DRAFT

Negotiation in China

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China being one of the greatest economies in the world has continued to attract various business people and organizations globally. The country enjoys rapid and positive changes in her economy thus creating numerous opportunities for both the locals and foreign investors. Many entrepreneurs have strived to make their ways in China with different investment intentions that include creating partnership with the Chinese firms. However, negotiations are never easy since there are special insights that are required for proper negotiations processes. There exist a number of complications that hinder negotiations in china which are largely based on the complicated Chinese culture. Better negotiation styles and skills are therefore very necessary in bringing competitive advantages and benefits. Chinese culture has very great influence on her business negotiations. China’s culture and behavior should be viewed differently by investors since the economics within Greater China become more internally linked together. To create competitive advantage among foreign investors going to china, there is a dire need to train them in international manners and customs so that they can learn a better negotiation style that is appropriate for China. The collectivism, hierarchical, relationship and the haggling culture of Chinese people should be well understood particularly their long courting, formal and the fact that they prefer drawing on intermediaries when it comes to negotiation process.

Dr. Robert Grosse authorized this research to further investigate the business managers’ perceptions regarding specific characteristics needed for successful negotiation in China. Dr. Robert B. Rogow , Dean of the College of Business and Technology at Eastern Kentucky University will receive the finalized report on March 6, 2013.

Purpose of the Study

The purpose of the study was to determine managers’ perceptions regarding specific characteristics needed for successful negotiation in china. The report will answer the following questions:

Chinese Culture

Perception of Chinese culture by managers

Methods and Procedures Used

The data for this report were collected by Surav Shrestha. A total of 225 business managers were surveyed where 200 of them were usable and included in the study. The other way of collecting data was acquiring of relevant information from online scholarly journals. The participants were contacted through mail that contained surveys about their perception regarding specific characteristics needed for successful negotiation in china. You may refer to Appendix A in order to examine the cover letter and survey instrument.

Analysis of business managers’ perceptions regarding specific characteristics needed for successful negotiation in China has been grouped into three categories a) Emphasis on relationship and b) Negotiation process

Emphasis on relationship

From the survey, most business managers value the relationship between them and the Chinese people. 60% of managers depend heavily in creating relationship first with the Chinese business people before negotiating. They believe that relationship is a great way of negotiating with the Chinese people because they value collectiveness. This can be shown by 60% of the managers who strongly believe in creating relationship with the Chinese people.

50% of the participants agreed that social gathering as a way of negotiating with the Chinese people. They believe that when in social gathering, they can easily interact with the Chinese people and negotiate with them appropriately. They prefer meeting in Chinese expeditions, seminars and any other conference involving Chinese. This provides them with a clear chance of interacting and even learning about their culture. Social gathering further shows that the business managers appreciate the Chinese culture and way of life.

However, use of translators was not welcomed by the business managers since 50% disagreed with the idea. They do not believe in using translator since they may not be able to clearly discuss the business and other investment issues completely. Translator may even act as a barrier and perhaps, learning Chinese language is the best thing.

SA A N D SD

(%)

Depend heavily on the relationship60 20 5 15 –

Prefer social gatherings10 50 20 20 –

Use of translator-25 25 50 –

SA=Strongly Agree A=Agree N=Neutral D=Disagree SD= Strongly Disagree

Negotiation process

55% of business managers do not agree that there should be fixed terms between them and the Chinese people.

SA A N D SD

(%)

Prefer fixed terms- 20 5 55 20

Flexibility to contacts 50 10 20 20 –

Long, slow deal-making process 55 25 – 10 10