China and USA: Cultural Differences in Business Negotiations
China and USA have been categorized as the leading countries in terms of economic contributions and Gross domestic product in the world. The two countries continue to dominate the business sector throughout the world. The business approaches for the two countries are very different. They see each other’s ways of negotiations in a different way. Americans perceive Chinese way of negotiation as not direct, dishonest and not efficient at all. On the other hand, Chinese perception of US negotiation style is that they are too aggressive, impersonal and more exciting. Cultural history is the major factor that led to the differences between them. Hence it is crucial to learn their cultural differences so as to bring about understanding while transacting various forms of businesses. Culture has a great impact on the individual’s character as well as the way he or she thinks or even communicates.
Differences in Business Cultures
Unlike the USA’s culture which embraces so much the role that network and information plays in the field of business, Chinese culture is based on certain long-term historical ideologies of patience and harmony. Majority of the Chinese population live in the rural setups and this is where they have extended their business investments to. On the other hand, a higher percentage of the US population resides in the urban centers and this is the reason why Chinese are seen as communal as compared to the Americans.
Importance of Negotiation Approach
The strength of negotiation used also has a greater significant impact when a deal or contract is being made. China gives first priority to the relationship between individuals for the success of doing any business. Whenever they are negotiating any transaction, trust is valuable to them before even engaging in any form of a contract. But in the US, the most important thing in any deal is the signed contract itself. There negotiation skills’ aim is to win any deal that is made with the parties involved. After the agreement is made, they put down all the details agreed upon and both parties must strictly obey. This kind of negotiation is at times very risky and there could be a form of misunderstanding while the process is going on. The aim of any form of negotiation in the two countries is a win-win situation at the final stage.
Cultural Influence on Negotiation Style
When it comes to the way an individual way of negotiation which is largely influenced by the culture adopted, US culture is seen as informal as compared to Chinese culture. The Chinese values the formal way of conversation whenever they address each other. In contrast, US citizens normally address each other using their first names which are not acceptable in China not unless those involved are longtime friends. But any engagement with foreigners must be professionally conducted in a formal manner.
Differences in Communication Styles
Communication styles between the two cultures also differ. In America, time is an important factor to be considered while the deal is being negotiated on the table. To them, time is money, so any deal is conducted in a hurry. Chinese on the other hand are slow in their way of making deals. They take time before the contract is agreed upon. They are not much concerned about the time that is taken but about building a lasting relationship with their guests. Having that kind of a relationship is a great achievement in their view. According to Chinese, taking time with the other parties will lead to strong and a more successful transaction in the future. To them, mistrust between the two parties will result if the agreement is rushed. Americans will want the deal concluded and signed without having to spend too much time on it.
Influence of Culture on Emotional Expressions
During the negotiation process, different kind of emotions will be arising depending on the culture that has been planted to an individual. In the negotiation phase, Chinese normally show very low emotions and would want to maintain their calm and equanimity. They make sure that they do not speak anything that could hurt or embarrass the other person they are dealing with. For them not to lose face, Chinese culture forbids showing of disagreement in an open manner (Du " Lee, 2007). In contrast, the Americans will always want to speak what is exactly on their minds. Even if it will hurt or cannot please the other person involved. So when dealing with them, their character should be understood otherwise it would be difficult to enter into an agreement with them. They believe that everything that needs to be addressed must be dealt with before signing any contract. Also, Chinese are very reluctant to transact any business with individuals they seem not comfortable to partner together. Whenever they come across people for the first time, they will hold a small pleasant meeting in order to understand each other. But Americans will see it waste of time holding a meeting with people.
Differences in Agreement Styles
Different cultural norms affect the way agreement is written. The relationship that exists between the partners is more important to Chinese; hence they prefer a general form of agreement. If the partner they are contracting to seeks a more detailed agreement to be signed, they perceive it as lack of trust between them. On the US side, any form of agreement should be detailed and must contain everything that was agreed upon when it was negotiated. They consider all eventualities that may arise for examples risks that could be made and how to handle them. Chinese believe that any problem will be mutually discussed and negotiated with the partners but the Americans will prefer the lawsuit to address it (Brown, 2004).
Differences in Negotiation Team Formation
The way negotiation team is formed is greatly influenced by the nation’s culture. The US would prefer sending only one person, preferably the team’s leader, to the negotiation process. But the Chinese would prefer a common form of discussion where the whole team has to participate. Any kind of decision is made collectively and anyone who stands for anything against the will of the majority will be taken as a dishonor to the members. So no specific person will have the power to decide on what should be agreed upon at the end. To them, everybody has the power to contribute in any form of a deal but will be decided by the group. As a result, the negotiation will take much time before an agreement is reached. In the US culture, individualism is of great value to the society. Being unique and expressing your opinion in any manner is given total respect since every decision matters. Any person who is not independent-minded in America is taken to be insincere.
Indulgence and Hierarchy
Indulgence is another etiquette that determines the success of any form of business that is undertaken. Chinese are seen as people who are very humble and harmonious character wise, hence categorized as a society that possesses restraint indulgence. Indulgence is not given any attention in their way of conduct. On the side of America, indulgence is the key. They believe that your hard work and capability will enable you to indulge in several materials of high value (Cochran, 2002). In terms of the way, the hierarchy is perceived in a business environment, Chinese respects and accords high honor to it, unlike the Americans. In China, foreigners are given special hospitality even if there was any concern between them.
Conclusion
Over the years, culture and its influence on the way business is carried out have undergone several changes. However, there are some core values of traditions that will still remain unchanged. These have been evidenced by the way culture differs in Chinese and US way of doing business. As the technology changes, different cultural values are integrated into many business professions will be learning different cultures. In the process, some cultures that are deemed important to business will be assimilated. So it is more imperative for any individual who wishes to excel in doing business to learn different cultural etiquettes. By doing so it will make it easy to conduct business and interact with different personalities around the globe.
Anybody can opt to carry out business either in China or US after learning about their difference in terms of culture. They can either visit those countries for survey or they can learn in class or even inquire from professionals who are well conversant with those values. For any business to reap maximum profit, the concerned parties must be willing to adopt and embrace these cultures and apply whenever needed.
References
Brown, R. A. (2004). Chinese business enterprise. London: Routledge.
Cochran, T. C. (2002). Business in American life: A history. New York: McGraw-Hill.
Du, C. H., " Lee, Y. F. (2007). Cultural heritage management in China: Preserving the cities of the Pearl River Delta. London: Routledge.
