BBDM 2063 CROSS CULTURAL STUDIES

Tutorial 6-7
Case Study
Negotiation Styles: Chinese versus American
Although some argue that it is as difficult to identify the American negotiation style, several
characteristics have been mentioned in different studies. Americans are frequently associated
with arrogance (傲慢); however, this quality may not be a strictly American characteristic,
simply often associated with them due to their unique status as the ‘global hegemon’（全球霸
主）. They are often viewed as ‘risk-takers’ due to their willingness to make decisions on their
own. They are also known to be impatient, which stems from the American tendency to get
straight to the point and go for the goal. They focus on the contract and usually find anything
outside the boundaries of the contract superfluous (多余的).

China has a long and rich history that has shaped the minds, values, and beliefs of its people.
Face, which refers to a person’s reputation, is a crucial factor in Chinese negotiating style. The
importance of guan-xi is founded on the collectivist feature of Chinese culture, where the
welfare of the group is valued higher than the welfare of the individual. Further, hierarchy is
strictly followed. Moreover, the Chinese think in terms of the whole, so will address all issues
in the negotiation simultaneously with no apparent order, and seemingly not resolving anything.
All this consumes a tremendous amount of time to conclude negotiations with the Chinese.
Finally, after signing the contract, the Chinese will demand more than is stated in the contract.

Conflicts and misunderstandings arise due to conflicting significance placed on relationship

building, and the manner in which information is exchanged. Further, a failure to understand
the decision-making mechanism leads to unnecessary tension and frustration. Finally, failure
to recognize the nature of the relationship forged from successful negotiations to deal with the
post-agreement demands will cause tension amongst the parties.

Despite the many cultural differences between China and the USA, successful cross-cultural
negotiations is possible by adhering to three key points.
a) Building personal relationships, particularly in China.
b) Being patient, therefore, understanding of the decision-making process and hierarchical
interpersonal system of China.
c) Being conscious of face, which oftentimes simply means being aware that more is being
communicated than what is uttered, and being mindful of how the message is delivered
to the other party.
Required
Relate the facts given in the case to characteristic of Hofstede’s cultural value dimensions.

Hofstede’s cultural dimension index 【Index: >50,high; <50, low】

Country PDI IDV MAS UAI LTO

United States 40 91 62 46 29
China 80 20 66 40 118

Individualism
Individualism/Collectivism (IDV) is used to measure the level of interdependence of a society
maintains among its members. The term of “I” and “We” is important to be characterized by
individuals in the society. In Individualist societies individuals are concern on themselves and
their direct family as it were.
Example from case:
1. Americans are often viewed as ‘risk-takers’ due to their willingness to make decisions
on their own.
 Americans are “me” centred, they view themselves as independent of groups
and who think about themselves first.
2. Americans can say to be are low-context communication prevails because they are
impatient, they to tend to straight to the point and go for the goal. Besides, Americans
focus on the contract.
 ‘Time is MONEY’ for Americans. Therefore they will be impatient and straight
to the point during negotiation. They are good in time management, they do one
thing at a time. They want their work to be done perfectly.
Collectivism
In collectivism society, the term “We” is focused, Chinese view themselves as belonging to
one or more groups. They work together to support an entire group which include the extended
and work family, co-workers, organizations
Example from case:
1. China has a long and rich history that has shaped the minds, values, and beliefs of its
people.
2. The importance of guan-xi founded in China and welfare of the group is valued higher
than the welfare of the individual.
 Chinese are focused on the goals of the groups over their own personal goals.
The social network is primary source of information.
3. Face, which refers to a person’s reputation, is a crucial factor in Chinese negotiating
style.
 Chinese can be viewed as high-context communication prevails because they
emphasis on face-saving. They respect other’s reputation by not straightforward
pointing out other mistakes immediately during negotiation.
4. Chinese think in terms of the whole, so will address all issues in the negotiation
simultaneously with no apparent order
Power distance
Power distance is defined as the cultural dimension that reflects the extent to which a less
powerful community accepts and endorses authority which is distributed unequally, power
differences and status privileges.
Example from case:
1. Hierarchy is strictly followed.
 China is high power distance nations because there is dependence of
subordinates on bosses. A centralized authority generally designates the
procedures for employees to follow and inequalities in rewards are easily
accepted. As a result, Chinese will follow exactly what their boss assign.

Time Orientation

Long term orientation

Example from case:
1. The importance of guan-xi founded in China and welfare of the group is valued higher
than the welfare of the individual.
2. Chinese think in terms of the whole, so will address all issues in the negotiation
simultaneously with no apparent order
 Chinese emphasis the investment in lifelong personal networks, which is
“guanxi’’. They are future oriented people, they working toward long term
future goals.