...Title: Negotiating with the Chinese: A Socio-Cultural Analysis Author(s): Tony Fang and Pervez Ghauri Source: Journal of World Business. 36.3 (Fall 2001): p303. Document Type: Article Full Text: COPYRIGHT 2001 JAI Press, Inc. Full Text: China has been one of the most favorite markets for Western firms for the last decade. However, doing business with China is considered difficult, mainly because negotiating with Chinese counterparts is quite complex. This paper analyses the negotiation process with China from a socio-cultural perspective. A Swedish multinational, Ericsson, is followed for several years and its negotiation process for different Chinese projects in the telecommunication industry is studied in depth. Based on these cases and literature a model is developed and some conclusions are drawn. Finally, managerial implications presented as four Ps: Priority, Patience, Price and People sum up the essence of Chinese business negotiation process. The People's Republic of China (PRC) started to open up its economy to the rest of the world in December 1978. Since then, Western business communities have been enthusiastic about China--the world's largest emerging market with more than one billion consumers. The Western enthusiasm for China decreased somewhat during a period following the Tiananmen Square incident in June 1989. But it rebounded and increased even more vigorously in the 1990s. China's rank in world trade rose from 32nd in 1978 to 9th today. By the...
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...Negotiation: the Chinese style Tony Fang School of Business, Stockholm University, Stockholm, Sweden Abstract Purpose – To examine the nature of Chinese business negotiating style in Sino-Western business negotiations in business-to-business markets involving large industrial projects from a social cultural point of view. Design/methodology/approach – A conceptual approach developed from personal interviews. Findings – This study reveals that the Chinese negotiator does not possess an absolute negotiating style but rather embraces a mixture of different roles together: “Maoist bureaucrat in learning”, “Confucian gentleman”, and “Sun Tzu-like strategist”. The Chinese negotiating strategy is essentially a combination of cooperation and competition (termed as the “coop-comp” negotiation strategy in this study). Trust is the ultimate indicator of Chinese negotiating propensities and role choices. Research limitations/implications – The focus of this study is on Chinese negotiating style shown in large B2B negotiations with Chinese SOEs. Originality/value – Differing from most other studies on Chinese negotiating style which tend to depict the Chinese negotiator as either sincere or deceptive, this study points out that there exists an intrinsic paradox in Chinese negotiating style which reflects the Yin Yang thinking. The Chinese negotiator has a cultural capacity to negotiate both sincerely and deceptively and he/she changes coping strategies according to situation and context...
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...The Chinese view of negotiations The Chinese word for negotiation—tan pan—combines the characters meaning “to discuss” and “to judge.” From a Chinese perspective, negotiation exists primarily as a mechanism for building trust so that two parties can work together for the benefit of both. Trust is built through dialogue that lets each party judge or evaluate the partner and the partner’s capabilities and assess each other’s relative status. The negotiation process also enables parties to reach an understanding on a specific issue, condition, or transaction, in a way that lets each side feel that “a good deal” was brokered. But the concept of negotiation hinges on creating a framework for long-term cooperation and problem-solving much more than on drafting a one-time agreement. As such, negotiation in China is viewed as an ongoing, dynamic process that takes into account practical matters and context. Many Chinese prefer this approach over creating contract-based absolutes, which many Chinese perceive as the primary purpose of Western-style negotiations. Significant differences in negotiation style and culture can be accompanied by mutually unfavorable perceptions. Americans may see Chinese negotiators as inefficient, vague, and perhaps even dishonest, while Chinese perceive American negotiators as impersonal, impulsive, and overly focused on immediate gains. When adapting to Chinese-style negotiations, task-based, time-conscious foreign partners must balance the need for...
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...Michelin has decided to expand the company internationally to China. As treasurer for this prestigious company it’s my responsibility to research different factors prior to the expansion that will assist the company in this successful venture. Topics of discussions are foreign trade issues; determinants of entering China, embarking in international negotiation and many more valid points are included in my research to soften the blow of unnecessary challenges. Dealing with foreign trade issues. Acting as treasurer several factors would have to be developed and monitored when expanding internationally such as money exchange, current exchange rates, cash flow, bribery, tariffs, and international trade laws for the company. Having knowledge of the country’s culture is very important simply to keep the lines of communication open and most of all not to offend someone. Determinants of foreign entry and how would our company enter A few factors that determines if our company is qualified to enter China are as follows; the size of the firm my play a significant role in the organization’s entry into the country. The profitability of the company would indicate experience and target a dimension of competition within the country. (Culture Distance) Our firm will enter the country with a licensing agreement that is wholly owned by its affiliates. (Market Knowledge) The organizations will have an advantage by using the wholly owned entry mode as we gain knowledge and get...
