The kick backs is bribery and not desirable. It is an unfortunate exageration of giving tips by foreign nationals to locals which developing countries learned from foreign business partners and have mastered to an art - sadly.
The partying is also a learned behavior which the locals assume to be what foreign nationals expect and a lot of good business men offer to Americans night clubs etc as past of doing business.
What is networking in the US, is relationship building in other countries. Business is still seen as an interpersonal contract in maany developing economies and the lack of this level of relationship may break deals. Call it culture clash!!
As a part of globalization all most all the countries had opened their internal markets for foreign investment with red carpets & attractive soap facilities. Some of the key factors of globalization are they can take the advantages of economic growth, availability of skilled manpower, low labour cost, availability of raw materials etc. Since everybody wants to gain the advantage of these factors for their growth, companies had expanded their foot print outside the territory. China got much benefited from globalization because almost all companies started their production unit in china.
We can say Electronics industries are much global because regional distinctions play major roles. Here the product life cycle is like US/Europe will come up with idea and investment plans, design is done either in India or China, Manufacturing is done in Singapore/Taiwan/China, packaging is done in China/Malaysia. That means, for the same product different process at happening at different countries.
In my opinion, countries like US, Europe have to come up with some key policy and guidelines for attracting investments, which can in turn generate better economic growth and job opportunities
In order to win business deals, one must get used to the idea of going to nightclubs and karaoke and gifts to swoon the customers. Then again if you are relate to the government officials somehow or if you give some undertable kickback there is definitely better opportunities. That's part of the culture there. It's indeed everywhere but just to the degree. In U.S. networking is also very key to landing jobs / getting deals but just that there are other "rules" that regulate the deal making process.
yes I'm afraid it is completely correct, business is based on relationships, so much so that it can control the whole supply chain and in some cases have a significantly negative effect.
Consider a big factory requiring a part, the M.D went to school with some guy who produces low cost metal parts of inferior quality, such a relationship is likely to result in business for the School friend rather than an ISO 9xxxx company.
Now consider what happens when the metal parts enter the Quality system of the larger factory, in many cases they will be red stamped through and 'issues' will be corrected next time, in such a relationship it would be very rare for the parts to be returned back to the substandard supplier, sometimes it can be infuriating to have to deal with such methodology especially when a simple solution exists.
However as with most things in China there is a system and a way round such business practices, this is why 'tea' drinking and after hours entertainment is so popular, but that is only part of the story.
It seems odd that a company doesn't have to "earn" your business as we understand it in the West. It also seems to run against the theory of competition, which in part is "you can easily be replaced." But if it's a fact of doing business in China, we best get used to the idea.
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