Impact of the Differences between Chinese and Western Culture on Business Negotiation.doc

毕业论文(设计)Impact of the Differences between Chinese and Western Culture on Business Negotiation 1. Introduction22. How negotiation works32.1 Concept of negotiation32.2 Fundamental principles of negotiation42.2.1 Separating the people from the problem42.2.2 Focusing on interests but not positions52.2.3 Inventing options for mutual gain52.2.4 Insisting on objective criteria63. Culture and its impacts on negotiations73. 1 Comparison between Chinese and western cultures73.1.1 Values73.1.2 Individualism and collectivism83.1.3 “Showing Yourself” and “Being Modest”93.1.4 Family103.1.5 Nationalism103.2 General impact of culture on business negotiation113.2.1 Negotiation goal113.2.2 Sensitivity to time143.2.3 Form of agreement163.2.4 Decision-making183.2.5 Willingness to take risk204. Recommendation for Chinese negotiators214.1 Cultivating cultural awareness and sensitivity214.2 Making sufficient preparations224.3 Having a good command of the target language225. Conclusion23References251. IntroductionDuring the past decade, Chinese economy has been growing rapidly. After entering into the World Trade Organization, China became one of the major international business players. The business negotiation among China and the western countries is the key point for developing business relationship of China and the West. As the most active factor in business action, international business negotiation is regarded as more and more important. There are various factors that have impact on international business negotiation such as internationaleconomicfactors,politicalenvironment, pluralism of legal system, culture, etc. Culture is one of the most important factors which cannot be neglected. Cultural factor has been the most active one in affecting on the business negotiation process. The great diversity of culture makes negotiating style different. They could cause unnecessary misunderstanding, even affect the result of the business negotiations. It is impossible for any negotiator who lacks cultural background knowledge to succeed in international business negotiation no matter how skilled and experienced he is. This thesis focuses on the different cultures between China and the West, and how do they influence on business negotiation. 2. How negotiation works2.1 Concept of negotiationGenerally speaking, negotiation means discussions through which relevant parties can reach agreement to satisfy their needs and coordinate relations. The word “negotiates” derives from the Latin infinitive “negotiari” meaning “to trade or do business.” This verb itself was derived from another, “negare”, meaning “to deny” and a noun, “otium”, meaning “leisure.” Thus, the ancient Roman business person would “deny leisure” until the deal had been settled. Negotiation, especially international business negotiation, is regarded as an important and necessary social activity. International business negotiation means consultation and interlocution between two sides with different methods in international economic trade. International business negotiation involves negotiators representing at least two parties, one or more translators or interpreters when necessary, settings referring to office or meeting-room for negotiations, invisible cultural background of the participants, and at least one round discussions oriented to achieve certain interest goals. After the negotiation finishes, the happy “win-win” result will be made. Not only the interest goals will be achieved, but also the friendly and harmonious relationship among companies which the negotiators represented are established and continued.2.2 Fundamental principles of negotiationNegotiation is an art that requires both study and practice. It could be considered as competition, but communication for mutual profit and common development. There are four fundamental principles of negotiation which can help negotiators to achieve their goals. 2.2.1 Separating the people from the problemEvery negotiation has two basic components: people and problems. Sometimes negotiators bring their emotions, personalities, feelings when they discuss the interests and events. Negotiators prejudice against the other partys intention would cause personal disputes and both sides say something hurting each other when such prejudice or misunderstanding exists. In any negotiation, a negotiator has two intereststhe negotiation itself and the relationship with the other party. Negotiators should always keep in mind to separate two of them: to be firm on the problem and gentle on the people. In order to make a good negotiation, negotiators should try to maintain the relationship among the parties. However, the relationship should not have an influence on the negotiating conflict. In general, to separate people from problem, the crucial point is to understand the other party, control ones own emotion and strengthen communication. If the counterparts opinion is not right, one should look for chances to correct them afterwards；If they feel dissatisfied, one should let them express themselves; if misunderstanding occurs, one should try to find some ways to understand what they think and feel. 2.2.2 Focusing on interests but not positionsPeople negotiate because of their conflicts of interests. Usually, the two parties interests cannot both come to an agreement. Negotiators should look for new solutions to the problem which contribute to win-win, not just focus on the positions which cause one side wins, the other side loses. Unfortunately, in fact most of the negotiators try their best to make their counterpart change position. They think that way they can protect their interests or gain more interests. Therefore, neither party would come to an end in the negotiation. One important task of negotiation is to overpass ones position and to look for solutions satisfying both parties interests. Negotiators should not consider problems on their own position only and regardless of the other partys reasonable interest. Good agreements focus on the parties interests but not their positions. If negotiators neglect ones own positions, but consider more about mutual interests, negotiations will come to a successful ending. 