The Impact of Culture in International Business Negotiations between China and the USA - Essay Example

? The Impact of Culture in International Business Negotiations between China and United s of America INTRODUCTION There is a form of incompatibility with negotiation approaches used by China and America, since Americans have a perception that Chinese are incompetent, deceitful and oblique during their negotiations. On the other hand, the Chinese have a notion that Americans are antagonistic, impersonal and excitable in their negotiation. However, these differences are attributed to their cultural background; thus, there is need to understand these differences to avoid misunderstanding between individual for establishment of mutual business relationships. There is a significant contribution made by culture during international business organizations, and this has an influence on the transactions (Jiachu, Shifi & Li, 2000). Nevertheless, the paper will explore substantial factors that affect the business negotiations between America and China, which will be based on an evaluation of the cultural differences between these countries. CULTURE Interdependence between countries, people and businesses establishes the significance of national cultures. In fact, culture refers to a pattern of behaviors, norms, convictions, values, which are socially transmitted among the community members. Therefore, culture has a substantial influence on people’s thinking, communication and behaviors; thus, becoming a serious source of influence to the aspect of negotiations (Salacuse, 2004). Moreover, culture and nationality among different countries are not the same, while culture is distinct; thus, the paper will focus on the Chinese and American culture. There is an immense influence on Chinese culture by traditional philosophies such as Confucianism and Taoism. These philosophies focus on virtual like patience, harmony in relationships and instincts of survival (Faure, 1999). Americans have been identified by their individualism, though they are also known for their value for networking and information. WAYS CULTURE CAN AFFECT NEGOTIATIONS Negotiating Goal People of different culture have varying objectives of engaging in negotiation, there are those who focus on reaching a deal and singing a contract, while others perceive this as a commencement of a long-term association and this emanates to a contract. For instance, in China, there is a focus on creating an interpersonal relationship before establishment of a commercial transaction. In fact, these behaviors are attributed to values of Confucianism; thus, Chinese people have a conviction that a business relationship should be based on interpersonal relationship (Graham & Lam, 2003). Establishment of interpersonal relationship is aimed at fostering a relationship attributed to trust during pre-negotiation stage in China. On the other hand, Americans are known to lay lot of emphasis on the signed contract, since numerous negotiators in America are lawyers (Demers, 2002). In fact, there is a virtue acquired by the law students from their schools, which entail engaging in a negotiation with an objective of acquiring a signed contract. Moreover, the Americans consider reaching at an agreement as the final stage of the negotiation; thus, they have a great adherence to the details. Furthermore, Americans have a tendency of rushing to the preliminary stage of a negotiation, which creates a high chance of misunderstandings, and it leads to adverse effects to the process of negotiation. Negotiating Attitude There are forms of attitudes attributed to parties engaging in a negotiation, which are a win-lose or win-win attitude. However, negotiators with a win-win attitude have a perception of a negotiation being a collaborative effort aimed at ensuring that parties have established a mutual beneficial arrangement (Bazerman, Curhan, Moore & Valley, 2000). However, negotiations with parties having a win-lose attitude are focused on ensuring that at the end of the negotiation one party has lost. Nevertheless, Americans and Chinese share a similar attitude of win-win in their negotiations. Personal style: Informal or formal There is a substantial influence of culture on the personal styles of negotiators, whereby those with formal styles address their counterparts using their titles with avoidance of a discussion regarding their personal matters. On the other hand, there are negotiators with informal styles due to their culture focus on establishing friendly relationships (Chang, 2002). In this case, Americans are known to be informal than Chinese, whereby there are situations where they address each other by their first names, despite being acquaintances. Chinese are very formal, and this is taken to be a sign of respect; in fact, people who use their first names are those who have known each other since childhood or spouses, thus, Chinese negotiators are advised to respect formalities in their foreign cultures. Communication: Direct or indirect Preference of communication styles is based on