The not so baffling Chinese

Ming-Jer Chen knows what he’s writing about. He is founder-director of The Wharton School’s Global Chinese Business Initiative and he is, well, an ethnic Chinese.

Chen’s book reads like a fast-paced MTV in print, peppered with a lot of stories about the experiences of multinational companies in China.

There’s The Coca-Cola Co., which decided to initially push Sprite instead of its anchor brand (which the Chinese thought tasted too much like herbal medicine). The Chinese liked to mix Sprite with beer or red wine.

And there’s McDonald’s which gave a Chinese name to Ronald McDonald’s that translates to something like "Good Uncle" in a culture that places the family at the top of its priorities. (It is interesting that Joseph Lau, who developed the China market for McDonald’s is now the head of its Philippine operations).

There are also stories about overseas Chinese billionaires to illustrate how Chinese do business.

For example, Chen tells the story of how Yue-Che Wang has to be tricked into wearing brand new clothes to illustrate the Chinese trait of not drawing attention to themselves. When Wang, who runs Taiwan’s Formosa Plastics Group, goes abroad, his wife takes all his old and worn clothes out of the closet and replaces them with exactly the same but new clothes.

Unfortunately, Chen has only one story about the Chinese-Filipino community in his 234-page book. Although Lucio Tan is the only Filipino in Chen’s table on key Chinese business families across Asia, the book uses Henry Sy’s Sunday lunch to illustrate the informal decision-making process in Chinese family businesses. Sy cooks Sunday lunch for the six children who are based in Metro Manila. It is during these lunches that business problems are discussed and multi-million peso business decisions are made.

Aside from the stories, Chen also provides pockets of amusement. In discussing Salim’s First Pacific strategy after the 1997 Asian financial crisis, for example, Chen described First Pacific’s managing director Manuel Pangilinan as Chinese-Filipino.

And then, there’s the hilarious table on the migration patterns of ethnic Chinese billionaires, using Geoff Hiscock’s "Wealth Club: Who’s Really Who in Business–The Top 100 Billionaires in Asia" as its source. In this table, Tan is said to hail from Cebu, not from Bicol. Yuchengco and Gokongwei are mentioned but not their first names.

Insights

Chen’s book, however, has many helpful insights into the Chinese mind, many of them, on hindsight, making sense of the actions of one or the other Chinese-Filipino billionaire. Here are a couple.

* "Family leaders take a deep and personal interest in the business that continues even after their official retirement."

* "The family leader has the final say in all major decisions. Even in companies that resemble typical Western corporations, a central figure remains in the background. Without that person’s approval, nothing of consequence happens."

* "In the West, a successful businessperson is spoken of as ‘wealthy’; in the Chinese context, he or she is described as ‘well-connected’. The chief asset in building relationships is guanxi, which are connections based on reciprocity or mutual obligation and shared experiences."

* "When a Chinese businessperson says goodbye to a visiting associate, he or she will generally accompany a visitor of any importance to the outer door of the office as a sign of respect. A slightly more important visitor will be walked to the elevator. A very important guest may be accompanied to the front door."

* "From the Chinese point of view, it is not necessarily desirable to seize the maximum overall market share. Rather, their goal traditionally has been to obtain and maintain a profitable share in a specific segment–one that does not attract too much attention."

* "In the Chinese way of thinking, competition and collaboration are simply two sides of the same coin. Instead of seeing opponents in absolute terms, the Chinese look for ways that common ground can become part of competitive strategy."

* "In the Chinese context, one should always be moderate in dealing with others and modest in presenting oneself. The Chinese tend to downplay personal misfortunes."

* "From the Chinese point of view, business should be a ‘tie’ in order to proceed. This is not exactly the same as a ‘win-win’ mind-set; rather, the ‘tie’ refers to the bond established between business partners throughout – and as a result of – the negotiation process." – MJGrey