2.2.3 Inventing options for mutual gainFinding new options that will bring up the interests of both parties is the most important factor in having a successful negotiation. If one finds himself negotiating on a point of ego, this is usually a sign that he is losing. It is important for the parties to give up the idea that one partys gain is the others loss. In order to come to an agreement, negotiators should understand the interests of the other and jointly create options which lead to mutual interests. Therefore, one should realize that solving the others problem is also a way of solving his own. Both parties suggest some solutions to the problems. After the problems have been discussed and the interests have become clearer, parties need to work together to generate options for mutual satisfaction. Only when parties focus on the shared interests can they avoid falling into a win-lose mentality. 2.2.4 Insisting on objective criteriaBy using objective criteria as a guide, neither party has to give in to the other, even both parties can come out with a fair and mutual solution. Insisting on the objective criteria means to persuade the other side that an agreement is fair and to protect one side from being forced. Objective criteria are used to make solution easily and acceptable because they are fair, effective and rational. Different issues have different objective criteria. For instance, there are many factors which affect the criteria of price, including cost, price competition and market situation, and so on. There are three judgments to consider whether a criterion is objective or not: 1） It should be independent of wills of all parties and thus be free from sentimental influence of any one. 2） It should be valid and realistic. 3） It should be at least theoretically accepted by both sides.3. Culture and its impacts on negotiationsCulture is commonly defined as a set of shared and enduring meanings, values, and beliefs that characterize national, ethnic, or other groups and orient their behavior. Faure & Sjostedt, Hofstede, Namenwirth and Weber view culture as a system of values and norms that are shared among a group of people and that when taken together constitute a design for living and negotiating. When people of different cultures are engaged in business negotiations, difficulties and misunderstandings occur all the time.3. 1 Comparison between Chinese and western cultures3.1.1 Values The core of western values is individualism. David Hitchcock (1994) said that western values have three levels: 1) physical level science, technology, business, public administration, and modern capitalist economics; 2) conceptual level equal opportunity, the role of law; and time management; 3) core values open debate, equality, balance of power; free speech, and democracy. The core of the Chinese value in a way relates to the Confucianism. The ethnic principle of Confucianism is the well-known Five Relationships: ruler-minister, father-son, husband-wife, elder-younger brother and friend-friend. This was explained as “There should be affection between father and son, righteous sense of duty between ruler and minister, division of function between man and wife, stratification between old and young, and good faith between friends.”Take Americans for instance, the top personal values were self-reliance, hard work, and a tie between achieving success in life, personal achievement, and helping others. On the contrary, hard work, respect for learning, honesty, and self-reliance were most valued among Chinese people. In addition, the top social values for Americans were freedom of expression, personal freedom, rights of the individual, open debate, thinking for oneself, and official accountability. The top six social values for Chinese people were maintenance of an orderly society, harmony, accountability of public officials, openness to new ideas, freedom of expression, and respect for authority.3.1.2 Individualism and collectivismWesterners believe in individualism which refers to the doctrine that the rights of the individual are the most important ones in a society. They hold an idea that each person has his own separate identity and personality, which should be recognized and reinforced. The core of individualism is the pursuit of personal and achievements. In Christianity traditions, individuals are important not only to each other, but also to the society and God. Individualism has been handed down from their ancestors. Therefore, to westerners, individualism is not selfishness but rather virtue. However, to Chinese people, individualism means egoism, with represents selfishness in quality and looseness in discipline. Chinese people appreciate collectivism. It emphasizes cooperation among group members and individual success is due to the collective effort. The sacrifice of individual interest for that of the collective is a noble quality eulogized so much by Chinese people.In individualistic cultures, typically found in Western Europe and North America, individual interests tend to prevail over group interests. In collectivist cultures like China, there is a strong concern for group interests. Collectivists are oriented towards harmony in well-defined in-groups.3.1.3 “Showing Yourself” and “Being Modest”In western countries, “showing yourself” is very normal for all westerners and has a strong influence upon their behaviors. Most of westerners take it for granted that to impress people, you have to show yourself. Different from the westerners, Chinese people have learned to be modest. At a result, many Chinese behave