Avoiding a Shocking Corporate Culture

Controlling the workplace culture should be a top priority throughout the entire planning and hiring process. Regardless of how you run your company back home, we guarantee it has a much more developed culture of accountability and controls than what most Chinese employees are used to. Your Chinese employees need to both understand the controls and subscribe to the idea of having them. You need to get people to understand that when the system works well, the company does well and the employees also benefit.

Also, your China operation is going to need a lot of support from home (see Chapter 4), and having a common corporate culture helps a lot with that. Finally, Chinese people who want to work in FIEs are looking for something different from traditional Chinese company culture. They’ll appreciate your efforts to indoctrinate them into how you operate back home. The following sections explain how to export your culture and why it’s so important.

Passing up the Chinese imperial palace

Chinese imperial palaces were infamous for their over-the-top intrigue and politics. A very real risk of not implementing your company culture in China is having the FIE go the complete opposite way and become an imperial palace. Before you laugh, you’d be surprised at how many Western companies’ China operations have gone that route!

Imperial palace culture in a Western company can work something like this: You have a top manager who’s more concerned with enjoying the perks of his position than with running the business effectively. The most common perk he wants to enjoy is employees who are sycophants — praising everything the manager says or does and speaking extremely deferentially (or in Western parlance, “kissing butt”). These managers see themselves as the emperors of their fiefdoms.

Many Chinese employees, who’ve been exposed their whole lives to the rigid hierarchies that result from China’s imperial tradition and government bureaucracy, immediately know how to act when an emperor is managing the office. In addition to becoming sycophantic, they rarely offer their opinions on how to improve the business. And they very rarely offer any opinion that may run contrary to the emperor’s view.

The organization develops a rigid hierarchy, with each employee sizing up his or her rank relative to other employees’. Employees focus on secretly undermining employees above them. Meanwhile, they also seek to enjoy the perks of their positions by being overly harsh to their subordinates. Employees in this environment become especially afraid of being recognized as having made a mistake. As a result, they often refuse to share information or collaborate with their coworkers. They may even attempt to sabotage each other’s work. The result is a dysfunctional organization dominated by fear of making mistakes and distrust of coworkers. This culture will affect your bottom line — quickly!

Guarding against imperial palace syndrome

To an extent, many Chinese employees feel somewhat comfortable in an imperial palace type of environment. They don’t usually like working in it, but it’s familiar to them in many ways. It reflects a lot of traditions, the educational system, and the types of jobs their parents and grandparents had. If given enough leeway, some Chinese employees will revert to this kind of system. However, by training managers and employees, you can encourage a Western-style work culture.

One of the keys to guarding against imperial palace culture is watchfulness and control. Observe your employees closely. Do they seem overly deferential to you or other managers? Do they hesitate to offer opinions? Do you sense that they’re trying hard to look busy even when they aren’t? Are employees making subtly derogatory statements to you about their coworkers? The following sections explain what you can do to prevent an imperial palace — or turn around the one you have.

Using home connections to export your culture

The best way to export your culture to China is through your top managers. Ideally, from your home operation, you can send over a general manager (GM) and a financial controller who understand your company and culture well. Be clear to both of them that one of their priorities is ensuring that your culture takes hold in China.

If you can’t find suitable people in your operations, require that anybody you hire from outside for a senior management position work for at least six months (the longer the better) in your home operation to get an understanding of how it works. If your top one or two managers aren’t long-time company employees, you may want to send HR personnel over to China during the initial period (at least several months) to help train the employees.

Hiring managers who aren’t would-be emperors

If you’re going to hire an outside manager (or management team) to run your operations, then you have to be especially careful. Some companies assume that they can guard against imperial palace syndrome just by hiring a Chinese manager with some Western education and experience. That’s not necessarily the case. Some returnees (but certainly not all) can become emperor-managers pretty easily. Sizing up their potential to become emperors is pretty much impossible because they’ll know how to act very Western when they’re around their Western bosses.