cultural differences, whereby there are cultures use direct and basic methods of communication, while others prefer complex and indirect methods such as application of facial impressions, figures of speech and body language. Americans are known to use the direct styles of communication and this involves honesty and trustworthiness, while Chinese are indirect and this is attributed to vagueness and ambiguity (Sebenis & Qian, 2008). For instance, with Chinese value a smile as a means of communicating in a negotiation, though Americans takes that as an expression of cooperation or denial, happiness, anger, or distrust, where it is used as a mask or disguise in a certain situation during a negotiation. Sensitivity to time There are different attributes associated with different situation and time among cultures; for instance, Chinese are known to be slower in negotiation, while Americans are fast due to their convictions that time is money (Faure & Ubin, 1993). Therefore, Americans are always in a hurry to complete their negotiations; thus, this can as a reflection of the aims to engage in a negotiation. Americans have a tendency of reducing formalities in order to get their contracts signed, while Chinese use a lot of time in pre-negotiations (Mole, 1998). Chinese are focused on getting to know their counterpart in order to determine the chance of establishing a long terms business relationship (Salacuse, 1999). In this case, Americans effort to shorten the negotiation process is perceived by the Chinese ad a way to conceal something; thus, resulting to mistrust. Emotionalism: High or low There are cultures, which can show their emotions during negotiation, while others are known to conceal, for instance, Chinese hide their emotions during a negotiations and they always focus on maintaining their composure (Bjerke, 1999). The act of hiding their emotions is aimed at avoiding the chance of embarrassing negotiations. On the other hand, Americans are straight to the point and they do not hide their emotions even in situations where they might embarrass their counterparts. These have a conviction that all facts should be presented prior to signing a contract. Team Organization: One leader or Group Consensus Organization, judgment and procedures of the negotiation team is substantially influenced cultural values, whereby there are cultures that emphasis on individual and others focus on groups (Chua & Fujino, 1999). Americans are known to have a great preference for a negotiation that is headed by one individual; thus, the leader is charged with the responsibility of making the final judgment. On the other hand, Chinese are known to have a great preference for a negotiation process with authority resting with members of the negotiation team; thus, their decision-making is based on a consensus (Chang, 2003). However, the Chinese approach creates confusion in determining the person with decision-making power. Therefore, negotiation process in China may take a longer process due to slow decision-making among the negotiation team (Boettcher, 2001). Nevertheless, this can serve as a reflection of the importance of hierarchy and interdependence in the Chinese culture that stems from Confucianism. CONCLUSION There is great significance associated in understanding the culture of a counterpart before engaging in an international business negotiation. In fact, this can serve as a way of avoiding problems that can arise during these negotiations. The paper has focused on discussing the differences in the negotiation approaches of Americans and Chinese based on their cultural differences. On the other section of the paper, effects of culture in the negotiation process have been explored in a way that fosters understanding of the negotiation behaviors of Chinese and Americans. References Bazerman, M. H., Curhan, J. R., Moore, D. A. & Valley, K. L. (2000). Negotiation. Annual Review of Psychology, 51, 279-314 Bjerke, B. V. (1999). Book review: Business decision making in China. Asia Pacific Journal of Management, 16(1), 178 Boettcher, J. B. (2001). The China predicament. Multinational Business Review, 9(1), 27-42 Chang, L. C. (2002). Cross-cultural differences in styles of negotiation between North Americans and Chinese. Journal of American Academy of Business, 1(2), 179-188. Chua, P., & Fujino, D. C. (1999). Negotiating new Asian-American masculinities: attitudes and gender expectations. Journal of Men's Studies, 7(3), 391 Chang, L. C. (2003). An examination of cross-cultural negotiation: Using Hofstede 97 framework. Journal of American Academy of Business, 2(2), 567-570 Demers, J. (2002). Negotiating skills can be learned: An increasing number of Canadian universities are offering courses on the art - and the science - of negotiations. CMA Management, 76(8), 33 Faure, G. O., & Ubin, J. Z. (1993). Culture and negotiation. Newbury Park: Sage Publications Faure, G.O., (1999). The Cultural Dimension of Negotiation: The Chinese Case, New York: GDN Graham, J.L. & Lam, M.N. (2003). 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