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Table and Context

1) 2) 3)

Table and Context ..... 1 CHAPTER 1 Introduction . 2 CHAPTER 2 Cultural Profile of the China I. II. Cultural Profile of China ... 3-4 Cultural Profile of China On Hofstede 5-D Model ............ 5-7

4) 5) 6)
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CHAPTER 3 - Challenges of Doing Business in China . 8-12 CHAPTER 4 Conclusions .... 13 CHAPTER 5- Reference . 14-17 CHAPTER 6 - Appendix

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CHAPTER 1 Introduction

Globalization refers to the change of a more integrated and interdependent world economy of every country to get benefit from globalization and benefit their citizen and the nation. (Hill, 2009) The purpose of this module is to recognize and value the important feature of the global business environment and development. Travel Agency will be business be used in mode of joint ventures to entry China market that important feature of the global business environment and development in this assignment. The first parts will be discuss about cultural profile of China and apply cross-cultural models of Hofstede to describe China cultural profile. The second part will discuss about the Mode of Entry to penetrate their business into China. Way of entry foreign country is several that are internet, exporting, licensing, franchising, joint ventures, wholly owned subsidiaries, purchasing foreign assets and others. Follow by identify the challenges and viability of business expansion in China. The last part will close by the viable conclusions about the operation of business in China.

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CHAPTER 2 Cultural Profile of the China

(a) Cultural Profile of China Geographical Information China is located in eastern Asia, along the countries and the East China Sea, Korea Bay, Yellow Sea border with the South China Sea. China is divided into three geographical regions: the western mountains, desert and basin northeast and in the eastern low-lying valleys and plains. Such as, the Himalayas and Everest led to the Qinghai-Tibet Plateau Mountains and plateaus. Tropical in the south, the eastern region is temperate and the Tibetan Plateau cold and drought. The arid desert in northern and northeast is cold temperate zone (Briney Amanda, 2012). Demographic Information China is the world's most populous country, including one fifth of the world's population. It has total population of 1.33474 billion as at December 31, 2009 with 51.44% male and 48.56% women. The population is more nearly five times more than the United States, even if both sides have about the same geographic area. (starmass.com, 2001-2011) In order to curb population growth, the China government launched such as "movement of the one-child family planning policy in the 1970s and early 1980s (starmass.com, 2001-2011).The country's population of 1.3 billion in the early 2000s is projected to grow by another 100 million by 2050. It is predicted to have higher birth rate; India will surpass China to become the most populous country by 2035(starmass.com, 2001-2011).

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MGT 348 Traditions and Customs

Business in Context 4 (GLOBALIZATION)

The unique cultural of China are due to thousands of years of history change. Chinese considered tea as one of their seven basic necessities. Children serve tea to their elders as a token of respect. Low-level person should or disabled person of higher rank. This custom is still practiced in a formal setting for example, when a person some tea, he bent index finger and middle finger to knock on the table and said: "Thank you" (buzzle.com, 2000-2012). On meeting someone for the first time, the Chinese shake hands. A handshake may be accompanied by a bow to show respect. According to Chinese customs, guests are always a gift to visit their host. It is best to the current host, flowers or fruit. The host should not be opened the gift, until the guests leave. The host typically escorts their guests to a considerable distance, when they leave. (buzzle.com, 2000-2012) Three main colors: red, black and white in the Chinese culture. Red is the color of blood, symbolizes the positive aspects of life, such as happiness, wealth, fame etc. Black is the color of feces and dirt, sin, evil, disasters, sadness, cruelty and suffering among other negative things. White symbolizes the mother's milk, the middle between red and black, balancing the two colors. It symbolizes the gentle, pure, honest and life, but also at the funeral because it believes it can co-ordinate all the elements. (us2.mofcom.gov.cn, 2004) The people and Cultures Today there are 56 distinct recognized ethnic groups in China. In terms of numbers however, the pre-eminent ethnic group is the Han Chinese. Throughout history, many groups have been assimilated into neighboring ethnicities or disappeared without a trace. Exist of 56 distinct ethnic groups in China mean there will consist of 56 groups cultural. Such as different ethnic group will having different customary clothing, music instrument, life style, language, festival, religion, and other. China is a multi-religious country. Taoism, Buddhism, lslamism, Protestantism and

Catholicism have all developed quite a following in this country (travelchinaguide.com, 19982012).

