[TEA-JAN-26] BBB4M I ...

Q1: How did Mr. Jones and Mr. Wang differ in their preparations?

Mr. Jones:

· Did thorough homework about all the details and knew exactly what specific info we needed

· Wanted specific answers to specific questions to create a proposal that is beneficial to both sides

· Value: fairness, trust, openness, transparency

Mr. Wang:

· Did thorough homework about the American company’s business philosophy, corporate culture, the people running the company, and their production technology

· Wanted to know the people better and to enter a long-term partnership built on mutual trust

· Subsequently, thought of Americans as people who don’t care for people and trust, but only the bottom line

Q2: How did the two people differ on their views towards all the banquets and meeting government officials at the beginning?

Mr. Jones:

· Initially, felt greatly honoured

· However, wanted to know the schedule and when negotiations would start

· Boss called every day to inquire about the negotiations

· Got impatient and wanted to get on with the negotiations

· Wanted facts and figures presented in formal presentations or documents

Mr. Wang:

· Invested a lot to make guests feel welcome to show they are valued: lavish dinners, meetings w/ gov’t officials

· Felt that people should value status and access to important people

· Got annoyed when the Americans kept asking to start negotiations and requesting to know the agenda b/c they don’t always have the schedule (the boss decides it)

· Felt undignified when Americans kept asking about the agenda to which they didn’t have the answers to

· Concerned negotiations to have started with the first hand-shake

· Believed that it’s their fault for feeling under time pressure; time is part of the game

Q3: How did the two people differ on their views regarding general principles?

Mr. Jones:

· Rehearsed a lot for the presentation; annoyed that they talked about the history of China instead

· Wanted to discuss detailed issues

· Didn’t understand why the CEO would want to talk about “general principles”

· Noticed that the communique barely mentioned American interests

· Later, the Chinese would refer to these general principles for every little detail of the contract to request concessions

Mr. Wang:

· Not impressed that the American CEO did not fly over for the meeting with our CEO à viewed as a sign of disrespect and insincerity

· Considered the meeting where the “general principles” for the joint venture to be agreed upon the most important part of the negotiations

· Thought Mr. Jones to be foolish for agreeing to everything we suggested

· How can you trust someone who ignores general principles which are based on trust?

· Only those with bad intentions hide behind paragraphs of a contract

Q4: How did the two people differ on their views with patience and making decisions?

Mr. Jones:

· Felt the Chinese used delays purposefully to put us under pressure

· Whenever we thought we had made progress, the Chinese had to double-check with their superiors and even gov’t and part officials and that could take forever

· However, when we took a bit longer than foreseen to get advice from our HQ, then this was unacceptable to the Chinese

· So much for mutual understanding!

Mr. Wang:

· Felt quite annoyed and almost insulted by the insistence of the Americans on discussing specific details, coming to an agreement, and moving on

· We value people: what’s the point of hurrying and discussing details when you haven’t got to know the other party well?

· People matter more because details will need to change over time, and we can’t adapt if we don’t have mutual understanding

· We can’t just make decisions at the negotiation table b/c we often need approval from both superiors and gov’t agencies; however, we can’t openly admit this because it makes us lose face

· Americans should understand that negotiating teams in China don’t have the autonomy that Americans have

Q5: How did the two people differ on their views regarding harmony and contracts?

Mr. Jones:

· Felt that the constant insistence on friendship and long-term trust was strange

· Whenever the Chinese offered something, they made a big story out of it, implying that it was only because of our friendship that they “offered” us this “favour”

· And whenever they wanted something we considered as out of question, they tried to pressure us with the hint that refusing would endanger our friendship

· As far as I am concerned, I have never concerned any of these people as friends

· We certainly have different interests during negotiations, but sorting them out is a question of professionalism, not friendship

· Harmony: the more we gave the Chinese, the more they wanted, and so we became more direct in communicating our limits

· Trust: the Chinese never seemed to fully trust what was written in a contract. They constantly asked who they should turn to if something went wrong

o That should be solved by required legal procedure

o But the Chinese insisted on adding clauses about arbitration through a third party, again emphasizing mutual understanding and trust

o But how can you trust someone who think about breaking the contract before it is actually signed?

Mr. Wang:

· We Chinese do business on the basis of personal relationships, friendship, and trust, NOT on the basis of some written document

· We give ourselves a long time before doing business with someone, but once we do, we stick to it and we would never give it up only because someone else would offer us a better deal

· Felt the Americans were rude when they couldn’t control their anger and maintain harmony

· To keep harmony is our intention to build up a long-term relationship

· The Americans only care for speed in negotiations

· The Americans said if something goes wrong, we have to go to court; how can you trust someone who wants to sue you if a problem comes up?

· A contract is like a marriage; you cannot foresee all eventualities and its success is based on trust

Q6: How did the two people differ on their views on Guanxi (relationships)?

Mr. Jones:

· The Chinese take connections and networks to the extreme and apply it to almost every aspect in society

· The Chinese suggested us to take the senior officials of the local planning approval commission out for a luxurious dinner; however, what the Chinese labelled as building connections sounded to us like corruption, and it is our company’s strict policy to not engage in any kind of such activities, no matter where in the world.

· Apparently, the recruitment and promotion policy of our Chinese business partner was mainly determined by guanxi; children of business partners and influential bureaucrats clearly received preferential treatment

o Once engaged in the joint venture, we would have to end all that and make sure only the best candidates got recruited or promoted

o What a mess to clean up!