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...BUSINESS SCHOOL Cultural Differences between China And Italy SUBMITTED BY KUSHAGRA MEHROTRA GROUP –B A0102314029 MBA HR ABSTRACT International management studies have been based primarily on the comparison of managerial behavior in countries around the world. Often, these studies have implied that businesspeople behave similarly with their domestic colleagues as with their foreign counterparts which indeed sums up to conflicting results. Context of the negotiations at the international level are faced with the differences between various cultures: a longterm attitude towards communication, the power placement, the uncertainties avoiding, emotional differences between the negotiating parties and others. These and other differences in cross-cultural dimensions can influence the process of negotiations between the representatives of different cultures in the negotiations. There may happen in a variety of misunderstandings in negotiations and between the two parties of the same culture, while the process of preparing for the talks with different cultures requires empirical studies in Intercultural Communication. The article discusses cultural dimensions of two contrasting cultures and their effect on negotiations. The Article includes cross cultural studies between an Asian and a European nation’s cultural strengths and weaknesses to anticipate an opposing nation’s possible behaviors in the negotiation process, and to understand the cultural factors that...
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...EMPL 3270: NEGOTIATION – THEORY & PRACTICE RESEARCH ESSAY Q2: According to Fells (2012, p.207) “As a negotiation unfolds, it is easy to attribute any behaviour, particularly behaviour that is different to your own, to culture and so ignore the many similarities”. Consider this statement with reference to contemporary research on cross-cultural negotiation and use examples to illustrate your analysis Introduction: Former President and charismatic leader of the United States John F. Kennedy once stated that, “We cannot negotiate with people who say what's mine is mine and what's yours is negotiable” (Kennedy, 1961). This timeless quotation epitomizes and typifies in essence what can commonly be regarded as cooperative negotiation. Formally, the term negotiation is commonly defined as two or more parties or groups deliberating amongst each other endeavoring to achieve a decisive result, which is mutually beneficial for both entities. When considering the process of negotiation across contrasting geographic locations or countries, negotiators have to understand the repercussions which heterogeneous cultures have in the final outcome of a potential deliberation. Culture is defined as the ‘unwritten rules of society’ (Hofstede et al, 2010) and most typically refers to those characteristics or values, which are unconsciously embedded in a large group of citizens through the ongoing processes of tradition and various forms of education. Understanding the pertinence of cultural...
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...form, negotiation is a method of conflict resolution. It is a problem-solving process in which two or more parties attempt to resolve their disagreement or conflict in a manner, and through a process, that is mutually agreeable. Whereas the general concept of negotiation is easy enough to understand, in practice it can be an extremely difficult proposition. Opposing views about what is right and wrong, disagreement on what is fair and equitable, understanding each other’s message and form of communication, and even the procedures that will be used to conduct negotiations are but a few of the hurdles that negotiators will encounter. Negotiation is further complicated when the parties find themselves negotiating across dissimilar cultures. Culture is a powerful factor in shaping how people think, communicate and behave. It therefore affects how they negotiate. In business arena, negotiations are crucial aspects of inter-organizational relationships like joint ventures, mergers and acquisitions, licensing and distribution agreements, and sales of products and services. As the proportion of foreign to domestic trade increases, so does the frequency of business negotiations between people from different countries and cultures. To successfully manage these negotiations, businesspeople need to know how to influence and communicate with members of cultures other than their own. This paper investigates the impact of culture on negotiations. It begins by defining negotiation, cross...
