Guanxi in Jeopardy Responses

Question 1:1) The biggest difference I see is with the individual vs. collectivist aspect of the Hofstede model that can

affect negotiating. China is a highly collectivist society which means that they act in the interests of groups rather than themselves. When negotiating, a person from the US might want to get straight to business while a Chinese person will want to build personal relationship before proceeding to negotiating. The massive difference in this aspect could also call for misunderstanding. A Chinese might perceive an American acting in the interest of him/her self rather than in the interest of a group or the company. They won’t be willing to negotiate with somebody that is acting in their self-interest. Also while negotiating, an American might single out a person from the group, which can create conflict because the group is part of one’s identity in China.

2) Another big difference that can impact negotiating is that of short vs. long-term orientation. The US is a very short-term oriented country whereas, China is long term oriented. This means that when it comes to negotiating, the Chinese might be thinking far into the future long term impacts while the Americans would only think with a short term mentality. A difference in performance reports will also be in conflict. The US produces reports on a quarterly/short term basis whereas China would be producing them on a yearly basis. This has to be accounted for while negotiating.

3) Power distance will also impact the negotiating style. China thinks that is acceptable to have inequalities between people whereas in the US all people are equal in the eyes of the law. When negotiating, a Chinese executive might not see it just for a US person to ask someone of lower rank for his or her thoughts. They might start thinking why the American is asking this person. A US company might also want to consider who they send over to negotiate. If the Chinese see that that person is of a lower rank, they will not want to negotiate with that person.

4) The fourth difference that would impact the negotiating styles and strategies is that of indulgence. China scores really low on this, which means that they might be cynical or pessimistic when negotiating. They don’t like to indulge themselves because it is restrained by the societies’ norms. The US will show greater indulgence, like visibly celebrating a great deal they just made, which can come off as offensiveness to the Chinese.

5) The last but not least difference that will impact negotiating styles is that of uncertainty avoidance. The Chinese like to avoid uncertainty more than the US Americans. This means that while negotiating, they might ask for more details than the US can provide. The US will be more tolerant of uncertainty in a negotiation while China wouldn’t be as much.

Question 2: a)

Team Member Standpoint Pros Cons

Deng Zang

Business B.S. in Business Administration

Factory Director (10 Years)

Poor English

Cultural Knew his culture well Wanted to build

strong relationships with the US team

Took their time as they are culturally raised but maybe they should have prepared for the western culture as well and acted accordingly

Ai Hwa Chew Business Taken some post high school classes

Serious, Diligent &

High school graduate He is “one who lost educational

opportunities”

Guanxi in Jeopardy Responses

competent deputy director

Well respected

Poor English Distributed no agenda for the

business meeting Changed the meeting place and time

the night before at 11pmCultural He understood his

culture and acted accordingly

Didn’t understand Western gift giving and got irritated when Top refused

Didn’t attempt to understand the western culture

Wang Yoo

Business B.S in Accounting Fluent in English Minister of Finance

for 15 years

Rigidly Commissioned the objectives for Motosuzhou with an unwillingness to change

Cultural Cousin of Deng Zang Didn’t understand the American context in terms of language even though he was fluent in English

Tom Sherman

Business B.S. in Mechanical Engineering

Highly knowledgeable and technical about industrial operation

32 years at Electrowide

Plans to retire at the end of the year Went behind the back of the Chinese

and created a contract IN English.

Cultural Accepted the gift (eventually)

Played along with the Chinese culture in the beginning even though he didn’t understand the meaning behind it all

Only international experience was a symposium in Canada

Didn’t understand the Chinese way of negotiating

Decided not to apologize for irritating Hwa during gift giving (the Chinese were hearing no but the “heart” aspect wasn’t there)

Grew restless and forced smilesBarb Morgan Business B.S in Psychology &

Computer Science Speaks

conversational Chinese

Project manager of a venture in Sweden

Seeking overseas assignment to cope with divorce….not to help the organization

Cultural Affable with the host initially

Enjoys a night of “quyi”

Took offense to the male counterparts not interacting with her

Enthusiasm diminished after being offended by the males not engaging

Guanxi in Jeopardy Responses

in conversation

Mark Porter

Business B.S in Finance Well rounded in

experience but fast paced

‘Fast tracker’ rotating jobs every 1.5 years

No international experience

Cultural type-A personality focused on excelling

no matter what the cost or sacrifice

Young comparatively Stopped attending events Didn’t show interest or appreciation Preoccupied thoughts with business

related matters when on outings

b) I do not believe either team was suitable for the negotiating task. I would also say that the Chinese team had less preparations to make since they were the hosting country and still were not able to. The US team was not suitable at all but just because China was the meeting place, does not mean that China shouldn’t have done research on western culture and ways of doing things. The Chinese team pushed their customs and acted according to their culture without considering how the Americans did things. Their team was older and very much rooted with the Chinese culture. I think because they were the hosting country, they were more suitable than the US team in comparison. The US team was not suitable at all. They had one person (Tom) with no international experience and highly technical/knowledge based person as the leader of the task. One person on the team (Mark) was very fast paced, young comparatively, and again had no international experience. The one person (Barb) with some international experience was working to cope with a divorce and had other responsibilities within the company while on the assignment. They all hadn’t researched the country, their culture, their language, their business etiquette or anything. They saw an opportunity and they took it but they didn’t make any preparations other than develop their business plan. Both teams could have prepared better and came to a middle ground in terms of understanding each other’s culture because that is what negotiation is all about; coming to a middle ground.

