Since globalization, if a company wants to grow bigger, it often means expanding its market internationally. Although it is becoming easier to establish partnerships abroad, even on the other side of the world, however the cultural problems remain. We can not behave with a Chinese like we would behave with an American. This is why before starting any negotiation, it is therefore essential to know the customs of the country concerned. By not respecting them, you could offend your future partners and make the negotiation fail. That is why you should be careful. In addition, the Chinese have a culture very different from ours. The errors could be numerous.

Although the negotiation technique is universal, communication and proper behavior depends on the country. This is why for a successful negotiation, the knowledge of these cultural differences is needed! This allows both parties to build a good relationship and carry out their partnership. According to the work based on a study of more than 70 countries made by Geert Hofstede (a Dutch psychologist specialized in social psychology), a model is to be followed to compare one country to another in the context of intercultural negotiation. He found out 6 main points:

 

 

Here’s the comparison of China (blue) and USA (purple) according to Hofstede’s main points

 

  • Strong or weak hierarchical distance

When negotiating with businessmen from a country where these distances are strong (such as China), you should always pay attention to hierarchical positions.

  • Individualism or collectivism

In an individualistic society (the USA for example), the negotiation will tend to go fast. Businessmen will go straight to the point. Though in a collectivist society, human relationships will take over business.

  • Male / female dimension

This factor is particularly interesting for conflict situations. The study shows that male-dominated societies will prefer force demonstrations and confrontation. While more feminine societies (France for example), would look for solutions and “win-win” compromises.

  • Degree uncertainty control

The question is whether the partners of a country are easily ready to accept changes (a new way of working for example) without being afraid of the unknown. Or on the contrary if they prefer to stay in their comfort zone and follow the traditions.

  • Long term or short term orientation

This is valid both for the negotiation itself (the time spend for talks) but also at the level of the investment (is your partners in a hurry to see the rewards of your partnership or not).

  • Pleasure or moderation

This dimension particularly impacts the general atmosphere of a negotiation (positive, optimistic or the opposite) and will depend on the degree of control of the impulses and the needs of every actor.

 

To compare the countries of your choice you can go to the official website of Geert Hofstede to quickly and easily see the differences between cultures! Here are some concepts to know and respect for a successful negotiation with Chinese.

 

doing business with Chinese people

One of the crucial elements to know before doing business with Chinese people is the notion of respect for the hierarchy. As soon as you meet someone, you have to know who you are talking to. This is why business cards are often exchanged, as it is important to know the position of the person in the company. An intermediary can thus be here to present the different businessmen.

After this step, it’s time to start getting to know your partner. For this, the Chinese enjoy talking awhile having a banquet.

They have no trouble mixing private and professional life. It is also a time to create what they call “GuanXi” (关系). It is a very important term in China, which means to make a “network”. The Chinese will only deal with people they consider to be part of their “GuanXi” because they like to know their partners and they need to trust them before doing business with them. But be careful not to approach the “老板” (big boss) if you are at a much lower position. It will be necessary to go through several intermediate persons (of lower position) previously, so they can introduce you themselves to him.

Once trust is established, it’s time to negotiate.

Another notion is importance to know: “丢脸” (losing face). This is the worst thing that could happen, because Chinese culture attaches great importance to social harmony. Humiliating your partner, even unintentionally, can have serious repercussions. You must always show modesty and respect towards your interlocutors. The Chinese themselves can also express themselves in an indirect and ambiguous way, as they do not to want to embarrass you or create a conflict. Especially when they want to refuse your proposal, this will never be clearly stated. The Chinese are very “pacifist” in their negotiations (influence coming from Confucianism) and are generally like to take their time. But this is changing due to the increasingly rapid pace of the international market economy, especially in large cities. So you have to be careful about how you behave and express yourself. It is important to know how to listen, be patient and speak clearly to avoid misunderstandings.

 

 

Finally, when signing a contract, it is advised to start with a friendly discussion. It may seem futile, but the Chinese really value those “small-talks”. This proves that you are interested in them and not only in the strictly professional relationship. It should also be known that the Chinese may not have the same vision as for the application of the contract. The Chinese may tend to be more flexible about the application of the terms of this one. But as the legal system grows stronger (and will continue to), laws are getting more and more respected.

 

Guest post by Mike (IworkinChina)

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