The Advantages and Disadvantages of the Eastern and Western Styles of Doing Business

Every country has its own style of doing business. Some of them prefer to carry out a market research, some depend on one person's idea, some rely on good relationship with others and some depend on a degree of creativity and inventiveness. In this essay, I am going to define China as an example of Eastern and examine its styles of doing business with the Western styles. Their advantages and disadvantages of them will also be looked at. After that, I will then go on to consider whether the Eastern style or the Western style is more efficient in doing business.

According to Li ( 1 9 9 8:p. 3), "Chinese company relies on just one person's seasoned instinct and acumen. " Chinese enterprise usually owned by a family and is often rely on one person's decision. The person who makes decisions is usually the most respected one in a family. This is an effective management style when a fast decision needs to be done in a limited period of time. Also, it is likely for a company to make a quick and flexible respond to opportunities and threats.

One man decision making, however, does cause problems. A person's knowledge and experience are limit, if a business only relies on one's opinion and decision, it is very likely to limit a company's expansion. If a person who runs a company have to deal with all matters, he may not have enough time to spend on those important tasks. Time also limits the number of decision a person can make. Therefore, a company may miss any profitable chance to expand. One man decision making also reduces the chance for young managers to make contribution. Although young managers may lack of experience, they may have bright and creative minds that are likely to make useful contributions and valuable suggestions to the company.

Li ( 1 9 9 8:p. 4) also states "Relationship and networks are everything to the traditional Chinese company. " Chinese companies trust the man who had handshake with them. It is true that good relationship is likely to reduce squabbles, help a firm to solve many problems and gain important information in a market. An example is the tallest building in Hong Kong, Central Plaza. The contract was signed after the building was half built.

In my opinion, a company cannot only depend on good relationship or handshake. By looking at the above example, if the firm who took part in building the Central Plaza said that he would not continue to build the Central Plaza and there was no contract between. Then the firm who assign the work is very likely to suffer a huge lose.

Li ( 1 9 9 8:p. 8) agrees "Western culture has a degree of creativity and inventiveness that Chinese companies cannot easily emulate. " These may be the main advantages of the Western business style companies. The degree of creativity is likely to allow them to develop new markets and then expand their businesses in different fields to gain more profit. The products they invented may also help them to perform better. These may be the reasons for many Western styles companies to become international.

Although the degree of creativity and inventiveness has the above advantages, there are also some disadvantages. If a company always invests in new markets, it will end up no core business. A company may not have the ability to develop all markets it invested, this may bring unnecessary wastages, for example it may waste the investment capital and resources.

Western style companies usually employ specialists to make decision. Therefore, the process of decision making is systematic. As the decisions made by specialists are often based on survey results, decisions are more efficient when detail information are required. Also, this method is likely to provide a reliable result.

On the other hand, a decision make by a specialist may be time consuming and it may not be able to give an immediate respond. Therefore, urgent tasks may be delayed. Since market research is required before the decision is make, it may be costly. Also, a systematic decision making may lead to inflexible respond when a company needs to deal with any daily problems.

From the above paragraphs, we can see that both Eastern and Western styles of doing business have advantages and disadvantages. Eastern styles companies tend to rely on specialists opinion while Eastern styles companies depend on a respect person's decision. Chinese companies think that relationship between peoples is very important and Western companies often adopt a creativity and inventiveness styles.