by John L. Graham and
N. Mark Lam
In preparing for a business trip to China, most
Westerners like to arm themselves with a handy, one-page list of
etiquette how-tos. "Carry a boatload of business cards," tipsters say.
"Bring your own interpreter." "Speak in short sentences." "Wear a
conservative suit." Such advice can help get you in the door and even
through the first series of business transactions. But it won’t sustain
the kind of prolonged, year-in, year-out associations that Chinese and
Western businesses can now achieve.
Indeed, our work with dozens of companies and
thousands of American and Chinese executives over the past twenty years
has demonstrated to us that a superficial obedience to the rules of
etiquette gets you only so far. In fact, we have witnessed breakdowns
between American and Chinese businesspeople time and time again. The
root cause: a failure on the American side to understand the much
broader context of Chinese culture and values, a problem that too often
leaves Western negotiators both flummoxed and flailing.
The challenge of mutual understanding is great;
American and Chinese approaches often appear incompatible. All too
often, Americans see Chinese negotiators as inefficient, indirect, and
even dishonest, while the Chinese see American negotiators as
aggressive, impersonal, and excitable. Such differences have deep
cultural origins. Yet those who know how to navigate these differences
can develop thriving, mutually profitable, and satisfying business
relationships.
The roots of
Chinese culture
Four thick threads of culture have bound the Chinese people together
for some 5,000 years, and these show through in Chinese business
negotiations.
The first thread is agrarianism. In contrast to
the U.S. population, which is mostly urban, two-thirds of the Chinese
people still live in rural areas, laboring primarily in rice or wheat
cultivation. Traditional Chinese agriculture is peasant farming. It is
communal, not individualistic; survival depends on group cooperation
and harmony. Loyalty and obedience to familial hierarchy binds laboring
groups together. Many of China’s city dwellers were born and raised in
the country and have retained their agrarian values. Just as the most
urbane Americans are influenced by the country’s cowboy roots—"shoot
first and ask questions later," "lay your cards on the table," and so
on—the most modern Chinese are affected by millennia of living close to
the soil.
| We have
witnessed breakdowns between
American and Chinese
businesspeople time and time again. |
Before the 1980s, agrarian values trumped business
values. When during the Cultural Revolution Mao Tse-tung sent
bureaucrats and students to be "reeducated" by the peasantry, he was
reflecting the deep-seated belief in the virtues of rural life. Indeed,
Chinese philosopher Fung Yu-lan explains in his works that Chinese
sages historically distinguished between the "root" (agriculture) and
the "branch" (commerce). Social and economic theories and policies
tended to favor the root and slight the branch. People who dealt with
the branch—merchants—were therefore looked down upon.
The second thread is morality. The writings of
Confucius served as the foundation of Chinese education for some 2,000
years. During those two millennia, knowledge of Confucian texts was the
primary requisite for appointment to government offices. Confucius
maintained that a society organized under a benevolent moral code would
be prosperous and politically stable and therefore safe from attack. He
also taught reverence for scholarship and kinship. Confucius defined
five cardinal relationships: between ruler and ruled, husband and wife,
parents and children, older and younger brothers, and friend and
friend. Except for the last, all the relationships were strictly
hierarchical. The ruled—wives, children, and younger brothers—were
counseled to trade obedience and loyalty for the benevolence of their
rulers—husbands, parents, and older brothers. Rigorous adherence to
these hierarchical relationships yielded social harmony, the antidote
for the violence and civil war of Confucius's time.
For a taste of the importance of hierarchy in
Chinese society, consider what happened to Cheng Han-cheng and his
wife. According to Chinese scholar Dau-lin Hsu, in 1865 Cheng’s wife
had the insolence to beat her mother-in-law. This was regarded as such
a heinous crime that, among other punishments, Cheng and his wife were
both skinned alive, their flesh displayed at the gates of various
cities, and their bones burned to ashes. Neighbors and extended family
members were also punished. This is, of course, an extreme example—but
the story is oft told, even in today’s China. And it underscores why it
is so easy for casual Westerners to slight their authority-revering
Chinese counterparts.
