Guanxi in Jeopardy – Case Study

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Case study on US and Chinese culture in business life and negotiations.

Sales and negotiations class
2011
Guanxi in Jeopardy – Case Study

Intercultural Research
In order to find out in what way the American culture of Electrowide as opposed to the Chinese culture of Motosuzhou will influence negotiation attitudes and positions, some intercultural research needs to be done beforehand. In assessing these cultures at an informal level as well as a business or formal perspective, I need to become aware that not all actions or behaviours can be directly explained by cultural differences alone. Sometimes it is a party’s incapability of correctly identifying its position or leverage points within the negotiation which causes rudeness or misunderstandings. Given that in this case (Electrowide VS. Motosuzhou) a linguistic barrier has to be overcome as well, makes finding the right conclusions even harder. Therefore I first need to have studied both cultures intensively in order to come up with a revised preparation for a new negotiation.

China
To start with I will talk about The People’s Republic of China. With its 1,300 million inhabitants, ancient history and innumerable traditions and customs it is perhaps the most difficult culture to study and to understand as a Westerner. Nevertheless it is a country that has intrigues us all over the course of history. Giving us many great inventions in the past and probably also in the future, as it is manifesting itself in becoming the world’s biggest economy. The question remains, how did China change so rapidly in the last 20 year considering their high level of Autarky it ones had? But more importantly, with the country becoming more liberated and open, we want to know how much of their original way of thinking is still left in their culture today.

First of all for the Chinese, the honour (or “Mianzi”) is the first thing to take into account when talking about their company culture. It’s upmost important for the Chinese to ‘save face’. Even in the middle of a successful negotiation, they can leave the negotiation table for a disrespect made by the other party, such as asking too personal questions or disrespecting a person’s social status or hierarchy levels. These hierarchy levels are very clear in everyday life but even more in business; everyone has a clear understanding of its obligations, and individuals are not thanked for carrying out their duties or tasks. In addition they will not discuss about any issue they are not completely sure they can talk about. Instead of saying that, they may begin giving vague answers because they think it is impolite showing that they don’t have the position to talk about it.

This preservation of honor and clear view on hierarchy or social status makes Chinese business men to be very reluctant against out standers. Also the way that Chinese ‘make friends’ is very different from the Western way and shows that they are very careful in not losing face. They need to be very sure of your amount of goodwill and effort you want to put into the relation before they see you as ‘friend’. It sometimes takes them years to see that and let you in into their social circles. Therefore being invited for dinner at a Chinese business men’s home is a great deal for both parties and can be seen as the first step in establishing a good relationship. Continuing this relationship needs to be done by upholding a pleasant and harmonious atmosphere at all time. This takes lots of patience for the Westerner but should never be over rushed. Once they see you as a friend they will treat you differently in a way that they want to care for you and feel embedded in you. They will trust you more and show their humbleness and gratitude and they will expect the same from you. This amount of devotion and responsibility to each other goes far beyond our Western level of friendship. It is hard to put in words this intangible knowing of each other that you will...
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