Running Head: Case Study Culture , Corruption

Case Study Culture , Corruption

MGT 630
Global Business Environment
September, 2015

Case Study Culture , Corruption

DMG-Shanghai

1. Why is it important to have Guanxi and Guanxiwang in China?

Ans: Gunaxi or Guanxiwang means network or building a networking for mutually relationships
purpose. It is Chinese culture that Chinese people do business whom they previously know.
Guanxi and Guanxiwang are very important in China because of the cultural implications of the
rule of law. In the past rule of law was not good enough for Chinese people, they need to develop
trust amongst themselves in business matters. So Gunaxi and Guanxiwang is the part of the
Chinese culture. To do business in China, an organization have to respect the Chinese culture. In
China, there are so many laws that without guanxi and guanxiwang nothing would get done and
a business would go out of business.

2. What does the experience of DMG-Shanghai tell us about the way business relations
work in China?
Ans: China is a country where people will not do anything without money. In this country,
everything has a cost. This kind of cost may be called bribery, in other countries this kind of cost
may be considered as a crime under bribery law. But this is part of the Chinese culture. To do
business in China, an organization have to do this kind of things.

Case Study Culture , Corruption

3 .What are the ethical issues that might arise when drawing upon Guanxiwang to get
things done in China? What does this suggest about the limits of using Guanxiwang by a
Western firm committed to high ethical standards?
Ans: Culture is totally different in every country. Today is an era of globalization. Organizations
are not staying in the boundary; companies are trying to reach every corner of the world. To do
business in the globally organization may have to do business that they are not familiar with.
According to the many studies, Networking is important in China. Business connection is so
essential for doing business here. In China to get job done, people might have to satisfy other
people or authority. DMG films their advertisement in forbidden city of China by bribing some
authority. This bribing may be consider as unethical event in western countries. But in China it a
not crime or any unethical deeds. It is their culture. They believe that it is the right things to do
get job done.
When we will do business in another country we have to respect other countries culture. We
cannot break or do something disrespectful t that hamper other countries culture's belief. If
Western business wants do business in China, they have respectful for the Chinese culture. Even
though guanxiwang is unethical in Western culture but they would have to go against their
beliefs to work in China.
Confucianism

4
a) What are the historical roots of Chinas legal system?

Case Study Culture , Corruption

Chinese legal system is in a form much closer to the legal systems of continental of Europe
than to the common law. Today Chinese law is a mixture of Soviet Union Law and traditional
Chinese law. The traditional Chinese law is not religious basis like other countries. It was
more of legitimacy. But later on the legal system of China change its character. Some
Chinese laws are borrowed from some European legal system.

b) Is there a common cultural/religious/ethical background shared by China and Japan?

China and Japan both are pioneer country of Asia. The country Japan has the big influence on China.
According to some article, Japan has borrowed lots of culture from China. Japanese culture has been
greatly influenced by the Chinese culture and yet they are almost as different from each other as any
other neighboring countries can ever be. Both China and Japan give importance on masculinity and
femininity. Buddhism is the main religion of both countries. Both cultures is strongly influenced by
Confucianism. They are loyal to their families.

c) What are the business implications of the ethical system shared by both countries?
Both China and Japan share the same business implications of the ethical system for doing business.
Both these countries are influenced by Confucianism. People are loyal to each other. Here people like
to do business whom they know well.

Case Study Culture , Corruption

5. How would you classify Chinese culture using Hofstedes four dimensions?
Ans: Chinese culture using Hofstede's four dimensions are
First, Western countries seem to be generally lower (United States of America 40, Canada 39,
United Kingdom 35, Germany 35, and France 68) than China (80) in power distance.
Second, in terms of individualism, Western countries are generally much higher (United States
of America 91, Canada 80, United Kingdom 89, Germany 67, and France 71) than China (20).
Third, Western countries seem to have short-term orientation while China is considered to be
long-term oriented.

Fourth, China has higher values for uncertainty avoidance than Western countries, which shows
that Chinese are relatively risk-avoiding while Western countries are relatively risk-taking.

Corruption
6.
a. What is the Corruption Perception Index and how is it formed?
Corruption Perception Index (CPI) is a ranking system of some countries based on corruption
rate of a country. It was formed in 1995 by the transparency International. Itranks almost 200
countries around the world on scale of zero to 10. Where zero indicate high level of corruption
and 10 indicates low levels.

Case Study Culture , Corruption

a) For 2014, determine the rankings for the following countries:

Finland(3), Japan(15), Chile(21), USA(17), Uruguay(21), Spain(37), South

Korea(43), Costa Rica(115).......Brazil(69), China(100), India(85), Mexico(103)......
Philippines(85), Indonesia(107), Vietnam(119), Honduras(126), Nigeria(136),
Russia(136), Ukraine(142), Bangladesh(145).

7. Did you expect different rankings from the ones you found in Question b), above?
Explain in detail

Yes I expect different ranking from the CPI 2014 ranking. Developing nations ranking is higher
than the developed country. So in this view under develop a country like Bangladesh, Nigeria,
Honduras are higher in rank is acceptable. But a developed country like Russia, China, Brazil are
in higher rank which is not acceptable.
Reference
Peng, M. (2014). Global Business (3rd ed.).

Case Study Culture , Corruption

Cross-cultural challenges when doing business in China ... (n.d.). Retrieved from
http://www.thefreelibrary.com/Crosscultural+challenges+when+doing+business+in+C