in a modest way in whatever they say or do. Most Chinese people like to belittle the actual significance of what they have done. Suppose a Chinese has achieved some remarkable progress. But when he is appreciated by others, he would say that what he had done was nothing and not worth mentioning. For Chinese, being modest is not only a usual practice, but a recognized virtue that governs ones actions as well. For that reason, a Chinese would not show off no matter how much he has done for the organization or for society.3.1.4 Family Western families advocate equality. The husband and the wife usually have an equality voice in decision-making, and on certain matters, the children, too, have a vote. Family members are regarded as friend and they should treated equality in daily life. In the western, most old people do not live with their children or relatives. They do not gain honor, respect or attention as old people.On the contrary, most Chinese family members tend to live together and the young are supposed to show respect and obedience to old people. Generally, old people receive honor, privilege and satisfaction because people believe that an old person is a wise man full of experience. Just as Confucianism shows in Five Relations, the young should filial love, obedience and duty to the old in a family. For example, the Chinese who have moved abroad usually continue to send money back to their parents as a token of their filial piety. Moreover, many young people still try to live near their parents whenever possible even after they are marriage. Westerners stress individualism in families while Chinese stress coalition, which makes the Chinese family extremely cohesive. Generally speaking, the Chinese have a stronger sense of family honor than westerners.3.1.5 NationalismSince the ancient times, the nation form of China has been based solely on the Han nationality. The Han nationality developed their privities in the language expression and social contact during the common life and work of their forefathers in the history. People can express some meanings with a subtle facial expression or a slight action only. When one says half of his words, even just a little, the others still can understand what he wants to say. Therefore, Chinese people sometimes do not say all their words when they want to express something. However, in western countries, take the American for instance: America is an immigrant country which has more than two hundred years of history. Nevertheless, America people still cannot reach privities. They must express clearly what they want, otherwise the others cannot understand well. 3.2 General impact of culture on business negotiationCultural differences play a crucial role in international business negotiation. It can generate misunderstandings, sow the seeds of distrust, and generate negative emotions among negotiators. Different cultures will inevitably have different influence on peoples attitude toward power among social members, peoples basis for trust, peoples goal orientation, peoples way of making decisions and peoples tendency to take risks, which will be discussed in detail in the next part. 3.2.1 Negotiation goalDifferent cultures may view the purpose of a business negotiation differently. In China, personal relationships come first. Chinese negotiators start to make friends with their customers, to build and develop the relationship. They promote their business through their personal contacts (guanxi), dinners, gifts, and friendly experiences. After they have a good relationship with their counterparts, then they begin negotiations and do business, through formal dinners and lunches. Actually, western people do not want to waste time eating and prefer to combine meals with business. The goal of a negotiation is to sign the contract between the parties. They consider the signing of a contract between the parties as their primary negotiating aim.An American executive had his first business trip to China. He had been waiting months to hear from the Chinese; then when he did, a whole team went to work helping to prepare his presentation. When he arrived at the hotel, full of anticipation, his Chinese contact said, “How about visiting the Great Wall tomorrow?” So he agreed, but then the next day it was the Ming Tombs, then the Forbidden City, the Temple of Heaven, and so on. He came to do business and he expected them to be in a big hurry, and it turned out that they would rather spend time leisurely sightseeing and chatting. (Griffin, T. J. and Daggatt, W. R. The Global Negotiator. HarperBusiness, 1990.)The American here has a big misunderstanding of his Chinese counterpart. To Chinese people, a business negotiation is a time to develop a business relationship with the goal of long-term mutual benefit. Like what happened in the above-mentioned case, the Chinese negotiators demonstrated their hospitality for their guests with an aim to achieving the establishment of good relationship. To Americans, however, a business negotiation is a process to achieve a deal. Therefore, they think the relationship building is unnecessary. This distinction in negotiating goals between Chinese and western negotiators is influenced by the collectivism/individualism cultures and being/doing orientation. Chinese culture is a typical collectivist culture. Collectivism implies in-group solidarity, loyalty, and strong perceived interdependence among individuals. Relationships are based on mutual self-interest and dependent on the success of the group. Moreover, Chinese culture displays a being orientation. Being-oriented cultures value affiliations, character, and personal qualities. Chinese are being-oriented, they believe that it is important to build and maintain solid relationships. For the Chinese, a firmly established relationship means more than a written contract. On the other hand, western culture is a typical individualistic cu