Chinese and Canadian Negotiation Styles When Dealing

Chinese and Canadian Negotiation Styles

When dealing with businessmen globally, it's critical to be aware of the cultural beliefs and values that shape their negotiation style and business behavior. This is imperative for successful and positive business relationship because not all cultural foster similar beliefs and hence there can vast differences in negotiation styles. These differences become more pronounced as we move from west to east because while most western countries may have few things similar in terms of culture and education, the same is not true for eastern countries. In this paper we shall compare the negotiation style of Chinese and Canadians. This will help us understand what a business person from the west need to know about the Chinese business communication style in order to be successful in their relationship with them.

Negotiation refers to the process where two or more parties communicate with each other in order to reach a solution or agreement. In business negotiation takes place often when two parties come to deadlock and in order to move forward, they need to start a process of communication with the primary purpose of getting rid of the deadlock, reach an agreement and finally moving forward. However the way two parties communicate is highly dependent on their cultural values and education. In western countries, there is more individualism than collectivism. Similarly they tend to more aggressive during negotiation and are focusing on funding a solution. The same is not true for eastern countries especially China where negotiation is a collective process, it is not based on aggression and solution may not be the end result. In many cases, days of negotiation with Chinese business persons may not end in a solution or agreement but the whole process would still be important to Chinese businessmen because it gives them an idea of who are they dealing with and if they can trust the person in future or not.

Some important characteristics of Chinese negotiations can be deduced from the key attitude and values of Chinese businessmen described below (Graham and Lam, 2006):

Guanxi:

China is a culture that focuses on personal relationships. For this reason, they tend to trust those in business whom they have known for a long time. Strangers are not trusted easily and this is key difference with Canadian people who tend to trust everyone as long as they bring a history of good business acumen and reputation. Chinese would however be more comfortable working with relatives and good friends especially close family members and hence they do not forget kind deeds.

Zhongjiang ren

This is an important thing to remember. Chinese will not be comfortable during negotiation without an intermediary. In the case of differences, it is the intermediaries who would first bring the issue to the table, help the two parties connect and then facilitate discussion. However this person must be known very well by the Chinese party or else the intermediary is useless.

Shehui dengji (social status)

Chinese businessman will take social status seriously and hence the more critical a negotiation, the more senior should the representative be. In other words, Chinese people believe they have earned a social standing and by sending a low level representative, you will be seen as someone deliberately trying to overlook the importance of the negotiation meeting and hence it is important that if Chinese party has sent a high level representative, you must do the same. Canadians are similar in this practice. They do not however make it a matter of social status but do not wish to negotiate a high level deal with a low level representative.

Renji Hexie

Deeper harmony on interpersonal level is always encouraged. Chinese negotiations can fail dramatically if the other party appears impersonal and doesn't wish to develop closer harmonious connection through gifts and home visits. The opposite of this is true for Canadians who consider home visits and such other actions highly unprofessional and even unethical since this would seem like bribery. Chinese however see it in a totally different light and believe that if a person is taking them out to dinners, golf events and such other meetings, he is trying to build a positive relationship and this is highly valued during negotiations.

Zhengti guannian

Chinese will always take the whole picture in the view. They do not wish to diligently work on each and every detail but instead would see the whole deal as one big picture. They feel that if they have come to an agreement it is about each and everything instead of one single issue or two for that matter. Canadians on the other hand have a difference on this aspect because they tend to see negotiations as composed of variety of issues so if someone agrees to one it doesn't mean they need to agree to each and every thing on the list. The opposite of this is true for Chinese who tend to see it all as a whole picture and not separate list of items to be discussed. For them it is all or nothing unlike Canadians who feel that just because they agree to one doesn't follow that they are agreeing to everything else too. That tends to create the most friction during negotiations.

Jiejian

Chinese are always looking for a deal which means bargaining on price is very important to them. When they say they want a deal, they mean it. They are looking for concessions and it is believed that if you are sincere in your negotiation efforts, then you will certainly offer the same. However there is no such expectation on part of the Canadians who understand that some deals cannot be closed like that and hence they are not exactly seeking concessions beyond what is a normal part of business deals.

Mianzi

Chinese believe in polite negotiations and any show of anger can lead to an abrupt ending to the negotiating process. They also do not trust those who have broken a promise once even if it is a slight mistake. The reason being that while corruption and broken promises are common in the otherwise corrupt Chinese business world, they do not allow the same concessions to foreigners as they do to locals. Secondly they know their locals well and know where they are coming from. However they are very wary of strangers especially white people and hence would not offer the same flexible attitude to them as to their own people. Hence a slight mistake would be taken very seriously.

Canadians on the other hand have no such issues with strangers or own people. They do not create this kind of distinction and hence while they wouldn't allow a broken promise as well, they are the same with everyone. Canadians will not trust a Canadian just the same way they will not trust a foreigner during a negotiation process if the other person appears to be double-crossing them.

