The Chinese culture has been world-known for their collectivist and formal business culture. To be successful in branching out the organization to the Chinese culture, the western world must be fluent in the teachings of the Chinese “way”. The Chinese demonstrate four major elements within their culture: respect for age and hierarchical position, group orientation, concept of face, and the importance of relationship (Wong, 2001). Confusian philosophy greatly influences Chinese culture through teaching the “values of filial piety, loyalty, righteousness, friendship and the importance of education” (Pang, Roberts & Sutton, 1998).

The social relationships in the Chinese culture are formal and hierarchical whereas the American social relationships are egalitarian, informal, and most people prefer to be with social equals (AIEF, n.d.). The mechanism of relationship is strongly based on the rules of proper behavior preserving the rights and responsibility for each member of the group; when authority is valued, the top management visions are more readily accepted (Noronha, 2002).

China encompasses a collectivist concept of self, where a higher emphasis if placed on the group cooperation and individual modesty, whereas the American value of self-concept promotes a higher value on individual self-reliance and self-promotion over the group (AIEF, n.d.). Asian cultures assess and define themselves in relationship to a group, which entails a high level of interrelation among the group members (Georgianna, 2007). In an effort to ensure the survival of the majority of the group, the Chinese are willing to sacrifice the minority (Pang, Roberts & Sutton, 1998). The Chinese strongly respects the loyalty toward family (Wong, 2001).

The concept of harmony “measures one’s peace of mind, contentment, as well as interpersonal harmony” and the avoidance of conflict while maintaining balance is a strong virtue in Chinese culture (Chan, 2005). The Chinese believe that success only comes with harmony with oneself and one must maintain harmony between others in conflict (Pang, Roberts & Sutton, 1998). This concept advocates the importance of knowing others and the unimportance of being known; therefore Chinese are more attentive to personalities and interests of others and negotiators are defensive about disclosing information (Buttery & Leung, 1998).

The Chinese are very aware of time and patience with persistence in their pursuits and are willing to renegotiate contracts to achieve their long-term objectives (Buttery & Leung, 1997). They will only listen to those that they have formed a relationship with and trust which are the only real entry into the Chinese community for someone that is an “outsider” (Pang, Roberts & Sutton, 1998). The Chinese pay great attention to the past and to the long-term future while American culture is concentrated on short-term future results (AIEF, n.d.).