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(b) Geert Hofstede Five Model

Geert Hofstede in the 1980 discovered 5 fundamental dimensions of national cultures that can be seen to illustrate different values in different national cultures. The dimensions found can be used to illustrate which value lie deeply embedded in people from different cultures behave, and how they will potentially behave in a work related context. The five values found by Geert Hofstede are: 1. Power Distance 2. Uncertainty Avoidance 3. Masculinity vs. Femininity 4. Individualism vs. Collectivism 5. Time Orientation (Long vs. Short Term Orientation) (businessmate.org, 2009)

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Further refers: http://www.businessmate.org/Article.php?ArtikelId=4 Power distance (PDI)

Power distance is defined as the extent of agencies and organizations within the not so powerful a country members expect and accept unequal distribution of power. At 80 is located in the PDI's higher ranking, for example, a society, believe that the inequality between the people is acceptable. Superior-subordinate relationship tends to polarize the defense did not abuse the power of the superiors. The formal powers and sanctions the personal impact, leadership and initiative in most people's optimism. People should not be beyond the desire of the rankings (clearlycultural.com 2009). Individualism (IDV)

Solve the fundamental problem of the level of a society, the degree of interdependence among its members to maintain. Individualistic society, people should take care of themselves and their immediate family only. In collectivist societies people belong to "groups", in exchange for loyalty to take care of their score in 20, China is a highly collectivist culture in the interest of the Group and not necessarily. The group must consider the impact of groups, such as the family is close in hiring and promotion of preferential treatment. The relationship between the groups of colleagues, they are indifferent or even hostile to the group (clearlycultural.com 2009).

Masculinity / Femininity (MAS)

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A high score (masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the best in field a value system that starts in school and continues throughout organizational behavior.

A low score (feminine) on the dimension means that the dominant values in society are caring for others and quality of life. At 66 China is a masculine society success oriented and driven. The need to ensure success can be exemplified by the fact that many Chinese will sacrifice family and leisure priorities to work. For example, is that Chinese students care very much about their exam scores and ranking as this is the main criteria to achieve success or not (clearlycultural.com 2009).

Uncertainty Avoidance (UAI)

Uncertainty to avoid doing involving society, can never be called to the fact of the future: we should try to control the future, just let it happen? Members of a culture was under threat of vague or unknown, have created beliefs and try to avoid these institutions is reflected in the extent to which the UAI score. China has a low score on uncertainty avoidance that is 30. The Chinese are comfortable with ambiguity; the Chinese language is full of ambiguous meanings that can be difficult for Western people to follow. Chinese are adaptable and entrepreneurial. At the time of writing the majority (70% -80%) of Chinese businesses tend to be small to medium sized and family owned (clearlycultural.com 2009).

Time Orientation (Long Term Orientation) (LTO)

The long term orientation dimension is closely related to the teachings of Confucius and can be interpreted as dealing with societys search for virtue, the extent to which a society shows a pragmatic future-oriented perspective rather than a conventional historical short-term point of view. With a score of 118 China is a highly long term oriented society in which persistence and perseverance are normal. The relationship is the order status and order of observation. Nice people are frugal and reserved resources and investment in the long-term project, such as real estate. The tradition can be adjusted to adapt to new conditions (clearlycultural.com 2009).
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CHAPTER 3 Mode of Penetration into China Market

