Negotiation in China - Research Paper Example

Negotiation in China 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 the economy, thus, creating numerous opportunities for both locals and foreign investors. Many entrepreneurs have strived to make their ways in China with different investment intentions that include creating partnership with 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 (Graham & Lam, 2003). 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 (Harpaz, 2010). 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: 1. How does Chinese сulture affect business relationship? 2. Do business managers and foreign investors prefer certain negotiation process with China? 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 The 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 is a way of negotiating with the Chinese people. They believe that when in social gathering they can easily interact with Chinese people and negotiate with them appropriately. They prefer meeting in Chinese expeditions, seminars and any other conferences involving Chinese business people. 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. Social gathering is one of the identities of the Chinese people hence making it a suitable place to negotiate. However, the use of translators was not welcomed by the business managers, since 50% did not approve 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. Chinese people are very secretive and therefore may not prefer use of third party as a translator particularly while agreeing on contracts. Emphasis on Relationship SA A N D SD (%) Depend heavily on the relationship 60 20 5 15 - Prefer social gatherings 10 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. However, there are at least 20% who agree on fixed terms and another 20% who strongly disagree on the use of fixed terms. Most business managers prefer liberal mind even while negotiating hence making fixed terms unreliable method. 50% of the business managers strongly agreed that flexibility in contracts is one of the best ways of negotiating with the China. This is brought about by perhaps their aggressiveness and the fact that they believe that flexibility is part of economic success. There are 20% of the participants who disagree with the idea of flexibility to contracts and another 20% who are neutral when it comes to the issue of flexibility. It is also worth noting that none of the participants strongly disagree with the flexibility to contracts because of the fact that business dealings are always flexible and that economy is prone to fluctuations. Long slow deal making process is strongly supported by 55% of the participants maybe because of unfamiliarity between the business managers and the Chinese society. This would probably be a better way of developing trust between the business managers and the Chinese society. None of the participants was neutral about this issue since it is a very sensitive issue as it can also be noted that only 10% disagree and another 10% strongly disagreeing with the issue. Chinese people prefer long term relationship while most societies such as the American society where most of the business managers originate, prefer good deals. Negotiation Process SA A N D SD (%) Prefer fixed terms - 20 5 55 20 Flexibility to contracts 50 10 20 20 - Long, slow deal-making process 55 25 - 10 10 Conclusions The following conclusions are based upon the analysis of Surav Shrestha: 1. Most business managers depend heavily on the relationship between them and the Chinese people before negotiating. 2. Business managers strongly agree that flexibility in contracts is one of the best ways of negotiating with China. 3. Long slow deal making process is strongly supported by business managers as a way of negotiating with the Chinese society. Recommendations Based on the above conclusions, the following recommendations are made for Dr. Robert B. Rogow: 1. There should be forums and seminars organized between the Chinese business managers and other foreign business managers. 2. There should be flexible contracts that can be terminated in case of any disagreement between the foreign investors and china to encourage risk-averse investors to invest. 3. Foreign investors must only enter into long term contracts with China. References Harpaz, M. D. (2010). Sense and Sensibilities of China and WTO Dispute Settlement. Journal Of World Trade, 44(6), 1155-1186. Retrieved from http://search.proquest.com/docview/819244372?accountid=45049 Graham, J., and Lam, M. (2003). The Chinese negotiation. Harvard Business Review. Retrieved from http://www.globalnegotiationbook.com/John-Graham-research/negotiation-v1.pdf Appendix A: Cover Letter June 15, 2013 Mr. Ron Jackson 1776 N. Sunset Blvd., Suite #1200 Miami, FL 80909 Dear Mr. Jackson I am conducting a research study to determine managers’ perceptions regarding specific characteristics needed for successful negotiation in China. I am asking for your assistance in collecting the data and the enclosed survey instruments is part of the study designed to determine the perception of every manager towards negotiation in China. Your corporation is highly valued since the results of the study will be useful in providing educational research. Your experience as a business manager is very vital and may even help the foreign investors to learn how to negotiate with china. I promise to take all the necessary steps to protect your identity and business. Please take only 20 minutes to complete the enclosed form and please ensure return it by February 1, 2013 in a well stamped and addressed envelope. However, in case of any issue or question, please contact me via my employer at The Academy of International Business, 521 Lancaster Ave., Richmond KY, 40517. Sincerely Surav Shrestha, Media Consultant Appendix B: Survey Instrument Figure 1 Emphasis on Relationship SA A N D SD (%) Depend heavily on the relationship 60 20 5 15 - Prefer social gatherings 10 50 20 20 - Use of translator - 25 25 50 - SA=Strongly Agree A=Agree N=Neutral D=Disagree SD= Strongly Disagree Figure 2 Negotiation Process SA A N D SD (%) Prefer fixed terms - 20 5 55 20 Flexibility to contracts 50 10 20 20 - Long, slow deal-making process 55 25 - 10 10 Read More