Case Study: Buckeye Glass Company in China Essay
The differences between Chinese Culture and American Culture are immense. Both cultures have very different values and norms, and these differences come out within the negotiation between Buckeye Glass Company and the Xia Xian Glass Factory. Both parties during this negotiation had different objectives and ways to get what they wanted out of the proposed joint venture. The Chinese negotiation style is based on building relationships with people in the negotiation rather then to hammer out details of an agreement.
They feel the beginning stages of the negotiation is the time establish a human relationship and to create the bonding of friendship with the goal to become “old friends” by the time the deal has been made.
The Chinese want to build this personal relationship, and view the contract as a starting point to a long term business relationship, rather then the end. This is the reason behind the sightseeing and chatting that takes place during the beginning of a negotiation, rather then how the Americans would like to work on the details of the arrangement.
The sightseeing and special features of the region frustrated Mr. Brickley as he wanted to discuss the proposed joint venture, rather then building a personal relationship with Tien Chao. A way the Americans can use this to their advantage is to realize that the Chinese don’t view time as a constraint like the American’s do, and to enjoy the sightseeing and informal chatting as a way to become personal friends with the Chinese, and this will help them with terms later in the negotiation.
The reason that Chinese people place so much importance on relationship and less security on written words as their basis of trust may be found partly in their attitude to litigation. Chinese people have a strong aversion to litigation, for it results in face losing and a threat to social harmony. Litigation, which is viewed as the pursuit of personal interests at the expense of others, runs counter to the Confucian spirit of self-criticism. Although the Americans wanted more formality and specifics in the agreement, the Chinese said it wasn’t necessary.
The American’s have a general distrust with the other side in a negotiation; while the Chinese believe by building a personal relationship that the parties will work together for success. At this point it would have been a better idea to save face and agree to the general terms of the letter of intent for the Americans to show mutual trust with the Chinese. They eventually did sign the letter of intent, but when publicizing the signing in the United States, no dates were stated. This was sticking with the Chinese culture with regards to time.
In China, they don’t believe time is a barrier and don’t put much into deadlines like the Americans. Chinese see the relationship building as their driver of time, rather then getting tasks accomplished in a short period of time. The Chinese people generally believe that a considerable amount of time should be invested in establishing a general climate of understanding, trust, and willingness to help, in matters quite apart from the specific business issues brought to the table. Producing a satisfactory agreement in as short a time as possible may be one of their least concerns.
Therefore, the non-task sounding stage of negotiation often witnesses much time spending in establishing rapport and getting to know their partners. The Americans grew frustrated with this approach at the start of the negotiation as well as when Mr. Brickley was thinking of the cost’s associated with the trip to China, he would have spent his time better thinking about building a personal relationship with the Chinese rather than worrying about the drawn out process and cost of the trip. Another way to gain an advantage in the negotiation would be for each side to learn the language of the other.
This would allow each side to have a better understanding of what was being said, rather then rely on others interpretation of the message trying to be conveyed. For instance, when the Chinese talked with the American interpreter during a break in negotiations to try to gain concessions, it would have been a much easier task for them to ask the Mr. Brickley’s team directly. The more open the lines of communication and ease in ability to understand and communicate with each other make the negotiation a smoother process for both sides.
China and the United States have vastly different cultures and ways of doing business. Americans are more direct, distrustful, and have a rigid way regarding time that drives their negotiating style, while the Chinese are completely opposite in each regard. Building a personal relationship is the most important part of a negotiation in China and the Americans should have concentrated on becoming friends at the start, rather then becoming frustrated with the differences in culture and attitudes.