A mode of entry to international markets is the channel which your organization employs to gain entry to a new international market. This is a lesson that a number of key alternatives, but acknowledged that the alternative to the many different that will be considering entering the international market, such as the Exporting, Licensing, Franchising, and Joint venture (marketingteacher.com, 2000-2012). Exporting Rather than trying to partner or license to foreign companies, some companies sell their products to distributors in overseas; they will sell the product to the consumer. The export of money to prevent investment, manufacturing facilities the company in the development of foreign markets, transportation costs and restrictive tariff may make this model does not pay for certain products (Wolfe Michael, 1999-2012). Licensing Entry in the licensing model, companies sign contracts with foreign enterprises, known as the "license" that allows foreign companies legal production and sale of the company's products. The foreign company will buy the license outright, pay the regular license fee, or pay a percentage of their income over time, in the form of royalties but allow them to control foreign marketing and sales of products (Wolfe Michael, 1999-2012). Franchising The franchise is similar to the license, even though the franchise often involve more than the licensed long-term commitment. The franchise is basically a specialized form of license and sale of intangible property of the franchise, not only in the license, but also insisted that the franchisee agrees to comply with strict rules, because it is how to conduct business (Wolfe Michael, 1999-2012).

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Joint Ventures Strength and Limitation (JV)

The most popular model is to establish a joint venture to integrate the resources of the two companies, products or services. Strictly controlled economy of many countries such as China, tend to need a foreign partner with a local company, if they want to sell your product, and its inhabitants. With foreign companies in foreign markets through joint venture the partnerships is very difficult to manage, and requires the split of profits (Hill McGraw, 2009). The travel agency will enter the China market in the joint venture mode. The travel industry, providing travel services to customers from different countries. For example, foreign-owned enterprises and joint ventures are still limited outbound tourism packages and ticket sales. In addition, China requires all travel agencies airlines to book flights and domestic flights, international flights, and China's state-owned and operating systems for computer reservation systems to connect to the starting point (ustr.gov). The first strength of a joint venture company is of the knowledge of the competitive conditions of a local partner, the host country's culture, language, political systems, and business systems. In fact, any business has opened a joint venture in the Chinese culture. For example, migrant workers away from their families living factory to get an extra holiday, pure are the length of time for their travel home the annual Chinese Lunar New Year holiday period. If you do not understand, this could lead to conflict or abuse (Devonshire-Ellis Chris and Hoffmann Richard, 2009). Second, when the development cost or risks of opening a foreign market are high, a firm might gain by sharing these costs and or risks with a local partner. For approximately equal to the ideal case, the partner's contribution to the number of resources and capital of each enterprise. "About" is very important foreign joint ventures, as some countries, the majority ownership of domestic enterprises such as China will not allow foreign companies (although they encourage joint ventures) (referenceforbusiness.com, 2012). Third, strength of Joint Ventures is flexibility in entry foreign country. The joint venture, has limited life, which makes it desirable for strategic expansion. In addition, it provides flexibility. Through the joint venture, the company can test a new product or market, not to take any
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substantial risk. Based on the success or failure of the joint venture, the company may decide to give up or to further establish it. The joint venture's results can help the company's strategic divestiture or acquisition plans (Gandevani Ned, 2011). The first limitation of Joint Ventures is as with licensing, a firm that enters into joint ventures risks giving control of its technology to its partner. For example, multinational companies are still striving to protect their intellectual property in China and joint ventures, particularly the vulnerable. But the concept of intellectual property protection is the new China, and to resort to the legal system can be long and inadequate. (Devonshire-Ellis Chris and Hoffmann Richard, 2009) Second limitation is that joint ventures do not give a firm the tight control over subsidiaries and that it might need to realize experience curve or location economies. For example, many foreign investors do not have a joint venture operation, and to devote sufficient time or expertise. If you are running a joint venture, there will be gaps in this way in the management, financial reporting, production and quality. If you cannot afford to send a full-time manager to help enterprises in China, then you should not invest in China (Devonshire-Ellis Chris and Hoffmann Richard, 2009).

