Calypso Consulting

(This article originally appeared in a two-part Chinese version in CHO Magazine in July and August 2008)
 
There are very big differences between the ways Chinese and Western executives make decisions.   In multinational companies in China, this can be a cause of difficulty for the executives here as well as the bosses in the home country.  This posting examines those differences.  The information here was derived from my book, Business Leadership in China: How to Blend Best Western Practice with Chinese Wisdom.
Westerners believe in the value of making quick decisions and then taking action.  While they are taught to seek the advice and consent of their peers and subordinates, they are then expected to act independently and make a decision. Chinese, on the other hand, do not always value the need for speed when it comes to making a decision.  Chinese tend to focus on the complexity of an issue and want to be sure that all matters be thought through before coming to a conclusion.  This process often involves going back to the beginning and starting the thinking and the discussion again.  Chinese want to be sure that all angles of an issue be reviewed first. These two different approaches are sources of frustration for the other.
Chinese are typically holistic thinkers.  This allows them to view an issue at once in all of its complexity.  The Westerner, who is typically more of a linear thinker, sees a preferred order to tackling a problem.  This involves a beginning, a middle and an end.  When you violate this order, the Westerner sees fault in the process.  The Chinese, on the other hand, see the Western approach as too rigorous and inflexible.
Another big difference is in the way the Western and Chinese cultures view individuals versus the group.  The collectivistic culture of the Chinese leads to a consensus building decision-making approach.  Westerners view this approach as inefficient and too slow.  Alternatively, the Western individualistic style leads to an approach were the leader sees the need to drive to a decision and then force it to be followed through.  The Chinese often see this method as overly aggressive and also dangerous.
Often, the Chinese consensus building approach can lead to a “safe” decision - or worse, no decision.  While this would be seen as a failure in the West, in China it is often better to wait things out than force a decision based on one person’s opinion.  In this regard, Chinese employees sometimes see their Western managers as reckless and inconsiderate.  On the other hand, Westerners often see the Chinese manager as indecisive.  Both situations cause enormous frustration.
Seeking consensus, as a Chinese manager will typically do, often takes a long time.  Westerners give credit to the individual who can quickly help drive a decision and follow it through.  While the Chinese approach may be a safer one in the long run, the bosses in a multi-national company’s home country who are looking for action now often meet it with disgruntlement.
So, with these major differences between China and the West in making decisions, what is a company to do?  Oftentimes, the HR department in a multinational firm is forced to be in the middle of this dilemma.  They hear both sides of the story and then are asked to help solve the dilemma.  What follows is a potential solution.
Developing a Decision-Making Process in China
As is often the case with cultural difference, the answer lies in compromise.  If the top bosses are Western and they require a quick answer, then the Chinese employees must respond.  But they should not be haphazard.  One approach is to have a decision-making group available for such a situation.  When the Western bosses need a quick decision, the group should be called together – even if it means doing this by phone or email. 
The group may have its own set of rules.  For example, instead of seeking 100% agreement, the group may look for 75%.  If they are deadlocked at 50-50, they need to do more work quickly and then re-convene soon to get a clear majority.
Another approach is to hold a jue ce hui, a meeting designed for making important decisions.  Most Westerners do not know this concept so HR can explain how it works.   This type of meeting is valuable because it lets everyone know that the purpose is to make a decision.  There is no alternative.  You may set a time limit for discussion, after which there will either be consensus, a vote or someone in charge will force a decision.
Whatever method you use, someone needs to pai ban.  Again, most Westerners will not know this term but they will understand the concept.  Someone must finally decide.  We cannot discuss indefinitely.  The strong leader needs to eventually pai ban.
Leaders in China must understand the values of both the Western and Chinese approaches to decision-making.  When there is a problem between these approaches, the leader needs to get agreement from all parties on their process up front.  In China, I recommend using the Chinese approach.  As long as you incorporate methods of finalizing a decision such as holding a decision-making meeting (jue ce hui) and also that everyone understands that the leader can (pai ban) if necessary, then you should be fine.
            Sometimes, the bosses in headquarters may require a decision by a specific time.  In this case, the local leader needs to explain that to the others on the team.  Everyone then understands they are time limited and their goal is to get a decision.
            No company can afford to be frozen.  Doing so is disaster.  The Chinese holistic and collectivist approach to decision-making has its merits.  But the Western approach of quickly making a decision is also valuable in this competitive market.  It may have been fine in the days of government-sponsored enterprises to not force decisions in a timely fashion.  It is no longer true today.