This article discusses how the art of giving gift in China may affect business and how management can handle the issue of gift giving. China has become the trading hub of many multinational corporations (MNCs). This is largely due its large market and the increasing taste of the Chinese on luxury goods. However, despite the large potential of the Chinese market business owners are often advised to take caution while trading in China because of Chinese many culture and strict trade law. Such common business law common includes property law, gift giving among others.
Gift giving, entertainment, party are among the most important way of ceiling good relationship with business partners and customer. But such approaches might have some consequential effect on the health and continue existence of business organization….. Michael Porter
In China gift giving after business transaction is a common practice especially when the organization want to sustain the relationship for a long time. Although, this culture has been antagonized by many Chinese leaders of recent in the fight against corruption and business ethics (Irwin, 2012). Among the common items often give out by corporate organization to its customers includes cards, pen printed with the company logo. Other promotional gift includes electronics – smart phones as tools for wooing more customers.
The common question often asked by business leaders, individuals and government is, when does gift giving becomes ethical in business? What does it cost an organization to give out certain gift in terms of profitability index? These and many more will serve as the basis of my argument as regard whether to give a gift of $10, 000 to a Chinese customer for making a sale worth of $10 million.
Having analyzed the culture of Chinese in relation to gift giving after business transaction and I discover that it is lawful, ethical to organization business model then I will give the gift of $10, 000 to the customer for the sales of $10 million on the following ground.
Increase organization revenue: Just like the question suggest, the company will make a major hit with the sales, if the transaction will increase the firm profitability index without violating business ethics with other business partners. After comparing what it will cost the organization to deliver the goods to the customer with the revenue generated from the sales, and it was revealed that the firm will be making substantial profit from the sales, then I won’t hesitate to give the gift.
Improve the organization relationship with customer: Since it is customary culture to give gift to customers after closing sales in China and it does not affect business profitability index much. The next thing to consider is the intimacy and relationship that will be established with the customer because of the gift. Most customers will feel appreciated giving them the gift as such becomes a loyal customer to the organization. So I will give the $10, 000 if it will boost the customer loyalty to our organization.
Marketing Strategy: It has been a general belief that a satisfied customer will not only come back again to patronize an organization but will also referred others to the business. If the customer has the potential of directing more people to the firm, the organization will be spending less in marketing and advertising its product.
Intention behind the giving: In order not to rogue the integrity of the firm in any form bribery scandals. As the VP of the firm I would study critically the intention of the customer in demanding the gift. To know if he/she is demanding as a condition to patronize us or is it a customary right of such customer for buying in large quantity. If it is a customary approach then I will give the gift after considering other conditions.
Organization policy: I will consider the organization culture, ethics and policy towards gift giving. If it is against the organization policy of engagement, then I will be forced to let go of the sale. There is no point going against the policy, ethics of the organization no matter the amount involved.
If the gift giving does not conflict with the above listed factors and other unlisted organization ethics then I will consider giving the gift to the customer to make the sales.
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