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...Press • Princeton, New Jersey MANAGING ACROSS CULTURES NEGOTIATING ACROSS CULTURES NEGOTIATING ACROSS CULTURES Published by: PRINCETON TRAINING PRESS Princeton, New Jersey a division of TRAINING MANAGEMENT CORPORATION 600 Alexander Road Princeton, New Jersey 08540-6011 USA Tel: Fax: Web: Email: (609) 951-0525 (609) 951-0395 www.tmcorp.com info@tmcorp.com Editor-in-Chief: Series Manager: Writer: Cover Design: Interior Design: Monique Rinere-Güven, Ph.D. Talia Bloch Robert J. Greenleaf Donna Lukis Bonnie Jacobs © 2000 TRAINING MANAGEMENT CORPORATION. Managing Across Cultures Series: Negotiating Across Cultures All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher. Printed in the United States of America ISBN: 1-882390-911 The Cultural Orientations Indicator®, COI® and TMC’s graphical depiction of our Cultural Orientations Model are registered trademarks of Training Management Corporation; Registration: 2,329,085 and 2,361,803. 4 Training Management Corporation TABLE OF Preface OF CONTENTS TABLE CONTENTS iii Introduction 1 Negotiation Defined Negotiating Across Cultures Chapter One: The Impact of Culture on Negotiating Behavior Case Scenario The Ten Dimensions of Culture Cultural...
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...world, demonstrating sensitivity towards cultural differences in order to gain from the proliferation and growth of international enterprise. Recent studies indicate that while some corporations compete successfully in the global marketplace, others have failed to sustain their competitive advantage because of cultural imperialism or inadequate acculturation of their managers on international assignment. Corporate analysts argued that the key to global business success depends on effective cross-cultural etiquette and global workforce diversity management. Other significant studies emphasized that global managers should be trained in interpersonal relationship and group communication competence, and should be equipped with cross-cultural negotiation skills that can maintain global...
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...Professional report on negotiation between Danone and Wahaha (2007-2009) On the 30th of September 2009 an almost 12 year relationship between French multinational enterprise Danone and Chinese Wahaha group ended by Danone withdrawing from the IJV (International Joint Venture) for monetary settlement. This report analysis the negotiation journey of the dispute and tries to classify the different negotiation steps based on the challenges of negotiating business deals in China. As a tool IRENEs framework on “Who/ How/ What” is used. Based on the analysis of the negotiation and the review of the cultural differences between western oriented and Chinese businesses suggestions will be made what could have been done differently by Danone. Overview of the Situation between Danone and Wahaha early 2007 The multinational Danone Group SA based in Paris in France is one of the biggest players on the global dairy product and bottled water markets. They are active on all five continents and the net sales in 2007 was more than 12 billion €. The Hangzouh Wahaha Group Co., Ltd. is a company that has grown from a small business, selling drinks to school children to become one of the most important and largest Chinese bottled-water companies already in 2007. Although it is difficult to find detailed financial figures on Wahaha it can clearly be stated that in 2007 the Group was much smaller than Danone. At that time Wahaha contributed approximately 6% of Danone’s...
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...Negotiation I. Introduction Negotiation is a skill used throughout life from infancy to adulthood. But a lot of factors and tactics are involved within it and even though negotiating may be something we do naturally and daily, doing it well can be a competitive advantage. I suggest that this is particularly true in the global economy involving international negotiations that include various cultures and the norms that dictate interpersonal interactions such as negotiation. II. Body a. Importance of negotiation a.1 Definition of negotiation “Negotiation is a decision making process among interdependent parties who do not share identical preferences” (Neale, 1992: page 42). It is an activity in which two or more parties are involved and each one of them have their own personal goals and negotiation is the process in which all of the parties will try to reach an agreement throughout different strategies to maximize their final output. a.2 Negotiation as a day to day issue Negotiation is a process that is present in almost every aspect of our lives. Two parties will try to come up with a strategy that maximizes their output. A key word here is strategy and the way parties make their strategy, using knowledge and information and as the world is more open than ever and the information they can access is increasing, making negotiation a more complex issue. As a globalized world, people have to negotiate not only with the issues in our own country but also interact with people...