The other issue with returnees is that they often can’t admit to making a mistake or being wrong for face reasons. Ordinary Chinese heap many expectations on returnees, creating tremendous pressure for them to be almost perfect in their management. This situation doesn’t mean that you shouldn’t go the returnee route. But if you do, have a senior person on the ground in China who has the clear authority to make sure that your corporate culture is instilled.

Western expatriates who’ve been in Asia for a while can pose the same potential danger. They may have become so used to this culture (which is also in other parts of Asia) that they turn your company into an imperial palace. On the other hand, Chinese who don’t have overseas experience can make excellent foreign-invested enterprise (FIE) managers — and for much less money! It all depends on the individual. Note that a Chinese manager who doesn’t already have significant experience working in FIEs is unlikely to work well as your manager.

Beware any manager who resists your control of the culture by telling you that things are “done differently in China.” You have to respect cultural differences, but there’s no reason why the big picture can’t resemble a Western company. Don’t ever fall for the you-don’t-understand-China rationale from such a manager, either. You don’t understand everything, but good business practices are good business practices.

When you see this kind of imperial environment in an FIE, it usually comes from the people in charge. Usually, your top management negotiates greater job protections in their contracts than the law requires. You have two main choices when making a change:

✓	Take the manager completely by surprise, kick him or her out of the office one day, and more or less offer compensation per the contract.
✓	Work with the manager to get him or her to exit gracefully, often giving more than what the contract requires.

You don’t want to decide to fire the manager but then inadvertently tip him or her off before you take action. If the manager sees the termination coming, he or she can do a lot of damage before removal. For that reason, the second approach is usually better.

Cultivating an ideal culture

Although all workers contribute to corporate culture, managers especially can help set the stage for the values and norms of your company. First, clearly tell managers that you expect them to instill a Western company culture. Provide managers with detailed dos and don’ts. For example, managers should

✓	Enthusiastically maintain various controls (good controls are vital in China — we discuss them in Chapter 17)
✓	Make extra efforts to recognize lower-level employees, such as secretarial staff
✓	Neither discuss employees with one another nor convey messages to employees through other employees

For information on maintaining an appropriate employee-management relationship, see “Earning respect,” later in this chapter.

Frequently train your employees how to behave in an open, Western-style culture. Here’s how:

✓	Offer employees who display great teamwork small prizes or bonuses, which should mitigate Chinese employees’ tendency to view coworkers as competitors.
✓	Ensure that employees speak their heartfelt opinions in meetings by making each one speak out in turn and asking numerous follow-up questions until you feel that they’ve said their piece. Hopefully, they’ll realize that they should express their opinions freely.
✓	Publicly praise employees for saying things that are out of consensus or contrary to your views. This move reinforces that your FIE is not a traditional Confucian enterprise.
✓	Assign people to work in teams, and be clear that they’re collectively responsible for the success and failure of their tasks.
✓	Accept no finger-pointing when you have problems within the teams.
✓	Minimize the formal titles you give to employees. That way, they’ll spend less time obsessing over their relative ranks.
✓	Give each person a turn to lead a team: If you form a team of four employees, let employee A lead one task. Then employee B takes a turn, and so on. After the completion of each leadership turn, the leaders fill out formal evaluations on the other team members; the other team members also each formally evaluate the leader. Such a system that minimizes rank and causes abusive team leaders to reap what they sow can reduce the hierarchy of your office.

Keeping an eye on managers and employees

The only way to prevent your company from becoming an imperial palace is to constantly and closely watch your managers and the company. Keep an eye on your employees through a combination of obvious and not-so-obvious monitoring. By obvious monitoring, we mean spending some time in the office observing. Sit in on meetings to see whether employees seem to be offering their opinions. Figure out whether they’re behaving in a strict hierarchical way toward one another. Try to cultivate relationships with many of them. To conduct your not-so-obvious monitoring, speak with many of these same employees from time to time. Be careful when you do check in with them, though — if you want them to speak frankly, keep the fact of your meeting confidential and secret.

If your China people seem to be scheduling a lot of out-of-the-office time for your observers, you may want to ask some questions.