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Chinese Negotiation Style Essay

To cite this document: Tony Fang, (2006),”Negotiation: the Chinese style”, Journal of Business & Industrial Marketing, Vol. 21 Iss: 1 pp. 50 – 60 Permanent link to this document: http://dx. doi. org/10. 1108/08858620610643175 Downloaded on: 08-10-2012 References: This document contains references to 76 other documents Citations: This document has been cited by 10 other documents To copy this document: [email protected] com.

Access to this document was granted through an Emerald subscription provided by UNIVERSITY OF GAVLE For Authors: If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service. Information about how to choose which publication to write for and submission guidelines are available for all. Please visit www. emeraldinsight. com/authors for more information. About Emerald www. emeraldinsight. com With over forty years’ experience, Emerald Group Publishing is a leading independent publisher of global research with impact in business, society, public policy and education.

In total, Emerald publishes over 275 journals and more than 130 book series, as well as an extensive range of online products and services. Emerald is both COUNTER 3 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. *Related content and download information correct at time of download. 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 re?ects 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, all depending on the level of trust between negotiating partners. Keywords China, National cultures, Negotiating, Management skills, International business Paper type Research paper An executive summary for managers can be found at the end of this article. The People’s Republic of China (PRC) has emerged as one of the most dynamic elements in the global economy (Lardy, 2002; Nolan, 2001; Panitchpakdi and Clifford, 2002).

During the 1990s, US$300 billion foreign direct investment (FDI) went to China. In 2002, China overtook the USA as the world’s largest FDI recipient (China Daily, 2003; Kynge, 2003). In 2003, the FDIs in China have increased by US$53. 5 billion in 2003. Today, some 500,000 foreigninvested enterprises including more than 400 large companies of Fortune 500 with numerous large projects and establishments are now operating in China, now known as “the workshop of the world” (Roberts and Kynge, 2003; Chandler, 2003).

Despite enormous Western interests in China, China remains a dream for many western companies (Studwell, 2002). One potentially pitfall that often jeopardizes SinoWestern commercial relationships is negotiation (Faure, 1998, 2000; Frankenstein, 1986; Lewis, 1995; MacDougall, 1980; Stone, 1992). A survey of Western companies trading with China has shown that Western managers considered negotiation strategy the no. 1 success factor for trading relationships with the PRC (Martin and Larsen, 1999). Indeed, negotiation is a fact of Chinese life.

Understanding of how the Chinese negotiate has both theoretical and practical values (Pye, 1982; Tung, 1982). The current issue and full text archive of this journal is available at www. emeraldinsight. com/0885-8624. htm China in the B2B marketing literature The B2B marketing literature with the European-pioneered IMP paradigm at its core (e. g. Ford, 2002; Gemunden et al. , ? ? ? 1997; Hakansson, 1982; Hakansson and Snehota, 1990, ? ? 1995; Moller and Wilson, 1995; Naude and Turnbull, 1998; Turnbull and Valla, 1986) has made tremendous contribution to theory building in marketing.

IMP’s commitment to marketing as interaction, relationships and networks has awakened the mind of management to the signi? cance of inter? rm relationships in understanding business markets. Despite its enormous achievement in theory building, IMP has been found to have dealt with “less and less international themes” (Gemunden, 1997, p. 9). In particular, culture, ? which is often referred to as “the business of international business” (Hofstede, 1994), seems to have been ignored in the IMP paradigm (Fang, 2001). This is an enigma given the business preoccupation with a rapidly expanding global market place.

By doing less international and culture-related research, IMP could be accused of losing touch with the real business reality (Fang and Kriz). If we put people and relationship in focus – the hallmark of the IMP mission – we have to face up to the reality that culture always exists in the background through its fundamental impact on the behavior of people who are at the centre of business relationships. More importantly, despite China’s growing importance in the global business landscape, China-oriented B2B studies are extremely underdeveloped.

