Global Executive Forum in China Sets the Stage for Doing Business in the East

Given China’s significance to the global economy and the vast cultural differences between East and West, the University of Pittsburgh Katz Graduate School of Business recently implemented a Global Executive Forum that offers business professionals opportunities to learn about Chinese business culture by immersing themselves in professional experiences on site in Shanghai.

“People doing business in China tend to assume that they’re playing in the same business environment with the same set of rules,” according to James A. Cook, PhD, associate director of the University of Pittsburgh Asian Studies Center and forum instructor. “But to be successful, it is essential to understand the important structural differences between the two economies.”

Part of the University’s executive MBA (EMBA) degree program, the forum in China highlights important historical factors, gives participants a better understanding of how Chinese businesses operate, reviews the vital role that government plays, and helps professionals from other countries consider these contexts when formulating business plans.

Cook was born in the East, and he is an expert economic historian regarding China through the 20th century to the present. In addition to his work with the Asian Studies Center and the EMBA degree program, he works with the National Science Foundation regarding public health issues in China and assists Pittsburgh organizations that are trying to enter the Chinese market, including the Allegheny County Airport Authority.

A few specific differentiators Cook highlights in the forum coursework:

  • China characterizes its government as “socialist,” and that designation is very meaningful to its people, but that form of government is not fully understood or appreciated by Americans, for example.
  • Chinese culture places great importance on family, education, and history. In addition, business professionals there expect to build strong personal relationships and trust before execution of a contract or partnership, which requires extra patience from professionals from the West.
  • China’s development strategy is based on sequential five-year plans, which Cooks says must be taken very seriously. Not only do the five year-plans offer glimpses into potential pitfalls, he said, but they also can point to opportunities. For example, in its current five-year plan, health care is a high priority due to its aging population and “graying economy.” China also currently is very interested in making business contacts in Latin America, particularly Brazil.
  • When China first re-entered the world market in 1978, all business was owned by the state, Cook said. Although the state has since pulled back from a leading role in economic decision-making, it still owns or operates 40% of the economy. Some industries are under full government control, whereas others are financially supported by the state as an investor. Professionals from other countries must understand how to factor these important differences into their approach to business in China. Government leadership may have different priorities than their business counterparts.

To prepare students in advance, Cook teaches three lessons on campus in Pittsburgh, and the Brazilian EMBA cohort joins remotely. Then, on site, he brings his lessons to life with guest speakers; simulated proposals for new business development; business dinners where participants can practice very specific Chinese etiquette; and field visits to companies, such as Coca-Cola, Wujiang Huayan Water Co., and bustling electronics mega-market Huaqiangbei, where technology professionals acquire equipment.

Cook believes that cultural experiences such as the EMBA forum is part an important mission at the University of Pittsburgh. “The University is interested in developing the global outlook of all students in all fields,” he said. “If we don’t, they will continue to make mistakes doing business throughout the world.”