Mr. Wang:

· Once again the Americans think about business in terms of abstract concepts rather than the people

· Everything comes down to give and take, there must be a balance b/ the favours you receive and do at the end of the day

· We like to do someone a favour, as we know the person will feel morally obliged to return the favour, and we also like to repay a favour ASAP so that we don’t feel indebted anymore

· Moral obligations are much smoother, flexible, and adaptable than contractual obligations

· We don’t like to sue; if you go to court, all parties lose face

· We are upset that the Americans equal guanxi with corruption; although corruption is a problem in China, the problem is because of abusive bureaucrats, not because of the importance we attach to mutual obligations which go back to Confucius.

· America might be at the moment the most powerful country in the world, but their values are not as universal as they might think

Q7: How did the two people view the American-Chinese interpreter?

Mr. Jones:

· Got a Chinese fellow in our negotiation team; he helped a lot by giving accurate interpretations and prediction of responses from the Chinese

· But when problems occurred, the Chinese began pressuring him to sort things in their favour

· He is a US citizen and is working for an American company; this is not China against America, this was a negotiation b/w two companies

· It’s ridiculous that the Chinese felt entitled to ask so much from him just because he’s Chinese

Mr. Wang:

· We interpreted the presence on the US-born Chinese man as a sign of sincerity and goodwill on the part of the Americans and their wish to establish a good relationship with us

· We saw him as someone who would finally appreciate how business is done here

· But instead of acting like a bridge b/w the two sides, he showed no sympathy whatsoever for us

· When he overheard us discussing in Chinese, he must have passed on what he heard to his bosses. The man we thought of as a friend turned out to be a spy. Not exactly the best way to establish trust.

Question 8: How did the two people differ on their views on honesty?

Mr. Jones:

· The Chinese are masters of deception and game play

· They told us stories which are not true.

· We were quite frank with what we wished to see to come out of the negotiation b/c we were convinced we were in a win-win situation and we wanted to build trust

· But we didn’t get anything back for our honesty

Mr. Wang:

· Life in society would not be possible w/out honesty, but in a business negotiation, you have to act strategically.

· To our great surprise, the Americans turned out to be unbelievably naïve with being overly honest

· If you start out at the weaker end, you need to compensate by being cleverer

· We considered when the Americans called us dishonest an insult; we were being clever by not revealing everything, not dishonest

· What the Americans mistook for honesty and frankness was often nothing but impolite and rude behaviour

Question 9: How did the two people differ on their views on face/shame?

Mr. Jones:

· The Chinese concept of “saving face” soon began driving us mad

· In a business negotiation, you need to be objective and look at the facts

· You need to be able to criticize and accept criticism

· They behaved childishly in the correction/mistake incident

· I don’t understand why they care about the formal way of communication instead of its actual content

Mr. Wang:

· The Americans were fixated on profits and efficient and showed no respect to people

· I made a point that was not well thought through, and Mr. Jones lectured me for 10 minutes about why I was wrong, thus causing me embarrassment in front of my entire team

· What’s worse is that Mr. Jones isn’t even aware that he made me lose face

· The Americans always think that their way of behaviour is the universal standard and everything else are just folkloristic oddities

· Additionally, Mr. Jones is 10 years younger than I am; how dare he treat me w/ so little respect!

Question 10: How did the two people differ on their views on haggling?

Mr. Jones:

· I was amazed by how the Chinese adopted the same strategy in business negotiation as in shopping on the street market

· They demand an unreasonably high price, and eventually drops to half after intense haggling. But why haggle when the parties could have settled for half the price right away?

· It took us a while to realize the satisfaction the Chinese take from asking and receiving concessions.

· The Chinese take pride in their bargaining ability

· They just don’t understand the concept of a positive sum game. They only think in terms of winning or losing

· How can you enter a JV if you are always perceived as the rival and not as the partner?

Mr. Wang:

· We are surprised how little negotiation skills the Americans had

· In negotiation, you should never reveal what you think

· The Americans reacted always so nervously if there was a delay in negotiation; however, we need approval from our superiors

· We just don’t have the decision-making authority the Americans are used to

· As they often reacted so impatiently, we delayed sometimes the process on purpose

· Skillful negotiation sis about ascertaining the genuine intention of the other side and preparing responding strategies to reap the most benefits from the final results; this is far more than “haggling” as the Americans refer to our tactics

Question 11: How did the two people differ on their views on saying “yes” and “no”?

Mr. Jones:

· We were really frustrated by how the Chinese negotiators were never prepared to give us a definitive answer: everything remained “subject to approval” by their superiors

· Even if we got what we thought a definitive agreement, the Chinese were not the slightest embarrassed to reopen a subject we thought was settled

· So a yes could mean anything, including “no”

· We also never got a clear no. it took us a while to figure out phrases like “this would be difficult” mean “forget it”.

· When we say yes, we mean it and they can count on it. But when we say no, they never took “no” for answer. I felt like being in a kindergarten!

Mr. Wang:

· Reality is too complex for simple “yes” or “no” answers; what matters is the overall picture

· Americans like to analyze. But we don’t analyze reality, we take a holistic view in order to comprehend the totality of the problem.

· Therefore, we couldn’t comprehend how upset the Americans became when we asked to revise a certain point

· Negotiations are a circular and iterative process, not a linear and sequential one.

Question 12: What mistakes did Mr. Jones make related to conversation topics?

Mr. Wang:

· We were just tired of the Americans lecturing us all the time. They kept making critical comments about everything, about our interpreter who had a strong accent which made it difficult to understand him, about people in the streets who seldom obey traffic rules, about air pollution in the cities and so on.

· At one point they even touched upon sensitive issues such as democracy, human rights, and Taiwan. How dare they mingle into our internal affairs; that is none of their business