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...NEGOTIATIONS Cross-Culture Work in a Global Economy Erin Meyer, affiliate professor at INSEAD and author of The Culture Map, on why memorizing a list of etiquette rules doesn’t work. For more, read the article, Navigating the Cultural Minefield. 14:47 SARAH GREEN: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Sarah Green. I’m talking today with Erin Meyer, an Affiliate Professor of Organizational Management at INSEAD. She’s the author of the book, The Culture Map, and of the HBR article, “Navigating the Cultural Minefield.” Erin, thanks so much for talking with us today. ERIN MEYER: Thank you, Sarah. SARAH GREEN: So let’s just start by tell us what The Culture Map is. And tell us a little bit about why you developed it, what’s the problem you’re trying to solve. ERIN MEYER: I became very interested in researching how cultural differences were impacting business people, because I found that, although the world has changed quite dramatically over the last 15 years, the discourse around management hasn’t kept up with it. So just to give you an example of this, I was just in a bookstore yesterday. And I picked up a book about negotiations, a new book written by an American author. And as I’m looking through it, I can tell that the implicit assumption by the author is that the people who are negotiating, who are reading the book, are going to be negotiating with people who come from their own culture. But this isn’t the case anymore...
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...December, 2008 An Analysis of Business Challenges Faced by Foreign Multinationals Operating the Chinese Market Jianlian Wu International Management, University of Nottingham Ningbo 315100, China E-Mail: zlixcwj1@nottingham.edu.cn, qqnamei@163.com Abstract China’s rapid economic growth has presented numerous opportunities and challenges for foreign firms there. Many large corporations have established a China centre to coordinate and control their operations in the country. As firms have increased their presence in China, their concerns are increasingly focused on implementing successful management practices and strategies. This article describes the challenges and difficulties that multinational companies faced in Chinese market. It analyses roles played by the human resource function in these China, culture differences, social environment and other factors. Keywords: Challenge, Multinationals, Chinese market 1. Introduction Over the last few decades, the process of globalization has created unprecedented opportunities for global business investment and trade. Many multinational companies are attempting to expand their business international by many entry strategies such as joint venture and subsidiary. While China, with over 1.3 billion population and 9.6 million square kilometers (China Popin, 2008) has become a valuable land for foreign multinational companies. They try to enter the Chinese market by using many different strategies. For example, Siemens set up its representative...
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...December, 2008 An Analysis of Business Challenges Faced by Foreign Multinationals Operating the Chinese Market Jianlian Wu International Management, University of Nottingham Ningbo 315100, China E-Mail: zlixcwj1@nottingham.edu.cn, qqnamei@163.com Abstract China’s rapid economic growth has presented numerous opportunities and challenges for foreign firms there. Many large corporations have established a China centre to coordinate and control their operations in the country. As firms have increased their presence in China, their concerns are increasingly focused on implementing successful management practices and strategies. This article describes the challenges and difficulties that multinational companies faced in Chinese market. It analyses roles played by the human resource function in these China, culture differences, social environment and other factors. Keywords: Challenge, Multinationals, Chinese market 1. Introduction Over the last few decades, the process of globalization has created unprecedented opportunities for global business investment and trade. Many multinational companies are attempting to expand their business international by many entry strategies such as joint venture and subsidiary. While China, with over 1.3 billion population and 9.6 million square kilometers (China Popin, 2008) has become a valuable land for foreign multinational companies. They try to enter the Chinese market by using many different strategies. For example, Siemens set up its representative...
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...Introduction This report shall focus on China as the world’s largest emerging market, examining how managerial practice in China differs from Western practice. This report shall attempt to offer guidance to managers operating in China, taking into consideration issues outside their normal experience, for example government regulation and cultural differences. According to Justin Lin, The World Bank's chief economist, China, which became the world's second largest economy in 2010, may become the world's largest economy in 2030, overtaking the United States, if current trends continue. Taking this into consideration we can see that not only is China the world’s main production market but also the world’s centre for consumption. It is crucial that western businesses and managers understand how to do business in China and the issues they may face in management practice in an international and cross-cultural context. Political and regulatory considerations for doing business in China, Anti-gifting regulations in China The giving of gifts is an essential part of Chinese culture (Yang 1988). Personal and corporate gifts accounted for approximately 25% of luxury goods sales in China in 2012. Bain et al (2013) This sale percentage is now at risk as the Chinese government attempts to combat both the act of corruption and a negative view among the population of the behaviour of politicians. As part of the anti-corruption campaign, in July 2012, the State Council passed regulations...
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