Chiku Nailao

One of the most frustrating aspects of negotiations with a Chinese businessperson is that Chinese people tend to take a long time in arriving at a conclusion or resolution of conflict. Unlike Canadians who are looking for a swift ending and quick wrap up of the negotiation process, Chinese would prepare diligently for the negotiation process and do not mind if it keeps on going for endless weeks. However Canadians are completely different in this regard and hence this can lead to serious frustration.

These were some of the common differences and similarities between Chinese and Canadian people. We must understand that negotiation style in both cases is dependent on cultural norms and traditions. There is a value system at work which accounts for these differences. Chinese believe in hard work and slow progress like a tortoise, Canadians believe in hard work that is quick to produce results. For this reason any Canadian who is hoping to start negotiations with a Chinese party must not look for a swift end or resolution. he must prepare himself for a long process that might not even produce the desired outcome.

Discussion:

Chinese culture like any other eastern culture happens to be value relationships and close connections with family and friends. For this reason, family always comes first even in business dealings. They tend to work more often with family and relatives than with complete strangers. (Romano, Lee, Nguyen, & Boemihardjo, 2000). Building a relationship with a Chinese businessmen or business concern hence takes time. They value close friendships and good positive connections which have been built over a long period of time. This is because Chinese people are not looking for a one time deal with any business concern, they seek to do repeat business with the same party if the party proves trustworthy and hence they seek to develop positive relationship. (Palich, et al., 2003).

This characteristic of Chinese negotiation style is helpful to both parties because when Chinese people work in collaboration with only the people they know, they tend to be more flexible and more positive in their approach. With a complete stranger, they tend to be very stiff which can be disastrous for the negotiation meeting. The fact that they deal with only trusted people, Chinese people are more successful in their negotiation about entering new markets. (Romano, et al., 2000).

Chinese people will also even resort to complete denial and lying if it can help them save face. They would not lose face in any negotiation meeting because honor is important (Silverman, 1997). This doesn't mean that they won't lie or cheat. Chinese business environment is highly corrupt but most businessmen would try to avoid embarrassment in the wake of having been caught by doing whatever they can to deny that they even took the action. It is important to understand that owning up is not an attribute to look for when dealing with Chinese people in a negotiation meeting. Canadians on the other hand do believe in owning up even if it means losing face. This is essential difference between eastern and western style of negotiation.

Chinese negotiating process can be unbearably long and for a Canadian who is looking for swift wrap up, this can be highly frustrating. Chinese tend to take a long time in making decisions in order to be able to make the most correct and appropriate decision. On the other hand Canadians tend to be rather impulsive because they are risk takers. They do not mind a swift resolution even if it later proves to be the wrong one. This is because they do believe that in a volatile business environment, this kind of risk taking is important and swift decisions are needed. Chinese businessman wouldn't however believe in such a theory and hence take a long time in making decisions and considering every aspect of the negotiation process to reach the most suitable and agreeable decision. (Manzelmann, 2001).

Another important feature of Chinese negotiation style in indirect communication which means that instead of rejecting an idea completely with a straight forward No, they would use words like "Ming Bai" (I understand) "Dui," meaning "okay" and such indirect remarks to avoid giving you a direct answer. This can confuse the other party to the extent that they might even take this as a yes when Chinese party is only trying to reject the idea (Kracht, 2003). This is their polite way of rejecting an idea and turning down an offer or advice. However this can confuse Canadians who prefer a more direct answer (James, 2000). They would directly reject an idea if they do not approve of it and even give explanation as to why they feel it is a bad solution. The same is not true for Chinese people who equate directness with rudeness. (Kracht, 2003).

The indirect communication style is not limited to rejection and acceptance of ideas. Instead of graciously accepting praise and compliments on a job well done, Chinese people will prefer not to instead divert the attention to some other factor responsible for their success (Silverman, 1997). They hate showing off but this is not how a Canadian would react to praise. They would be more than happy to graciously accept praise. This is in line with their preference for directness in communication.

Chinese also prefer a more formal way of addressing each other during negotiations. It is not appropriate to address them by first names because last names are always preferred with a prefix like Mr. so and so. On other hand Canadians who are more influenced by the American style of communication would prefer to be on first name basis. (Silverman, 1997).

Unlike Chinese people who can bend rules to please the other party if they trust them, Canadians would not resort to this tactic. They believe in following rules and wouldn't bend them for anyone because this would be unprofessional in their view. They feel it is best to keep the rules the same for everyone so every person in the negotiation party would know what they have bargained for and what does the decision entail. (McBlane, personal communication, Sept, 2003).

Chinese people would depend as much on verbal communication and good relationship as they would on terms of a contract. This is not true for Canadians who are not interested in building relationships and all that really matters is a contract and adherence to the terms of the contract. They can severe a business tie easily if the other party is not honoring the terms of the contract and relationships are very secondary in a business matter. However Chinese businessman would consider relationship just as important as the contract and sometimes even more so. "…trust and harmony are more important to Chinese businesspeople than any piece of paper. Until recently, Chinese property rights and contract law were virtually nonexistent -- and are still inadequate by western standards. So it's no wonder that Chinese businesspeople rely more on good faith than on tightly drafted deals." (Graham and Lam, 2006)