Among the existing China-related B2B studies, Bjorkman and Kock (1995) pointed out the ? importance of relationship and networks building in the PRC business environment based on their investigations of Western ? rms in China. They also found that Chinese government is an imsportant player in the process of key business ventures in China. Fang (2001) studied the scenarios of inter? rm This study has been partially ? nanced by a research grant from the Jan Wallanders och Tom Hedelius Stiftelse Tore Browaldhs Stiftelse.

Journal of Business & Industrial Marketing 21/1 (2006) 50– 60 q Emerald Group Publishing Limited [ISSN 0885-8624] [DOI 10. 1108/08858620610643175] 50 Negotiation: the Chinese style Tony Fang Journal of Business & Industrial Marketing Volume 21 · Number 1 · 2006 · 50 –60 adaptations during a series of complex shipbuilding negotiations between Chinese supplier (shipyard), Western buyers (ship owners) and classi? cation societies. These studies have revealed the Chinese way of doing business as interpersonal-oriented, reciprocal, tactical, and networkembedded.

Surprisingly, although titles about how the Chinese way of doing business appear from time to time in various popular magazines and academic literature (e. g. , Blackman, 1997; Chen, 2001, 1995; Davidson, 1987; Faure, 1998, 2000; Pye, 1982, 1992; Graham and Lam, 2003; Shi and Wright, 2001; Tung, 1982, 1989), there has been no major work that deals with how the Chinese negotiate in business-to-business markets involving large industrial projects. Such projects have important consequences not only for China but also for Western ? rms’ long-term reputations in the market.

Large projects are complicated as a variety of actors, activities and resources including the Chinese government are involved and bureaucratic processes are to be dealt with. The lack of in-depth understanding of Chinese business negotiating style and how to do business with the Chinese in B2B contexts may have contributed to the phenomenon that despite more than two decades of dedication by the IMP to relationship and networks far too many Western managers are still failing to manage business relationships in the Chineseculture dominated markets (Bjorkman and Kock, 1995; Tung ? and Worm, 2001; Yeung and Tung, 1996).conducted (61 “Swedish negotiators” and 22 “Chinese negotiators”).

The Swedish companies involved in the research represent those very active Swedish companies that sell large industrial goods and/or undertake technology transfer to China in various industries. The Chinese organizations involved in this research are the Swedish companies’ Chinese negotiating partners (e. g. local and national industrial corporations and the relevant Chinese government agencies). The Chinese negotiator: a paradoxical personality Reality has painted a picture of the Chinese negotiator as bewilderingly complex.

I have met Western business executives who recalled their wonderful time in China. They said they loved to negotiate and work with the Chinese and were captivated by the harmonious Chinese style of negotiating. To them, the Chinese are sincere business gentlemen who worked at a very high level of mutual trust and respect. I have also talked to many other Western businesspeople. They narrated a very different story about China and said they hated to negotiate and work with the Chinese and were fed up with the tricky Chinese style of negotiating.

In their eyes, the Chinese are “immoral” businesspeople who can “cheat”, “lie”, or do whatever is necessary to knock you off balance. I was struck by this contradictory picture and was myself very much a part of this Chinese phenomenon some years ago. The Chinese negotiator is both a sincere and a deceptive negotiator. Unfortunately no previous studies provided a coherent framework to understand, systematically, the paradoxical personality of the Chinese negotiator. Although complex, Chinese negotiating style is not unfathomable.

The key lies in an in-depth systematic understanding of Chinese business culture. I own much of my inspiration to study Chinese business negotiating style to my previous life as a naval architect and seaman. One may marvel at the magni? cent sight of the collection of ships sailing across the sparking blue sea, wondering how anybody can design and operate such wonderful works, from meterlong small yachts to large tankers weighing hundreds of thousands of deadweight tons. Though complex, all vessels are, nonetheless, built to a technical speci?

cation that merely consists of three parts: deck, engine, electric parts. In the shipping industry, “deck,” “engine,” and “electric” are also the professional terms that de? ne the work of crews: The deck department is responsible for navigating and operating the vessel, the engine department is responsible for providing the propulsion for the vessel and maintaining all on-board machinery equipment, and the electric department is responsible for supplying the electricity and furnishing all electric and radio communications for the operation of the vessel.

