A Tip for Doing Business in China: Meet the Family

Last Updated Apr 1, 2009 9:43 AM EDT

When Americans build professional networks, they tend to leave out friends and family. Business partners only.

But in China, the two are so intertwined that conducting a successful business arrangement with a partner will often get you an invitation from that person to an important family event, like inviting Steve Jobs over for your daughter's 12th birthday party.

At the same time, a Chinese manager's personal relationships can impact her business decisions. And therein lies is an important lesson for doing business in that country.

"For foreign businesspeople in China, understanding this aspect of Chinese networking can greatly reduce culture shock and frustration," says Harvard Business School professor Roy Chua. "For instance, Chinese business people may allow personal considerations to be factored into financial decisions and while that may be construed as corrupt in the eyes of the Westerners, that's certainly not so in the eyes of the Chinese people. The ability to understand and deal with such cultural differences is critical for business success in China."
In the article Professional Networks in China and America on HBS Working Knowledge, Chua advises that the need to penetrate these extended business networks means it can take a longer time to build trusting business relationships in China than in the United States.

Another tip: Know who knows your Chinese partner. Says Chua:

"When cultivating business relationships in China, a manager may want to know as many people in the Chinese counterpart's network as possible. It may not be sufficient to just interact with the person with whom you want to do business. You would need to get acquainted with the other people in this person's network because that could improve your level of perceived trustworthiness."
  • Sean Silverthorne

    Sean Silverthorne is the editor of HBS Working Knowledge, which provides a first look at the research and ideas of Harvard Business School faculty. Working Knowledge, which won a Webby award in 2007, currently records 4 million unique visitors a year. He has been with HBS since 2001.

    Silverthorne has 28 years experience in print and online journalism. Before arriving at HBS, he was a senior editor at CNET and executive editor of ZDNET News. While at At Ziff-Davis, Silverthorne also worked on the daily technology TV show The Site, and was a senior editor at PC Week Inside, which chronicled the business of the technology industry. He has held several reporting and editing roles on a variety of newspapers, and was Investor Business Daily's first journalist based in Silicon Valley.