Focus on both US and China. Explain each dimension. Relate it to the case study below.

Cultural Considerations: Know Before You Go

Background

A team of two top executives of a U.S. equipment manufacturer had just arrived in China to negotiate a sale with a local manufacturer who needed new equipment to increase production. The Americans had never sold in Asia before, but based on the communications that had taken place over the past several months, they were confident they could provide the right solution for the prospective new customer and get a deal done quickly. If all went well, they would save the last day to visit the Great Wall of China. Planning While the Americans scheduled a full week for their visit, they were surprised to find that for the first three days, no business was discussed. Their Chinese hosts took them out for elaborate dinners with top management and high ranking officials, and to night clubs for entertainment. They were taken on a tour of the city to view historical and industrial sights and eventually for a factory tour. Business discussions did not start until the fourth day. The Americans were perplexed, because in their minds the clock was ticking and their time was running out. Any attempts by them to initiate business discussions were repeatedly thwarted by the Chinese.

Translation and Interpretation

The Americans used an interpreter supplied by the Chinese company. They found that translation slowed down communication and they were not making progress at the speed they had anticipated. The interpreter didn’t seem to understand some of the more technical terms and hesitated frequently, or just shrugged her shoulders at times. There were elaborate exchanges between the interpreter and the Chinese company since they knew each other well, and quite often the Americans were left wondering what was being said and how it might impact their progress in getting a deal realized.

The Sales Presentation

When the visiting executives were finally able to make the sales presentation, they were surprised to find a team of ten Chinese counterparts facing them across the table. Despite their initial trepidation, their hosts were cordial, frequently nodded and smiled, and seemed to react positively during the exchange. They were not surprised that a final agreement was not made that day but were confident they could wrap things up the next day once their prospective customers had had the night to reflect on it. The next day they were asked to explain again the things they had covered the previous day, but this time to six new people. This time the questions were highly technical, and they were concerned about giving away too much information, so they answered in general terms. They returned to their hotel exhausted, made worse because again they didn’t feel as if they had made much progress over the course of the day. Although they now knew that their planned tour of the Great Wall was out, they began to wonder if they would be able to close the deal on their last day in China. The executives had pressing commitments at home and could not afford the time to extend their stay.

The Negotiations

The Americans arrived Friday, irritated they had spent Monday touring the city instead of working, and were determined to get a deal done, but they were asked again about the technical details. This time one member of the first-day Chinese team pointed out discrepancies between what they had said and what had been promised in earlier communications about technical support. The Chinese were reproachful about the discrepancies, and the Americans were becoming increasingly anxious about making an agreement. The tone had cooled, but everyone remained polite. Discussions resumed with the same questions being asked yet again. The Chinese appreciated the high quality of the American product, but worried they wouldn’t be able to fix the equipment if it broke down. They suggested—delicately, so as not to imply they expected breakdowns—that perhaps the Americans could give them some help with maintenance training. The executives pointed out the expense and difficulty of keeping someone in their city for several weeks or months and expressed confidence there wouldn’t be any problems that could not be worked out over the phone. Finally, before lunch, the technical discussions turned to price. The Americans began to think they might get the deal done after all, but were shocked when the Chinese asked for a 20 percent price discount. The Americans barely contained their irritation, since they knew their original price was fair, but offered a 5 percent discount to try to get the order quickly. Furthermore, the payment schedule could not be guaranteed because of apparent deadlines and requirements of the municipal officials. After lunch, the executives began to ask pointed questions to focus on the remaining unresolved points, but the Chinese seemed reluctant to discuss them. Although some minor progress was made, many issues remained unresolved that afternoon. At the end of the day, the Chinese manager smiled and spoke of cooperation in the future, past Chinese-American relations and the great amount he and his factory could learn from the Americans. They signed a general letter of intent, and the executives left with expressions on both sides of willingness to continue to discuss the sale.
 

80 40 China x Power Distance United States * 20 91 Individualism 66 62 Masculinity 30 46 Uncertainty Avoidance 87 26 Long Term Orientation 24 68 Indulgence