A vessel is essentially a system in which deck, engine, and electric parts cannot be missing if the vessel is to be a vessel because each has its distinctive function; all three parts, however, are interrelated and interact with each other for the well-being of the entire vessel to navigate safely toward its destination. Having once been a seaman sailing from China to the West and vice versa under various conditions, I luckily derived a useful perspective from the sea: what are the deck, engine, and electric parts of life?

Embarking on my research on Chinese business negotiating style, I asked myself: what are the deck, engine, and electric components of Chinese business culture and negotiating style? 51 About this study The purpose of this study is to explore 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. The central question to be answered is: What is Chinese business negotiating style?

Other relevant issues to be addressed include: What is the philosophical foundation of Chinese behavior? What are the main components of Chinese business culture? What is the nature of Chinese negotiation strategy? What are the major managerial implications for doing business more effectively in China? There are two basic approaches to the study of cultures: emic (culture-speci? c) and etic (culture-general) (Triandis, 1994). This study uses an emic approach to analyze Chinese business negotiating style.

In other words, the study aims at penetrating the idiosyncratic nature of China’s sociocultural traits to seek explanations of Chinese business negotiating behaviors rather than using the established etic “dimensions” to frame these behaviors. The study is based on the author’s investigation of large Swedish corporations’ business negotiations in China since 1994. Sweden has more large companies per head of population than any other country in the world (Birkinshaw, 2002).

Sweden is also the home country for a number of world-class multinational corporations, such as Ericsson, ABB, Volvo, Saab, Electrolux, Atlas-Copco, Sandvik, Tetra Pak, Alfa-Laval, SKF, and IKEA. In 2003, China passed Japan as Sweden’s largest commercial partner in Asia. Some 220 Swedish ? rms with more than 300 establishments are active in various Chinese industries ranging from telecommunications, automobile, power generation, pulp & paper, to banking, management consulting, and home furnishing. The empirical objects (companies and interviewees) were selected purposely.

Eighty-three (83) personal interviews were Negotiation: the Chinese style Tony Fang Journal of Business & Industrial Marketing Volume 21 · Number 1 · 2006 · 50 –60 Professor Lucian W. Pye (1986, p. 74), the pioneer of the ? eld of Chinese business negotiation studies, observes: The Chinese may be less developed in technology and industrial organization than we, but for centuries [italics added] they have known few peers in the subtle art of negotiating. When measured against the effort and skill the Chinese bring to the bargaining table, American executives fall short.

Figure 1 The Yin Yang principle The Chinese style of negotiating is, therefore, not a recent invention but comes from Chinese culture and tradition. To understand the nature of Chinese negotiating style, we need to look at the philosophical foundation of Chinese thought and study Chinese business culture. Philosophical foundation Chinese culture has been molded by three philosophical traditions – Confucianism, Taoism, and Buddhism. Brie? y, Confucianism deals with human relationship, Taoism deals with life in harmony with nature, and Buddhism deals with people’s immortal world.

For the Chinese, Confucianism, Taoism, and Buddhism are philosophies rather than religions. Chinese people are less concerned with religion than other peoples are (Fung, 1966). Lee (1995, p. 12) describes the Chinese capacity to follow different philosophical teachings at the same time “a wonderful way of life” which makes the Chinese “intensely practical”: This is a wonderful way of life which some Westerners cannot understand – how can a person follow the teachings of three teachers who have always been regarded by many Western and even Chinese writers as the founders of the three religions of China – Confucianism, Taoism and Buddhism?

