Running Had: CROSS CULTURAL NGOTIATION

Cross-Cultural Ngotiation: Amricans Ngotiating a Contract in China

Nam:
Cours:
Tutor:
Dat:

CROSS CULTURAL NGOTIATION 2

Cas summary
Cultur is bttr charactrizd as a spctrum rathr than a trm with on st dfinition.
Th spctrum is a mixtur of idas, thoughts, and flings on on nd and bhaviors, valus, and
blifs on th othr. To think of cultur is to think of an individual. No two groups hav an
idntical cultur and ach prson within a group has an individual prsonal cultur.
Whn working with cultural diffrncs, a natural starting point is to find a workabl
dfinition of "cultur." Slcting a singl dfinition of cultur is difficult.

Cultur is both

prvasiv and yt largly invisibl. Cultur is lik th watr around th fish or th air around
popl Cross-cultural diffrncs oftn rsult in bhavior that is intrprtd by a prson from
anothr cultur as strang, if not insulting or offnding. Howvr, as cross-cultural xprt Paul
Pdrsn liks to say, "Bhaviors hav no maning until thy ar placd into a cultural contxt."
Unfortunatly, almost all of us intrprt th bhaviors of popl from othr culturs as if thos
popl wr from our own cultur. Th rsult is that cross-cultural diffrncs crat a high
dgrs of friction and frustration. Thy mak us qustion whthr th othr party is "playing
fair" and whthr w want to crat or continu a businss rlationship with th prson from th
othr cultur.
Th two partis clarly cam to th mting with a common communicativ purpos: to
dvlop businss collaboration btwn th two countris. Howvr, th Chins dlgation
smd to hav an additional purpos, to stablish furthr trust or rlationship bfor signing any
businss dals. This diffrnc in communicativ purposs ld to furthr clashs in ach of th
ngotiation procsss.
In this cas, two groups of a Chins and an Amrican company find thmslvs at th
hight of cross cultural ngotiation frictions ach group accusing th othr of th failur to rach

CROSS CULTURAL NGOTIATION 3

a constructiv conclusion. Mr. Jons lading th Amrican tam and Mr. Wang lading th tam
from china found thmslvs ntangld in a myriad of problms all rsulting from ach tam
failing to apprciat thir cultural diffrncs. Failing to rcogniz th importanc of diffrncs
across th tabl can ruin rlationships. Th rason for failur was that both tams ndd to fl
apprciatd and that thy wr acknowldgd as a prson. Ignoring cultur may oftn angr or
hurt th othr ngotiator and thrfor, trust cannot b stablishd.
From Mr. Jons rmarks, it is vidnt that h had conductd quit a fw background
rsarch of his ngotiation countrparts. Indd, h was awar of th fact that th Chins ar
known for bing tough ngotiators. Howvr, what h xprincd on th ground was somthing
diffrnt and far from what h xpctd. In his opinion, h discovrd that Chins ar not
tough, which would hav bn fin with him, but rathr thy just don't know how businss is
don ths days and thy just try to chat and play unfair gams whrvr possibl. Mr. Wang
also contnds that h knw about Amricans always bing dirct to th point of rud nss and
that indd h had to put up with a lot of just uncivilizd bhavior. From th word go, this
implis how th Chins tam had a ngativ prcption about businss countrparts from
Amrica vn bfor th ngotiations commncd.
In ordr to undrstand why a prson is racting in a crtain way, it is important to b
awar of prsonal rsrvations and inhibitions that prson may hav ntring into th ngotiation.
This is somthing that both tams nvr did. Som of th situations a ngotiator facs may b
risky bcaus h is ntring unfamiliar trritory. In this cas, th Amricans wr ntring an
unfamiliar trritory and thus wr pron to things that thy had not ncountrd bfor. Th
ngotiation may consist of groups, issus, and gographical aras that th ngotiator has nvr
yt addrssd or ncountrd. A ngotiator nds to b cognizant of his motions and what part

CROSS CULTURAL NGOTIATION 4

thy will play. For xampl, nrvousnss as a rsult of ths unfamiliar aras may caus on to
los sight of th goals of th ngotiation. By first attmpting to tackl th nrvousnss, a
ngotiator can us ngativ motions as a tool in th ngotiation bcaus it will liminat a factor
that could hav takn on by surpris. Minimizing potntially harmful factors ovr which thy
could xrt control would hav promotd succssful ngotiations.
Th Chins approachs
Confucianism. Confucianism mphasiss th rsponsibilitis of individuals toward on
anothr within fiv important human rlationships: thos btwn rulr and subjct, husband and
wif, fathr and son, brothr and brothr, and frind and frind. Confucianism also advocats a
social ordr that valus duty, loyalty, honour, filial pity, rspct for ag and sniority, and
sincrity. Confucianism concrns obdinc to, and rspct for, supriors and parnt, duty to th
family, loyalty to frinds, and th hirarchy at work. In our cas,it was vidnt thatth Chins
tam couldnt just tak dcisions at th ngotiating tabl,as thy oftn ndd approval, not
only from thir

supriors but also from crtain govrnmnt agncis and this took tim.