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Chapter 4 Challenges and viability of business expansion in the China Political Challenge
China is not a free market economy. It has an authoritarian communist government. Although they employ the same terms and capitalist market strategy, political control is everywhere. Unlike western economies where the government promotes transparency for doing business; in China rules and regulations are not so transparent or absolute. Large-scale manufacturing enterprises on the basis of a variety of regulations and bureaucracy in the form known as guanxiwang, the relationship between them is the relationship between the individuals and entities in order to promote social networks (ehow.com, 1999-2012).

Economic Challenge
China is the world's second largest economy, the growth of the world's fastest growing economies. China's economy is mainly dependent on manufacturing exports, China has been trying to maintain stability of RMB against the U.S. dollar linked exchange rate. Foreign economists believe the Yuan is undervalued by as much as 40%. Therefore, during the Yuan Dynasty, the changes can affect the operating profit of Western companies in China. Due to high economic growth labor costs in the past five years has been steady growth, the government raise the minimum wage. This will affect China and operating costs, a result, Western companies operating in China; plans must take into account this risk (Roberts Dexter, 2009).

Culture Challenge
China has proven for thousands of years of history, culture and traditions. The behavior of the Chinese people today is the result of historical changes, which witnessed the conversion, is very different from Western society. For example, a huge reflection of the culture of the Chinese people in the business world, the CEO of the Western world usually despise consensus builders or individuals who debate and discussion, and staff strategic implementation strategy, while the Chinese as the only strategy policy makers and executors. There is a strict hierarchy in Chinese business culture; business culture is very different from some Western countries (digitalcommons.kennesaw.edu 2009).

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Language or communication Challenge

Doing business in China will have two great opportunities and great challenges. If you do not speak Chinese, to overcome the language barrier is one of the biggest challenges you will face. For example, if the direct translation of the expression: "I am tomorrow to go shopping from China in English, you will get something like this:" I go shopping tomorrow. If you want to understand China, found a good mentor or participate in the proceedings. A competent translator should be able to communicate ideas, help to avoid misunderstanding, rather than just translation of the word (gaebler.com, 2001-2011).

Challenge related to Market Behavior

The Chinese market is unique in many ways, many Western companies have tried to sell their products as a defeat in the Chinese market, these are not some unknown brand, but a big giant brand has been successful for decades and different market. For example, Google and eBay have failed to become a leader in the Chinese market. The lessons learned from the failure of these companies are that they "do not understand the local factors, Google and eBay did not initially localize their products to meet the specific needs of the Chinese market (Guppy Daryl, 2012).

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Chapter 5- Conclusion
If a business want global will need time to analysis the suitable way and location to expanded the business in others country. Suitable way is joint ventures and suitable location is China with Travel Agency business. China is the right location because it has a wide market that has pool of customers and others reason. Joint Ventures are the right way because the western or Asian people lack of knowledge in china culture, management skills, language, and others. Careful on choose the right partner will affect the hole business operation. China is a good and interesting place to do business but must do a good survey before enter the market.

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CHAPTER 5-Reference

Buzzle.com 2000-2012, Traditions and Customs [Online] Available from :< http://www.buzzle.com/articles/ancient-chinese-traditional-customs.html> [8 May 2012]

Briney Amanda 2012, Geographical Information China [Online] Available from :< http://geography.about.com/od/chinamaps/a/china.htm > [9 May 2012]

businessmate.org 2009, what are Geert Hofstede 5 Cultural Dimensions? [Online] Available from :< http://www.businessmate.org/Article.php?ArtikelId=4 > [10 May 2012]

chinahighlights.com 1998, China Cultural [Online] Available from :< http://www.chinahighlights.com/travelguide/culture/ > [10 May 2012]

clearlycultural.com 2009, Geert Hofstede Cultural Dimensions (Power Distance) [Online] Available at: <http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/powerdistance-index/> [Accessed 14 May 2012]

clearlycultural.com 2009, Geert Hofstede Cultural Dimensions (Individualism) [Online] Available at: < http://www.clearlycultural.com/geert-hofstede-culturaldimensions/individualism/> [Accessed May June 2012]