The fact is they are not religions, and that is why the Chinese can follow all three teachings, each for one aspect of his life. This foundation of Chinese culture has made the Chinese intensely practical . . . and given them great power for absorbing all things that are good and bene? cial, irrespective of their origin. Chinese culture has survived and has been enriched by this power. In other words, every universal phenomenon embraces both Yin and Yang, embraces both the black and the white, and embraces contradiction, paradox and change.

Yin and Yang are complementary if life is to be created, maintained, and developed in a harmonious way. The reversion of Yin and Yang, love and hatred, good and bad, fortune and misfortune is well illustrated by the Chinese proverb Sai weng shi ma an zhi fei fu (“The old man has lost his horse but who knows if this is a misfortune”). Behind the proverb is the story about the “old man” and his “horse” (Cooper, 1990, p. 39): [T]he poor old man . . . lived with his son in a ruined fort at the top of a hill. He owned a horse which strayed off one day, whereupon the neighbors came to offer sympathy at his loss.

“What makes you suppose that this is misfortune? ” the old man asked. Later the horse returned accompanied by several wild horses and this time the neighbors came to congratulate him on his good luck. “What makes you think this is good luck? ” he enquired. Having a number of horses now available, the son took to riding and, as a result, broke his leg. Once more the neighbors rallied round to express sympathy and once again the old man asked how they could know that this was misfortune. Then the next year war broke out and because he was lame the son was exempt from going to the war.

In this research, Confucianism and Taoism, the two indigenous Chinese philosophies are singled out as the foundation of Chinese thought. Buddhism, which was “imported” to China from India around the ? rst century, especially the Buddhist doctrine of “reincarnation” has enabled many Chinese to endure hardship, suffering and other vicissitudes in life and to look forward to a better life. The Chinese capacity to endure hardship and look to a better future, however, can also be well explained from the Yin Yang principle. Yin Yang Yin Yang is a Taoist philosophical principle of dualism, a cosmic symbol of primordial unity and harmony.

The Yin Yang image, probably the best-known symbol in the East Asia (Cooper, 1990), is illustrated in a circle being equally divided by a curved line forming the black and white areas (see Figure 1). Yin represents female elements such as the moon, night, water, weakness, darkness, mystery, softness, passivity, etc. , while Yang, male elements such as the sun, day, ? re, strength, brightness, clearness, hardness, activity, etc. Yin and Yang are not the two absolute opposing forces but rather the paired nature of everything in existence in the universe. More signi? cantly, there is a dot of black in the white, and a dot of white in the black.

The Yin Yang principle suggests that there exists neither absolute black nor absolute white. Opposites contain within them the seeds of the other and together form a dynamic unity (Chen, 2001). Yin and Yang depend on each other, exist within each other, give birth to each other, and succeed each other at different points in time. 52 The Yin Yang philosophy offers a dialectic worldview, a paradoxical yet balanced approach to life. It is the philosophical foundation that empowers Chinese people to follow different teachings and behave differently under different circumstances.

This is key to understanding the paradoxical and intensely ? exible Chinese style of negotiating. Chinese business culture The dynamics of Chinese business negotiating style is driven by Chinese business culture. I de? ne Chinese business culture as consisting of three fundamental components: the PRC condition, Confucianism, and Chinese stratagems. The PRC condition The PRC condition (Guoqing) refers to the distinctive characteristics of contemporary social political system and conditions of the People’s Republic of China (PRC).

The PRC condition involves variables such as Chinese politics, China’s socialist planned economic system, legal framework, technology development, great size, backwardness and uneven development, and rapid change (Campbell and Adlington, 1988; Child, 1990, 1994; Hsiao et al. , 990; Lockett, 1988; Porter, 1996). The central theme under the PRC condition is Chinese bureaucracy, characterized by centralized decision making, internal bargaining, bureaucratic red tape, and quick learning in the age of reform. In the light of dramatic transformations of Chinese society the diversity Negotiation: the Chinese style Tony Fang.

