I'm reading a book right now on Cultural Differences by Geert Hofstede. It's viewed by many to be the authoritative study of why and how cultures differ from one another. Really dry reading, but interesting content.
One of the things discussed that I believe affects the US and China in a big way is context. China is a high-context society, while the US is low-context. When I do something wrong at my job, no matter what job it is, my manager will call me into the office and tell me how I screwed up. Then there will be a conversation about what I can do to fix things and how to perform better in the future. Emotions are not really involved, and I don't walk out of the office expecting to begin seeking new employment. I don't fell embarrassed around my peers for getting told to revise how I do things and it doesn't cause me to lose self-confidence. If this same conversation happened in China, which it often does between foreign managers and local employees, things would be very different.
Lets say a plant manager from Texas asks his local director of engineering to come into his office. As the director sits down the Texan starts talking about a report on the status of operations and some new system they're implementing. He tells the local director that he was hoping for something different than the report he received and explains what he wants again in simpler terms than he did the first time. He points out what in the report was not to his liking, asks the director if he understands everything that has been discussed (just so that they can be clear with one another) and then asks if three days is enough time for the director to fix the report.
There are numerous problems with how this meeting just went. If the Texan starts off telling the director what he wants done differently, the employee is going to lose "face". Also, it is difficult in China to be too clear unless given permission to do so. Starting over and explaining what one wants in China is demeaning. At the end, when he asks if three days is enough, the only possible answer from the director is "of course". It doesn't matter if the report was fifty pages long and the Texan asked for it in five minutes. No matter how impossible, there is only one allowed response to that type of question.
Losing face is the biggest issue, though, and it occurs a lot in China, especially to foreigners. Many of them don't even know it is happening. I don't always know when I'm embarrassing myself in China, and I lived there for four years.
The last time it happened, I was in an airport on my way from Chongqing to Shanghai, and I needed to make a phone call to a German guy in Shanghai whose apartment I was planning on crashing at. I knew there were no phones in the airport that I could use, but still went up to the ticketing desk and asked the girl if I she knew where I could find a phone. She said she didn't know of any phones in the airport. I also knew it would be in bad form for me to ask her if I could use her phone, so instead I "asked" in the way most Chinese would ask: I started telling her all about my problem, that I was going to land in Shanghai very late at night (the flight was delayed) and I invited a group of people to a bar but my flight would arrive so late that they would have left by the time I got there, which would cause me to lose face. As I told her the problem, I was giving her the opportunity to offer her cel phone to me to use in calling my friends.
She eventually interrupted me and asked me if I would be okay using her phone. I thanked her profusely, called my German friend, and left him a message asking him to please tell everyone else I couldn't make it. Up until this point I was doing fine, but then I thanked her and asked her if it cost any money to make the call. This was embarrassing, and she told me not to worry about it, but like an idiot I pulled out a wad of cash from my pocket and tried to offer her some. She was more embarrassed, and the guy standing next to me waiting for his turn to talk to her about the delayed flight told his traveling partner "He just lost even more face".
This time the Chinese guy lost face, because he momentarily forgot I could understand him. Things like this occur all the time in China, and one of the reasons Americans never learn how they've just offended someone is because nobody tells them what they've done, because you lose face when you call someone out on something they've done wrong.
This is high and low context. We believe very strongly in being clear with one another in the west, especially when it comes to business. We write everything down when forming agreements and are straight talkers in meetings. We don't shy away from issues and we tell it like it is. This is low context. The Chinese don't like direct questions, and they don't like straight talk. The Texan should have started the meeting by apologizing for not being clear enough earlier, and pointing out that he, not the director, was completely at fault for the director's report. This gives the director the opportunity to deny any responsibility on the part of the Texan, then claim to be unskilled himself and ask for the Texan's guidance. At this point, they should be able to get down to business. This is high context. Low context societies like the US shy away from apologizing because it's an admission of guilt. In China if a superior started a conversation with an apology, I knew I had made a mistake and would interrupt my boss, tell him that I was in the wrong, and ask for his guidance.
If you're going to China to manage the Chinese and increase profitability, you don't need to know how to speak Mandarin, but you'd better understand how to avoid embarrassing your subordinates every time you speak. Eventually, once a relationship has been established and you've invited everyone out for dinner, drank with them, sang karaoke, and learned their stories, you can begin to be more direct and clue them in on the differences between your country and theirs. But you will not succeed in teaching them and connecting with them until you first learn from them. That is how it works.