Negotiating with Chinese Business Partners

I think the EDC directors had good intentions in hiring Anne and felt they had done their research.  Unfortunately, there were several things that attributed to the misunderstandings of the negotiations that Anne could have helped direct them by advising them on negotiation techniques .  The EDC directors did only hired her as a translator and I do think she did that job appropriately. It seems she could have made herself more valuable by sharing some cultural differences before they were in the meetings. Especially since EDC directors had briefed her and she knew exactly what the meeting was about and how much time, effort and investment had gone into the negotiations thus far.   For example, recommending to them to bring a small a gift or advising them to be  ready for aversion tactics.

         There are eight clear elements in the Chinese culture for negotiation as stated in the article “The Chinese Negotiation”.  Anne was hired to translate, she also should have shared the negotiation style of the Chinese, especially the Zhongjian Ren aspect.  Zhongjian Ren is overcoming distrust of foreigners, it was Anne's job to help find out details of the negotiation process and help create the best situation for the optimal outcome.  One thing would be finding out specific links to immediately help the EDC directors begin to  build a relationship with the officials. Moods and body language are also a very important part of Chinese negation, I can’t help but wonder if her being a woman, had a detrimental effect on negotiations, or lack thereof.  

Anne could have guided them on the specific techniques of negotiation in China. For example, they should have started with an informal meeting at a high end restaurant, building relationship and Zhongjian Ren, with gift giving.  Pre scheduling another meeting at a more formal place two days later for signatures. There are not the same timelines in China as in the United States, there is no hurry or reason for expedition.  If personal connections, Guanxi, is established there is a reciprocity that happens.  All of this failed.

The EDC directors weren’t sincere in their relationship building.  From their point of view there didn’t need to have a relationship, just a signature.   The EDC directors also should have done more research into finding out if they needed two signatures or just one, who actually had the authority to sign.  The EDC directors could have sent one director out to meet the city officials, planning another meeting to meet the other two directors at another informal lunch meeting at a later date to really work on relationship building. If there was an established relationship with the city officials the counter offer of Malaysia may not have ever happened.  The EDC directors had been building relationships with Zhang Gan and Wen Diao, not the city officials.

Another very important element in Chinese culture for negotiation is Shehul Dengji, this has to do with the social status of individuals.  In the case study,  it clearly indicated when Anne was turned away from the building, in the rain, her social status was not accepted. Confucianism has shaped the Chinese culture for 2500 years.  The Confucian hierarchical values of obedience and loyalty, casual and informal relationships are not viewed as appropriate. This could have contributed to the counter negotiation of the inappropriate bribery ask for a trip to the Maldives.

         Although traditional Chinese negotiations use the 8 elements,  the blatant bribery could indicate corrupt government officials.  Most Chinese care more about a long term relationship than a quick bribery.  These officials were not following the aspects of Confucianism that involve, trust, interpersonal relationships, moral cultivation, avoidance of conflict and need for harmony.  They were deliberately trying to manipulate the EDC directors.  They could have simply been teasing them, using this as a delay tactic, but highly not likely.

There are so many aspects that could have been done to prepare for the meeting.  Possibly researching the difference between men and women in the work space regarding culture in China. Researching cultural difference is at utmost importance as we have discussed in class.  Another option could be flying the officials to the US instead of flying to China for negotiation.  Therefore removing many of the cultural complications that muddled the negotiation.

Preparation for a plausible negative negotiation. For example, knowing that the Chinese use stalling behaviors. The officials were very late to the initial meeting, then decided to move the meeting to an informal lunch setting.  Drinking and smoking at lunch instead of keeping the atmosphere professional and business like.  They threatened EDC directors, stating they would not sign if they did not comply to meet them in two days, then extending the meeting another 5 days out.  Using these tactics, the longer the EDC directors stay, they more money they are investing in the project.  They feel the pressure for the deal to happen because of time and money already invested.  The EDC directors should have been prepared for counter offers.