Managing Across Borders
Culture is an important part of any business practice despite religion, values and beliefs. Culture also bring different values on which business practices in a country is formed. These cultural values are incorporated in the businesses to build good inter-personal relationships across the globe. One of such cultural practise which is famous among Chinese businesses are offering ‘gifts’ or precisely ‘gift money’ to international clients. These type of traditions are based on the personal beliefs of the Chinese community. Furthermore, china follows this tradition for showing courtesy, respect and developing good relationships with other countries. However, it is difficult to analyze whether these traditions fall under ethical business practices or not. Another important aspect is the ethical business practice is still required for the success of the organisation. Additionally, not all cultural practices are good as they in-turn could lead to unethical business practices.
Gift giving or gift money is considered the most famous and old cultural practice in Chinese businesses. Gift giving is expressed an exchange of goods or services as a part of social behaviour. However, in the legal terms gift-giving has another sort of definition. The process of corruption and illegal practise suggested by authorities is known as gift money (Graycar, & Jancsics, 2016, pp.2). Thus, gift-giving has different meanings as per authority, population and cultural practise. Still, in Chinese business practise gift-giving is based on their ancient philosophy. Confuscianism is one of principle which state-building of harmonious relationships among men is needed (Pogliani, 2019a). Hence, in this practise providing gifts is a way to maintain relationships by showing respect to other communities. One real-life example of ‘gift-giving’ new business partners exchange quality and branded gifts after their first successful meeting. This can be considered as showing respect after a successful business deal.
Several factors promote the gift culture in the Chinese business society. The first factor is considered as a cultural factor of ritual based on theories of Chinese leaders and their followers. People follow their superiors and their ancient theories of cultural practice. Even though it is considered bribery by law, Chinese people cannot dismantle their ancient practices. Secondly, emotional attachments with practice such as reciprocity, trust and empathy which is considered above everything even laws (Pogliani, 2019b). Some of the social factors are also responsible for gift money and gift-giving system. People accepting gifts from others has also become a huge problem, for example, slipping cash to doctors, a box of mooncakes and dough envelope (Demik, 2016a) to school principal for admission. The society does not want to stop giving or receiving gifts in Chinese society. Chinese businesses for healthcare also suffer due to such social factors. For example, a doctor in Jiangxi province rejected a red cash envelope was found beaten by patient’s family members (Demik, 2016b). Not only healthcare, however, but educational institutions, political alliance, brands, cigarettes packaging and other businesses in China also follows gift-giving cultural practice. Henceforth, factors such as blind cultural faith and social stigma still influence business practices to follow gift money or gift giving method in their system.
There is a slight way through which gifting can become bribery in Chinese culture. For instance, giving of red envelope Hongbaos as a gift-giving tradition during cultural events such as lunar new year, weddings and birthday parties is considered as gift (ABC, 2018). On the contrary, providing a similar red package to doctors for medical preference can be considered as bribery. Therefore, gift exchange can instantly become bribery if given with the wrong intention. Hence, there must be some type of line that could differentiate between bribe and gift-giving in Chinese practice. However, first, it is mandatory is address what gift exchange and bribery refer to in Chinese criminal code. As per section 369, “whoever for purpose of seeking unlawful profit, gives property to a state functional shall be found guilty of bribing” (Szto, 2015, pp. 594). Whereas, gift exchange that occurs among close relationships, family members, and friends is known as a gift-giving.
It is essential to understand the difference and similarity between gift-giving and bribe. The similarity between bribery and gift-giving is when they are performed for unlawful profit than considered similar to the criminal offence. Whereas, the difference among two is when gift exchange is done without any malicious intention. Therefore, again a slight line transforms innocent gift into a huge bribe. Another way through which gift and bribe can be differentiated is a limited gift ban based on the perception that a line identifies the money value of gift differentiate it from bribe (Bac, 2019). For example, if the limited gift ban increases money value than it is bride and if it does not then consider as an innocent gift. Consider another example, offering mooncakes to the principal in china can be considered as showing respect. However, offering lump sump money of donation for child admission is known as a bribe. Therefore, gift giving cultural practice can be converted easily with an increment of money value in Chinese businesses.
There must be some ethical considerations regarding gift practice in Chinese business culture. Without such principles, it will be difficult to control bribery in the form of gift money. Some of the principles are designed by the companies for making gift-giving legal and more respectful. The first principle is setting up an account for gift and another purpose with their operational cost value (Sun, 2016a, pp. 403). In this way, they can keep a record for the business expense and will be saved from the taxation authority penalty. The second principle is keeping track of gift-giving limit whether it offers reciprocity or not. If the exchange of gifts goes over-broad then managers must intervene effectively. The third principle is no physical damage to a person if he/she does not accept the gift. There must be civilized refusal among two parties rather than beating similar to the doctor’s case. Thus, such ethical guidelines are required for the proper management of gift-giving practice. Additionally, gift-giving should be done for achieving reciprocity rather than making it intentional and malicious for business operations globally.
To summarize, gift-giving is considered a form of reciprocity by Chinese businesses. They often use such practices and try to send offers to clients across the globe. However, Chinese law strictly prohibits such bribery as per rules and regulations. Furthermore, social, emotional, and cultural factors are also responsible for Chinese practices. The people in china still follow practices that are considered ancient now. Hence, businesses still follow this practice which goes in support with their cultural beliefs. Lastly, it is necessary to identify similarities and differences among bribe and gift exchange. It is okay to provide a token for respect with clients however offering them a large amount of money is not. This could influence relations with other countries in a negative manner. In other words, businesses can exchange small gifts but cannot make them large. Further, ethical principles must be applied to such gift-giving or make them legal.
References
ABC. (2018). From envelopes of cash to cigarettes: The hidden agenda of China’s widespread bribery culture. ABC News, viewed 14 October, 2019, <https://www.abc.net.au/news/2018-11-22/the-hidden-agenda-of-chinas-widespread-bribery-culture/10498074>
Bac, M. 2019, ‘Gift policy, bribes and corruption’. European Journal of Law and Economics, vol. 47, no. 2, pp. 255-275.
Demik, B 2016, China trying to pull back on gift-giving, in , Los Angeles Times, viewed 14 October 2019, <https://www.latimes.com/world/la-fg-china-gifts-20191006-story.html>.
Graycar, A & Jancsics, D, 2016, ‘Gift Giving and Corruption’ International Journal of Public Administration http://dx.doi.org/10.1080/01900692.2016.1177833, pp.1-34.
Pogliani, G 2019, The exchange of gifts in Chinese business practices, in , Sapore di Cina, viewed 14 October 2019, <https://www.saporedicina.com/english/gift-exchange-chinese-business/>
Sun, F., 2016, ‘How to manage client entertainment in China’. Business Horizons, vol. 59, no. 4, pp.401-410.
Szto, M., 2015, ‘Chinese gift-giving, anti-corruption law, and the rule of law and virtue’. Fordham International Law Journal, vol. 39, no 3, p.591-628.