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Chinese Business Negotiation Style
(1). Six Dimensions of Chinese Business Negotiation StyleIn this section, I will talk about six dimensions of Chinese business negotiation style which represent six primary patterns of Chinese business negotiating behaviors: political, legal, technical, commercial, social, and strategic dimensions. Political behavior concerns how Chinese business decision- making process is influenced by Chinese politics; legal behavior deals with the Chinese attitude toward contracting and other legal arrangement; technical behavior concerns the Chinese attitude toward technology, technical specification, quality and so on; commercial behavior refers to how the Chinese bargain about price and other economic arrangements; social behavior refers to how the Chinese establish trust toward the other part through personal contacts and other forms of social interactions both verbal and non verbal during the negotiation process; and finally, strategic behavior shows how the Chinese manipulate various negotiating stratagems.
This dimensional analysis also suggests that Chinese negotiating style involve both rational and strategic patterns. Political, legal, technical, commercial and social patterns or dimensions represent rational Chinese negotiating behavior, whereas the strategic pattern or dimension constitutes strategic Chinese negotiating behavior – or say Chinese negotiating tactics.
1. political behavior:
The Chinese government is the real negotiator, customer, and ultimate decision maker; Chinese companies must follow the government’s plan and policies to do business.
The frontline Chinese negotiators have a limited mandate and fear criticism; inter-organizational communication within the Chinese negotiating organization is usually poor, and the Chinese negotiating team tends to be large.
Business in China, whether Chinese or foreign, is under the control of the Chinese government; Chinese business is governed by the “political book”. Chinese patterners are protected under the “umbrella” of Chinese bureaucracy.
2. Legal behavior:
The Chinese view contracting as an intial intention and an onging problem-solving framework rather than a one-off nicely wrapped legal package.
The Chinese awareness of law is normally blunt, and its legal system is young. Chinese lawyers seldom participate in face-to-face meetings, although recently they have begun to increasingly appear.
The Chinese tend to insist that arbitration, if any, is to be held in china.
3. Technical behavior:
The Chinese want to cooperate with large, technologically strong companies.
The Chinese want to buy the most advanced and research-and-
development-oriented technology, apart from price, technology is other major issue in Chinese business negotiation.
The basic Chinese attitude toward foreign technology transfer to China is to exchange the Chinese market for foreign technology. However, when talk about the above three point, when must notice that the attitude of Chinese companies toward technology is changing: most Chinese companies are the more and more profit-oriented.
4. Commercial behavior:
The Chinese tend to choose large and financially strong foreign companies with which to cooperate.
The Chinese are extremely price sensitive; Chinese business negotiation is essentially a negotiation about price and technology.
The Chinese companies insist on having the majority share of equity in a Sino-foreign business joint venture.
5. Social behavior:
There is a pre-negotiation phase in the Chinese business negotiation process in which the Chinese try to establish trust and confidence in the other party through information gathering, personal contacts and other social activities.
The Chinese attach great importance to sincerity and reputation on the part of foreign side.
Chinese negotiating style is generally people-oriented and permeated with such Confucian notions of guanxi, renqing, li, face, family, age, hierarchy, and harmony etc.
6. Strategic behavior:
“ji” or “Chinese stratagems” exists in the mentality of Chinese negotiation.
The Chinese may employ negotiating tactics deliberately or inadvertently.
Chinese business negotiating tactics empirically evident in the supplementary materials I gave to you. But here I must mind you that we Chinese people are clever, friendly but we have our own moral standard or behavioral code which guided us what we can do and what we cannot do.
When comparing the six dimensions of Chinese business negotiating style with the western theory of business negotiation, you may find that there are stark contrasts in the political, legal and strategic dimensions of Chinese business negotiating behaviors. Most remarkable is the strong political feature in Chinese business negotiation. The decisive influence of the Chinese government and Chinese bureaucracy on the behavior of Chinese negotiators constitutes a major difference between Chinese and western business negotiating styles.
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