Journal of Business & Industrial Marketing Volume 21 · Number 1 · 2006 · 50 –60 and changing aspects of the PRC condition such as regional variation, the rise of non-state sectors, and the emergence of a new generation of Chinese managers warrant more attention. Confucianism Confucianism (Rujia) is a fundamental philosophical tradition that has shaped Chinese culture for 2500 years. Confucius (551479 BC ), a native of Qufu, Shandong province, is the founder of this philosophy. Confucianism is a form of moral ethic and a practical philosophy of human relationships and conduct (Tu, 1984).

It includes six basic values (Bond and Hwang, 1986; Child and Markoczy, 1993; Hofstede and Bond, 1988; Lockett, 1988; Redding, 1990; Shenkar and Ronen, 1987; Tan, 1990; Tu, 1984): Moral cultivation, importance of interpersonal relationships (concepts of trust, guanxi, renqing, and li), family orientation, respect for age and hierarchy, avoidance of con? ict and need for harmony, and concept of face. Chinese stratagem The Chinese stratagem (Ji) is a strategic component in Chinese culture (Chen, 1995; Chu, 1991; Faure, 1998; Mun, 1990; Tung, 1994).

A Chinese proverb “The marketplace is a battle? eld” re?ects a deep-seated Chinese belief that the wisdom that guides the general commander in the battle? eld is the same one that applies to business (Chu, 1991). Sun Tzu’s Art of War is the best introduction to the strategic Chinese thinking, or Chinese stratagems. Another widely read text is The Thirty-Six Stratagems which has crystallized the Chinese nation’s wisdom in dealing with enemies and overcoming dif? cult and dangerous situations (von Senger, 1991). Inherent in all Chinese stratagems or “trickeries” lies Sun Tzu’s (1982, p. 77) admonition: “To win one hundred victories in one hundred battles is not the acme of skill.

To subdue the enemy without ? ghting is the acme of skill. ” Chinese stratagems assert the superiority of using human wisdom and indirect means rather than resorting to direct pitched battle to cope with various situations and to gain advantages over the opponent. The Chinese negotiator will typically not force you into accepting the Chinese terms but rather signals that your competitors are waiting next door prepared to present a better offer! All Chinese stratagems used by the Chinese negotiator at the negotiation table (see list below) ? nd their philosophical origins in the Yin Yang and Wu Wei (“do nothing”) principles.

The 36 Chinese stratagems (Jis): Ji 1 Cross the sea without Heaven’s knowledge (Man Tian Guo Hai) Deceive the Emperor (“Heaven”) into sailing across the sea by inviting him into a seaside city which is in reality a huge camou? aged ship. Hide the deepest secrets in the most obvious situations. Ji 2 Besiege Wei to rescue Zhao (Wei Wei Jiu Zhao) Save the state of Zhao by besieging the state of Wei, whose troops are out attacking Zhao. Avoid the strong to attack the weak. Ji 3 Kill with a borrowed knife (Jie Dao Sha Ren) Make use of external resources for one’s own gain.

Ji 4 Await leisurely the exhausted enemy (Yi Yi Dai Lao) Relax and preserve your strength while watching the enemy exhaust himself. Ji 5 Loot a burning house (Chen Huo Da Jie) Take advantage of the opponent’s trouble or crisis. Ji 6 Clamor in the east but attack in the west (Sheng Dong Ji Xi) Devise a feint eastward but launch an attack westward. 53 Ji 7 Ji 8 Ji 9 Ji 10 Ji 11 Ji 12 Ji 13 Ji 14 Ji 15 Ji 16 Ji 17 Ji 18 Ji 19 Ji 20 Ji 21 Ji 22 Ji 23 Ji 24 Create something out of nothing (Wu Zhong Sheng You) Make the unreal seem real. Gain advantage by conjuring illusion.

