An Interesting Observation About Business Ethics in China

It’s been a busy week so I wasn’t able to put this observation down as fast as I’d like to. I attended a great speech on Thursday morning given by Chris Devonshire-Ellis, Senior partner/founder of Dezan Shira & Associates. Mr. Devonshire-Ellis was giving a talk comparing business environments in China and India where his company has offices and his business is growing in both countries.

He made a very interesting statement about business ethics: one place where India has an advantage over China is knowledge and experience working with in international business norms. China on the other hand while having a system of business ethics on paper doesn’t really enforce them and therefore businessmen (at least those in powerful positions) can get away with growing their business by what ever method they want whether it is ethical or not. This becomes a disadvantage for Chinese businessmen when they go overseas and try to apply their business experience to the international system and realize that their experience doesn’t jive with the international ethical system and actually prevents Chinese businessmen from growing their businesses.

I read a real life demonstration of this right after the speech when I read Paul Midler’s take on Alibaba’s launch of its Alimama blog-advertising venture on his China Game blog:

“There is little about the new business model that suggests it’s legit, and the biggest tip-off is Alimama’s logo – it’s a blatant rip off of Amazon’s. Even if you want to forgive copyright issues in China, this is not what you expect from a global company that is valued in the billions. We don’t expect Burger King ever to come out with a Burger Queen sub-brand, while borrowing a logo from a completely unrelated industry. And any number of consultants can explain to you why Coca-Cola never launched with Shmoka-Cola.”

It looks like Alibaba is trying to compete in the global business environment as a big player (now that its stock price has it valued in the billions) by still using marketing that you see from many small players in China. To be honest, the logo will probably change soon, but this is supposed to be a modern international Chinese company –it should be able to come up with its own logo and a business venture that isn’t copying the model of one of its international partners. I’d expect more from Alibaba especially since it’s always talked about being a global player.

Maybe Jack Ma needs to spend more time in the international business arena to learn how to play by the rules.

J.

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