Confucianism is mor concrnd with rightousnss and human hartdnss than profit. This
xplains why Chins ngotiators do not rush into formal contract discussions, but tak
considrabl tim to build up trust with thir ngotiation partnrs.
Fac. Fac is dscribd as a projctd social imag in a divrs rang of communicativ
situations. Mor spcifically, fac implis status and prstig and is a mark of prsonal dignity.
This is linkd to Confucianism and powr dimnsion in Chins socity. Th Chins wr so
proccupid with th concpt of fac and wr vry snsitiv to having and maintaining fac in
all th aspcts of thir social and businss lif.

CROSS CULTURAL NGOTIATION 5

Guanxi. Guanxi, th Chins trm for rlationship, is on of th most important Chins cultural
traits. It is also translatd as prsonal contacts or prsonal connctions. Th concpt of
guanxi is not uniqu to China, but it is closly rlatd to th fiv rlations of Confucianism as
part of th socio-cultural tradition in China. To th Amricans, this soundd vry much lik
corruption.
Amrican approachs
Intgrativ orintation: Th Amricans had an intrgrativ, co-oprativ orintation
to th ngotiations. Th fundamntal structur of this approach is such that it allows both
sids to achiv thir objctivs. Th Amricans intgrativ way of ngotiating was basd on
four principls: sparating th popl from th problm, focusing on intrsts rathr than on
positions, invnting options for mutual gains and insisting on using objctiv critria.
Monochronic approach to tim: th Amricans wr always punctual to appointmnts
and mtings. Thy always finishd th mtings rapidly. Th Amricans thrfor can b said
to hav had an conomic tim concpt whil th Chins wr not tim conscious.

Conquring and Harmonizing: Amricans uphold th spirit of conquring whn thy

ngotiatd, whras th Chins focusd on a natural way of harmonizing. It was also vidnt
from th cas that Amricans lov to rtort, and this probably originatd from thir lgal systm
that is basd on two opposing sids. Thrfor, thy did not giv in asily.
Mistaks both partis hav committd
Th Chins rluctanc to put thir cards on th tabl, intransignt bargaining,
vasivnss, dilatorinss, and radinss to walk away from th tabl without agrmnt rally
frustratd thir Amrican partnrs. This was a big mistak as it cratd a prtty bad imag about
thmslvs spcially as far as honsty was concrnd. Amricans howvr should hav bn a
littl bit mor snsitiv to mak th whol procss a smooth on. Th Amricans tndncy to

CROSS CULTURAL NGOTIATION 6

bypass stablishd channls of authority was also as anothr mistak as thy couldnt just com
to a forign country and start imposing thir own policis from thir country. Anothr mistak
that th Amricans did was that thy talkd too much. Instad of doing this th Amricans could
hav trid to ask purposful qustions. It could also hav bn hlpful to tak on point at a tim
with pauss for th Chins to think and rspond.
Th Amricans wr also vry pushy. Slling is a procss of building rlationship with
lots of patinc. Thy could hav takn advantag of vry opportunity by building rlationship
first. At last thy could hav trid to b calm and mditat for th bst. Anothr Mistak that th
Amricans did was to b disrspctful. To thm it could hav bn normal whn Jons corrctd
Wang ovr a crtain rror but to th Chins, that was bing disrspctful. At bst, th Amricans
could hav askd prcis qustions at th right momnt.
Th Chins did a mistak by assuming that th Amricans must do businss by thir
trms. Thy faild to harmonis thir idals and instad choos to rmain quit and rigid ovr
som vry contntious issus. Sinc th Chins flt that thy had not yt stablishd mutual
trust and guanxi with th Amricans, thy wr rluctant to spak in front of popl thy
considrd strangrs. This was vidnt whn thy ngagd th Amrican-Chins intrprtr
from th Amrican tam in a Chins dialct. This was a big mistak as it just rodd th trust
btwn th two partis.

