Negotiating Across the Pacific - Case Study

Table of Contents 2.0 Executive Summary 2 3.0 Case Analysis 2 3.1 Major Issue 2 3.1.1 Relationship Building 2 3.1.2 Adversial versus Guanxi Business Methodologies 3 3.2 Cultural Theories 4 3.3 Cultural Characteristics involved in the case 8 3.4 Solution and Action Plan 10 4.0 References 12

2.0 Executive Summary

There was breach of faith by withholding information and not being upfront during the communication process between different parties. This situation was also caused by cultural differences like relationship building, “Guanxi”, emphasis on personal relationships versus factual-based legalistic approach, completely varied styles of doing business, and also …show more content…

These situations are completely acceptable in the American industry and work ethics. However, from the perspective of the Chinese, they take it as a mark of disrespect, and being more emotional and sensitive, decided not to reply to such an excessive offer, and waited for a month. This shows that they were too humbled to even name a price they thought to be correct, and decided to wait till the other party came back to them with renewed terms. This affected them to an extent that they thought the Americans were not serious about the business and even with the new terms ended up cutting the order by 50%.
3.2 Cultural Theories

Fons Tompennars has researched value dimensions that affect daily business activities. Some of his dimensions are detailed below.
Universalism versus Particularism: In the universalistic approach people place a high importance on laws, rules, values, and obligations. They try to deal fairly with people based on these rules, but rules come before relationships. It helps people understand how their work ties into their values and beliefs. It provides clear instructions, processes, and procedures. It also helps in keeping promises and be consistent. It gives people time to make decisions. It uses an objective process to make decisions yourself, and explain your decisions if others are involved.
In the particularistic approach, people believe that each circumstance,