Thursday, March 14, 2013

China Business Negotiation - Understanding the Culture

Business negotiation in China can be very a frustrating exercise for western business executives. The Chinese business culture and deliberate style of negotiation is vastly different from the more direct western approach.It is easy to lose perspective and patience and ultimately fail in reaching the desired agreement.

European and American business men and women are accustomed to a straight-forward style of negotiation. Both parties generally agree on the objectives and attempt to take a direct path to reach those goals in the shortest time possible.

Business negotiations in China require a much more patient approach. The Chinese culture makes the people suspicious of strangers, both Chinese and foreign, but especially foreign business men and women. The initial meetings in any negotiating session in China may seem to be going nowhere, but this time is required for establishing relationships and, ultimately, the trust of the Chinese participants. Personal relationships are the key to business success in China.

The final decision maker in a Chinese company is the man at the top. He will get involved in issues at a level lower than most western CEO's would ever consider. Unless dealing with a small company in China, with an owner/manager, the decision maker usually will not participate in any negotiating sessions. Final positions of the Chinese side on any proposal will be reached at private meetings and then returned to the negotiating table later. Hence, the term "we"ll consider it" will be heard frequently and means "we must talk to the boss."

There are several cardinal rules in negotiating in China:

* Don't say or do anything to embarrass the Chinese participants and cause them to lose "face."

* Don't point your finger or any sharp object such as a pen or pencil at anyone.

* Don't lose your temper and raise your voice.

* The lead Chinese negotiator gains "face" from his boss if he wins the negotiation. Structure your negotiating position to help him do so.

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Successful business negotiation in China requires patience and appreciation for the Chinese business and social cultures. The Chinese will not adapt to western ways soon and failure to
understand and adopt their practices can doom an otherwise successful venture.

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