Introduction
One might agree that business negotiations are often challenging, and numerous factors can prevent the parties from coming to an agreement, understanding each other, and establishing higher levels of trust. One essential aspect that has to be considered in international negotiations is cultural differences. In a case study by Sebenius and Qian (2009), cultural unawareness is demonstrated in disrupting discussions between the American company Wyoff and the Chinese firm China LuQuan, and this essay explores some details.
Main Body
To begin with, China LuQuan (CLQ) had low trust for Wyoff. During the first negotiations, Mr. Bingtan Zhou stated: “After several months of difficult discussion with Wyoff, we began to doubt its sincerity regarding the joint venture” (Sebenius & Qian, 2009, p. 3). When one does not think the other party is honest and genuine in its intentions, the trust lowers significantly. The second indication is that, when considering the new cooperation, Zhou noticed: “We need to be careful” (Sebenius & Qian, 2009, p. 7). CLQ’s trust was so low that the company doubted Wyoff’s sincere intentions, referring to the previous unpleasant experience. Lastly, the fact that CLQ wanted to keep its doubts and concerns private to its business partner proves that it did not believe Wyoff would perceive them seriously.
Further, evidence from the case study shows that Wyoff also had low trust for its Chinese partners. For instance, the American company kept its processes and technologies confidential because it suspected that CLQ would use them freely for its own purposes. Moreover, Wyoff wanted more information on how Chinese businessmen reacted to their offerings and requests. Still, if the trust were stronger, CLQ’s vague or delayed responses would be perceived more positively (Sebenius & Qian, 2009). Eventually, the third proof is that Wyoff constantly expected the other party to improve its operations and become the key competitor in the market, which caused the former company to seek a higher share.
One may notice that China-LuQuan’s negotiators demonstrated some aspects of collectivism. For instance, an indicator of this phenomenon is the need for businesses to consult with external stakeholders, such as governments. Thus, CLQ put the country’s and Chinese authorities’ needs above the company’s preferences: “Our national interests were a higher priority than our company’s bottom line” (Sebenius & Qian, 2009, p. 5). Additionally, the company mentioned several times that it needed to ask the superiors to then give a specific answer to Wyoff’s proposals.
Another concept to discuss in relation to the case study is character-based trust, which is preferred by Chinese businessmen. Thus, CLQ indicated that Wyoff “seemed quite satisfied maintaining an arms-length relationship with us in business. But to us, business partners are more like trustworthy friends than financial counterparts” (Sebenius & Qian, 2009, p. 12). This statement and the whole section describing the warm and friendly hosting practices of CLQ prove that Chinese companies prefer to become closer to their partners and establish harmonious relationships.
Several practices can be advised when an organization seeks to improve its cultural competence, and precisely, this improvement is needed for Wyoff to regain the trust of its Chinese negotiation partners. Firstly, the new negotiating team should carefully explore the ways Chinese businessmen express their sincere intentions, including some friendship-building practices, and then respond adequately to CLQ’s welcoming efforts. Secondly, the American company should stop paying too much attention to deadlines, strict schedules, and confidentiality. To have a long-term and beneficial relationship with CLQ and regain its trust, Wyoff must adhere better to Chinese cultural norms of sharing and patience.
Conclusion
To conclude, the case study proves the value of cultural awareness and demonstrates how a failure to consider it leads to negotiation disruptions. Both parties had trust and confidence issues and could not find ways to express their sincere intentions in a manner understandable to the other organization. Collectivism, individualism, and character—and fact-based trust-building are essential factors that can highlight cultural differences and also help overcome them.
Reference
Sebenius, J. K., & Qian, C. J. (2009). Wyoff and China-LuQuan: Negotiating a joint venture (A) [Case study]. Harvard Business School.
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