This section includes information on guanxi, face and establishing common ground when negotiating.
When considering negotiating in China, there are stereotypes on both sides which need to be avoided. Regardless of which country you are from, the Chinese approach to negotiation compared to yours may often appear incompatible. For example, Americans often see Chinese negotiators as inefficient, indirect, and even dishonest, while the Chinese see Americans as aggressive, impersonal, and excitable. This article attempts to highlight some aspects of the Chinese business mindset to assist you in understanding your prospective Chinese partner, thereby creating the atmosphere within which a mutually beneficial business relationship can prosper.
Guanxi
Guanxi (personal connections) is part of the fabric of Chinese society. Personal relationships are central to every aspect of Chinese society, especially business. In the West, relationships grow out of deals. In China, deals grow out of relationships. The cultivation of guanxi is an integral part of doing business. For an in-depth look at Guanxi click here.
Interpersonal Harmony (Renqing)
The Chinese sayings, "A man without a smile should not open a shop, " and, "Sweet temper and friendliness produce money, " speak volumes about the importance of harmonious relations between business partners.
The Intermediary
Business deals for Americans in China don't have a chance without the intermediary. In the United States, we tend to trust others until or unless we’re given reason not to. In China, suspicion and distrust characterize all meetings with strangers.
Social Status
American-style, "just call me Mary" casualness does not play well in a country where Confucian values of obedience and deference to one’s superiors remain strong. The formality goes much deeper, however unfathomable Westerners may find it.
Holistic Thinking
The Chinese think in terms of the whole while Americans think sequentially and individualistically, breaking up complex negotiation tasks into a series of smaller issues: price, quantity, warranty, delivery, and so forth. Chinese negotiators tend to talk about those issues all at once, skipping among them, and, from the Americans’ point of view, seemingly never settling anything.
Thrift
China’s long history of economic and political instability has taught its people to save their money. The focus on savings, in business negotiations, results in a lot of bargaining over price, usually through haggling. Chinese negotiators will pad their offers with more room to maneuver than most Americans are used to, and they will make concessions on price with great reluctance and only after lengthy discussions.
"Face" or Social Capital
In Chinese business culture, a person’s reputation and social standing rest on saving face. If Westerners cause the Chinese embarrassment or loss of composure, even unintentionally, it can be disastrous for business negotiations.
Establish common ground
Before you begin, try and approach negotiations with the Chinese with an open mind, as well as desire to make things work. While one has to be careful about generalizing across cultures, experts agree that a problem-solving approach to cross-cultural negotiations is prudent. Always look for common interests or approaches upon which you can start to build bridges between the two parties.
But in focusing on your potential partner’s culture, don’t lose sight of him/her as an individual. It’s always best to learn as much as you can about his/her personality and communication style. Ultimately, if you can both move culture to the background and establish your own two-party way of achieving business success, then this is beneficial to all.
For more general advice on communicating across borders please click here
Source: "The Chinese Negotiation," Harvard Business Review, Vol. 81, No. 10, October 2003.
