What’s culture got to do with it?

Successful westerners tend to see their Chinese counter-parties as more trustworthy, less short-term oriented and less competitive than those western deal-makers who are less successful in China. “Cultural difference” seems to enter the lexicon of Western business-people to explain why things go wrong in China. Successful dealmakers, on the other hand, seem to be paying more attention to selecting appropriate Chinese counter-parties.

Cultural roadblocks vs. business bridges
Negotiators with the most success tend to see culture as less of a roadblock while less successful negotiators are the ones declaring that cultural issues are sinking their deals.

A recent survey of 160 businesspeople from all over the world asked participants to assess Mainland Chinese counter-parties in terms of 5 culture issues: Trustworthiness, long term orientation, value placed on relationship, risk aversion and negotiating style. This universe of participants included 11% ML Chinese, 18% overseas Chinese, 34% North Americans, and 28% Europeans.

The general base-line responses for the entire sample group:

1. Which side is more trustworthy?

Mainland Chinese were more trustworthy: 5%
No trend: 53%
Westerners were more trustworthy: 42%

2. Are Mainland Chinese more long-term oriented or less compared to Western negotiators?

Mainland Chinese are more long term: 33%
No trend: 17%
Mainland Chinese are less long term: 50%

3. Which side is more likely to cultivate better post-deal relationships?

Chinese: 62%
No Trend: 25%
Westerners: 13%

4. In your opinion, are Mainland Chinese counter-parties more or less risk averse than Western negotiators?

More: 37%
Same/no trend: 38%
Less 25%

5. What is your Mainland Chinese counter-party’s negotiating style?

Yielding: 7%
Compromising 16%
Competitive 35%
Avoiding 22%
Collaborative 19%

Western Views on Chinese negotiators:
For analysis we isolated North Americans and Europeans to examine the impact of cultural differences on negotiating behavior. While we couldn’t say for sure that this sample contains no ethnic Chinese, participants had the option of selecting an Overseas Chinese category.

1. Trustworthy

a. MC more 3%
b. No trend 49 %
c. Westerners more 48 %

2. Long Term orientation

a. More 37%
b. No trend 12%
c. Less 51 %

3. Value of relationship

a. More: 60%
b. No trend 24 %
c. Less 16%

4. Risk aversion:

a. More: 42%
b. Same/no trend: 34%
c. Less 24 %

5. Counter-party style

a. Yielding: 4%
b. Compromising 9%
c. Competitive 39%
d. Avoiding 28%
e. Collaborative 20%

Success rates influence attitudes towards Mainland counter-parties
The next step was to sort the Western negotiators based on how successful they saw themselves in China. Participants were asked what percentage of their negotiations led to completed contracts. “High Success” negotiators reported that 75% or more of their negotiations resulted in signed contracts. “Low Success” negotiators completed deals in 50% or less of their transactions.

High Success (75 – 100% of negotiations resulted in deals)

1. Trustworthy

a. Mainlanders 4%
b. No trend 59%
c. Westerners 37%

2. Long Term orientation

a. More 43%
b. No trend 13%
c. Less 44%

3. Value of relationship

a. More: 61 %
b. No trend 28 %
c. Less 11%

4. Risk aversion:

a. More: 39%
b. Same/no trend: 35 %
c. Less 26%

5. Counterparty style

a. Yielding: 4 %
b. Compromising 9 %
c. Competitive 35%
d. Avoiding 30%
e. Collaborative 22%

Low Success (50% or fewer of their negotiations lead to success)

1. Trustworthy

a. Mainlanders 2%
b. No trend 36 %
c. Westerners 62%

2. Long Term orientation

a. More 30%
b. No trend 12%
c. Less 58 %

3. Value of relationship

a. More: 58%
b. No trend 19%
c. Less 23%

4. Risk aversion

a. More: 45%
b. Same/no trend: 33%
c. Less 21%

5. Counterparty style

a. Yielding: 5%
b. Compromising 10%
c. Competitive 43%
d. Avoiding 26 %
e. Collaborative 17%

Conclusions: Westerners who ranked themselves as more successful in China tended to see less of a cultural difference between themselves and their Mainland Chinese counter-parties. This was particularly true in terms of trustworthiness. 59% of high-success negotiators didn’t see any difference between Westerners and Chinese negotiators, but only 36% of the low-success negotiators felt that trust was a non-issue. While successful negotiators balanced out on their views towards Chinese negotiatiors’ time-frames, less successful Westerners saw Chinese as more short-term oriented.

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