Openly repair the walkway but secretly march to Chen Cang (An Du Chen Cang) Play overt, predictable, and public maneuvers (the walkway) against covert, surprising, and secretive ones (Chen Cang). Watch the ? re burning from across the river (Ge An Guan Huo) Master the art of delay. Wait for favorable conditions to emerge. Hide a knife in a smile (Xiao Li Cang Dao) Hide a strong will under a compliant appearance, win the opponent’s trust and act only after his guard is down. Let the plum tree wither in place of the peach tree (Li Dai Tao Jiang) Make a small sacri? ce in order to gain a major pro?

t. Lead away a goat in passing (Shun Shou Qian Yang) Take advantage of opportunities when they appear. Beat the grass to startle the snake (Da Cao Jing She) Use direct or indirect warning and agitation. Borrow a corpse to return the soul (Jie Shi Huan Hun) According to popular Chinese myth, the spirit of a deceased may ? nd reincarnation. Revive something “dead” by decorating or expressing it in a new face. Lure the tiger to leave the mountains (Diao Hu Li Shan) Draw the opponent out of his natural environment from which his source of power comes to make him more vulnerable to attack.

In order to capture, ? rst let it go (Yu Qin Gu Zong) The enemy should be given room to retreat so that he is not forced to act out of desperation. Toss out a brick to attract a piece of jade (Pao Zhuan Yin Yu) Trade something of minor value for something of major value in exchange. To capture bandits, ? rst capture the ringleader (Qin Zei Qin Wang) Deal with the most important issues ? rst. Remove the ? rewood from under the cooking pot (Fu Di Chou Xin) Avoid confronting your opponent’s strong points and remove the source of his strength. Muddle the water to catch the ?

sh (Hun Shui Mo Yu) Take advantage of the opponent’s inability to resist when they are put in a dif? cult and complicated situation. The golden cicada sheds its shell (Jin Chan Tuo Qiao) Create an illusion by appearing to present the original “shape” to the opponent while secretly withdrawing the real “body” from danger. Shut the door to catch the thief (Guan Men Zhuo Zei) Create a favorable enveloping environment to encircle the opponent and close off all his escape routes. Befriend the distant states while attacking the nearby ones (Yuan Jiao Jin Gong) Deal with the “enemies” one by one.

After the neighboring state is conquered, one can then attack the distant state. Borrow the road to conquer Guo (Jia Dao Fa Guo) Deal with the enemies one by one. Use the nearby state as a springboard to reach the distant state. Then remove the nearby state. Negotiation: the Chinese style Tony Fang Journal of Business & Industrial Marketing Volume 21 · Number 1 · 2006 · 50 –60 Ji 25 Steal the beams and change the pillars (Tou Liang Huan Zhu) In a broader sense the stratagem refers to the use of various replacement tactics to achieve one’s masked purposes.

Ji 26 Point at the mulberry tree but curse the locust tree (Zhi Sang Ma Huai) Convey one’s intention, opinions in an indirect way. Ji 27 Play a sober-minded fool (Jia Chi Bu Dian) Hide one’s ambition in order to win by total surprise. Ji 28 Lure the enemy onto the roof, then take away the ladder (Shang Wu Chou Ti) Lure the enemy into a trap and then cut off his escape route. Ji 29 Flowers bloom in the tree (Shu Shang Kai Hua) One can decorate a ? owerless tree with lifelike yet arti? cial ? owers attached to it, so that it looks like a tree capable of bearing ? owers.

One who lacks internal strength may resort to external forces to achieve his goal. Ji 30 The guest becomes the host (Fan Ke Wei Zhu) Turn one’s defensive and passive position to an offensive and active one. Ji 31 The beautiful woman stratagem (Mei Ren Ji) Use women, temptation and espionage to overpower the enemy; Attach importance to espionage, intelligence and information collecting. Ji 32 The empty city stratagem (Kong Cheng Ji) If you have absolutely no means of defense for your city and you openly display this vulnerable situation to your suspicious enemy by just opening the city gate, he is likely to assume the opposite.