Question 3:1. The US team started thinking that the Chinese team was going to accept the terms and that they

understood the concessions by the expressions they were giving. The US team was using the self-reference criterion where they were using their own culture to assess the Chinese culture. The Chinese not asking questions led the US team to believe that they understood because that is what the norm is here. Obviously this was a big misunderstanding because it turned out that they had many questions and disagreements between the two.

2. There was a language barrier between the two teams as well. Not understanding the language, one of the five elements of culture, can create many misunderstandings. For example, when the Chinese team nodded or said yes, they were not agreeing with the terms, they were simply being polite and saying “ok, we get it.” They value relationships more than confrontational disagreements that might ruin the relationship.

3. Another cultural conflict was that of gift giving. In China, gift giving is a sign of trust, strengthening of a relationship and part of their culture. It is a mean of communication for these things in China. However, Tom was unable to understand that and rather refused “tactfully” to accept that gift until Ai Hwa seemed to get irritated. Again this is a culture mistake that the US team failed to recognize and it could have hurt the relationship as well as make thing awkward.

Guanxi in Jeopardy Responses

4. In the beginning when the US team was touring China and visiting their scenic places also created a culture misunderstanding. Tom wanted to get right down to business and thought that’s how the first couple of weeks would be spent. They were really disengaged and disinterested in the outings. He again failed to acknowledge that the Chinese like to build relationship through these outings/dinners because they are a collectivist society. They would like to get know the people/company and trust them before they even start discussing business matters.

5. The last misunderstanding between the two teams was that of not knowing that the Chinese like to demand at extreme points to start off and then lay off a bit by bit. They are not the ones that get straight to the point in what they want and what they can potentially give away to the other team. The cultural reason behind this is that the Chinese are a high context society. With this misunderstanding, the US team decided to keep arguing and then to visit a lawyer to draft a contract, which was not the right way of going about it.

Question 4:Tom’s strategy to present the contract to Ai Hwa’s team was inappropriate from the cultural and business standpoint. From the cultural standpoint, he broke the trust they had between the two teams. The Chinese team was completely unaware that Tom and his team were going to go to a US based law firm. The Chinese team had spent weeks trying to build this relationship of trust and it was broken in a matter of hours. They took offense to that because this is not something you do when negotiating. Another thing inappropriate from the cultural standpoint was that of being direct when he entered the room for the meeting with Ai Hwa. Tom didn’t ease the Chinese team into the contract and then present it. The Chinese are never direct about anything because they are a high context society. They will never be straightforward like Tom presenting the contract immediately. The last thing to take into account is that contracts are not enforced in the Chinese culture. It is the relationship that matters there, not a piece of paper outlining what they can and cannot do. It was clear that Tom didn’t know this aspect of the Chinese culture. From the business standpoint, it was inappropriate because nothing was agreed upon. They were still discussing and Tom took the initiative to make a contract based on what the American team wanted. That is not what negotiating is about. It is about fulfilling the needs of both companies and coming to a middle ground with their concessions. Another inappropriate thing about the strategy was that the contract was in English and only in English. Tom didn’t bother to take into account that the Chinese team primarily didn’t know English. This was extremely inappropriate and offensive. Not only did he break their trust, but also he managed to be offensive and only create the contract in a language they didn’t understand. The last thing to that was inappropriate is that within the contract, Tom thought of every possible contingency and addressed them in the contract. He left no room for negotiation/loop holes/questions, which is what they were there for. To negotiate, ask questions, determine a middle ground and a way of implementing those that they agreed on. There was never a consensus on how the agreements would be honored. Tom took it upon himself and decided a extensive detailed contract in English was the way to go about it.

Question 5:1. I think the first thing both teams need to do is research both cultures. Who did what, How did they do it,

and more importantly why did they do it. This is a starting point to salvaging the negotiation. The both teams need to understand what went wrong and how and why so they can avoid making the same mistakes again.

2. Once they do this, the American team should send them a letter of apology and ask them to meet again for dinner as their treat. At the dinner, treat them appropriately and even buy them a gift while apologizing for their actions.

Guanxi in Jeopardy Responses

3. Try to build that relationship that the Chinese party seeks. Go out on outings and have dinners and regain their trust. The second time around is going to be much harder so the American team should really prepare for each thing. They should be careful not to rush into business matters and avoid being direct with them. The American team should be aware that this time the process is going to take much longer than the first time. Some sacrifices will need to be made if this negotiation is really going to work out.

4. When the relationship is established once again and the time is appropriate, both teams should sit down and discuss task related information. Maybe before even starting that, establish how the agreements that will be made are going to be honored. This is crucial to in the beginning rather than the end when all agreements have already been made. Also, both teams should try to understand each other’s viewpoints on the task related information.

5. The American team should now understand that when the Chinese are nodding, they are not agreeing with the terms they stated.

6. Afterwards, persuade each other on what each team wants. Don’t take it upon each other and assume that one team can do it better than the other. Already know which concessions you are willing to give up and which ones you want for sure. Knowing this beforehand will be beneficial when it comes to negotiating.

7. Lastly, when agreements are made, both teams should already know how those agreements are going to be honored. Implement that. Whether that’s a contract or something else.

8. Once the negotiating is done, don’t pack up and leave. Celebrate with the Chinese party and leave on a good note to strengthen to relationship. Always keep in mind the relationship aspect when making every move and act accordingly.

9. Enjoy the benefits of the deal!