How trust in business is different between UK and Chinese business.

by



Chapter 1: Introduction1

Background1

Research Questions2

Aims And Objectives Of The Study2

Chapter 2: Literature Review3

Trust In Business3

Cultural Awareness6

Research Approach8

Data Collection8

Primary Data8

Secondary Data8

Research Method9

Quantitative Research Method9

Qualitative Research Method9

Chapter 4: Analyses And Discussion11

Chapter 5: Conclusions29

References31

CHAPTER 1: INTRODUCTION

Background

Nowadays, the movement of the world is getting faster and faster. In order to capture the development of the world, organizations have to move forward to become a network, they work together to be more competitive to others, to gain more profits and advantages. Organizations have to trust each other so that they can work as a team. Trust becomes more and more important nowadays, it is the key element for long term relationship in business, without trust it seems to be very hard to sustain a business. Moreover, each year there is significantly more trade between China, UK and the West. With China's increasing economic strength it is very important that UK companies trade advantage of these business opportunities. For any UK company which wants to have business relation with a Chinese company, it needs to understand the culture that affects the behaviors of its Chinese partner, and this works the other way also.

An important part of any business relationship is the trust that each partner has in the other partner. It is believed that trust can help to reduces transaction cost, uncertainty and long term business between organizations (Lewicki. R, Bunker. B, 1996, p. 115). Also in their book, Lewicki and Bunker state that “trust does not come naturally. It has to be carefully structured and managed.” Moreover, according to Shankar, Urban and Sultan (2002), they s suggest that trust is difficult to earn and easy to lose; so that trust need to be well structured and managed. In addition trust is fragile, once broken it may be repaired but not always (Lewicki. R, Bunker. B, 1996, p. 129). UK companies tend to ensure that other firms that they do business with honor their contracts, by writing the contracts in such a way that there are penalties for failing to honor them. However, Chinese culture has a different emphasis. Chinese companies tend not to want to do business with other until they know enough about them so that they know they can trust them. This is called “Guanxi”.

Research Questions

The research questions of the study are as follows:

What role does each stage of trust play in business relationship? Is it going to be different in different culture?

What are the relevant cultural differences between China and UK?

How do these cultural differences affect how Chinese and UK companies prefer to do business and what adjustments do they need to make when engaging in business relationship?

Aims and Objectives of the Study

The aims and objectives of the research are as follows:

To analyse the role played by trust in business relationship.

To understand that how trust plays different role in different culture.

To analyze the main cultural differences between China and United Kingdom. To understand the impact of these cultural differences affect ...