May 22nd, 2006

Rules of Business


I had dinner with Charles Lee* earlier this month when he is in Singapore. I considered Charles a mentor who has given me many valuable career advises, esp. at times when I need it most.

Anyway, I have being thinking over something he said over dinner: “世上所有的事都讲情,讲理,讲法。”. Loosely translated “the rules are relationship, logic and law”. The only difference is the order of the three.

In United States, it is “logic, law, relationship” whereas in China it is “relationship, logic, law”. There lies the difficulty when a Chinese and an American tries to do business because the priority is different.

Perhaps this also explained why many Singaporeans also fail to do business in China because the rules in Singapore are “law, logic, then relationship if any”. The assumption that a contract would be binding in China (as in the case in Singapore) is often an expensive mistake. In general, Chinese see contract as a paper formality to seal the relationship and there is no business otherwise.

Being in Malaysia the last couple of weeks also made me realized how different things is where the rules are “relationship, logic, law” just like China as in Taiwan and Hong Kong. Perhaps this is why Taiwanese, Hongies and Malaysians has more success in China. It also explains the difficulties between the cross bounder relationship between Singapore and Malaysia on various issues like water and the bridge.

So whats the rules of business in your country?

* btw, Charles is now the Dean of School of Management in Beijing University altho he also spend some of his time in Singapore lecturing in NUS. He also manages a seed fund (~50m USD) to help young aspiring technopreneurs in China using his past experience in helping entrepreneurs in US. Many years ago, he helped a young man to raise 1m seed fund for a crazy idea – The name is Steve and the company is Apple.

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