Roughly contemporary with Confucius was Lao Tsu,
the inspiration for Taoism, whose fundamental notions involve the
relationship of yin (the feminine, dark, and passive force) to yang
(the masculine, light, and active force). The two forces oppose and
complement one another simultaneously. They cannot be separated but
must be considered as a whole. The implications of the collision and
collusion of yin and yang are pervasive, affecting every aspect of life
from traditional medicine to economic cycles. According to Lao Tsu, the
key to life was to find the Tao—"the way" between the two forces, the
middle ground, a compromise. Both Lao Tsu and Confucius were less
concerned about finding the truth and more concerned about finding the
way.
These moral values express themselves in the
Chinese negotiating style. Chinese negotiators are more concerned with
the means than the end, with the process more than the goal. The best
compromises are derived only through the ritual back-and-forth of
haggling. This process cannot be cut short. And a compromise allows the
two sides to hold equally valid positions. While Americans tend to
believe that the truth, as they see it, is worth arguing over and even
getting angry about, the Chinese believe that the way is hard to find
and so rely on haggling to settle differences.
The third cultural thread is the Chinese
pictographic language. Just as Western children learn to read Roman
letters and numbers at an early age, Chinese children learn to memorize
thousands of pictorial characters. Because, in Chinese, words are
pictures rather than sequences of letters, Chinese thinking tends
toward a more holistic processing of information. Michael Harris Bond,
a psychology professor at the Chinese University of Hong Kong, found
that Chinese children are better at seeing the big picture, while
American children have an easier time focusing on the details.
The fourth thread is the Chinese people’s wariness
of foreigners, which has been learned the hard way—from the country’s
long and violent history of attacks from all points of the compass. So,
too, has China fallen victim to internal squabbling, civil wars, and
the ebb and flow of empires. The combination yields cynicism about the
rule of law and rules in general. It can be said that the Chinese trust
in only two things: their families and their bank accounts ...
The eight elements
The cultural influences outlined above have given rise to a clearly
defined set of elements that underpins the Chinese negotiation style.
Most American businesspeople we have worked with often find those
elements mysterious and confusing. But if Americans ignore them at any
time during the negotiation process, the deal can easily fall apart.
Following are the eight important elements of the
Chinese negotiation style in the order most Westerners will encounter
them:
Guanxi (Personal Connections)
While Americans put a premium on networking, information, and
institutions, the Chinese place a premium on individuals’ social
capital within their group of friends, relatives, and close associates.
Zhongjian Ren (The Intermediary)
Business deals for Americans in China don't have a chance without the zhongjian
ren, the intermediary. In the United States, we tend to trust
others until or unless we’re given reason not to. In China, suspicion
and distrust characterize all meetings with strangers.
Shehui Dengji (Social Status)
American-style, "just call me Mary" casualness does not play well in a
country where the Confucian values of obedience and deference to one’s
superiors remain strong. The formality goes much deeper,
however—unfathomably so, to many Westerners.
Renji Hexie (Interpersonal Harmony)
The Chinese sayings, "A man without a smile should not open a shop."
and "Sweet temper and friendliness produce money." speak volumes about
the importance of harmonious relations between business partners.
Zhengti Guannian (Holistic Thinking)
The Chinese think in terms of the whole while Americans think
sequentially and individualistically, breaking up complex negotiation
tasks into a series of smaller issues: price, quantity, warranty,
delivery, and so forth. Chinese negotiators tend to talk about those
issues all at once, skipping among them, and, from the Americans’ point
of view, seemingly never settling anything.
Jiejian (Thrift)
China’s long history of economic and political instability has taught
its people to save their money, a practice known as jiejian.
The focus on savings results, in business negotiations, in a lot of
bargaining over price—usually through haggling. Chinese negotiators
will pad their offers with more room to maneuver than most Americans
are used to, and they will make concessions on price with great
reluctance and only after lengthy discussions.
Mianzi ("Face" or Social Capital)
In Chinese business culture, a person’s reputation and social standing
rest on saving face. If Westerners cause the Chinese embarrassment or
loss of composure, even unintentionally, it can be disastrous for
business negotiations.
Chiku Nailao (Endurance, Relentlessness, or
Eating Bitterness and Enduring Labor)
The Chinese are famous for their work ethic. But they take diligence
one step further—to endurance. Where Americans place high value on
talent as a key to success, the Chinese see chiku nailao as
much more important and honorable.
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