Charactristics of a succssful cross-cultural ngotiator

1. An apprciation & undrstanding of th 'Big Pictur' as wll as th ability to plumb th
dtail.

CROSS CULTURAL NGOTIATION 7

Probably th most critical charactristic of world class ngotiators is thir ability to
undrstand what it is that all partis to th ngotiation want. Th ability to s past th 'dmands'
of your countrpartis and rally undrstanding why it is that thy ar ngotiating with you is an
ssntial lmnt that will hlp you to undrstand what common ground xists btwn partis.
qually important is to undrstand all th individual lmnts that will nsur th adoption and
implmntation of an agrmnt by all th partis. Th ky tool at your disposal to facilitat an
undrstanding of both th big pictur and th supporting dtail is th ffctiv us of qustioning.
2. Th ability to gnrat crativ options.
What a lot of popl would lik to dscrib as businss ngotiation is oftn no mor than
on dimnsional haggling about pric. Mor than 50% of ngotiators struggl to crat or
uncovr options outsid of this on dimnsion. Th ability to think crativly is not somthing
that coms naturally to all of us but fortunatly thr ar som tools that xist to assist us in
gnrating crativ options.
3. Trating othrs with dignity & rspct at all tims - occupying th 'high moral ground'.
A common misconcption is that in ordr to b a tough ngotiator on has to b a rud
ngotiator. On can b tough on th issus whilst trating th popl involvd with dignity at all
tims. Th rul of rciprocity stats that w will rturn to othrs th form of bhaviour xhibitd
towards us. It is folly to think that w can run roughshod ovr othr without thm rsorting to
mans to rclaim thir dignity. Vry oftn victims bcom aggrssors.
5. Know and undrstand your own ngotiation strngths & waknsss.

CROSS CULTURAL NGOTIATION 8

It is important to continuously dvlop your skills. Not unlik world class prformrs in
profssional sport, world class ngotiators spnd significant tim analysing th way that thy
ngotiat - particularly undr prssur. It is only onc you hav built an undrstanding of your
own waknsss & strngths that you can implmnt masurs to improv your ngotiatd
outcoms. World class ngotiators nvr stop rfining thir skills bcaus thy ralis that on
can nvr rach prfction. Th world within which w ngotiat today can oftn sm much
mor complx than th largly monocultural and closd socitis of ystryar.
How both sids could hav prpard bttr
Broad Outlins - Ky Dtails
Both sids should hav prpard both th broad outlins and ky dtails. Most popl
rmmbr to prpar for th ky dtails. Aftr all, ths ar important to th ngotiation procss.
Th two tams should hav also askd thmslvs if thr wr othr dtails that might hav
bn important from thir rival cultural prspctiv. In broad outlins too, this is whr thir own
natural assumptions could hav lad thm to miss somthing. Knowing thir limits and th
broad outlins could hav hlpd thm to navigat any cultural diffrncs mor ffctivly
should thy hav found that thy wr not on th sam boat.
Th ngotiators should hav familiarizd thmslvs with th ntir contxt and
background of thir countrparts and to th spcific subjcts to b ngotiatd as wll as with
diffrncs in cultur, languag, and nvironmnt. Th ladrs should also hav had an
undrstanding of thir own ngotiating styl. Th ladrs should hav found out as much as
possibl about th kinds of dmands that might hav b mad, th composition of th opposing

CROSS CULTURAL NGOTIATION 9

tam, th rlativ authority that th mmbrs possssd. Morovr, thy should hav dvlop a
profil of thir countrpart and considr diffrnt variabls during this procss as wll

CROSS CULTURAL NGOTIATION 10

Rfrncs
Hsu f. 1985, Amricans and Chins: Passag to Diffrncs. Honolulu: Univrsity Prss of
Hawaii

Chang, Lih-Ching (Jun, 2001). How to Ngotiat with Chins. Hawaii Confrnc on
Businss. Univrsity of Hawaii, USA.

Chaptr Cas, "Cross-Cultural Ngotiation: Amricans Ngotiating a Contract in China," on

pags 594-601

Ralston, D.A., Gustafson, D.J., lsass, P.M. tc, (1992). astrn Valus: A comparison of
managrs in th Unitd Stats, Hong Kong, and th Popls Rpublic of China, Journal of
Applid Psychology, 77, 664-671.

Victor A., 2002. INTRNATIONAL NGOTIATION: ANALYSIS, APPROACHS, ISSUS

d., 2d. d.