.com. During his undergraduate days, he completed internships with Hellman and the John Pappajohn Entreprenurial Center's Student Business incubator totaling 1+ years.
RELATIONSHIP-BUILDING IS KEY IN CHINA
By Joseph Burke
When one of my professors offered me the opportunity to take a three week course on global business in China, I jumped at the chance.
I had watched China with a great deal of interest during my final months of school, paying special attention to the variety of recent product quality scares and the PR snafus during the Beijing Olympics (such as the world outcry after the opening ceremony's anthem singer was upstaged in favor of a more attractive lip-synching girl).
Joseph Burke |
A senior account executive at Fleishman Hillard in Beijing helped me to get a feel for Chinese PR and report on my major impressions.
Guanxi and Ethics
Business in China mostly operates under the traditional system of guanxi, which is essentially doing business within a large network of personal contacts, reciprocal favors and accumulated relationship capital.
For instance, if a contractor wants to land a large government job, he may have to secure the favor of a government official who is the gatekeeper of the contract.
However, if they do not have a previous relationship, the contractor may need to use a mutual contact who is willing to introduce him to the official and vouch for his integrity.
Even after the introduction, a large amount of time and effort is typically spent on banquets, gifts and outings to establish the strong amount of trust and familiarity needed to finally land the contract.
In the end, the contractor not only owes favors and patronage to the government official, but also to the middleman who introduced them. These reciprocal relationships can sometimes supercede variables such as business competence or quality of product, highlighting the importance of guanxi in Chinese business culture.
Guanxi Can be Corruptive
Besides being a foreign concept to many western firms, the gift and favor culture of guanxi can sometimes escalate to levels that violate laws such as the Foreign Corrupt Practices Act and put practitioners into an ethical bind. What does a practitioner do when spending hundreds of dollars on gifts or banquets is culturally required to grease the wheels of business?
Many foreign firms like Fleishman-Hillard are held to the ethical standards of their home country. In this case, FH is held to its own internal standards as well as those of any professional associations it is affiliated-- such as the PR Society, in addition to laws of its home country, like the Foreign Corrupt Practices Act.
The firm must also consider the internal standards of its client. Often, the in-house PR and legal council of the client may need to weigh whether a proposed tactic violates its own standards or legal obligations.
Deciding whether guanxi relationship-building tactics are ethical becomes a delicate process of balancing what is culturally necessary to build the desired relationship versus the legal and social repercussions for each key stakeholder.
The Chinese are well aware of these issues and in the case of large multinational companies with significant reputation or bargaining clout, guanxi protocols are sometimes done away with entirely to ensure a smooth transaction.
Two PR Groups; Government Controls Press
China has two PR associations -- the China Public Relations Assn. and the China International PR Assn., the latter being far more popular. While ethical standards are on the agenda of each group, their primary role so far has been to report on the progress and happenings of the profession, with enforcement of ethical standards placed somewhere on the back burner for now.
Government is a very powerful concept in China. The government sets major agendas, owns and controls the media, and is the gatekeeper of licenses and permits for business.
The Chinese government is sensitive to political currents so rules, mandates and promises can change like the weather.
Maintaining strong and, if possible, personal relationships with the government officials associated with clients can be a make-or-break variable in achieving goals. Again, this could involve Chinese guanxi-style tactics or simply carefully maintaining more traditional networking initiatives.
State ownership of media affects content. But while some westerners believe that the press in China is simply a propaganda tool in the vice-grip of a Communist regime, Chinese journalists are actually given a great deal of latitude in covering local events, personal interest stories, and even for investigative journalism.
For a practitioner working with a local client, this is good news. However, multinational clients may face additional challenges. The Chinese government is much more concerned with world events-- especially those with political or financial significance or issues that are China-specific.
In these cases, the propaganda department is likely to issue a directive indicating the "official" position on such topics, a position that the media would do well to support.
For instance, when Google agreed to censor and report its service to the Chinese government amidst world criticism, the Chinese media covered it as an "internal" issue within Google. However, the government and press are always interested in stories of local growth, especially that of foreign investment.
PR Must Track Government Positions
Practitioners in China must be well aware of official government positions in relation to their clients and know how to issue potentially controversial messages delicately. PR pros must also keep tabs on political shifts and appointments in the Chinese government. This can be difficult with a state-controlled media, but white papers from independent sources such as The American Chamber of Commerce in China (AmCham-China) can be a great balance to state controlled sources for gauging the political environment.
At present, PR as a profession is still considered an imported concept from the west, the practice of which is not highly regarded
Partly due to a history of Communist rule and Western exploitation and partly due to cultural business norms, PR has been slow to catch on in China.
Traditional mindsets are equally slow to change, and appreciating the value of public opinion may be difficult for a culture accustomed to social and economic Communism suddenly thrust upon the world stage.
But after an extensive image-cleanup campaign before the 2008 Olympics and image damage control after major product scares, I believe the Chinese government and businesses are beginning to see the necessary value of effective PR.
With ever-improving economic freedom and growth, the Chinese have seen encouraging, albeit slow, improvements in freedom of press and speech. As China continues to grow and become increasingly prominent in world affairs, I believe PR has an equal opportunity to thrive in China and advance the growing popularity of the profession. |