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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…
This process has more significance in most countries except the Unites States. The approach in the U.S. is to get down to business straight away without wasting too much time on people. This is in stark contrast to the process in China where the focus is on building “Guanxi”, that is, the intricate and omnipresent network of personal relations. The U.S. approach can be a huge problem when doing business with China. The American efficiency interferes with the patient development of a mutually trusting relationship – the very basis of an Asian business agreement. This is what happened in the case study. Mr. Smith had done his research and was aware about the Chinese business methodology, but he did not think it was important to implement it. He was well advised by Mr. Tang. Mr. Tang, even though pointed out the significant features of the “American” and the “Chinese” way of doing business, did not stress enough to make Mr. Smith understand its significance. Mr. Tang also jeopardized his relationship with Mrs. Ming whom he had known for many years by not disclosing that the supplier was not a direct supplier. 3.1.2 Adversial versus Guanxi Business Methodologies Americans have a very straight forward and practical approach towards business. They believe in driving hard bargains and negotiating, while the Chinese put more focus on respect, friendship saving face in their business conduct. Mr. Smith was a typical American businessman who in spite of knowing that
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