Negotiation Strategy and Styles Between the United States and China (Term Paper Sample)

NEGOTIATION STRATEGY AND STYLES BETWEEN THE UNITED STATES AND CHINA
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Introduction
There is a very huge chasm that exists between the american and Chinese cultures with respect to fundamental basic philosophical assumptions, economic systems, historical influences, tactics and business strategies as well as a number of business related understandings and interpretations. Such differences only create a challenge for achievement of successful results as a consequence of negotiations in businesses.
Culture
There are differences that come right from the education system. The education style differences have led the Chinese to be more overconfident as their education system does not allow them to ask as many questions as the Americans do. The Chinese are therefore overconfident and tend to draw hasty inferences from what is said during the negotiations which may not be warranted in many cases (Li, Chen & Yu, 2006). This provides an explanation why Chinese may have to be more careful so not to read much implied meaning into what is said and written that make up negotiations and instead they are known to rely more on literal interpretations.
Chinese Business Culture
The Chinese business culture is described to be composed of three components (Zhang, 2008). These components involve the influence of the national state on the culture which are namely the People’s Republic of China or simply referred to as the ‘PRC condition’. This has a reference has to do with the influence of the socialist government that is exerted on both trade and negotiations. The government of the republic has leverage and enjoys the rights of an owner, the rights and privileges of the majority of the large industries in the country.
The second component of culture of the Chinese is what is called the Confucianism with respect to moral cultivation regarding the importance of relationships, the respect for hierarchy as well as age, the place and importance of families as well as the adherence to avoidance of conflicts in business (Fang, 2006). The other cultural component is referred to as the Chinese stratagems which are 36 in number and they provide an insightful ways of reaching a desired goal. Some of these stratagems involve underhandedness and deception. As and when negotiators begin to use these stratagems, harmony can no longer prevail and at this point the negotiations may not go well (Zhang, 2008). These stratagems are also known to instead the optimisation of outcomes that are expected in the long term (Ford et al., 1996).
American Business Culture
For America, individualistic and capitalism cultures have a tendency to place much more emphasis on the needs of a person rather than the needs of the culture. In the american individualistic culture of business, immediate returns count more than anything else and therefore the managers try to seek to make the deals and go home (Ford et al., 1996). The american favour a fast closure of negotiations in order to allow time to get the next business deal and typical American negotiators or deal makers always aim to strengthen their personal interests and aggrandisement through the commissions and compensations that accrue out of the negotiations (Tinsley & Pilluta, 1998).
Communication
This takes the form of all types of communication whether verbal or non – verbal. The Americans are known to make more eye contact as compared to the Chinese and this is a way they show interest as well good will. On the other hand the Chinese show their respect by doing exactly the opposite as they avoid much eye contact (Pye & Pye, 1992). The Chinese believe that a lot of eye contact is taken as staring. This kind of disparity in body language may only lead to mistaking of attitudes and the intentions of the parties at the negotiating table. This in turn can lead to mistrust and yet trust is very crucial to any success that can got from negotiations when it comes to the Chinese.
Besides the idea of non verbal communication, Americans always strive to make sure that any communication between parties on a table are made very clear and understood by the concerned parties. During negotiations, miscommunication causes poor outcomes and sometimes emotional turmoil (Zhao, 2008). Sometimes nonverbal and personal relations may be more important than a signed contract because the Chinese law of contracts permits that the contracts be either, oral, written or in any other form. By the fact that most of the Chinese big companies are owned by the state, the negotiations sometimes take longer than the time expected and instant answers may not be available. This is the issue because the government may need to review any proposed contracts and sometimes a number of times they can allow their negotiators to sign them or otherwise make any formal agreements on the same.
It is also noted that the American contract law is as stringent as the Chinese contract law is flexible and yet contracts depend more on the existing relationships than the process of writing these contracts. The Chinese negotiators are known to have a tendency of keeping their options open and can abandon the proposed deal should a better option relating to the same open elsewhere (Friedman, 2007). It is very critical therefore to have a predetermined method when it comes to resolving any disputes that may arise during negotiations. This can be done and usually through application of clauses embedded at the end of every contract. The clauses always satisfy the Chinese needs to practice the Confucian aversion to the law and may also involve arbitration (Zhang, 2008). There are some questions that are considered taboo in the Chinese culture and therefore it takes some particular tacit knowledge to find out who to ask and what type of questions shall be asked. Particular questions should therefore be asked to certain individuals but not others and it should be clear which of the questions are likely to offend some of the Chinese members of the negotiating team.
Xenophobia and Xenophilia
While xenophobia is distrust of all foreign aspects with respect to ones culture, xenophilia is taken as lust to understand all things that are foreign to a given culture. The Chinese have an incline not to trust anyone and anything that is foreign because of their history of violent revolutions and seizures (Pye & Pye, 1992). They however have experienced new technologies with high standards of living of the west and in turn many of them have got mixed feelings when they pursue business opportunities with foreign counterparts because many of them seek to acquire western technology styles. China has recently transformed after their entry to World Trade Organisation (WTO) and their hosting of the Olympic Games in 2008. They have had their relationship with the west improve in terms of the economy, culture.
Economic Systems
The economic systems of the Chinese differ very much from the western economic systems and in particular the American economic system. The Chinese practice a socialist type of government and therefore a socialist economic system with focus on promotion of the well being of the entire national population (Ralston, Holt, Terpstra & Kai – Cheng, 2008). Socialist countries are known to have only one business for every industry owned by their states while the Americans practice the capitalist economic systems in which there are numerously several private owned businesses in a given industry fighting for the same market and customers. We can say that generally cultures from socialist countries like china tend to place priority on cooperation both within and business entities while for the capitalist cultures, emphasis is placed on value for competition.
Relationships in Negotiations
The American negotiating team believe that relationships can develop after an agreed contract and on the other hand the Chinese believe that a relationship is prerequisite for a contract. However, building relationships takes some time and it is also a drawn out process that can cause given negotiations to take time longer that what is expected. The Chinese espouse that personal relationship shall ultimately build trust and therefore should take precedence before a contract is agreed upon (Friedman, 2007). They also believe that strong relationship can lead to a good contract and on the contrary American negotiators believe that any partnering individuals and companies should show a strong commitment even though they show lose interest to the contracts.
In the Chinese culture, there are pre existing relationships that are expected to take precedence. Such relationships include relationships of family, relatives, schoolmates, subordinates and superiors (Friedman, 2007). These relationships are based on a hierarchical structure and on face and favour (Wong & Tam, 2000).
TACTICS
Chinese Negotiators
The Chinese negotiators are basically guided by the three cultural dimensions which are apparent in their system, namely the PRC condition, Confucian philosophy and the Sun Tzu stratagems which all play a leading influence in the negotiation processes. These three elements are all underlying concepts and they are very different from the ones that are applied by the western or American negotiators. The Chinese negotiators ask several questions and they also frequently interrupt the proceedings of the meetings (Ghauri & Fang, 2001). The Chinese often settle suspending items of the deals in a one package deal and they prefer only to make any concessions at the end of their discussions. Although reciprocation of concessions may not immediately follow the Chinese negotiating team always expect over time. The Chinese negotiator is also known to have several forms of negotiations they choose to apply to different types com...