Investigation of Mexican and Chinese Negotiations: Culture’s Effect on Negotiating with Chinese and Mexican Negotiators

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Investigation of Mexican and Chinese Negotiations: Culture’s effect on negotiating with Chinese and Mexican negotiators Research Report

By
Richard Ardito

For
BUS 545 – Global Business Management - California Baptist University Dr. Marc Weniger – Professor
Abstract
The purpose of this paper is to examine the similar driving forces between Chinese and Mexican cultures and how those forces direct the negotiation tactics of Chinese and Mexican nationals. The goal is to determine what the major driving force is for Mexican and Chinese negotiators and to give foreigners an idea of what to expect and how to successfully negotiate among Mexican and Chinese cultures. The research focuses on the similarities in the cultural priorities of the People’s Republic of China and Mexico, and seeks to make connections between these priorities and the negotiating practices of business people in these countries.

Introduction
Mexico and China are both high context cultures that place a high value on power, relationships, and trust, yet their negotiators behave differently in relation to these concepts. The Chinese tend to negotiate with the goal of gaining the most favorable terms for their organization, while Mexicans concentrate on relationship building and attempt to strike a fair deal (Miles, 2003; Elahee & Brooks, 2004; Metcalf, Bird & Shankarmahesh, 2006). What strategies are used and what cultural norms are the driving forces of these strategies? What is it about these two cultures that cause their business negotiations to take quite different paths when dealing with the same primary values? Negotiation Strategy

Chinese negotiators are greatly influenced by the concept of Ji, or stratagems which were originally documented by Sun-Tzu in The Art of War (Ghauri & Fang, 2001; Miles, 2003; Fang, 2006). They are often described as schemes which the Chinese use to deal with all kinds of situations in order to gain an advantage, either psychological or material, over their counterparts (Ghauri & Fang, 2001). The thirty-six stratagems are highly valued in Chinese culture, so much so that youth are taught to memorize the stratagems and understand the lessons they teach in grade school (Fang, 2006). These stratagems give the Chinese “go to” responses for almost any situation where one would need to intellectually battle a counterpart such as in war, politics, or business negotiations (Miles, 2003). Chinese negotiators also tend to be extremely price sensitive (Miles, 2003); they believe that prices offered by foreigners often contain a lot of cushion and try to squeeze out as much of that cushion as possible (Ghauri & Fang, 2001; Graham & Lam, 2003). They concentrate on gaining the most favorable agreement as it relates to equity share, contribution of each party, management control, technology, and price (Ghauri & Fang, 2001). Mexican negotiators, however, tend to rely on relationship building. They are careful and tend to avoid risks whenever possible (Volkema, 1998; Salacuse, 1998; Metcalf, Bird, Shankarmahesh, 2006), as they tend to lack trust of people and government (Hackley, Waters, & Woodside, 2006). Mexican negotiators were less likely to use dubious tactics in negotiating when they had an established relationship (Elahee & Brooks, 2004). However, they were still more apt to proceed with caution and try to build relationships with their counter negotiators, rather than rely on schemes in order to gain a favorable negotiating position (Ritchie, 1997; Volkema, 1998). Both Chinese and Mexican negotiators place a high value on trust; however, they each treat that value differently. The Chinese use stratagems to scheme or trick those who they do not trust, while Mexicans prefer to build relationships to promote current and future negotiations. Whereas Mexican negotiators are willing to leave the negotiation table with a stronger relationship, but no signed contract or...
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