Business Rivew for Cultural Negotiation

Topics: Confucianism, Song Dynasty, China Pages: 16 (4736 words) Published: June 22, 2013
Cultural Notes on Chinese Negotiating Behavior
James K. Sebenius Cheng (Jason) Qian

Working Paper
09-076

Copyright © 2008 by James K. Sebenius and Cheng (Jason) Qian Working papers are in draft form. This working paper is distributed for purposes of comment and discussion only. It may not be reproduced without permission of the copyright holder. Copies of working papers are available from the author.

Cultural Notes on Chinese Negotiating Behavior
James K. Sebenius (jsebenius@hbs.edu) Cheng (Jason) Qian (J Q I A N @ H B S . E D U ) Harvard Business School, Boston, MA USA December 24, 2008

“ He who knows his enemy and himself well will not be defeated easily.” — Sun Tzu, Art of War Western businesses negotiating with Chinese firms face many challenges, from initiating and smoothing communication to establishing long-lasting relationships and mutual trust, and from bargaining and drafting agreements to securing their implementation. Chinese negotiators can be at once warm hosts and friends and tough bargainers. Unique Chinese cultural elements such as complicated local etiquette, obscured decision-making processes, and heavy reliance on interpersonal relationships instead of legal instruments all add to the complexities of Sino-foreign business negotiations, and can make the process tiresome and protracted. Besides talking past each other, Chinese and western negotiators often harbor mutually unfavorable perceptions. Many westerners find Chinese negotiators to be inefficient, indirect, and even dishonest; Chinese negotiators frequently perceive their western counterparts to be aggressive, impersonal, and insincere. The way to decipher the Chinese negotiating style and bring about mutually beneficial results is to better understand the key elements of Chinese culture to which Chinese negotiators attune their business mentality and manners.

Cultural Roots of Chinese Business Negotiating Style
China has been undergoing rapid political, economic, and social change since the early 20th century. Its cultural heritage, guo qing (i.e. “special national circumstances” caused by frequent institutional and political turnovers), and international exposure/exchange are three intertwined and interacting factors (Exhibit 1) that have been the major determinants of Chinese business culture and negotiating style. First, traditional Chinese philosophies—largely Confucianism, Taoism, and war stratagems— that have governed Chinese society for two thousand years remain the core value system in Chinese business behavior today. They are manifested in such well-known characteristics of Chinese business negotiation as patience (a famous Confucian virtue), an orientation towards harmonious relationships (a fundamental concept of Taoism), and survival instinct (a motivation of war stratagems). ________________________________________________________________________________________________________________ Copyright © 2008 by James K. Sebenius and Cheng (Jason) Qian

Cultural Notes on Chinese Business Negotiation

Second, China’s contemporary guo qing has greatly affected the way business is conducted between Chinese and foreign firms. For instance, one element of China’s guo qing is lack of economic and social development due to foreign invasions and exploitation in the late 19th and early 20th centuries, and the military and political movements that ensued. Humiliation and trauma disposed the Chinese to deeply distrust foreigners, with the result that today Chinese businesses employ with foreigners hard, win-lose bargaining tactics motivated by nationalistic emotions. The Chinese deem it time for affluent westerners to pay back their ancestors’ debts. The backwardness occasioned by externally stifled economic and social development, on the other hand, generated a strong sense of urgency among Chinese leaders to catch up in science and technology, which accounts for the insistence of Chinese negotiators on technology transfer...
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