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clearlycultural.com 2009, Geert Hofstede Cultural Dimensions (Masculinity) [Online] Available at: < http://www.clearlycultural.com/geert-hofstede-culturaldimensions/individualism/> [Accessed 14 May 2012]

clearlycultural.com 2009, Geert Hofstede Cultural Dimensions (Uncertainty Avoidance) [Online] Available at: <http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/masculinity/ > [Accessed 14 May 2012]

clearlycultural.com 2009, Geert Hofstede Cultural Dimensions (Time Orientation) [Online] Available at: < http://www.clearlycultural.com/geert-hofstede-cultural-dimensions/long-termorientation/ > [Accessed 14 May 2012]

Devonshire-Ellis Chris and Hoffmann Richard 2009, China Joint Ventures: Understanding the Intangibles [Online] Available at: <http://www.china-briefing.com/news/2009/11/04/china-joint-venturesunderstanding-the-intangibles.html> [Accessed 16 May 2012]

digitalcommons.kennesaw.edu 2009, Risk of doing Business in China [Online] Available at: <http://digitalcommons.kennesaw.edu/cgi/viewcontent.cgi?article=1006&context=jekem> [Accessed 17 May 2012] ehow.com, 1999-2012, what are the Disadvantages of Doing Business in China? [Online] Available at: <http://www.ehow.com/facts_4927942_what-disadvantages-doing-businesschina.html> [Accessed 20 May 2012]

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Gandevani Ned 2011, Advantage Joint Ventures [online] Available at: <http://www.ehow.com/info_8755980_advantages-disadvantages-joint-venturealliances.html> [Accessed 23 June 2012]

Gaebler.com 2001-2011, the Chinese Language Barrier [Online] Available at: <http://www.gaebler.com/The-Chinese-Language-Barrier.htm> [Accessed 25 May 2012]

Guppy Daryl 2012, How market behavior will stir up instability [Online] Available at: <http://www.chinadaily.com.cn/bizchina/2010-01/11/content_9296439.htm> [Accessed 25 May 2012]

Geert-hofstede.com 2012, Geert Hodstede for China [Online] Available at: <http://geert-hofstede.com/china.html > [Accessed 26 May 2012]

Hill McGraw, 2009.Global Business Today. 6rd Ed. New York: Hill Companies, Inc

Marketingteacher.com 2000 2012, Modes of Entry into International Markets [Online] Available at: <http://www.marketingteacher.com/lesson-store/lesson-international-modes-ofentry.html> [Accessed 19 May 2012]

referenceforbusiness.com 2012, Advantage of Joint Ventures [Online] Available at: <http://www.referenceforbusiness.com/encyclopedia/Int-Jun/Joint-Ventures.html> [Accessed 26 May 2012]
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Roberts Dexter 2009, China's Economic Challenges [Online] Available at: <http://www.businessweek.com/globalbiz/blog/eyeonasia/archives/2009/03/premier_wen_jia.ht ml> [Accessed 27 May 2012]

Starmass.com 2001-2011, Demographic Information China [Online] Available from :< http://www.starmass.com/china_review/demographic_data/china_population_trends.htm > [28 May 2012]

Travelchinaguide.com 1998-2012, Chinese Ethnic Groups [Online] Available at :< http://www.travelchinaguide.com/intro/nationality/> [Accessed 29 May 2012]

us2.mofcom.gov.cn 2004, Traditions and Customs Chinese [Online] Available from :< http://us2.mofcom.gov.cn/aarticle/aboutchina/custom/200411/20041100004548.html> [30 May 2012]

ustr.gov, China Services Barriers (Travel and Tourism Services) [Online] Available at: <http://www.ustr.gov/webfm_send/2694> [Accessed 5 June 2012]

Wolfe Michael 1999-2012, Five Modes of Entry into Foreign Markets [Online] Available at: <http://www.ehow.com/list_6736756_five-modes-entry-foreign-markets.html> [Accessed 10 June 2012]

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