A deliberate display of weakness can conceal the true vulnerability and thus confuse the enemy. The stratagem can also be used to mean something with a grand exterior but a void interior. Ji 33 The counter-espionage stratagem (Fan Jian Ji) When the enemy’s spy is detected, do not “beat the grass to startle the snake, but furnish him with false information to sow discord in his camp. Maintain high intelligence and alertness. Ji 34 The self-torture stratagem (Ku Rou Ji) Display one’s own suffering in order to win sympathy from others.

Ji 35 The stratagem of interrelated stratagems (Lian Huan Ji) A stratagem combining various stratagems into one interconnected arrangement. Deliberately planning a series of stratagems. Ji 36 Running away is the best stratagem (Zou Wei Shang Ji) Run away, when all else fails. Put up with temporary disgrace and losses to win ultimate victory. Running away to gain more bargaining power. To sum up, the PRC condition is a changing force whereas Confucianism and Chinese stratagems are enduring forces driving Chinese business negotiating behaviors and tactics.

Using shipping terminology, I call the PRC condition the deck, Confucianism the engine, and Chinese stratagems the electric parts of Chinese business culture. Together, these three different and often contradictory forces interact with each other to shape a dynamic Chinese negotiating style. like to emphasize that it is this “three-in-one” Chinese style that makes Chinese business negotiating style unique; it is this “three-in-one” Chinese style that perplexes many Western businesspeople in dealings with the PRC. “Maoist bureaucrat in learning” As a Maoist bureaucrat, the Chinese negotiator follows his government’s plans for doing business.

He gives ? rst priority to China’s national interest and never separates business from politics. He avoids taking initiatives, shuns responsibility, fears criticism, and has no ? nal say. He lacked international business experience but is currently moving quickly upward on the steep learning curve. He is a shrewd and tough negotiator because he is trained daily in Chinese bureaucracy in which bargaining is an integrated element (Davidson, 1987; Frankenstein, 1986; Lieberthal and Oksenberg, 1986; Pye, 1982).

His negotiating style can be “militant” given Mao’s doctrine: “A revolution is not a dinner party. ” He is the most “elusive” or “inscrutable” negotiator because of the changing nature of the PRC condition. His negotiation strategy comes naturally from his old culture, which can be called a mix of Confucian-style cooperation and Sun Tzu-style competition. “Confucian gentleman” Being a Confucian gentleman, the Chinese negotiator behaves on the basis of mutual trust and bene? t, seeking cooperation and “win-win” solutions for everybody to succeed.

He places high value on trust and sincerity on his own part and that of the other party as a human being. For him, cultivation of righteousness is far more important than the pursuit of pro? t.

He shows a profound capacity to conclude business without negotiating. He simply does not like the word “negotiation”; he prefers to use the words “talk” or “discuss”(as a matter of fact, the Mandarin words for negotiation is Tan Pan, which literally translates as “Talk” and “Judge”) because the Western notion of “negotiation” suggests somewhat disagreeable connotations of con?ict, which must be avoided at all costs. He is reluctant to involve lawyers in face-to-face discussions.

He is well mannered and generous; a mere handshake or exchange of business cards can signify a lifelong commitment. He views contracting essentially as an ongoing relationship or problem-solving process rather than a one-off legal package (Deverge, 1986; Kindel, 1990; Seligman, 1990; Shenkar and Ronen, 1987; Withane, 1992). He associates business with guanxi, friendship, and trust.

He is group-oriented, self-restrained, conscious of face, age, hierarchy, and etiquette, and suspicious of “non-family” persons. He can be a daunting negotiator, for example, when he revisits old issues in the light of a changing market situation to seek mutual bene? ts for both parties and when he bargains toughly in the interests of his “family. ” His negotiation strategy is characterized basically by cooperation. “Sun Tzu-like strategist” As a Sun Tzu-like strategist, the Chinese negotiator sees negotia.


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